Essex Property Trust, Inc. (Essex) is a self-administered and self-managed real estate investment trust (REIT) that focuses on the ownership, operation, management, acquisition, development, and redevelopment of apartment communities along the West Coast of the United States **[0000920522-24-000033_ess-20231231.htm:6]** **[0000920522-24-000033_ess-20231231.htm:62]**. As of December 31, 2023, Essex owned or had ownership interests in 252 operating apartment communities, comprising 61,997 apartment homes, with an additional development pipeline of 264 apartment homes **[0000920522-24-000033_ess-20231231.htm:6]** **[0000920522-24-000033_ess-20231231.htm:62]**. The company's strategy is centered on investing in major metropolitan areas with high rental demand and limited new housing supply, aiming for above-average rental growth and long-term asset appreciation **[0000920522-24-000033_ess-20231231.htm:7]**.

1. **Apartment Communities** - Owns and manages a portfolio of 252 operating apartment communities, primarily located in Southern California, Northern California, and the Seattle Metro area, providing rental housing solutions **[0000920522-24-000033_ess-20231231.htm:62]**.
2. **Real Estate Investments** - Engages in the acquisition, development, and redevelopment of apartment communities to enhance portfolio value and generate long-term asset appreciation **[0000920522-24-000033_ess-20231231.htm:6]** **[0000920522-24-000033_ess-20231231.htm:62]**.

89c315f8579af8e04f2671a525b3c7f0df6bf594546088c2ebfbbcada052002c

**Net Operating Income ($000)**

**Same-Property NOI ($000)**

**Cash Delinquencies (%)**

**Average Financial Occupancy (%)**

**Average Rental Rates ($)**

540ce39b699905854427267fc86016d64e6784062a9b6a4b525402fa4c31e4b2

cf5fe819a0165f2ec684f89701c1fe727bd487e7a8982b1ac3ebc32ff66ef8eb

| Metric [Unit: $ Thousand] | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| Same-property Revenues    | **381,400**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:2]**  | N/A     | N/A     | N/A     | **400,331**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**  | N/A     | **414,800**  **[0000920522-24-000075_ess-20240630.htm:26]**  | **413,200**  **[0000920522-24-000092_ess-20240930.htm:41]**  |
| Acquisitions              | **2,700**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**   | N/A     | N/A     | N/A     | **1,568**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**    | N/A     | **12,800**  **[0000920522-24-000075_ess-20240630.htm:26]**   | N/A     |
| Development               | **11,200**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**  | N/A     | N/A     | N/A     | **5,865**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**    | N/A     | N/A     | N/A     |
| Redevelopment             | **1,400**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**   | N/A     | N/A     | N/A     | **1,536**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**    | N/A     | **1,600**  **[0000920522-24-000075_ess-20240630.htm:26]**    | N/A     |
| Non-residential/Other, Net| **13,500**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**  | N/A     | N/A     | N/A     | **10,695**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**   | N/A     | **11,100**  **[0000920522-24-000075_ess-20240630.htm:26]**   | N/A     |
| Straight-line Rent Concessions | **2,200**  **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**  | N/A     | N/A     | N/A     | **(1,050)**  **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**  | N/A     | **(0.5)**  **[0000920522-24-000075_ess-20240630.htm:26]**    | N/A     |
| Rental Income             | N/A     | **404,600**  **[0000920522-23-000011_ess-20230331.htm:21]**  | N/A     | **410,438**  **[0000920522-23-000042_ess-20230930.htm:25]**  | N/A     | N/A     | N/A     | N/A     |
| Other Property Revenue    | N/A     | **5,000**  **[0000920522-23-000011_ess-20230331.htm:21]**    | N/A     | **5,960**  **[0000920522-23-000042_ess-20230930.htm:25]**    | N/A     | N/A     | N/A     | N/A     |
| Management and Other Fees from Affiliates | N/A | **2,800**  **[0000920522-23-000011_ess-20230331.htm:21]**  | N/A | **2,785**  **[0000920522-23-000042_ess-20230930.htm:25]**  | N/A | **2,713**  **[0001140361-24-023399_ef20027783_ex99-1.htm:9]**  | N/A | **2,600**  **[0000920522-24-000092_ess-20240930.htm:27]**  |

