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What changed in Essex Property Trust's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Essex Property Trust's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+358 added−341 removedSource: 10-K (2025-02-21) vs 10-K (2024-02-23)

Top changes in Essex Property Trust's 2024 10-K

358 paragraphs added · 341 removed · 292 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

39 edited+17 added−14 removed20 unchanged
Biggest changeThe Company's $35.0 million working capital unsecured line of credit had an interest rate of Adjusted SOFR plus 0.75%, which is based on a tiered rate structure tied to the Company's credit ratings, adjusted for the Company's sustainability metric grid, and a scheduled maturity date of July 2024. 4 Table of Contents Equity Transactions During the year ended December 31, 2023, the Company did not issue any shares of common stock through its equity distribution agreement entered into in September 2021 (the "2021 ATM Program").
Biggest changeIn September 2024, the scheduled maturity date was extended from January 2027 to January 2029. The Company’s $75.0 million working capital unsecured line of credit had an interest rate of Adjusted SOFR plus 0.765%, which is based on a tiered rate structure tied to the Company’s credit ratings, adjusted for the facility’s sustainability metric adjustment feature.
Additionally, the Company offers retirement support, associate discount programs, a mental health program, which includes counseling and coaching sessions for mental well-being support at no cost, and refresh days for our operations teams, and health benefit credits for participation in wellness programs. Compensation and Benefits The Company offers competitive compensation to secure and retain top talent.
Additionally, the Company offers retirement support, associate discount programs, a mental health program (which includes counseling and coaching sessions for mental well-being support at no cost), refresh days for our operations teams, and health benefit credits for participation in wellness programs. Compensation and Benefits The Company offers competitive compensation to secure and retain top talent.
Employee Engagement In order to engage and promote communication with our associates and solicit meaningful feedback on our efforts to create a positive work environment, the Company issues engagement surveys to all associates to measure 10 key drivers of employee engagement including goal setting, organizational fit, DEI, well-being, freedom of opinion, meaningful work, management support and recognition, among others.
Employee Engagement In order to engage and promote communication with our associates and solicit meaningful feedback on our efforts to create a positive work environment, the Company issues engagement surveys to all associates to measure 10 key drivers of employee engagement including goal setting, organizational fit, well-being, freedom of opinion, meaningful work, management support and recognition, among others.
To identify, retain and reward top performers, the Company engages in meaningful internal succession planning and offers a tenure program, excellence awards, and a spot bonus recognition program to reward associates for good teamwork, good ideas, and good service.
To identify, retain and reward top performers, the Company engages in meaningful internal succession planning and offers a tenure program, excellence awards, and a bonus recognition program to reward associates for good teamwork, good ideas, and good service.
Some competitors are larger and have greater financial resources than the Company. This competition may result in increased costs of apartment communities the Company acquires and/or develops.
Some competitors are larger and have greater resources than the Company. This competition may result in increased costs of apartment communities the Company acquires and/or develops.
There are certain types of losses which may not be covered or could exceed coverage limits. The insurance programs are subject to deductibles and self-insured retentions in varying amounts. The Company utilizes a wholly owned insurance subsidiary, Pacific Western Insurance LLC ("PWI"), to self-insure certain earthquake and property losses.
There are certain types of losses which may not be covered or could exceed coverage limits. The insurance programs are subject to deductibles and self-insured retentions in varying amounts. The Company utilizes a wholly owned insurance subsidiary, Pacific Western Insurance LLC (“PWI”), to self-insure certain earthquake and property losses.
The Company currently intends to continue to invest in apartment communities in such regions. However, the geographical composition of the portfolio is evaluated periodically and may be modified by management. 9 Table of Contents
The Company currently intends to continue to invest in apartment communities in such regions. However, the geographical composition of the portfolio is evaluated periodically and may be modified by management. 8 Table of Contents
For each joint venture the Company holds a non-controlling interest in the venture and, in most cases, may earn customary management fees, development fees, asset property management fees, and a promote interest. The Company has also made, and may continue in the future to make, preferred equity investments in various multifamily development projects.
For each joint venture the Company holds a non-controlling interest in the venture and, in most cases, may earn customary management fees, development fees, asset property management fees, and a promote interest. The Company has also made, and may continue in the future to make, preferred equity investments in various multifamily stabilized communities or development projects.
These plans include benchmarks for future financial performance based on collaborative discussions between on-site managers, the operations leadership team, and senior management. • Development and Redevelopment – The Company focuses on acquiring and developing apartment communities in supply constrained markets, and redeveloping its existing communities to improve the financial and physical aspects of the Company’s communities.
These plans include benchmarks for future financial performance based on collaborative discussions between property operations teams and the senior leadership team. • Development and Redevelopment – The Company focuses on acquiring and developing apartment communities in supply constrained markets, and redeveloping its existing communities to improve the financial and physical aspects of the Company’s communities.
WORKING CAPITAL 8 Table of Contents The Company believes that cash flows generated by its operations, existing cash and cash equivalents, marketable securities balances, availability under existing lines of credit, access to capital markets and the ability to generate cash from the disposition of real estate are sufficient to meet all of its reasonably anticipated cash needs during 2024.
WORKING CAPITAL The Company believes that cash flows generated by its operations, existing cash and cash equivalents, marketable securities balances, availability under existing lines of credit, access to capital markets and the ability to generate cash from the disposition of real estate are sufficient to meet all of its reasonably anticipated cash needs during 2025.
As of December 31, 2023, there were no outstanding forward sale agreements, and $900.0 million of shares remain available to be sold under the 2021 ATM Program. In September 2022, the Company's Board of Directors approved a new stock repurchase plan to allow the Company to acquire shares of common stock up to an aggregate value of $500.0 million.
As of December 31, 2024, there were no outstanding forward sale agreements, and $900.0 million of shares remained available to be sold under the 2024 ATM Program. In September 2022, the Company’s Board of Directors approved a stock repurchase plan to allow the Company to acquire shares of common stock up to an aggregate value of $500.0 million.
Securities and Exchange Commission ("SEC"). The information contained on the Company's website shall not be deemed to be incorporated into this report. BUSINESS STRATEGIES The following is a discussion of the Company’s business strategies in regards to real estate investment and management.
The information contained on the Company’s website shall not be deemed to be incorporated into this report. BUSINESS STRATEGIES The following is a discussion of the Company’s business strategies in regards to real estate investment and management.
The Company encourages internal promotions and hiring for open positions, and the executive team actively mentors the Company’s top talent to ensure strong leadership at the Company for the future. 37% of the Company’s associates have approached or surpassed the Company’s average tenure of 6.35 years, with 21% reaching beyond 10 years of service.
The Company encourages internal promotions and hiring for open positions, and the executive team actively mentors the Company’s top talent to ensure strong leadership at the Company for the future. 38% of the Company’s associates have approached or surpassed the Company’s average tenure of 6.57 years, with 22% reaching beyond 10 years of service.
The Company currently offers training courses to its associates via Workday Learning, and its associates spent 22,373 hours learning in 2023. The Company also provides its associates with an annual $3,000 tuition reimbursement to further support outside professional growth opportunities.
The Company currently offers training courses to its associates via Workday Learning, and its associates spent 13,122 hours learning in 2024. The Company also provides its associates with an annual $3,000 tuition reimbursement to further support outside professional growth opportunities.
Item 1. Business OVERVIEW Essex Property Trust, Inc. ("Essex"), a Maryland corporation, is an S&P 500 company that operates as a self-administered and self-managed real estate investment trust ("REIT"). Essex owns all of its interest in its real estate and other investments directly or indirectly through Essex Portfolio, L.P. (the "Operating Partnership" or "EPLP").
Item 1. Business OVERVIEW Essex Property Trust, Inc. (“Essex”), a Maryland corporation, is an S&P 500 company that operates as a self-administered and self-managed real estate investment trust (“REIT”). Essex owns all of its interest in its real estate and other investments directly or indirectly through Essex Portfolio, L.P. (the “Operating Partnership” or “EPLP”).
The Company's $1.2 billion credit facility had an interest rate of Adjusted Secured Overnight Financing Rate ("Adjusted SOFR") plus 0.75% which is based on a tiered rate structure tied to the Company's credit ratings, adjusted for the Company's sustainability metric grid, and a scheduled maturity date of January 2027 with two six-month extensions, exercisable at the Company's option.
The Company’s $1.2 billion credit facility had an interest rate of Adjusted Secured Overnight Financing Rate (“Adjusted SOFR”) plus 0.765% which is based on a tiered rate structure tied to the Company’s credit ratings, adjusted for the facility’s sustainability metric adjustment feature, and a scheduled maturity date of January 2029 with two six-month extensions, exercisable at the Company’s option.
The Company has safety policies in place that align with its health and safety goals and seeks to proactively prevent workplace accidents and protect the health and safety of the Company's associates through training and analysis of incident reports.
The Company’s safety policies align with its health and wellness goals and seeks to proactively prevent workplace accidents and protect the health, wellness and safety of the Company’s associates through training and analysis of incident reports.
As of December 31, 2023, PWI had cash and marketable securities of approximately $125.5 million, and is consolidated in the Company's financial statements. All of the Company's communities are located in areas that are subject to earthquake activity.
As of December 31, 2024, PWI had cash and marketable securities of $98.9 million, and is consolidated in the Company’s financial statements. All of the Company’s communities are located in areas that are subject to earthquake activity.
The Company’s website address is http://www.essex.com. The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the Proxy Statement for its Annual Meeting of Stockholders are available, free of charge, on its website as soon as practicable after the Company files the reports with the U.S.
The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports, and the Proxy Statement for its Annual Meeting of Stockholders are available, free of charge, on its website as soon as practicable after the Company files the reports with the U.S. Securities and Exchange Commission (“SEC”).
All taxable REIT subsidiaries are consolidated by the Company for financial reporting purposes. The Company is engaged primarily in the ownership, operation, management, acquisition, development and redevelopment of predominantly apartment communities, located along the West Coast of the United States.
A domestic taxable REIT subsidiary is subject to federal income tax as a regular C Corporation. All taxable REIT subsidiaries are consolidated by the Company for financial reporting purposes. The Company is engaged primarily in the ownership, operation, management, acquisition, development and redevelopment of predominantly apartment communities, located along the West Coast of the United States.
Essex is the sole general partner of the Operating Partnership and as of December 31, 2023, had an approximately 96.6% general partner interest in the Operating Partnership. In this report, the terms the "Company," "we," "us," and "our" also refer to Essex Property Trust, Inc., the Operating Partnership and those entities/subsidiaries owned or controlled by Essex and/or the Operating Partnership.
Essex is the sole general partner of the Operating Partnership and as of December 31, 2024, had an approximately 96.5% general partner interest in the Operating Partnership. In this report, the terms “Company,” “we,” “us,” and “our” also refer to Essex Property Trust, Inc., the Operating Partnership and those entities/subsidiaries owned or controlled by Essex and/or the Operating Partnership.
The Company's culture supports its mission and is guided by its core values: to act with integrity, to care about what matters, to do right with urgency, to lead at every level and to seek fairness.
The Company’s culture supports its mission and is guided by its core values: to act with integrity, to care about what matters, to do right with urgency, to lead at every level and to seek fairness. The Company is headquartered in San Mateo, CA, and has regional corporate offices in Woodland Hills, CA; Irvine, CA and Bellevue, WA.
The Company's Volunteer Program is aimed at supporting and encouraging eligible associates to become actively involved in their communities through the Company's support of charity initiatives and offering paid hours for volunteer time. Additionally, the Company’s “Essex Cares” program provides direct aid to the Company’s residents, associates, and local communities, including those who have experienced financial hardships.
The Company’s volunteer program is aimed at supporting and encouraging eligible associates to become actively involved in their communities through the Company’s support of charity initiatives and offering paid hours for volunteer time.
The Company's mission is to create quality communities in premier locations and it is critical to the Company's mission that it attracts, trains and retains a talented and diverse team by providing a better place to work and significant opportunities for professional growth.
The Company earns a preferred rate of return on these investments. HUMAN CAPITAL MANAGEMENT Company Overview and Values The Company’s mission is to create quality communities in premier locations and it is critical to the Company’s mission that it attracts, trains and retains a talented and diverse team by providing a compelling place to work and opportunities for professional growth.
The plan supersedes the Company's previous common stock repurchase plan announced in December 2015. During the year ended December 31, 2023, the Company repurchased and retired 437,026 shares of its common stock totaling $95.7 million, including commissions. As of December 31, 2023, the Company had $302.7 million of purchase authority remaining under its $500.0 million stock repurchase plan.
The plan supersedes the Company’s previous common stock repurchase plan announced in December 2015. During the year ended December 31, 2024, the Company did not repurchase any shares. As of December 31, 2024, the Company had $302.7 million of purchase authority remaining under the stock repurchase plan.
See the discussion under the caption, "Risks Related to Real Estate Investments and Our Operations - The Company’s portfolio may have environmental liabilities" in Item 1A, Risk Factors, for information concerning the potential effect of environmental regulations on its operations, which discussion is incorporated by reference into this Item 1.
See the discussion under the caption, “Risks Related to Our Real Estate Investments and Operations - The Company’s portfolio may have environmental liabilities. ” in Item 1A, Risk Factors, for information concerning the potential effect of environmental regulations on its operations, which discussion is incorporated by reference into this Item 1. 7 Table of Contents OTHER MATTERS Certain Policies of the Company The Company intends to continue to operate in a manner that will not subject it to regulation under the Investment Company Act of 1940.
Workplace Diversity The Company believes it has one of the most diverse workforces among its peers in the real estate industry in part due to its robust and integrated diversity, equity, and inclusion strategy, which allows the Company to broaden its perspective and better serve both the communities it operates in and the associates it employs.
Workplace Culture The Company believes it has a broad perspective that better serves both the communities it operates in and the associates it employs due to fostering one of the most talented and diverse workforces among its peers in the real estate industry.
Engagement surveys are split into three phases: new hire surveys, Company-wide bi-annual surveys, and exit surveys. 85% of Company employees participated in the surveys in 2023. The Company’s overall engagement score on the surveys was 8.0 out of 10.
Engagement surveys are split into three phases: new hire surveys, Company-wide annual surveys, and exit surveys. 90% of Company employees participated in the surveys in 2024. The Company’s overall engagement score on the surveys was 8 out of 10. Goal setting, Performance, and Alignment were recognized as the top three areas of strength for the organization.
Alongside competitive pay, the Company is committed to pay equity and parity, and conducts a pay equity analysis on an annual basis which includes the development and use of a robust, multiple regression analysis model to confirm the Company’s continued achievement of gender pay parity. 7 Table of Contents The Company’s total rewards program further reinforces its commitment to investing in the well-being of its associates while incentivizing its employees to promote fulfillment of the Company’s mission.
Alongside competitive pay, the Company is committed to pay parity, and conducts a pay analysis on an annual basis which includes the development and use of a robust, multiple regression analysis model to confirm the Company’s continued achievement of gender pay parity.
As of December 31, 2023, the Company owned or had ownership interests in 252 operating apartment communities, aggregating 61,997 apartment homes, excluding the Company's ownership in preferred equity co-investments, loan investments, three operating commercial buildings, and a development pipeline comprised of one unconsolidated joint venture project and various predevelopment projects aggregating 264 apartment homes (collectively, the "Portfolio").
As of December 31, 2024, the Company owned or had ownership interests in 255 operating apartment communities, aggregating 62,157 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of various predevelopment projects (collectively, the “Portfolio”). The Company’s website address is https://www.essex.com.
As of December 31, 2023, the Company had various consolidated predevelopment projects. The Company may also acquire land for future development purposes.
The Company may also acquire land for future development purposes. As of December 31, 2024, the Company’s development pipeline was comprised of various consolidated predevelopment projects with total incurred costs of $52.7 million.
(2) The Company recognized a $54.5 million gain on sale. 3 Table of Contents 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.
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’s notable diversity achievements for 2023 include the following data as of December 31, 2023: – The Company’s workforce self-identified as 71% ethnically or culturally diverse. – 53% of the Company’s managerial level employees, including 38% of its senior executives, self-identified as ethnically or culturally diverse. – There were 216 women in positions of manager or higher, equating to 61% of managerial positions in the Company. 5 Table of Contents – The Company’s workforce self-identified as 42% female and 57% male (1% chose not to disclose their gender). – 60% of the Company’s corporate associates self-identified as female.
The Company’s employee statistics for 2024 include the following data as of December 31, 2024: the Company’s workforce was comprised of 6 self-identified ethnically diverse groups, making up 71% of our population, 52% of the Company’s managerial employees, and included 29% of its senior executives; there were 204 women in positions of manager or higher, equating to 59% of managerial positions in the Company; the Company’s workforce self-identified as 41% female and 58% male (1% chose not to disclose their gender); and, 55% of the Company’s corporate associates self-identified as female.
Long Term Debt During 2023, the Company made regularly scheduled principal payments of $2.9 million to its secured mortgage notes payable at an average interest rate of 3.7%. In July 2023, the Company closed $298.0 million in 10-year secured loans priced at 5.08% fixed interest rates encumbering four properties located in Northern California.
Long Term Debt During 2024, the Company made regularly scheduled principal payments of $3.1 million to its secured mortgage notes payable at an average interest rate of 3.5%.
Bank Debt As of December 31, 2023, Moody’s Investor Service and Standard and Poor's ("S&P") credit agencies rated Essex Property Trust, Inc. and Essex Portfolio, L.P. Baa1/Stable and BBB+/Stable, respectively. At December 31, 2023, the Company had two unsecured lines of credit aggregating $1.24 billion.
These additional notes have substantially identical terms of the 2034 Notes issued in March 2024. Bank Debt As of December 31, 2024, Moody’s Investor Service and Standard and Poor’s (“S&P”) credit agencies rated Essex Property Trust, Inc. and Essex Portfolio, L.P. Baa1/Stable and BBB+/Stable, respectively.
The charts below detail the Company’s diverse representation as of December 31, 2023: Total Workforce Executives & Management Ethnicity 6 Table of Contents Gender Training and Development The Company values leadership at every level and enables the same by providing opportunities for all associates to develop personal and professional skills through programs that encourage associate retention and advancement.
The Company also supports employee-led resource groups which are open to all employees and intended to foster a sense of community and inclusion for associates at the Company that are intended to engage, educate, enable, and empower the Company’s employees. 5 Table of Contents Training and Development The Company values leadership at every level and enables the same by providing opportunities for all associates to develop personal and professional skills through programs that encourage associate retention and advancement.
A total of 1,321 employees worked on-site at our operating communities and 429 worked in our corporate offices.
As of December 31, 2024, the Company had 1,715 employees, 99.8% of whom were full-time employees. A total of 1,293 employees worked on-site at our operating communities and 422 worked in our corporate offices.
CURRENT BUSINESS ACTIVITIES Acquisitions of Real Estate Interests The table below summarizes acquisition activity for the year ended December 31, 2023 ($ in millions): Property Name Location Apartment Homes Essex Ownership Percentage Ownership Quarter in 2023 Purchase Price Hacienda at Camarillo Oaks Camarillo, CA 73 100 % EPLP Q2 $ 23.1 Total 2023 73 $ 23.1 Dispositions of Real Estate As part of its strategic plan to own quality real estate in supply-constrained markets, the Company continually evaluates all of its communities and sells those communities that no longer meet the Company's strategic criteria.
Dispositions of Real Estate Interests As part of its strategic plan to own quality real estate in supply-constrained markets, the Company continually evaluates all of its communities and sells those communities that no longer meet the Company’s strategic criteria.
Goal setting, meaningful work, management support, DEI, and social well-being were recognized as the top 5 areas of strength for the organization. INSURANCE The Company purchases general liability and property insurance coverage, including loss of rent, for each of its communities. The Company also purchases limited earthquake, terrorism, environmental and flood insurance.