48b0ed0fec291b01362de7e21d2727838419cee547366212453f9c4e89709133

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

45851f0da0bd92b769c145cb8942aa16bf63d9848c757c046953f5423f73ea1a

| Metric / Quarter                      | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|---------------------------------------|---------|---------|---------|---------|---------|---------|---------|---------|
| **Net Operating Income ($000)**       | **294,751** **[0001140361-23-005038_brhc10047520_ex99-1.htm:35]**  | **289,244** **[0001140361-23-021030_brhc20051881_ex99-1.htm:30]**  | **294,041** **[0001140361-23-036519_brhc20056337_ex99-1.htm:33]**  | **292,502** **[0001140361-23-049708_ef20013027_ex99-1.htm:34]** **[0000920522-23-000042_ess-20230930.htm:54]** **[0001140361-23-049708_ef20013027_ex99-1.htm:6]**  | **296,998** **[0001140361-24-005882_ef20020636_ex99-1.htm:34]**  | **298,349** **[0000920522-24-000045_ess-20240331.htm:45]** **[0001140361-24-023399_ef20027783_ex99-1.htm:29]** **[0001140361-24-023399_ef20027783_ex99-1.htm:6]**  | **313,749** **[0000920522-24-000075_ess-20240630.htm:51]** **[0001140361-24-034917_ef20033063_ex99-1.htm:31]** **[0001140361-24-034917_ef20033063_ex99-1.htm:6]**  | **313,883** **[0001140361-24-044545_ef20037625_ex99-1.htm:21]** **[0001140361-24-044545_ef20037625_ex99-1.htm:35]** **[0000920522-24-000092_ess-20240930.htm:54]**  |
| **Same-Property NOI ($000)**          | **272,314** **[0001140361-23-005038_brhc10047520_ex99-1.htm:35]**  | **274,099** **[0001140361-23-021030_brhc20051881_ex99-1.htm:30]** **[0000920522-23-000011_ess-20230331.htm:45]** **[0001140361-23-021030_brhc20051881_ex99-1.htm:6]**  | **280,791** **[0001140361-23-036519_brhc20056337_ex99-1.htm:33]** **[0000920522-23-000037_ess-20230630.htm:53]** **[0001140361-23-036519_brhc20056337_ex99-1.htm:7]**  | **279,979** **[0001140361-23-049708_ef20013027_ex99-1.htm:34]**  | **283,737** **[0001140361-24-005882_ef20020636_ex99-1.htm:34]**  | **286,359** **[0000920522-24-000045_ess-20240331.htm:45]**  | **293,424** **[0000920522-24-000075_ess-20240630.htm:51]**  | **287,452** **[0000920522-24-000092_ess-20240930.htm:54]**  |
| **Cash Delinquencies (%)**            | **1.1%** **[0001140361-23-005038_brhc10047520_ex99-1.htm:27]**  | **2.1%** **[0000920522-23-000011_ess-20230331.htm:32]**  | **2.1%** **[0001140361-23-036519_brhc20056337_ex99-1.htm:27]** **[0001140361-23-036519_brhc20056337_ex99-1.htm:28]**  | **2.0%** **[0001140361-23-049708_ef20013027_ex99-1.htm:28]**  | **1.4%** **[0001140361-24-005882_ef20020636_ex99-1.htm:29]**  | **1.3%** **[0001140361-24-023399_ef20027783_ex99-1.htm:23]**  | **0.9%** **[0001140361-24-034917_ef20033063_ex99-1.htm:25]**  | **0.7%** **[0001140361-24-044545_ef20037625_ex99-1.htm:29]**  |
| **Average Financial Occupancy (%)**   | **96.0%** **[0001140361-23-005038_brhc10047520_ex99-1.htm:20]**  | **96.7%** **[0000920522-23-000011_ess-20230331.htm:32]**  | **96.6%** **[0000920522-23-000037_ess-20230630.htm:38]** **[0000920522-23-000037_ess-20230630.htm:41]**  | **96.4%** **[0000920522-23-000042_ess-20230930.htm:39]**  | **96.1%** **[0001140361-24-005882_ef20020636_ex99-1.htm:22]**  | **96.3%** **[0000920522-24-000045_ess-20240331.htm:32]**  | **96.2%** **[0000920522-24-000075_ess-20240630.htm:37]**  | **96.2%** **[0000920522-24-000092_ess-20240930.htm:40]**  |
| **Average Rental Rates ($)**          | **2,556** **[0001140361-23-005038_brhc10047520_ex99-1.htm:21]**  | **2,571** **[0001140361-23-021030_brhc20051881_ex99-1.htm:18]**  | **2,597** **[0001140361-23-036519_brhc20056337_ex99-1.htm:19]** **[0001140361-23-036519_brhc20056337_ex99-1.htm:21]**  | **2,626** **[0001140361-23-049708_ef20013027_ex99-1.htm:20]**  | **2,624** **[0001140361-24-005882_ef20020636_ex99-1.htm:23]**  | **2,634** **[0001140361-24-023399_ef20027783_ex99-1.htm:16]** **[0001140361-24-023399_ef20027783_ex99-1.htm:18]**  | **2,649** **[0001140361-24-034917_ef20033063_ex99-1.htm:16]**  | **2,669** **[0001140361-24-044545_ef20037625_ex99-1.htm:22]**  |

c5237943eced7bb739d6495d44ac815c729ffe88c9ae830fb5c3df37e9950d1d

1. "Given the challenging developer environment on the West Coast and reports of developers permanently exiting the market  **[ESS_3395601_27]** , how do you intend to capitalize on the reduced competition, and what strategies are you implementing to mitigate potential negative impacts on your development pipeline?"

2. "With the potential impact of new single-family home supply on the rental market  **[ESS_3395601_17]** , how is Essex addressing the increased competition from single-family housing, and what measures are you taking to maintain occupancy and rental rates amid this competition?"

3. "Considering the slowdown in development starts and the resulting decrease in preferred and mezzanine investment opportunities  **[ESS_3395601_21]** , how do you plan to adjust your investment strategy to sustain growth, and are you exploring alternative avenues for capital deployment?"

4. "In light of possible changes to rent control regulations, including the upcoming vote on the repeal of the Costa-Hawkins Rental Housing Act  **[ESS_3395601_19]** , how are you adjusting your underwriting assumptions for long-term rent growth, and what risk mitigation strategies are you implementing if statewide rent regulations become more restrictive than anticipated?"

5. "Given the recent uptick in bad debt in regions like Southern California excluding L.A. County  **[ESS_3395601_29]** , are you observing early signs of financial stress among residents, and how are you proactively managing credit risk and potential increases in delinquency rates across your portfolio?"

0ed6b6b802aa583ed356262c33b8b11e1b66ccaf95666b01807470b3dfbfd961

Rental and Other Property Revenue

- Rental Income

- Other Property

Management and Other Fees

Total Revenue

37ab12096bddcd9437a31a588be6161f169cbbda2b63ac031daa3e0def0b10ad

| Program Details          | Program 1       |
|--------------------------|-----------------|
| Approval Date            | September 2022  **[0000920522-24-000092_ess-20240930.htm:46]** **[0000920522-24-000092_ess-20240930.htm:60]**  |
| End Date/Duration        | Ongoing as of September 30, 2024  **[0000920522-24-000092_ess-20240930.htm:46]** **[0000920522-24-000092_ess-20240930.htm:60]**  |
| Total Additional Amount  | **$500.0 million**  **[0000920522-24-000092_ess-20240930.htm:46]** **[0000920522-24-000092_ess-20240930.htm:60]**  |
| Remaining Authorization  | **$302.7 million** as of September 30, 2024  **[0000920522-24-000092_ess-20240930.htm:46]** **[0000920522-24-000092_ess-20240930.htm:60]**  |
| Details                  | Supersedes previous plans  **[0000920522-24-000092_ess-20240930.htm:46]** **[0000920522-24-000092_ess-20240930.htm:60]**  |