Additionally, the Company’s “Essex Cares” program provides direct aid to the Company’s residents, associates, and local communities. 6 Table of Contents INSURANCE The Company purchases general liability and property insurance coverage, including loss of rent, for each of its communities. The Company also purchases limited earthquake, terrorism, environmental and flood insurance.
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In general, the Company seeks to offset the dilutive impact on long-term earnings and funds from operations from these dispositions through the positive impact of reinvestment of proceeds.
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CURRENT BUSINESS ACTIVITIES Acquisitions of Real Estate Interests The table below summarizes acquisition activity for the year ended December 31, 2024 ($ in millions): Property Name Location Apartment Homes Essex Ownership Percentage Contract Price at Pro Rata Share BEXAEW Portfolio CA and WA 1,480 100% $ 252.0 (1) Maxwell Sunnyvale CA 75 100% 46.6 (2) ARLO Mountain View CA 164 100% 101.1 Patina at Midtown CA 269 100% 58.4 (3) Century Towers CA 376 100% 86.8 (4) BEX II Portfolio CA 871 100% 168.4 (5) Beaumont WA 344 100% 136.1 Total acquisitions 3,579 $ 849.4 (1) In March 2024, the Company acquired its joint venture partner's 49.9% interest in the BEXAEW LLC’s (“BEXAEW”) portfolio comprised of four communities for a total purchase price of $505.0 million on a gross basis.
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The table below summarizes disposition activity for the year ended December 31, 2023 ($ in millions): Property Name (1) Location Apartment Homes Ownership Quarter in 2023 Sales Price CBC and The Sweeps Goleta, CA 239 EPLP Q1 $ 91.7 (2) Total 2023 239 $ 91.7 (1) In March 2023, the Company sold a land parcel located in Moorpark, CA, that had been held for future development, for $8.7 million and recognized a gain on sale of $4.7 million.
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(2) In April 2024, the Company accepted the third-party sponsor’s common equity interest affiliated with its $14.7 million preferred equity investment. The community was consolidated on the Company’s financial statements at a $46.6 million valuation.
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As of December 31, 2023, the Company's development pipeline was comprised of one unconsolidated joint venture project under development aggregating 264 apartment homes and various predevelopment projects, with total incurred costs of $114.0 million.
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(3) In July 2024, the Company acquired its joint venture partner's 49.9% common equity interest in Patina at Midtown for a total purchase price of $117.0 million on a gross basis.
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The estimated remaining project costs are approximately $12.0 million, of which $6.5 million represents the Company's share of estimated remaining costs, for total estimated project costs of $126.0 million. 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.
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(4) In September 2024, the Company acquired its joint venture partner's 50% common equity interest in Century Towers for a total purchase price of $173.5 million on a gross basis.
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The following table sets forth information regarding the Company’s development pipeline ($ in millions): As of 12/31/2023 Essex Estimated Incurred Estimated Development Pipeline Location Ownership% Apartment Homes Project Cost (1) Project Cost (1) Development Projects - Joint Venture LIVIA at Scripps Ranch (2) San Diego, CA 51% 264 $ 90 $ 102 Total Development Projects - Joint Venture 264 90 102 Predevelopment Projects - Consolidated Other Projects Various 100% — 24 24 Total - Consolidated Predevelopment Projects — 24 24 Grand Total - Development and Predevelopment Pipeline 264 $ 114 $ 126 (1) Includes costs related to the entire project, including both the Company's and joint venture partners' costs.
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(5) In October 2024, the Company acquired its joint venture partner’s 49.9% interest in the BEX II, LLC (“BEX II”) portfolio, comprised of four communities for a total contract price of $337.5 million on a gross basis.
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Includes incurred costs and estimated costs to complete these development projects. For predevelopment projects, only incurred costs are included in estimated costs. (2) Incurred project cost and estimated project cost are net of a projected value for low income housing tax credit proceeds and the value of the tax-exempt bond structure.
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In general, the Company seeks to offset the dilutive impact on long-term earnings and funds from operations from these dispositions through the positive impact of reinvestment of proceeds. 3 Table of Contents The table below summarizes disposition activity for the year ended December 31, 2024 ($ in millions): Property Name Location Apartment Homes Sale Price at Pro Rata Share Hillsdale Garden CA 697 $ 205.7 (1) Total dispositions 697 $ 205.7 (1) In October 2024, the Company sold its 81.5% interest in a consolidated co-investment, Hillsdale Garden, a 697-unit apartment home community, for a contract price of $252.4 million on a gross basis ($205.7 million at pro rata).
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The Company earns a preferred rate of return on these investments. HUMAN CAPITAL MANAGEMENT Company Overview and Values The Company is headquartered in San Mateo, CA, and has regional corporate offices in Woodland Hills, CA; Irvine, CA and Bellevue, WA. As of December 31, 2023, the Company had 1,750 employees, 99.8% of whom were full-time employees.
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In March 2024, the Operating Partnership issued $350.0 million of senior unsecured notes due on April 1, 2034 with a coupon rate of 5.500% per annum (the "2034 Notes"), which are payable on April 1 and October 1 of each year, beginning on October 1, 2024.
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The Company has a Diversity, Equity, and Inclusion ("DEI") Committee which directs the overarching goal setting, implementation, and follow-up for DEI initiatives and whose chairperson reports directly to the CEO on the Committee’s activities.
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The 2034 Notes were offered to investors at a price of 99.752% of the principal amount. The 2034 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are unconditionally guaranteed by Essex.
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All Company associates are offered training aimed at preventing workplace harassment, including harassment based on age, gender or ethnicity, training covering the foundations of DEI and awareness of unconscious bias in the workplace, and all managers are required to complete anti-harassment training.
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The Company used the net proceeds of this offering to repay debt maturities, including to fund a portion of the repayment of its outstanding 3.875% senior unsecured notes due May 2024 and for other general corporate and working capital purposes.
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The Company supports the employee-led affinity groups, including Women at Essex and the LGBTQ+ focused Rainbow Alliance, which foster a sense of community and inclusion for a diverse mix of associates at the Company through discussions and activities that are intended to engage, educate, enable, and empower the Company's employees.
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In August 2024, the Operating Partnership issued an additional $200.0 million of the 2034 Notes at a price of 102.871% of the principal amount, plus accrued interest from and including March 2024, up to, but excluding, the settlement date of August 21, 2024, with an effective yield of 5.110% per annum.
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The DEI Committee’s goals for 2023 included increasing the Company’s training offerings, integrating DEI into talent recruitment processes, strengthening employee resource and affinity groups, making contributions to local DEI organizations, and improving recognition.
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As of December 31, 2024, the Company had two unsecured lines of credit aggregating $1.28 billion.
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In 2023, the Company promoted 13% of its employees to higher positions in the Company. Employee Health, Safety and Wellness Providing a safe working environment and promoting employee safety is imperative to the Company, and the Company continued to prioritize its associates’ health and safety throughout 2023.
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Prior to its maturity in July 2024 the line of credit facility was amended such that the line’s capacity was increased from $35.0 million to $75.0 million and the scheduled maturity date was extended to July 2026. 4 Table of Contents Equity Transactions In August 2024, the Company entered into a new 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”).
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The Company engages in an annual compensation study to align compensation with market standards and to ensure the Company is appropriately compensating its top performers.
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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.
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OTHER MATTERS Certain Policies of the Company The Company intends to continue to operate in a manner that will not subject it to regulation under the Investment Company Act of 1940.
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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.
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The 2024 ATM Program replaced the prior equity distribution agreement entered into in September 2021 (the “2021 ATM Program”), which was terminated upon the establishment of the 2024 ATM Program. During the year ended December 31, 2024, the Company did not issue any shares of common stock under the 2024 ATM Program or the 2021 ATM Program.
Added
Employee Safety, Health, and Wellness Safety is a top priority. The Company deeply cares about the wellbeing of its associates and residents. The Essex Safety Committee, comprised of key stakeholders across departments, meets quarterly and reviews the overall safety of the company in both our corporate offices and our communities.
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To maximize real-time responses, the Company has also established a working safety subcommittee that meets bi-weekly. The Company has implemented enhanced safety programs, which include a new Workplace Violence Prevention Program enacted companywide in 2024, regular safety inspections, emergency preparedness processes, hazard identification and control protocols, and related associate training.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

137 edited+26 added−12 removed109 unchanged
Biggest changeMoreover, if there is a compliance failure, or if a cybersecurity incident affects the Company’s or vendors’ systems, whether through a breach of the Company’s IT Systems or a breach of the IT Systems of third parties, or results in the unauthorized release of Confidential Information, the Company’s reputation and brand could be materially damaged, which could increase our costs in attracting and retaining tenants, and other serious consequences may result. 16 Table of Contents Potential other consequences include potential exposure to litigation, including government enforcement actions, private litigation (including class actions), fines or criminal penalties; and potential exposure to a risk of loss including loss related to the fact that agreements with such vendors, or such vendors’ financial condition, may not allow the Company to recover all costs related to a cybersecurity incident for which they alone or they and the Company should be jointly responsible for, which could result in a material adverse effect on the Company’s business, results of operations and financial condition.
Biggest changePotential other consequences include potential exposure to litigation, including government enforcement actions, private litigation (including class actions), fines or criminal penalties, negative reputational impacts that cause us to lose existing or future customers, and/or significant incident response, system restoration or remediation and future compliance costs, and potential exposure to a risk of loss including loss related to the fact that agreements with such vendors, or such vendors’ financial condition, may not allow the Company to recover all costs related to a cybersecurity incident for which they alone or they and the Company should be jointly responsible for, which could result in a material adverse effect on the Company’s business, financial condition and results of operations.
Finally, nonperformance by the other party to the hedging arrangement may subject the Company to increased credit risks. A downgrade in the Company's investment grade credit rating could materially and adversely affect its business and financial condition.
Finally, nonperformance by the other party to the hedging arrangement may subject the Company to increased credit risks. A downgrade in the Company’s investment grade credit rating could materially adversely affect its business and financial condition.
Competitive housing in a particular area and fluctuations in cost of owner-occupied single- and multifamily homes caused by a decrease in housing prices, mortgage interest rates and/or government programs to promote home ownership or create additional rental and/or other types of housing, or an increase in desire for more space due to work-from-home needs or increased time spent at home, could adversely affect the Company’s ability to retain its tenants, lease apartment homes and increase or maintain rents.
Competitive housing in a particular area and fluctuations in cost of owner-occupied single- and multifamily homes caused by a decrease in housing prices, mortgage interest rates and/or government programs to promote home ownership or create additional rental and/or other types of housing, or an increase in desire for more space due to work-from-home needs or increased time spent at home, could materially adversely affect the Company’s ability to retain its tenants, lease apartment homes and increase or maintain rents.
While the Company is the sole general partner of the Operating Partnership, and generally has full and exclusive responsibility and discretion in the management and control of the Operating Partnership, certain provisions of the Operating Partnership agreement may limit the Company’s power to act with respect to the Operating Partnership, which could delay, defer or prevent a transaction or a change in control that may otherwise be in the best interests of its stockholders or that could otherwise adversely affect their interests.
While the Company is the sole general partner of the Operating Partnership, and generally has full and exclusive responsibility and discretion in the management and control of the Operating Partnership, certain provisions of the Operating Partnership agreement may limit the Company’s power to act with respect to the Operating Partnership, which could delay, defer or prevent a transaction or a change in control that may otherwise be in the best interests of its stockholders or that could otherwise materially adversely affect their interests.
Our properties or markets may in the future be the target of actual or threatened terrorist attacks, shootings, or other acts of violence, which could directly or indirectly damage our communities both physically and financially, cause uninsured losses, adversely affect the value of and our ability to operate our communities, subject us to significant liability claims, or otherwise impair our ability to achieve our expected results.
Our properties or markets may in the future be the target of actual or threatened terrorist attacks, shootings, or other acts of violence, which could directly or indirectly damage our communities both physically and financially, cause uninsured losses, materially adversely affect the value of and our ability to operate our communities, subject us to significant liability claims, or otherwise impair our ability to achieve our expected results.
In these arrangements, we cannot guarantee that the terms of the shared facilities agreements will be enforced or interpreted in favor of the Company, and the Company’s inability to control expenditures, make necessary repairs and/or control certain decisions may adversely affect the Company’s financial condition and results of operations, and/or the property’s safety, compliance with applicable laws, marketability or market value.
In these arrangements, we cannot guarantee that the terms of the shared facilities agreements will be enforced or interpreted in favor of the Company, and the Company’s inability to control expenditures, make necessary repairs and/or control certain decisions may materially adversely affect the Company’s financial condition and results of operations, and/or the property’s safety, compliance with applicable laws, marketability or market value.
The use of social media, such as unauthorized live-streaming at our properties, could cause us to suffer brand damage or information leakage. Negative posts or comments about us on any social networking website could damage our reputation. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels.
The use of social media, such as unauthorized live-streaming at our properties, could cause us to suffer brand damage or information leakage. Negative posts or false comments about us on any social networking website could damage our reputation. In addition, employees or others might disclose non-public sensitive information relating to our business through external media channels.
Additionally, the value of these investments could decline for a variety of reasons. These and other factors could adversely affect our financial condition and results of operations. Real estate investments are relatively illiquid and, therefore, the Company's ability to vary its portfolio promptly in response to changes in economic or other conditions may be limited.
Additionally, the value of these investments could decline for a variety of reasons. These and other factors could materially adversely affect our financial condition and results of operations. Real estate investments are relatively illiquid and, therefore, the Company’s ability to vary its portfolio promptly in response to changes in economic or other conditions may be limited.
If the Company is unable to promptly renew or re-let existing leases, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then the Company’s results of operations and financial condition will be adversely affected. Economic environments can negatively impact the Company’s liquidity and operating results.
If the Company is unable to promptly renew or re-let existing leases, or if the rental rates upon renewal or reletting are significantly lower than expected rates, then the Company’s results of operations and financial condition will be adversely affected. Economic environments can negatively impact the Company’s liquidity and results of operations.
This competition may result in increased costs to acquire or develop apartment communities or impact the Company’s ability to identify suitable acquisition or development transactions. Investments in mortgages, mezzanine loans, subordinated debt, other real estate, and other marketable securities could adversely affect the Company’s cash flow from operations.
This competition may result in increased costs to acquire or develop apartment communities or impact the Company’s ability to identify suitable acquisition or development transactions. Investments in mortgages, mezzanine loans, subordinated debt, other real estate, and other marketable securities could materially adversely affect the Company’s cash flow from operations.
In addition, if our ability to obtain financing is adversely affected, the Company’s stock price may be adversely affected, and we may be unable to satisfy scheduled maturities on existing financing through other sources of our liquidity, which, in the case of secured financings, could result in foreclosure. Debt financing has inherent risks.
In addition, if our ability to obtain financing is materially adversely affected, the Company’s stock price may be materially adversely affected, and we may be unable to satisfy scheduled maturities on existing financing through other sources of our liquidity, which, in the case of secured financings, could result in foreclosure. Debt financing has inherent risks.
In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with apartment communities may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may adversely affect our business, financial condition and results of operations.
In addition, the total amount of costs and expenses that may be incurred with respect to liabilities associated with apartment communities may exceed our expectations, and we may experience other unanticipated adverse effects, all of which may materially adversely affect our business, financial condition and results of operations.
Increases in real estate taxes and income, service and transfer taxes cannot always be passed through to tenants in the form of higher rents, and may adversely affect the Company's cash available for distribution and its ability to make distributions and pay amounts due on its debts.
Increases in real estate taxes and income, service and transfer taxes cannot always be passed through to tenants in the form of higher rents, and may materially adversely affect the Company’s cash available for distribution and its ability to make distributions and pay amounts due on its debts.
ITEM 1A: RISK FACTORS For purposes of this section, the term "stockholders" means the holders of shares of Essex Property Trust, Inc.’s common stock. Set forth below are the risks that we believe are material to Essex Property Trust, Inc.’s stockholders and Essex Portfolio, L.P.’s unitholders.
ITEM 1A: RISK FACTORS For purposes of this section, the term “stockholders” means the holders of shares of Essex Property Trust, Inc.’s common stock. Set forth below are the risks that we believe are material to Essex Property Trust, Inc.’s stockholders and Essex Portfolio, L.P.’s unitholders.
Further, the presence of such substances, or the failure to properly remediate any such impacts, may adversely affect our ability to borrow against, develop, sell or rent the affected property, including due to any liens imposed on the impacted property by any government agencies for penalties or damages.
Further, the presence of such substances, or the failure to properly remediate any such impacts, may materially adversely affect our ability to borrow against, develop, sell or rent the affected property, including due to any liens imposed on the impacted property by any government agencies for penalties or damages.
We may pursue acquisitions of other REITs and real estate companies, which may not yield anticipated results and could adversely affect our results of operations. We may make acquisitions of and/or investments in other REITs and real estate companies or enter into strategic alliances or joint ventures, which involves risks and uncertainties and may not be successful.
We may pursue acquisitions of other REITs and real estate companies, which may not yield anticipated results and could materially adversely affect our results of operations. We may make acquisitions of and/or investments in other REITs and real estate companies or enter into strategic alliances or joint ventures, which involves risks and uncertainties and may not be successful.
In the event that the volatility of the financial markets adversely affects these financial institutions or counterparties, we, or other parties to the transactions with us, may be unable to complete transactions as intended, which could adversely affect our business and results of operations.
In the event that the volatility of the financial markets adversely affects these financial institutions or counterparties, we, or other parties to the transactions with us, may be unable to complete transactions as intended, which could materially adversely affect our business and results of operations.
Any such failures could impair our ability to continue providing quality housing and consistent operation of our communities, which could adversely affect our financial condition and results of operations. The Company’s real estate assets may be subject to impairment charges.
Any such failures could impair our ability to continue providing quality housing and consistent operation of our communities, which could materially adversely affect our financial condition and results of operations. The Company’s real estate assets may be subject to impairment charges.
If the communities and other real estate investments, including development and redevelopment properties, do not generate sufficient income to meet operating and financing expenses, cash flow and the ability to make distributions will be adversely affected.
If the communities and other real estate investments, including development and redevelopment properties, do not generate sufficient income to meet operating and financing expenses, cash flow and the ability to make distributions will be materially adversely affected.
Under the Maryland Business Combination Act (the “MBCA”), certain "business combinations", including a merger, between a Maryland corporation and certain “interested stockholders” or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder and must be approved pursuant to certain supermajority voting requirements, subject to certain exemptions which include business combinations that are exempted by the Board prior to the time that the interested stockholder becomes an interested stockholder.
Under the Maryland Business Combination Act (the “MBCA”), certain “business combinations”, including a merger, between a Maryland corporation and certain “interested stockholders” or an affiliate of an interested stockholder are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder and must be approved pursuant to certain supermajority voting requirements, subject to certain exemptions which include business combinations that are exempted by the Board prior to the time that the interested stockholder becomes an interested stockholder.
The CCPA requires the Company to, among other things, provide certain disclosures to California residents, promptly respond to certain consumer requests related to their data, and contractually impose certain obligations on vendors.
The CCPA requires the Company to, among other things, provide certain disclosures to California residents, promptly respond to certain requests related to their data, and contractually impose certain obligations on vendors.
The Company’s future issuances of common stock, preferred stock or convertible debt securities could be dilutive to current stockholders and adversely affect the market price of the Company’s common stock.
The Company’s future issuances of common stock, preferred stock or convertible debt securities could be dilutive to current stockholders and materially adversely affect the market price of the Company’s common stock.
Risks Related to Our Real Estate Investments and Operations General real estate investment risks may adversely affect property income and values, and therefore our stock price may be adversely affected.