87024b0e4b48f392957f0756d9c8e2be4a9b1203c2efb9398fee7f920c6d6a55

### Q2 2024 Earnings Call
- **Issued Period**: Q2 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO per Share**: Full year guidance raised by **$0.27 to $15.50 per share**, representing a **3.1% year-over-year growth**. Third quarter core FFO guidance at **$3.87 at the midpoint**  **[ESS_3395601_2]** .
  2. **Same-Property Revenue Growth**: Midpoint increased by **75 basis points to 3%**  **[ESS_3395601_2]** .
  3. **Blended Rent Growth**: Forecasted to be **120 basis points higher** than initial forecast  **[ESS_3395601_2]** .
  4. **Same-Property Operating Expenses**: Expected to increase by **4.75% at the midpoint**  **[ESS_3395601_2]** .
  5. **Controllable Expenses**: Expected to increase by less than **3%**  **[ESS_3395601_2]** .
  6. **Same-Property NOI Growth**: Expected to grow by **2.3% at the midpoint**  **[ESS_3395601_2]** .
  7. **Preferred Equity Portfolio**: Expected redemptions between **$125 million to $175 million**  **[ESS_3395601_2]** .
  8. **Net Debt-to-EBITDA**: Leverage levels at **5.4x**  **[ESS_3395601_2]** .
  9. **Available Liquidity**: Over **$1 billion**  **[ESS_3395601_2]** .
  10. **Bad Debt**: Includes about **1%** bad debt for the rest of the year  **[ESS_3395601_6]** .

### Q1 2024 Earnings Call
- **Issued Period**: Q1 2024
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Core FFO per Share**: Increased full-year guidance by **$0.20 per share**  **[ESS_3382053_2]** .
  2. **Same-Property Revenue Growth**: Midpoint increased by **55 basis points to 2.25%**  **[ESS_3382053_2]** .
  3. **Delinquency Rate**: Projected at **1.1% of scheduled rent**  **[ESS_3382053_2]** .
  4. **FFO Accretion from Joint Venture**: Expected **$0.03 of FFO accretion**  **[ESS_3382053_2]** .
  5. **Preferred Equity Investments**: Beneficial to 2024 core FFO forecast  **[ESS_3382053_2]** .
  6. **Debt Issuance**: Issued **$350 million in 10-year unsecured bonds** at **5.5% fixed rate**  **[ESS_3382053_2]** .

### Q4 2023 Earnings Call
- **Issued Period**: Q4 2023
- **Guided Period**: FY 2024
- **Guidance**:
  1. **Market Rent Growth**: Assumed **1.25%** on average  **[ESS_3372385_0]** **[ESS_3372385_2]** .
  2. **Same-Property Revenue Growth**: Expected **1.7%** at the midpoint  **[ESS_3372385_2]** .
  3. **Delinquency**: Assumed **1.5%** of scheduled rents  **[ESS_3372385_2]** .
  4. **Regional Revenue Growth**:
     - Southern California: **3%**  **[ESS_3372385_2]** .
     - Northern California: Around **1%**  **[ESS_3372385_2]** .
     - Seattle: Flat year-over-year  **[ESS_3372385_2]** .
  5. **Operating Expenses**: Projected to grow by **4.25%**  **[ESS_3372385_2]** **[ESS_3372385_15]** .
  6. **Same-Property NOI Growth**: Expected **60 basis points**  **[ESS_3372385_2]** .
  7. **Core FFO per Share Growth**: Expected to be flat  **[ESS_3372385_2]** .
  8. **Occupancy**: Forecasted **96.2%**  **[ESS_3372385_5]** .
  9. **Concessions**: Expected **10 basis point** headwind  **[ESS_3372385_5]** .
  10. **Noncore G&A Charges**: Approximately **$20 million**  **[ESS_3372385_20]** .
  11. **Insurance Costs**: Expected to increase by **30%**  **[ESS_3372385_15]** .

### Q3 2024 Earnings Call
- **Issued Period**: Q3 2024
- **Guided Period**: N/A
- **Guidance**: The documents do not contain information about the Q3 2024 earnings call for Essex Property Trust (ESS). Therefore, I cannot provide the guidance they issued for that period.

25af629842d8775dd2e5ad855c5b3225b74373b71ba909dec9e24695a3936c2b

| Name             | Position                                                                 | Start Date         | Short Bio                                                                                                                                                                                                                                                                                                                                 |
|------------------|--------------------------------------------------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Angela L. Kleiman| Chief Executive Officer and President                                    | April 1, 2023      | Angela L. Kleiman transitioned to the role of CEO on **April 1, 2023**, following the retirement of the former CEO, Michael J. Schall. She previously served as COO and Senior EVP from January 2021 to March 2023, and as CFO and EVP from October 2015 to December 2020. Kleiman joined Essex in 2009  **[0001140361-24-016195_ny20018132x1_def14a.htm:26]** **[0001140361-24-016195_ny20018132x1_def14a.htm:41]** .                                                                 |
| Barb M. Pak      | Chief Financial Officer and Executive Vice President                     | 2021               | Barb M. Pak joined Essex in **2012** and became an executive officer in **2021**. She previously served as Senior VP of Finance from February 2019 to December 2020. Before Essex, she was a Portfolio Manager for Oak Hill REIT Management and began her career at Green Street Advisors in 1999  **[0001140361-24-016195_ny20018132x1_def14a.htm:39]** .                                                                            |
| Anne Morrison    | Chief Administrative Officer, General Counsel, and Executive Vice President | December 2023      | Anne Morrison began serving as General Counsel in **February 2020** and was promoted to Chief Administrative Officer in **December 2023**. She joined Essex's Legal group in **2013** and expanded her role to include enterprise risk management, ESG matters, compliance, insurance placement, and all human resources matters  **[0001140361-24-016195_ny20018132x1_def14a.htm:39]** **[0001140361-24-016195_ny20018132x1_def14a.htm:40]** . |
| Rylan K. Burns   | Chief Investment Officer and Executive Vice President                    | January 2024       | Rylan K. Burns began serving as CIO in **January 2024**. He joined Essex in 2019 to lead the Investor Relations department and later managed the Co-Investment platform. Before Essex, he was a portfolio manager at Millennium Investments  **[0001140361-24-016195_ny20018132x1_def14a.htm:41]** **[0001140361-24-016195_ny20018132x1_def14a.htm:40]** .                                                                                       |
| Brennan McGreevy | Group Vice President and Chief Accounting Officer                        | September 4, 2024  | Brennan McGreevy was promoted to Group Vice President and Chief Accounting Officer on **September 4, 2024**. He joined Essex in May 2020, having previously worked as a senior manager in Audit Services at KPMG LLP for over 13 years  **[0001140361-24-040094_ef20035258_8k.htm:1]** .                                                                                              |