Risks Related to Our Real Estate Investments and Operations General real estate investment risks may materially adversely affect property income and values, and therefore our stock price may be materially adversely affected.
The Company utilizes a wholly owned insurance subsidiary, Pacific Western Insurance LLC ("PWI"), to self-insure certain earthquake and property losses for some of the communities in its portfolio. A decline in the value of the securities held by PWI may adversely affect PWI’s ability to cover all or any portion of the amount of any insured losses.
The Company utilizes a wholly owned insurance subsidiary, Pacific Western Insurance LLC (“PWI”), to self-insure certain earthquake and property losses for some of the communities in its portfolio. A decline in the value of the securities held by PWI may materially adversely affect PWI’s ability to cover all or any portion of the amount of any insured losses.
The market price per share of the Company’s common stock may fluctuate significantly in response to many factors, including the factors discussed in this Item 1A, and actual or anticipated variations in the Company’s quarterly operating results, earnings estimates, or dividends, the resale of substantial amounts of the Company's stock, or the anticipation of such resale, general stock and bond market conditions, actual or anticipated actions taken by the Federal Reserve Bank, the general reputation of REITs and the Company, shifts in our investor base, the inability of the United States Congress to pass bills that continue to timely fund the federal government and its obligations, including due to the current political climate or partisanship, natural disasters, armed conflict or geopolitical impacts, or an active shooter incident.
The market price per share of the Company’s common stock may fluctuate significantly in response to many factors, including the factors discussed in this Item 1A, and actual or anticipated variations in the Company’s quarterly results of operations, earnings estimates, or dividends, the resale of substantial amounts of the Company’s stock, or the anticipation of such resale, general stock and bond market conditions, actual or anticipated actions taken by the Federal Reserve Bank, the general reputation of REITs and the Company, shifts in our investor base, the inability of the United States Congress to pass bills that continue to timely fund the federal government and its obligations, including due to the current political climate or partisanship, natural disasters, armed conflict or geopolitical impacts, or an active aggressor incident.
In some cases, we may spend more than budgeted amounts to make necessary improvements or maintenance, which could adversely impact the Company’s financial condition and results of operations. Competition in the apartment community market and other housing alternatives may adversely affect operations and the rental demand for the Company’s communities.
In some cases, we may spend more than budgeted amounts to make necessary improvements or maintenance, which could materially adversely affect the Company’s financial condition and results of operations. Competition in the apartment community market and other housing alternatives may materially adversely affect operations and the rental demand for the Company’s communities.
There is a risk that we may not be able to refinance existing indebtedness or that a refinancing will not be done on as favorable terms, which in either case could have an adverse effect on our financial condition, results of operations and cash flows.
There is a risk that we may not be able to refinance existing indebtedness or that a refinancing will not be done on as favorable terms, which in either case could have a material adverse effect on our financial condition, results of operations and cash flows.
If the demand for the Company’s communities is reduced, rental rates may drop, which may have a material adverse effect on the Company’s financial condition and results of operations. The Company also faces competition from other businesses and other entities in the acquisition, development and operation of apartment communities.
If the demand for the Company’s communities is reduced, rental or occupancy rates may drop, which may have a material adverse effect on the Company’s financial condition and results of operations. The Company also faces competition from other businesses and other entities in the acquisition, development and operation of apartment communities.
Adverse changes in laws may adversely affect the Company's liabilities and/or operating costs relating to its properties and its operations.
Adverse changes in laws may materially adversely affect the Company’s liabilities and/or operating costs relating to its properties and its operations.
Any such recession or economic downturn may also affect consumer confidence and spending and negatively impact the volume and pricing of real estate transactions, which could negatively affect the Company’s liquidity and its ability to vary its portfolio promptly in response to changes to the economy.
Any such recession or economic downturn may also affect consumer confidence and spending and negatively impact the volume and pricing of real estate transactions, which could materially adversely affect the Company’s liquidity and its ability to vary its portfolio promptly in response to changes to the economy.
Our business, operating results, cash flows and financial condition are subject to various risks and uncertainties, including, without limitation, those set forth below, any one of which could cause our actual operating results to vary materially from recent results or from our anticipated future results.
Our business, results of operations, cash flows and financial condition are subject to various risks and uncertainties, including, without limitation, those set forth below, any one of which could cause our actual results of operations to vary materially from recent results or from our anticipated future results.
If any of the above were to occur, it could adversely affect the Company’s cash flows from operations.
If any of the above were to occur, it could materially adversely affect the Company’s cash flows from operations.
Additionally, the preferred return negotiated on these co-investments may be lower than the Company's cost of funds. The Company may also incur losses if any guarantees or indemnifications were made by the Company. The Company also owns properties indirectly under "DownREIT" structures.
Additionally, the preferred return negotiated on these co-investments may be lower than the Company’s cost of funds. The Company may also incur losses if any guarantees or indemnifications were made by the Company. The Company also owns properties indirectly under “DownREIT” structures.
The Maryland General Corporation Law (the “MGCL”) restricts the voting rights of holders of shares deemed to be "control shares." Although the Bylaws exempt the Company from the control share provisions of the MGCL, the Board may amend or eliminate the provisions of the Bylaws at any time in the future.
The Maryland General Corporation Law (the “MGCL”) restricts the voting rights of holders of shares deemed to be “control shares.” Although the Bylaws exempt the Company from the control share provisions of the MGCL, the Board may amend or eliminate the provisions of the Bylaws at any time in the future.
However, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, pollution, environmental matters or extreme weather conditions such as hurricanes, fires and floods that are uninsurable or not economically insurable.
However, there are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, wildfires, pollution, environmental matters or extreme weather conditions such as hurricanes and floods that are uninsurable or not economically insurable.
The Company’s ownership of shares in such subsidiary REIT would cease to be a qualifying asset for purposes of the asset tests applicable to REITs and it is possible that the Company could also fail to qualify as a REIT.
The Company’s ownership of shares in such subsidiary REIT would cease to be a qualifying asset for purposes of the asset tests applicable to REITs and it is possible that this could cause the Company to also fail to qualify as a REIT.
Should the impact of climate change be material in nature or occur for lengthy periods of time, even if not directly impacting the Company’s current markets, the types and pricing of insurance the Company is able to procure may be negatively impacted and our financial condition or results of operations may be adversely affected.
Should the impact of climate change be material in nature or occur for lengthy periods of time, even if not directly impacting the Company’s current markets, the types and pricing of insurance the Company is able to procure may be materially adversely affected and our financial condition or results of operations may be materially adversely affected.
Although the Company plans to hold the contributed assets or, if such assets consist of real property, defer recognition of gain on sale of such assets pursuant to the like-kind exchange rules under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"), the Company may not be able to do so and if such tax liabilities were incurred they could have a material impact on its financial position.
Although the Company plans to hold the contributed assets or, if such assets consist of real property, defer recognition of gain on sale of such assets pursuant to the like-kind exchange rules under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), the Company may not be able to do so and if such tax liabilities were incurred they could have a material adverse effect on its financial position.
Our business requires us and some of our vendors to use and store personal and other sensitive information of our tenants and employees. The collection, use and other processing of personal information is governed by federal and state laws and regulations.
Our business requires us and some of our vendors to use and store personal and other sensitive information of our tenants and employees, and our collection, use and other processing of personal information is governed by certain federal and state laws and regulations.
There is substantial competition for qualified personnel in the real estate industry and the departure of any of the Company’s key personnel could have an adverse effect on the Company. While the Company engages in regular succession planning for key positions, the Company’s plans may be impacted and therefore adjusted due to the departure of any key personnel.
There is substantial competition for qualified personnel in the real estate industry and the departure of any of the Company’s key personnel could have a material adverse effect on the Company. While the Company engages in regular succession planning for key positions, the Company’s plans may be impacted and therefore adjusted due to the departure of any key personnel.
The Company continually evaluates the recoverability of the carrying value of its real estate assets, including those assets it invests in indirectly or places subordinated loans on through its preferred equity and mezzanine lending program, under U.S. generally accepted accounting principles ("U.S. GAAP").
The Company continually evaluates the recoverability of the carrying value of its real estate assets, including those assets it invests in indirectly or places subordinated loans on through its preferred equity and mezzanine lending program, under U.S. generally accepted accounting principles (“U.S. GAAP”).
Such laws and regulations limit our ability to charge market rents, increase rents, evict tenants or recover increases in our operating expenses and could reduce the value of our communities or make it more difficult for us to dispose of properties in certain circumstances.
Such laws and regulations limit our ability to charge market rents, increase rents, evict tenants or recover increases in our 9 Table of Contents operating expenses and could reduce the value of our communities or make it more difficult for us to dispose of properties in certain circumstances.
Risks Related to Our Indebtedness and Financings Capital and credit market conditions and volatility, including significant fluctuations in the price of the Company’s stock, may affect the Company’s access to sources of capital and/or the cost of capital, which could negatively affect the Company’s business, stock price, results of operations, cash flows and financial condition.
Risks Related to Our Indebtedness and Financings Capital and credit market conditions and volatility, including significant fluctuations in the price of the Company’s stock, may affect the Company’s access to sources of capital and/or the cost of capital, which could materially adversely affect the Company’s business, stock price, results of operations, cash flows and financial condition.
Various proxy advisory firms and other corporate governance consultants advising institutional investors provide scores of our governance measures, nominees for election as directors, executive compensation practices, ESG matters, and other matters that may be submitted to stockholders for consideration at our annual meetings.
Various proxy advisory firms and other corporate governance consultants advising institutional investors provide scores of our governance measures, nominees for election as directors, executive compensation practices, corporate responsibility and sustainability, and other matters that may be submitted to stockholders for consideration at our annual meetings.
If the Company does not reserve the required number of apartment homes for tenants satisfying these income requirements, the tax-exempt status of the bonds may be terminated, the obligations under the bond documents may be accelerated and the Company may be subject to additional contractual liability.