02c6b318631697fdfc63724be98f9fe7327a4552eb823625369ed61f47f36878

Southern California

- Same-Property

Northern California

Seattle Metro

Other Real Estate Assets

8f07d167fe00e6c3e42b133abe29654cea540a883c2b5ec5b838720767332fff

**Quarterly guidance for Q4 2024:**
- **Renewal Rates**: mid-4% range  **[ESS_3404738_5]**  (no prior guidance)  
- **New Lease Rates**: expected to inflect positively or become neutral  **[ESS_3404738_20]**  (no prior guidance)

**Annual guidance for FY 2024:**
- **Core FFO per Share**: $15.56  **[ESS_3404738_2]**  (raised from $15.50  **[ESS_3395601_2]** )  
- **Same-Property Revenue Growth**: 3.25%  **[ESS_3404738_2]**  (raised from 3.0%  **[ESS_3395601_2]** )  
- **Same-Property NOI Growth**: 2.6%  **[ESS_3404738_2]**  (raised from 2.3%  **[ESS_3395601_2]** )  
- **Bad Debt**: around 1% or slightly under  **[ESS_3404738_27]**  (lowered from about 1%  **[ESS_3395601_6]** )  
- **Advocacy Expenses**: a little over $30M  **[ESS_3404738_12]**  (no prior guidance)  
- **Structured Finance Redemptions**: $146M total for 2024  **[ESS_3404738_2]**  (no change from $125M–$175M  **[ESS_3395601_2]** )

**Annual guidance for FY 2025:**
- **Structured Finance Redemptions**: $100M–$150M  **[ESS_3404738_2]**  (no prior guidance)  
- **Same-Property Revenue Growth**: 120–160 bps  **[ESS_3404738_0]**  (no prior guidance)  
- **Supply Growth**: 50 bps  **[ESS_3404738_0]**  (no prior guidance)

412d20209794335d1922ed0ecf493574e37c61322f19a8e9f3c4f524a7dea757

| Name       | Start Date | End Date | Reason for Change |
|------------|------------|----------|-------------------|
| KPMG LLP   | 1994  **[0000920522-24-000033_ess-20231231.htm:98]**    | Present  | Current auditor   |

946749bc5c6e84be9760f87ef613076ed81d00f9a3deffad7468104d4e347fa2

23794d91c53ae875c8e247d72561e35d9d06ee07c70c9e0dbcc977a6d161504a

- Total Revenue: $450.698 million (+7.5% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:27]**   
- Rental Income: $440.649 million (+7.4% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:27]**   
- Other Property Revenue: $7.486 million (+25.6% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:27]**   
- Management & Other Fees: $2.563 million (-8.0% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:27]**   
- Southern California: $188.959 million (+9.8% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:35]**   
- Seattle Metro: $74.576 million (+5.6% YoY)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:35]**   
- Other Real Estate Assets: $12.437 million (**+130% YoY**)  **[0000920522-23-000042_ess-20230930.htm:25]** **[0000920522-24-000092_ess-20240930.htm:35]**   

069f3b4cd90afa3c22fed3e27ba8dae9a643a86c2592c4f5fc40fbd0df56b858

5fd1b1e6f2f45b1c7e5577869ed0f3fc053fbc4d0661288c918b2bce9c0363b7

| Year | Amount Due ($ in millions) | Debt Type                  | Interest Rate (%)         | % of Total Debt                                                                 |
|----------|--------------------------------|---------------------------------|-------------------------------|------------------------------------------------------------------------------------|
| 2024     | 0.794                          | Fixed rate ($0.553M), Variable rate ($0.241M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 3.2 (fixed), 4.2 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 0.01% = (0.794 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                      |
| 2025     | 633.054                        | Fixed rate ($632.035M), Variable rate ($1.019M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 3.5 (fixed), 4.2 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 9.9% = (633.054 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                     |
| 2026     | 549.405                        | Fixed rate ($548.291M), Variable rate ($8.999M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 3.5 (fixed), 6.0 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 8.6% = (549.405 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                     |
| 2027     | 803.955                        | Fixed rate ($419.558M), Variable rate ($384.397M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 3.8 (fixed), 4.1 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 12.6% = (803.955 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                    |
| 2028     | 518.332                        | Fixed rate ($517.000M), Variable rate ($1.332M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 2.2 (fixed), 4.2 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 8.1% = (518.332 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                     |
| Thereafter | 3,881.937                     | Fixed rate ($3,748.000M), Variable rate ($133.937M)  **[0000920522-24-000092_ess-20240930.htm:34]**   **[0000920522-24-000092_ess-20240930.htm:56]**  | 3.6 (fixed), 4.2 (variable) **[0000920522-24-000092_ess-20240930.htm:56]** | 61.0% = (3,881.937 / 6,365.931) * 100  **[0000920522-24-000092_ess-20240930.htm:33]**   **[0000920522-24-000092_ess-20240930.htm:34]**                                  |

46fe9cd8f149cdb7a79dd899557df6642b0eb4c281d956b1602efafaaa03ef3e

8b8b618b99644d0fb15da2ff6e19a6c207ff6ef3a7ea3c52def1aaf108dcdb07

Number of operating apartment communities (communities)

Number of apartment homes (apartment homes)

Average financial occupancy for Same-Property portfolio (percentage)

Average financial occupancy for Southern California Same-Property (percentage)

Average financial occupancy for Northern California Same-Property (percentage)

Average financial occupancy for Seattle Metro Same-Property (percentage)

Cash delinquencies as a percentage of scheduled rental income (percentage)

Average monthly rental rate for Same-Property portfolio (USD per apartment home)

19b91d72c20c23a089155b3cdaeecbd659323992816394c6e429676187cc915e

- **Delinquency-related challenges in Los Angeles and Alameda are negatively impacting new lease rate growth**, with new lease rates being flat or slightly declining month-over-month from March to April due to these issues.  **[ESS_3382053_13]**
- The **overhang from delinquency in Los Angeles is expected to continue**, potentially affecting new lease rates and revenue growth moving forward, as working through the large volume will take a longer period of time.  **[ESS_3382053_4]**
- **Limited loss to lease of about 20 basis points in April** indicates constrained potential for significant rent increases across the portfolio; even excluding L.A. and Alameda, loss to lease is only a little over **1%**, compared to **80 basis points in April last year**.  **[ESS_3382053_17]**

11cb3938d94963706acd001ce6e5844aa529b2b0b728ae06785c8c1ada7a6560

- **Essex Property Trust** is projecting **market rent growth of only 1.25%** for 2024, which is below the previous year's projection, due to a muted economic backdrop and lack of high-quality job growth in their markets. This may lead to lower revenue growth.  **[ESS_3372385_3]** ,  **[ESS_3372385_24]**
- **Elevated delinquencies** are impacting revenue and occupancy, as longer court processing times delay the eviction of non-paying tenants. The company has **$134 million in receivables** that are challenging to collect, and management has limited control over the timing of this issue.  **[ESS_3372385_31]** ,  **[ESS_3372385_14]** ,  **[ESS_3372385_6]** ,  **[ESS_3372385_28]**
- Backfilling delinquent units during low-demand periods may require offering **concessions**, resulting in temporary headwinds to occupancy and rent growth, negatively affecting the bottom line.  **[ESS_3372385_5]** ,  **[ESS_3372385_20]** ,  **[ESS_3372385_28]**

51501e71713cb9df6407d7734f7205122385ee9428b38c0a44ab63521ca4d2ba

- **Strong Demand Leading to Outperformance and Raised Guidance**: Essex has experienced pricing power translating into outperformance, leading to an increase in full-year core FFO guidance by **$0.27 to $15.50 per share**, representing **3.1% year-over-year growth**, and a total increase of **$0.47 per share** so far this year. This is driven by strong demand in their markets, particularly in **Northern California and Seattle**, with factors such as **positive net domestic migration** and increased job openings supporting this demand.  **[ESS_3395601_0]** **[ESS_3395601_2]** **[ESS_3395601_14]**
- **Strategic Acquisitions Enhancing Growth Profile**: Essex has been active in the transaction market, successfully acquiring high-quality properties at favorable terms, including **three high-quality communities in the Bay Area** with significant upside potential, acquired at a **20% discount to replacement cost** and with rents about **15% below pre-COVID levels**. These investments are expected to generate **IRRs above 8%** and benefit from efficiencies of the Essex operating platform.  **[ESS_3395601_0]** **[ESS_3395601_15]**
- **Favorable Market Dynamics with Limited New Supply and Less Competition**: The challenging development environment has led to fewer developers in their markets, resulting in limited new supply and less competitive product in the near future, which should create additional opportunities for Essex. This, coupled with strong **blended rent growth of 3.4%** (would be **4.5%** excluding certain counties), **high occupancy rates**, and favorable affordability metrics (e.g., it's **2.8x more expensive to own than rent** in their markets today), positions Essex advantageously in the market.  **[ESS_3395601_27]** **[ESS_3395601_0]**

37f1f140a3bf40c7dfcc6e5f1ca7c3137ba3e4c6f78d0e05ac47df2e2b7f440b

1. **Renewal Rate Growth**  
   **Q:** How are renewal lease rates trending for the next few months?  
   **A:** Renewal rates for May and June are going out in the low to mid-**4%** range, averaging around **4.3%**.  **[ESS_3382053_6]**  They are slightly ahead of schedule in Seattle and Northern California, with Southern California generally as planned but with an LA drag.  **[ESS_3382053_5]**  They have not reforecasted yet but are monitoring peak leasing season activities.  **[ESS_3382053_5]** 

2. **LA Delinquency Impact**  
   **Q:** Is the overhang from LA and Alameda affecting new lease rate growth?  
   **A:** LA is expected to continue being an overhang on delinquency due to the large volume they're working through, which will take longer to resolve.  **[ESS_3382053_4]**  Alameda's improvement is steady and is a smaller part of the portfolio.  **[ESS_3382053_4]**  The overhang is primarily focused in LA, but they are not seeing it bleed into other markets.  **[ESS_3382053_4]**  Delinquency is improving, with April better than the first quarter.  **[ESS_3382053_10]** 

3. **Tech Job Market**  
   **Q:** What are the tech hiring trends in your markets?  
   **A:** They are seeing anecdotal evidence of hybrid workers moving closer to the office to reduce commute times as traffic has picked up.  **[ESS_3382053_7]**  Top 20 tech job openings have increased from about **8,000** jobs last year to **16,000** in March, doubling but still below the pre-COVID average of **25,000**.  **[ESS_3382053_7]**  Fundamentals are moving in the right direction, but acceleration will require a more robust pickup in high-paying jobs.  **[ESS_3382053_7]** 

4. **Acquisition and Transaction Market**  
   **Q:** Can you discuss opportunities for acquisitions and the transaction market?  
   **A:** They have significant opportunities to continue acquiring from joint venture partnerships, as demonstrated by the recent acquisition from a maturing JV that was accretive for shareholders.  **[ESS_3382053_14]**  Transaction volumes remain very low, but there's ample capital looking to be put to work in West Coast multifamily, leading to a scarcity premium for well-located suburban properties.  **[ESS_3382053_14]**  They are seeing very competitive bidding with deep bidder pools, both levered and unlevered, and expect this trend to continue.  **[ESS_3382053_14]** 

5. **Dividend Policy**  
   **Q:** How committed are you to the annual dividend increase given the importance of free cash flow?  
   **A:** Maintaining and increasing the dividend annually is very important to the company, and they aim to stay on the dividend aristocrat list.  **[ESS_3382053_26]**  They target a certain percentage of FFO and AFFO yield to go out as the dividend payment, and although the increase won't be **6%** every year, they carefully plan to balance dividend growth with capital needs.  **[ESS_3382053_26]** 

6. **Mezzanine Loan Portfolio**  
   **Q:** What is the status of the mezzanine loan portfolio and associated risks?  
   **A:** They had five loans on nonaccrual status or watchlist last quarter and have taken back one asset in the first quarter, reducing the number to four.  **[ESS_3382053_19]**  Of those, three have loans maturing in the next two to three quarters, and on the fourth, they are having productive conversations with the sponsor to contribute additional equity.  **[ESS_3382053_19]**  The book continues to perform, with no new assets added to the watchlist this quarter.  **[ESS_3382053_19]** 