If the Company does not reserve the required number of apartment homes for tenants satisfying these income requirements, the tax-exempt status of the bonds may be terminated, the obligations under the bond documents may be 17 Table of Contents accelerated and the Company may be subject to additional contractual liability.
Although the Company may carry insurance for potential losses associated with its communities, employees, tenants, and compliance with applicable laws, it may still incur material losses due to uninsured risks, deductibles, copayments or losses in excess of applicable insurance coverage.
Although the Company may carry insurance for potential losses associated with its communities, employees, tenants, and compliance with applicable laws, it may still incur material losses due to uninsured risks, deductibles, copayments or losses in 13 Table of Contents excess of applicable insurance coverage.
In order to finance the Company’s acquisition and development activities, the Company could issue and sell common stock, preferred stock and convertible debt securities, including pursuant to its equity distribution program, issue partnership units in the Operating Partnership, or enter into joint ventures which may dilute stockholder ownership in the Company and could adversely affect the market price of the common stock.
In order to finance the 19 Table of Contents Company’s acquisition and development activities, the Company could issue and sell common stock, preferred stock and convertible debt securities, including pursuant to its equity distribution program, issue partnership units in the Operating Partnership, or enter into joint ventures which may dilute stockholder ownership in the Company and could materially adversely affect the market price of the common stock.
Additionally, we have recently adjusted our operating model to reduce the number of staff on-site at individual properties and moved towards a hub model where specialized staff can service multiple properties from a central location and rely on certain technologies, such as virtual apartment tours, to further reduce the need for on-site staffing.
Additionally, we have adjusted our operating model to reduce the number of staff on-site at individual properties and instituted a hub model where specialized staff can service multiple properties from a central location and rely on certain technologies, such as virtual apartment tours, to further reduce the need for on-site staffing.
These laws and regulations may include zoning laws, building codes, rent control or stabilization laws, emergency orders, laws benefiting disabled persons, federal, state and local tax laws, landlord tenant laws, environmental laws, employment laws, immigration laws and other laws regulating housing or that are generally applicable to the Company's business and operations.
These laws and regulations may include zoning laws, building codes, rent control or stabilization laws, emergency orders, laws benefiting disabled persons, federal, state and local tax laws, landlord tenant laws, environmental laws, employment laws, immigration laws and other laws regulating housing, revenue management software and practices, or laws that are generally applicable to the Company’s business and operations.
The Company pursues development and redevelopment projects, including densification projects and those activities generally entail certain risks, including: • funds may be expended and management's time devoted to projects that may not be completed on time or at all; • construction costs may exceed original estimates possibly making some projects economically unfeasible; • projects may be delayed or abandoned due to, without limitation, weather conditions, labor or material shortages, municipal office closures and staff shortages, government recommended or mandated work stoppages, or environmental remediation; • occupancy rates and rents at a completed project may be less than anticipated; • expenses may be higher than anticipated, including, without limitation, due to inflationary pressures, supply chain issues, costs of litigation over construction contracts, environmental remediation or increased costs for labor, materials and leasing; • we are reliant on third party contractors’ and vendors’ ability to deliver services and products as planned, and if the timeframe, quality or scope of such services and products are different than we expected, our projects may be subject to increased costs and our future income may be lower than expected; • we may be unable to obtain, or experience a delay in obtaining, necessary governmental approvals or third party permits and authorizations, which could result in increased costs or delay or abandonment of opportunities; • we may be unable to obtain financing with favorable terms, or at all, for the proposed development or redevelopment of a community, which may cause us to delay or abandon an opportunity; and • we may incur liabilities to third parties during the development process.
The Company pursues development and redevelopment projects, including densification projects, and those activities generally entail certain risks, including: • funds may be expended and management’s time devoted to projects that may not be completed on time or at all; • construction costs may exceed original estimates possibly making some projects economically unfeasible; • projects may be delayed or abandoned due to, without limitation, weather conditions, labor or material shortages, municipal office closures and staff shortages, government recommended or mandated work stoppages, protestors obstructing access or environmental remediation; • occupancy rates and rents at a completed project may be less than anticipated; • expenses may be higher than anticipated, including, without limitation, due to inflationary pressures (including potentially exacerbated by the imposition of tariffs), supply chain issues, costs of litigation over construction contracts, environmental remediation or increased costs for labor (including potentially related to any shrinkage in the labor force or labor shortages related to changing immigration policies), materials and leasing; • we are reliant on third party contractors’ and vendors’ ability to deliver services and products as planned, and if the timeframe, quality or scope of such services and products are different than we expected, our projects may be subject to increased costs and our future income may be lower than expected; • we may be unable to obtain, or experience a delay in obtaining, necessary governmental approvals or third party permits and authorizations, which could result in increased costs or delay or abandonment of opportunities; • we may be unable to obtain financing with favorable terms, or at all, for the proposed development or redevelopment of a community, which may cause us to delay or abandon an opportunity; and • we may incur liabilities to third parties during the development process.
Any of these risks might result in losses that could have an adverse effect on the Company and its ability to make distributions and pay amounts due on its debt.
Any of these risks might result in losses that could have a material adverse effect on the Company and its ability to make distributions and pay amounts due on its debt.
Because the property taxing authorities may not determine whether there has been a "change in ownership" or the actual reassessed value of a property for a period of time after a transaction has occurred, we may not know the impact of a potential reassessment for a considerable amount of time following a particular transaction.
Because the property taxing authorities may not determine whether there has been a “change in ownership” or the actual reassessed value of a property for a period of time after a transaction has occurred, we may not know the impact of a potential reassessment for a considerable amount of time following a particular transaction.
If the Company fails to qualify as a REIT in any taxable year, the Company would be subject to U.S. federal corporate income tax on the Company’s taxable income, and the Company would not be allowed to deduct dividends paid to its stockholders in computing its taxable income.
If the Company fails to qualify as a REIT in any taxable year, the Company would be subject to U.S. federal corporate income tax on the Company’s taxable income, and the Company would not be allowed to deduct dividends 20 Table of Contents paid to its stockholders in computing its taxable income.
A California law commonly referred to as Proposition 13 (“Prop 13”) generally limits annual real estate tax increases on California properties to 2% of assessed value. However, under Prop 13, property tax reassessment generally occurs as a result of a "change in ownership" of a property.
A California law commonly referred to as Proposition 13 (“Prop 13”) generally limits annual real estate tax increases on California properties to 2% of assessed value. However, under Prop 13, property tax reassessment generally occurs as a result of a “change in ownership” of a property.
We may from time to time be subject to litigation, which could have a material adverse effect on our business, financial condition and results of operations.
We may from time to time be subject to litigation or regulatory investigation, which could have a material adverse effect on our business, financial condition and results of operations.
The tax imposed on REITs engaging in "prohibited transactions" may limit the Company’s ability to engage in transactions which would be treated as sales for federal income tax purposes.
The tax imposed on REITs engaging in “prohibited transactions” may limit the Company’s ability to engage in transactions which would be treated as sales for federal income tax purposes.
Further, our failure, or our software vendors’ failure, to adopt, anticipate or keep pace with the new technologies, such as generative AI solutions, may harm our ability to compete with our peers, decrease the value of our assets and/or impact our future growth.
Further, our failure, or our software vendors’ failure, to adopt, anticipate or keep pace with the new technologies, such as artificial intelligence solutions, may harm our ability to compete with our peers, decrease the value of our assets and/or impact our future growth.
In addition, pursuant to the MGCL, all matters other than the election or removal of a director must be declared advisable by the Board prior to a stockholder vote. Loss of the Company's REIT status would have significant adverse consequences to the Company and the value of the Company's common stock .
In addition, pursuant to the MGCL, all matters other than the election or removal of a director must be declared advisable by the Board prior to a stockholder vote. Loss of the Company’s REIT status would have a material adverse effect on the Company and the value of the Company’s common stock .
Legislative or other actions affecting REITs could have a negative effect on the Company or its stockholders. Changes to federal income tax laws, with or without retroactive legislation, could adversely affect the Company or its stockholders.
Legislative or other actions affecting REITs could have a material adverse effect on the Company or its stockholders. Changes to federal income tax laws, with or without retroactive legislation, could materially adversely affect the Company or its stockholders.
New legislation, Treasury Regulations, administrative interpretations or court decisions could significantly and negatively affect the Company’s ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in the Company.
New legislation, Treasury Regulations, administrative interpretations or court decisions could materially adversely affect the Company’s ability to qualify as a REIT, the federal income tax consequences of such qualification, or the federal income tax consequences of an investment in the Company.
Although we have taken steps to abide by applicable privacy and cybersecurity laws, and strive to protect the security of our IT Systems and Confidential Information, the compliance and security measures put in place by the Company and its vendors cannot guarantee perfect compliance or provide absolute security, and the Company and its vendors' IT Systems may be vulnerable to cyber-attacks or cybersecurity incidents that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information, including through ransomware distributed denial-of-service attempts, data theft, account takeovers, social engineering/phishing, technological error, employee error, malfeasance, misconfigurations, “bugs”, or other vulnerabilities in Company, or vendor, IT Systems.
Although we have taken steps to abide by applicable privacy and cybersecurity laws, and strive to protect the security of our IT Systems and Confidential Information, the compliance and security measures put in place by the Company and its vendors cannot guarantee perfect compliance or provide absolute security, and the Company and its vendors’ IT Systems may be vulnerable to numerous and evolving cybersecurity threats and risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information, including through social engineering/phishing, malware (including ransomware), distributed denial-of-service attempts, data theft, account takeovers, social engineering/phishing, technological 15 Table of Contents error, employee error, malfeasance by insiders, misconfigurations, “bugs”, or other vulnerabilities in Company, or vendor, IT Systems.
Compliance with existing and future laws and regulations related to data privacy and protection may increase the Company’s operating costs and adversely impact the Company’s ability to market the Company’s properties and services, and any failure to comply with such laws and regulations could harm our business, reputation and financial results.
Compliance with existing and future laws and regulations related to data privacy and protection may increase the Company’s operating costs and adversely impact the Company’s ability to market the Company’s properties and services, and any failure of our systems in place to comply with such laws and regulations could harm our business, reputation and financial condition.