7. **Concessions Burn-Off**  
   **Q:** Is there any remaining benefit to renewal rates from the burn-off of concessions?  
   **A:** There is a little benefit in May, but none expected in June and July.  **[ESS_3382053_17]**  First-quarter concessions pickup impacted renewals by about **60 basis points**, and April is about the same.  **[ESS_3382053_20]**  They have concessions burning off in June and July, with August flat and a slight pickup in September into the fourth quarter.  **[ESS_3382053_20]** 

8. **Loss-to-Lease Metrics**  
   **Q:** Where is the overall loss-to-lease of the portfolio today?  
   **A:** Loss-to-lease for the portfolio in April is about **20 basis points**.  **[ESS_3382053_18]**  Excluding LA and Alameda, loss-to-lease is a little over **1%**.  **[ESS_3382053_18]**  Last year around April, loss-to-lease was **80 basis points**. By region, Seattle has the best loss-to-lease at about **80 basis points**, Northern California about **10 basis points**, and Southern California about **10 basis points**.  **[ESS_3382053_18]** 

9. **Impact of Costa-Hawkins Repeal Attempts**  
   **Q:** What is the outlook on the attempted repeal of Costa-Hawkins?  
   **A:** The vast majority of the legislature are not supporting overturning Costa-Hawkins, recognizing the acute housing shortage.  **[ESS_3382053_12]**  They have maintained their coalition to support reasonable legislation, and the proposal has been defeated overwhelmingly twice before. They have not seen anything indicating it will be different this time.  **[ESS_3382053_12]** 

10. **Capital Allocation Strategy**  
    **Q:** How do you view your equity cost of capital today and capital allocation strategy?  
    **A:** They haven't issued common stock in many years due to trading levels, and their cost of equity capital is not attractive.  **[ESS_3382053_24]**  They are looking at other alternatives, including free cash flow, preferred redemptions, and potentially selling assets or JVs. They have always evaluated all sources of capital and aim to remain disciplined.  **[ESS_3382053_24]** 

105a08b57719a39847302e07a5134072158ec61dce41e91ddd948e58470dfa01

- **ESS benefits from a diversified tenant base across multiple industries, with recent job growth in government, health, and education services supporting stable occupancy and growth.**  **[ESS_3382053_22]** **[ESS_3382053_21]**
- **Renewal lease rates are increasing at an average of **4.3%** for May and June, indicating strong pricing power and positive rent growth trends across the portfolio.**  **[ESS_3382053_6]**
- **ESS is committed to maintaining and increasing its dividend, reinforcing shareholder value and confidence, and prioritizing its standing as a Dividend Aristocrat.**  **[ESS_3382053_26]**

4602235fbf5f82b2d53253f83f89767df93ef418ea325c036c84a2ceb3765d21

- **Potential impact of stringent rent control regulations and upcoming elections could pose risks to long-term rent growth and top-line revenue, especially as ESS operates in markets heavily under scrutiny for rent control measures.**  **[ESS_3395601_19]**
- **Elevated bad debt and delinquency-related turnover in certain markets such as Los Angeles and Alameda County are affecting occupancy rates and rent growth, indicating potential difficulties in tenant payment capabilities.**  **[ESS_3395601_29]** **[ESS_3395601_1]**
- **Limited opportunities in the development pipeline and a challenging development environment on the West Coast, with many developers exiting the market, could hinder ESS's future growth prospects.**  **[ESS_3395601_21]** **[ESS_3395601_27]** **[ESS_3395601_11]**

63cc6e59a06292d338598c0a128ba59b68556498df6191796c1582ca10cd29b3

- **Improvement in tenant delinquencies is expected to positively impact revenues in 2024.** The company has made significant progress in reducing delinquency rates, and anticipates continued progress, which should contribute to favorable revenue outcomes next year.  **[ESS_3362735_13]**
- **Return-to-office mandates among tech employers are gaining momentum, potentially boosting apartment demand in key markets.** The decrease in remote hiring and the enforcement of in-office policies are expected to benefit leasing activity, particularly in Northern California and Seattle.  **[ESS_3362735_15]**
- **The company anticipates attractive investment opportunities due to market dislocations caused by higher interest rates.** ESS is positioned to deploy capital into stabilized properties seeking recapitalization, which could enhance returns in their core markets.  **[ESS_3362735_10]**

b9c55c3d7e97190e0c0c53239f9885ac1eb75d0feb9ec1a76df3b0926ac8f73a

1. **Lease Rate Growth Guidance**  
   **Q:** What are your assumptions for lease rate growth?  
   **A:** Management expects **1.25%** growth for new leases and **1.75%** for renewals this year. Renewal growth should be above **2%** in the first half, then drift down to **1.25%** in the back half.  **[ESS_3372385_3]** 

2. **Concessions Impact on Rent Spreads**  
   **Q:** Why is the spread between new and renewal rates tight?  
   **A:** The tight spread is due to concessions burning off; about **50%** of January's **4.8%** lease growth was from concessions expiring, not real market rent growth. The company aims to price renewals appropriately, without pushing them above market.  **[ESS_3372385_4]** 

3. **Delinquency Concerns**  
   **Q:** What caused the jump in delinquencies in January?  
   **A:** Delinquencies increased seasonally post-holidays, as people prioritize paying off credit cards. January saw an **80 basis point** increase, lower than last year's **190 basis point** rise. Management is monitoring but not overly concerned.  **[ESS_3372385_6]** 

4. **Preferred Equity Risks**  
   **Q:** What risks exist in your preferred equity book?  
   **A:** The company takes a prudent approach, assessing factors like market value, maturity, and sponsor support. They have put two assets on nonaccrual status, totaling **$25 million**, and are monitoring a few others. Overall, the book is performing as expected.  **[ESS_3372385_7]** **[ESS_3372385_12]** **[ESS_3372385_13]** 

5. **Capital Recycling Plans**  
   **Q:** How will you use capital from preferred equity redemptions?  
   **A:** Management views acquisitions as more compelling now due to upside in rent growth in their markets. The preferred equity book may drift lower as they focus on acquisitions. Joint venture partners remain interested in deploying capital.  **[ESS_3372385_9]** 

6. **Northern California Rent Outlook**  
   **Q:** Why is rent growth guidance muted despite improvement?  
   **A:** While Northern California showed the largest improvement in January, the overall economic environment and elevated supply in areas like Oakland dampen rent growth. Northern California is expected to grow at **1%**, below the portfolio average.  **[ESS_3372385_10]** 