In addition, changes in federal, state and local legislation and regulation on climate change could result in increased operating costs (for example, increased utility costs) and/or increased capital expenditures to improve the energy efficiency of our existing communities (for example, increased costs associated with meeting electric vehicle charging mandates) and could also require us to spend more on our new development communities without a corresponding increase in revenue.
In addition, changes in federal, state and local legislation and regulation on climate change or natural disaster response could result in temporary rent control, temporary eviction moratoria, increased operating costs and/or increased capital expenditures to improve the energy efficiency of our existing communities (for example, increased costs associated with meeting electric vehicle charging mandates) and could also require us to spend more on our new development communities without a corresponding increase in revenue.
Accidental death or severe injuries at our communities due to fires, floods, other natural disasters or hazards could adversely affect our business and results of operations.
Accidental death or severe injuries at our communities due to wildfires, floods, other disasters or hazards could materially adversely affect our business and results of operations.
Any cybersecurity incident or failure in the implementation, compliance with or effectiveness of the Company’s IT Systems or cybersecurity program or those of third party service providers, or a breach of other third party systems that ultimately impacts the operational or IT Systems of the could result in a wide range of potentially serious harm to our business and results of operations.
Any cybersecurity incident or failure in the implementation, compliance with or effectiveness of the Company’s IT Systems or cybersecurity program or those of third party service providers, or a breach of other third party systems that ultimately impacts the operational or IT Systems of the Company could result in a wide range of material adverse effects to our business and results of operations.
Further, if we fail to comply with new ESG-related laws, regulations, expectations or reporting requirements, or if we are perceived as failing, our reputation and business could be adversely impacted.
Further, if we fail to comply with new laws, regulations, expectations or reporting requirements related to sustainability, or if we are perceived as failing, our reputation and business could be materially adversely affected.
Expenses associated with our investment in these communities, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in rental income from the community. 10 Table of Contents The future outbreak of contagious diseases could materially affect our business, financial condition, and results of operations.
Expenses associated with our investment in these communities, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in rental income from the community. Future pandemics could materially affect our business, financial condition, stock price, and results of operations.
A new pandemic or disease outbreak may also cause increased costs, lower profitability and market fluctuations that may affect our ability to obtain necessary funds for our business or may otherwise negatively impact the ability of the Company’s third-party mezzanine loan borrowers and preferred equity investment sponsors to repay the Company.
A pandemic or other health crisis may cause increased costs, lower profitability and market fluctuations that may affect our ability to obtain necessary funds for our business or negatively impact the ability of the Company’s third-party mezzanine loan borrowers and preferred equity investment sponsors to repay the Company.
As a result of climate change, we may experience extreme weather, an increased number of natural disasters and changes in precipitation, temperature and wild fire and drought exposure, all of which may result in physical damage, a decrease in demand for our communities located in these areas or affected by these conditions, damage to our properties, disruption of services at our properties or increased costs associated with water or energy use and maintaining or insuring our communities.
As a result of climate change, we may experience extreme weather, an increase in frequency and severity of natural disasters, changes in precipitation, temperature, wildfire and drought exposure, and impacts of sea-level rise, all of which may result in physical damage, a decrease in demand for our communities located in these areas or affected by these conditions, damage to our properties, disruption of services at our properties or increased costs associated with water or energy use and maintaining or insuring our communities.
There may be resistance to such change from our employees and residents, and if we experience difficulty in retaining and/or hiring employees or residents, as applicable, this could adversely affect the Company’s results of operations.
There may be resistance to such change from our residents, and if we experience difficulty in retaining residents, this could materially adversely affect the Company’s results of operations.
In late 2022 and early 2023, a number of purported anti-trust 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.
A number of purported anti-trust 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 intends to vigorously defend against these lawsuits.
The geographic concentration of the Company’s communities and fluctuations in local markets may adversely impact the Company’s financial condition and operating results. The Company’s communities are concentrated in Northern and Southern California and the Seattle metropolitan area, which exposes the Company to greater economic risks.
The geographic concentration of the Company’s communities and fluctuations in local markets may materially adversely affect the Company’s financial condition and results of operations. The Company’s communities are concentrated in California and the Seattle metropolitan area, which exposes the Company to greater economic concentration risks.
The partnership tax audit rules apply to Essex Portfolio, L.P. and its subsidiaries that are classified as partnerships for U.S. federal income tax purposes. There can be no assurance that these rules will not have a material adverse effect on us.
The partnership tax audit rules apply to Essex Portfolio, L.P. and its subsidiaries that are classified as partnerships for U.S. federal income tax purposes. There can be no assurance that these rules will not have a material adverse effect on us. General Risks The soundness of financial institutions could materially adversely affect us.
In the event of a recession or other negative economic effects, the Company could incur reductions in rental and occupancy rates, property valuations and increases in costs.
In the event of a recession or other negative economic effects, including slowing job growth in key markets, the Company could incur reductions in rental and occupancy rates, property valuations and increases in costs.
The Company’s acquisition of apartment communities may fail to meet the Company’s expectations due to factors including inaccurate estimates of future income, expenses and the costs of improvements or redevelopment, which may be exacerbated by the lack of current market data due to limited deal flow.
Acquisitions of communities involve various risks and uncertainties and may fail to meet expectations. The Company’s acquisition of apartment communities may fail to meet the Company’s expectations due to factors including inaccurate estimates of future income, expenses, and the costs of improvements or redevelopment, which may be exacerbated by the lack of reliable market data due to inconsistent deal flow.
Significant expenditures associated with each community such as debt service payments, if any, real estate taxes, insurance and maintenance costs are generally not reduced when circumstances cause a reduction in income from a community.
Significant expenditures associated with each community such as debt service payments, if any, real estate taxes, insurance and maintenance costs are generally not reduced when circumstances cause a reduction in income from a community. Such a reduction in income could cause the Board to reduce the amount of dividend distributions.
The continuing evolution of social media will present us with new challenges and risks. Any material weaknesses identified in the Company's internal control over financial reporting could have an adverse effect on the Company’s stock price.
The continuing evolution of social media will present us with new challenges and risks. Any material weaknesses identified in the Company’s internal control over financial reporting could have an adverse effect on the Company’s stock price. Section 404 of the Sarbanes-Oxley Act of 2002 requires the Company to evaluate and report on its internal control over financial reporting.
Marcus, is not an employee of the Company, and is involved in other real estate activities and investments, which may lead to conflicts of interest. Mr. Marcus owns interests in various other real estate-related businesses and investments.
The Company’s Chairman is involved in other real estate activities and investments, which may lead to conflicts of interest. The Company’s Chairman, George M. Marcus, is not an employee of the Company, and is involved in other real estate activities and investments, which may lead to conflicts of interest. Mr.
Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. Our real estate taxes in Washington could increase as a result of property value reassessments or increased property tax rates.
The Company may experience various increased costs, including increased property taxes, to own and maintain its properties. Real property taxes on our properties may increase as our properties are reassessed by taxing authorities or as property tax rates change. Our real estate taxes in Washington could increase as a result of property value reassessments or increased property tax rates.
Any downgrades in terms of ratings or outlook by any of the rating agencies could have a material adverse impact on the Company’s cost and availability of capital, which could in turn have a material adverse impact on its financial condition, results of operations and liquidity, as well as the Company's stock price. 18 Table of Contents Changes in the Company’s financing policy may lead to higher levels of indebtedness.
Any downgrades in terms of ratings or outlook by any of the rating agencies could have a material adverse effect on the Company’s cost and availability of capital, which could in turn have a material adverse effect on its financial condition, results of operations and liquidity, as well as the Company’s stock price.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+3 added−0 removed10 unchanged
Biggest changeAny failure by us to comply with applicable requirements or material failure, inadequacy, interruption or breach of the Company’s privacy or information systems, or those of our vendors or other third parties, could materially adversely affect the Company’s business, results of operations and financial condition”. 24 Table of Contents
Biggest changeAny material failure, inadequacy, interruption or breach of the Company’s privacy or information systems, or those of our vendors or other third parties, could materially adversely affect the Company’s business, financial condition and results of operations. ” in Item 1A, Risk Factors of this Form 10-K for further information. 24 Table of Contents
The Audit Committee reports to the full Board regarding its activities, including those relating to cybersecurity. Additionally, on an annual basis, the Chief Technology Officer (“CTO”) presents to the Audit Committee on any material updates to the cybersecurity program, such as process improvements, new initiatives and key vendor performance.
The Audit Committee periodically reports to the full Board regarding its activities, including those relating to cybersecurity. Additionally, on an annual basis, the Chief Technology Officer (“CTO”) presents to the Audit Committee on any material updates to the cybersecurity program, such as process improvements, new initiatives and key vendor performance.
The Company’s technology management team is principally responsible for managing the Company’s cybersecurity risk assessment and management processes. The Company’s technology management team performs enterprise-level risk assessments designed to help identify material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment.
The Company’s technology management team performs enterprise-level risk assessments designed to help identify 23 Table of Contents material cybersecurity risks to our critical systems, information, products, services, and our broader enterprise IT environment.
See “Risk Factors – We are subject to laws and regulations relating to the handling of personal information and we rely on information technology to sustain our operations.
See the discussion under the caption, “Risks Related to Our Real Estate Investments and Operations - We are subject to laws and regulations relating to the handling of personal information and we rely on information technology to sustain our operations.
Item 1C. Cybersecurity The Company has developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of its critical systems and information. The Company's cybersecurity risk management program employs several different measures, including perimeter monitoring, endpoint monitoring and user management, designed to assess and identify cybersecurity risks.
Item 1C. Cybersecurity The Company has developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of its critical systems and information.
Added
The Company’s cybersecurity risk management program is integrated into our overall risk management program, and shares common methodologies, reporting channels and governance processes that apply across the risk management program to other legal, compliance, strategic, operational and financial risk areas.