7. **Insurance Cost Increases**  
   **Q:** How are insurance costs impacting you?  
   **A:** Insurance costs have increased by **30%**, which is factored into this year's expenses. The company uses a captive insurance entity to minimize premiums. Recent storms haven't materially impacted costs yet.  **[ESS_3372385_15]** **[ESS_3372385_16]** 

8. **Rent Control Environment**  
   **Q:** Have there been changes in the rent control environment?  
   **A:** Management doesn't anticipate heightened concerns over rent control due to low rent growth. They are monitoring a proposition to repeal the Costa-Hawkins Housing Act but believe it lacks political support and is unlikely to pass.  **[ESS_3372385_27]** 

9. **Delinquency Collection Efforts**  
   **Q:** Can you collect past-due rents from tenants?  
   **A:** The company is pursuing all avenues to collect the **$134 million** in receivables, including credit reporting and legal action. They are collecting small amounts monthly, but timing depends on when former tenants need their credit restored.  **[ESS_3372385_31]** **[ESS_3372385_23]** 

10. **Application Fraud Concerns**  
    **Q:** Is application fraud increasing?  
    **A:** Management has not seen an uptick in fraud or misrepresentations by tenants. They remain vigilant, and fraud has not been a driver of financial impact.  **[ESS_3372385_33]** 

0a470db68d5f3b8aa3bb9d63000920cd421ae6360204c3661d6c837d2796b592

- **Elevated operating expenses expected in 2024, driven by higher insurance and utility costs, will pressure earnings.** The company anticipates insurance costs to continue rising nationally, and utility costs are up about **6%** year-to-date, with expectations of above-inflation increases near term. These factors "will cause expense growth to be elevated next year."  **[ESS_3362735_30]**
- **Delinquency levels remain elevated in certain markets, leading to challenges in occupancy and revenue growth.** In Los Angeles, delinquency was at **4.6%** in October, reflecting a 2.1% improvement since the start of the year but still significantly higher than historical levels. The company expects rents and occupancy in this area to be more volatile in the near term.  **[ESS_3362735_20]** ,  **[ESS_3362735_13]**
- **Increased supply in markets like Seattle and Oakland could pressure rent growth and occupancy.** Seattle has a higher level of supply, about **2x that of California as a percentage**, and Oakland will be "challenged for the next year or two given the supply that's went out there." This increased competition may impact rent growth in these markets.  **[ESS_3362735_29]** ,  **[ESS_3362735_14]**

17099dc235b31f5e234cb6b5248773e90404c7577599672ab1a3b1aa91811635

1. **Rent Growth Outlook**  
   **Q:** Could rents reaccelerate in the coming months?  
   **A:** We're anticipating a possible reacceleration of rents due to easier year-over-year comparisons. Last year, rents continued to increase through October, but we faced headwinds in November and December. This year, we don't have the same headwinds, and we're sending renewals out in the mid-**4%** range, with early indications landing in the high **3.8% to 3.9%** range.  **[ESS_3404738_7]**  New lease rates went negative in October, but with easier comps ahead, we expect an inflection point where rates become neutral or positive.  **[ESS_3404738_20]** 

2. **Supply Impact in Key Markets**  
   **Q:** How will new supply affect San Jose and Seattle?  
   **A:** In San Jose, we expect the supply impact to be concentrated in Q4, with **2,400 units** delivering this year, **1,100** of which are in Q4. This is still low overall, and we anticipate quick absorption within **3 to 4 months**.  **[ESS_3404738_10]**  In Seattle, supply is shifting to the east side, impacting Q4 and Q1 next year. However, Seattle's high demand and job growth should help absorb this supply, limiting the duration of concessions.  **[ESS_3404738_10]** 

3. **Acquisition and Disposition Cap Rates**  
   **Q:** What are the cap rates on recent acquisitions and dispositions?  
   **A:** We acquired two joint venture interests at **20% to 25% discounts** to replacement cost, yielding in the high **4%** range.  **[ESS_3404738_8]**  One transaction included an OP unit at a **$305** strike price when the stock was around **$270**, making it accretive.  **[ESS_3404738_8]**  We disposed of a 76-year-old asset in San Mateo at approximately a **5%** cap rate, redeploying the capital into higher-return investments.  **[ESS_3404738_8]** 

4. **Potential Repeal of Rent Control Protections**  
   **Q:** What if the Costa-Hawkins repeal passes?  
   **A:** We believe the repeal is unlikely. Similar initiatives were defeated by landslides in **2018** and **2020**.  **[ESS_3404738_6]**  Only about **8%** of California's **483** cities have enacted rent control, and **23 mayors** have announced opposition to Proposition 33, including those from cities with rent control like San Jose.  **[ESS_3404738_6]**  We're confident it will be defeated, but the impact would be minimal even if it passed.

5. **Capital Redeployment Impact**  
   **Q:** How will redeploying capital affect FFO?  
   **A:** We're losing investments yielding around **10%** on preferred equity and redeploying at approximately **5%**, impacting FFO.  **[ESS_3404738_11]**  Structured finance contributed about **5.5%** of our 2024 core FFO; we expect this to moderate to the low **4%** range next year due to redemptions.  **[ESS_3404738_11]**  However, higher NOI from acquisitions should offset some of this impact.

6. **Return to Office Trends**  
   **Q:** How is return to office affecting demand?  
   **A:** We've seen increased demand correlated with companies announcing return-to-office policies, notably in Seattle with Amazon.  **[ESS_3404738_22]**  When Amazon announced a three-day return, demand spiked within **30 to 45 days**.  **[ESS_3404738_22]**  With Amazon's full-time return in January, we're awaiting enforcement to see the benefit.

7. **New Development Plans**  
   **Q:** Are you planning new developments soon?  
   **A:** After not starting new developments for almost **5 years** due to unfavorable returns, we're seeing costs come down as permits decrease.  **[ESS_3404738_8]**  By securing land at attractive prices and designing efficient buildings, we're getting closer to starting new projects, potentially in the next several quarters.  **[ESS_3404738_8]** 

8. **Improvement in Bad Debt**  
   **Q:** How is bad debt improving, especially in LA?  
   **A:** Delinquency in LA has significantly improved from almost **5%** of rent in December last year to **1.6%** today.  **[ESS_3404738_3]**  This progress is due to courts processing evictions and positive economic signs like upcoming events (World Cup, Olympics) and increased film tax credits from **$330 million** to **$750 million**.  **[ESS_3404738_3]** 

9. **Exclusion of Advocacy Costs**  
   **Q:** Why exclude advocacy costs from core FFO?  
   **A:** We view these expenses as nonrecurring. We haven't incurred such costs since **2020**, so it's been **four years**.  **[ESS_3404738_23]**  We believe excluding them is standard industry practice and we're transparent about our spending, projected to be over **$30 million** this year.  **[ESS_3404738_12]** 

10. **Refinancing Plans Impact**  
    **Q:** How will refinancing affect earnings?  
    **A:** We have **$500 million** in unsecured bonds maturing next year. We'll refinance, moving from a **3.5%** coupon to the low **5%** range.  **[ESS_3404738_21]**  This will impact earnings due to higher interest expenses, but we're monitoring the market for attractive opportunities.

ab1f0f4118d4bb46283bb481586bd7947ce3b93fa17d620d3364294cc39b1504

1. **Pricing Strategy**  
   **Q:** What's the outlook for pricing and rents in the back half of the year?  
   **A:** Essex expects blended rents for the full year to be about **2.7%**, having achieved **2.9%** in the first half, implying a deceleration of **35 to 40 basis points**. This slowdown is due to tougher year-over-year comparisons and renewals converging toward market rates over time. Significant rent growth is unlikely without a substantial increase in job demand.  **[ESS_3395601_10]** ,  **[ESS_3395601_24]** 

2. **Bad Debt Trends**  
   **Q:** How is bad debt trending, and what are expectations for the rest of the year?  
   **A:** Bad debt improved to **80 basis points** in July and is expected to hold around **1%** for the rest of the year. Management is pleased with the progress and notes that any further improvement could result in upside to the high end of the guidance range. Delinquency numbers can fluctuate month-to-month, but overall trends are favorable.  **[ESS_3395601_6]** ,  **[ESS_3395601_7]** ,  **[ESS_3395601_29]** 

3. **Acquisition Activity**  
   **Q:** Are you considering new acquisitions or developments given market conditions?  
   **A:** Essex is actively pursuing acquisitions, noting cap rates in the **mid- to high 4%** range for high-quality assets. They seek unique opportunities that can provide additional accretion and are open to increasing their development pipeline as hard costs have come down slightly. For development projects, they require at least a **100 basis point** spread over acquisition cap rates.  **[ESS_3395601_11]** ,  **[ESS_3395601_15]** ,  **[ESS_3395601_28]** 

4. **Return to Office and Migration**  
   **Q:** Is the return to office translating into increased demand or applications?  
   **A:** Management is seeing some pricing power and positive migration trends, with about **100,000** people returning to their markets after a **400,000** person outmigration during COVID. They believe there's potential for more returnees, but the timing remains uncertain.  **[ESS_3395601_14]** 

5. **Supply Outlook**  
   **Q:** How is new supply affecting the market, and what's the outlook for 2025?  
   **A:** Multifamily supply forecasts have been adjusted due to delays, resulting in a small reduction in supply this year. Some deliveries have been pushed into next year, but overall supply remains muted at about **50 basis points** of total stock, similar to this year. Essex does not see significant competition from new supply, including single-family homes, as indicated by low concession activity averaging **2 days** in July.  **[ESS_3395601_8]** ,  **[ESS_3395601_17]** ,  **[ESS_3395601_25]** 

6. **Guidance and FFO Impact**  
   **Q:** Why didn't you raise the lower end of same-store revenue guidance more?  
   **A:** Factors such as potential declines in the back half of the year, occupancy levels, concessions, and delinquency trends contribute to maintaining the lower end of guidance. The fourth quarter implied Core FFO may be slightly down due to the timing of preferred redemption impacting earnings.  **[ESS_3395601_9]** ,  **[ESS_3395601_13]** 

7. **Delinquencies and Court Processing**  
   **Q:** How do delinquency issues compare to the broader market, and could they impact competition?  
   **A:** Essex has limited visibility into the broader market but notes that court processing times for evictions have improved from **12 months** to less than **6 months**, aiding in recovering delinquent units. They expect continued progress as long as court processing times remain stable.  **[ESS_3395601_26]** 

8. **Urban Market Opportunities**  
   **Q:** Will you pursue more urban market assets as they improve?  
   **A:** Essex is starting to see more opportunities in urban markets and is evaluating them. While their portfolio has traditionally been suburban, they are open to acquisitions that meet their return criteria, especially as urban markets show signs of improvement.  **[ESS_3395601_20]** 

9. **Developer Environment**  
   **Q:** Are you seeing developers exit the market, and does that create opportunities?  
   **A:** Some developers are pulling out of the West Coast due to the challenging environment. Essex views fewer developers as leading to less competition and is cautiously optimistic about rebuilding their development pipeline, potentially stepping in countercyclically as they have in past cycles.  **[ESS_3395601_27]** ,  **[ESS_3395601_28]** 

10. **Rent Control Risks**  
    **Q:** How do you underwrite rent growth given rent control regulations?  
    **A:** Essex does not anticipate changes to statewide rent regulations in the near term and believes that historical attempts to introduce stricter rent controls have been resoundingly defeated. They factor in rent control risks on a case-by-case basis but generally rely on their economic models for long-term rent growth assumptions.  **[ESS_3395601_19]** 

5e4a426d8e3971742b8d3ed8d0a30eb3437c5d26b1c17ab6ef4b26e5a56c1143

- **Essex has a strong financial position with net debt to EBITDA at 5.4x and over $1.6 billion of liquidity**, positioning the company to capitalize on investment opportunities and drive long-term value creation.  **[ESS_3372385_2]**
- **Positive demand trends with lead volumes increasing and leasing activity stable**, especially in **Northern California and the Bay Area**, indicating potential for rent growth as concessions burn off.  **[ESS_3372385_26]** **[ESS_3372385_8]**
- **Improving delinquency processing times**, with court times in LA reducing from 10-12 months to 8 months and in other areas from 9-10 months to 6 months, which should help recover revenue and occupancy.  **[ESS_3372385_14]**

7bd94ae4668e857e5c95ce84dea2562dcb66ffa7eac34b70fa7ba1104a13f9d5

Essex Property Trust Inc (ESS)

Financials