Added
The Company’s cybersecurity risk management program employs several different measures, including perimeter monitoring, endpoint monitoring and user management, designed to assess and identify cybersecurity risks. The Company’s technology management team is principally responsible for managing the Company’s cybersecurity risk assessment and management processes.
Added
The CTO and other members of the Company’s management team takes steps to stay informed about and monitor efforts to prevent, detect, mitigate and remediate cybersecurity risks and incidents through various means, such as briefings from internal security personnel; threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged; and alerts and reports produced by security tools deployed in our IT environment.

Item 2. Properties

Properties — owned and leased real estate

15 edited+1 added−1 removed8 unchanged
Biggest change(See Note 8, "Mortgage Notes Payable" to the Company’s consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information about the Company’s secured mortgage debt and Schedule III thereto for a list of secured mortgage loans related to the Company’s portfolio.) Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) Southern California Alpine Village Alpine, CA Garden 301 1971 2002 96% Barkley, The (3)(4) Anaheim, CA Garden 161 1984 2000 96% Park Viridian Anaheim, CA Mid-rise 320 2008 2014 97% Bonita Cedars Bonita, CA Garden 120 1983 2002 96% The Village at Toluca Lake Burbank, CA Mid-rise 145 1974 2017 97% Camarillo Oaks Camarillo, CA Garden 564 1985 1996 97% Camino Ruiz Square Camarillo, CA Garden 160 1990 2006 97% Hacienda at Camarillo Oaks Camarillo, CA Garden 73 1984 2023 86% Pinnacle at Otay Ranch I & II Chula Vista, CA Mid-rise 364 2001 2014 97% Mesa Village Clairemont, CA Garden 133 1963 2002 97% Villa Siena Costa Mesa, CA Garden 272 1974 2014 95% Emerald Pointe Diamond Bar, CA Garden 160 1989 2014 97% Regency at Encino Encino, CA Mid-rise 75 1989 2009 97% The Havens (5) Fountain Valley, CA Garden 440 1969 2014 97% Valley Park Fountain Valley, CA Garden 160 1969 2001 96% Capri at Sunny Hills (4) Fullerton, CA Garden 102 1961 2001 96% Haver Hill (6) Fullerton, CA Garden 264 1973 2012 96% Pinnacle at Fullerton Fullerton, CA Mid-rise 192 2004 2014 97% Wilshire Promenade Fullerton, CA Mid-rise 149 1992 1997 97% Montejo Apartments Garden Grove, CA Garden 124 1974 2001 97% The Henley I Glendale, CA Mid-rise 83 1974 1999 97% The Henley II Glendale, CA Mid-rise 132 1970 1999 97% Huntington Breakers Huntington Beach, CA Mid-rise 342 1984 1997 97% The Huntington Huntington Beach, CA Garden 276 1975 2012 96% Hillsborough Park (7) La Habra, CA Garden 235 1999 1999 97% Village Green La Habra, CA Garden 272 1971 2014 97% The Palms at Laguna Niguel Laguna Niguel, CA Garden 460 1988 2014 97% Trabuco Villas Lake Forest, CA Mid-rise 132 1985 1997 96% Marbrisa Long Beach, CA Mid-rise 202 1987 2002 97% Pathways at Bixby Village Long Beach, CA Garden 296 1975 1991 98% 5600 Wilshire Los Angeles, CA Mid-rise 284 2008 2014 97% Alessio Los Angeles, CA Mid-rise 624 2001 2014 96% Ashton Sherman Village Los Angeles, CA Mid-rise 264 2014 2016 98% Avant Los Angeles, CA Mid-rise 440 2014 2015 93% The Avery Los Angeles, CA Mid-rise 121 2014 2014 98% Bellerive Los Angeles, CA Mid-rise 63 2011 2011 96% Belmont Station Los Angeles, CA Mid-rise 275 2009 2009 95% Bunker Hill Los Angeles, CA High-rise 456 1968 1998 96% Catalina Gardens Los Angeles, CA Mid-rise 128 1987 2014 93% Cochran Apartments Los Angeles, CA Mid-rise 58 1989 1998 97% Emerson Valley Village Los Angeles, CA Mid-rise 144 2012 2016 97% 26 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) Gas Company Lofts (6) Los Angeles, CA High-rise 251 2004 2013 95% The Blake LA Los Angeles, CA Mid-rise 196 1979 1997 98% Marbella Los Angeles, CA Mid-rise 60 1991 2005 97% Pacific Electric Lofts (8) Los Angeles, CA High-rise 314 2006 2012 94% Park Catalina Los Angeles, CA Mid-rise 90 2002 2012 93% Park Place Los Angeles, CA Mid-rise 60 1988 1997 97% Regency Palm Court Los Angeles, CA Mid-rise 116 1987 2014 94% Santee Court Los Angeles, CA High-rise 165 2004 2010 92% Santee Village Los Angeles, CA High-rise 73 2011 2011 92% Tiffany Court Los Angeles, CA Mid-rise 101 1987 2014 95% Wallace on Sunset Los Angeles, CA Mid-rise 200 2021 2021 95% Wilshire La Brea Los Angeles, CA Mid-rise 478 2014 2014 96% Windsor Court Los Angeles, CA Mid-rise 95 1987 2014 94% Windsor Court Los Angeles, CA Mid-rise 58 1988 1997 97% Aqua at Marina Del Rey Marina Del Rey, CA Mid-rise 500 2001 2014 97% Marina City Club (9) Marina Del Rey, CA Mid-rise 101 1971 2004 97% Mirabella Marina Del Rey, CA Mid-rise 188 2000 2000 96% Mira Monte Mira Mesa, CA Garden 354 1982 2002 96% Hillcrest Park Newbury Park, CA Garden 608 1973 1998 97% Fairway Apartments at Big Canyon (10) Newport Beach, CA Mid-rise 74 1972 1999 98% Muse North Hollywood, CA Mid-rise 152 2011 2011 97% Country Villas Oceanside, CA Garden 180 1976 2002 96% Mission Hills Oceanside, CA Garden 282 1984 2005 97% Renaissance at Uptown Orange Orange, CA Mid-rise 460 2007 2014 97% Mariner's Place Oxnard, CA Garden 105 1987 2000 96% Monterey Villas Oxnard, CA Garden 122 1974 1997 96% Tierra Vista Oxnard, CA Mid-rise 404 2001 2001 97% Arbors at Parc Rose (8) Oxnard, CA Mid-rise 373 2001 2011 97% The Hallie Pasadena, CA Mid-rise 292 1972 1997 97% The Stuart Pasadena, CA Mid-rise 188 2007 2014 98% Villa Angelina Placentia, CA Garden 256 1970 2001 95% Fountain Park Playa Vista, CA Mid-rise 705 2002 2004 95% Highridge (4) Rancho Palos Verdes, CA Mid-rise 255 1972 1997 97% Cortesia Rancho Santa Margarita, CA Garden 308 1999 2014 97% Pinnacle at Talega San Clemente, CA Mid-rise 362 2002 2014 97% Allure at Scripps Ranch San Diego, CA Mid-rise 194 2002 2014 98% Bernardo Crest San Diego, CA Garden 216 1988 2014 98% Cambridge Park San Diego, CA Mid-rise 320 1998 2014 97% Carmel Creek San Diego, CA Garden 348 2000 2014 97% Carmel Landing San Diego, CA Garden 356 1989 2014 97% Carmel Summit San Diego, CA Mid-rise 246 1989 2014 96% CentrePointe San Diego, CA Garden 224 1974 1997 95% Esplanade (5) San Diego, CA Garden 616 1986 2014 96% Form 15 San Diego, CA Mid-rise 242 2014 2016 97% Montanosa San Diego, CA Garden 472 1990 2014 97% Summit Park San Diego, CA Garden 300 1972 2002 97% 27 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) Essex Skyline (11) Santa Ana, CA High-rise 350 2008 2010 93% Fairhaven Apartments (4) Santa Ana, CA Garden 164 1970 2001 96% Parkside Court (5) Santa Ana, CA Mid-rise 210 1986 2014 96% Pinnacle at MacArthur Place Santa Ana, CA Mid-rise 253 2002 2014 97% Hope Ranch Santa Barbara, CA Garden 108 1965 2007 98% Bridgeport Coast (12) Santa Clarita, CA Mid-rise 188 2006 2014 98% Meadowood (7) Simi Valley, CA Garden 320 1986 1996 97% Shadow Point Spring Valley, CA Garden 172 1983 2002 95% The Fairways at Westridge (12) Valencia, CA Mid-rise 234 2004 2014 98% The Vistas of West Hills (12) Valencia, CA Mid-rise 220 2009 2014 98% Allegro Valley Village, CA Mid-rise 97 2010 2010 98% Lofts at Pinehurst, The Ventura, CA Garden 118 1971 1997 97% Pinehurst (13) Ventura, CA Garden 28 1973 2004 97% Woodside Village Ventura, CA Garden 145 1987 2004 97% Passage Buena Vista (14) Vista, CA Garden 179 2020 2021 97% Walnut Heights Walnut, CA Garden 163 1964 2003 96% The Dylan West Hollywood, CA Mid-rise 184 2014 2014 95% The Huxley West Hollywood, CA Mid-rise 187 2014 2014 95% Reveal Woodland Hills, CA Mid-rise 438 2010 2011 96% Avondale at Warner Center Woodland Hills, CA Mid-rise 446 1970 1999 97% Vela (16) Woodland Hills, CA Mid-rise 379 2018 2022 96% 26,209 96% Northern California Belmont Terrace Belmont, CA Mid-rise 71 1974 2006 96% Fourth & U Berkeley, CA Mid-rise 171 2010 2010 96% The Commons Campbell, CA Garden 264 1973 2010 97% Pointe at Cupertino Cupertino, CA Garden 116 1963 1998 97% Connolly Station Dublin, CA Mid-rise 309 2014 2014 97% Avenue 64 Emeryville, CA Mid-rise 224 2007 2014 95% The Courtyards at 65th Street (15) Emeryville, CA Mid-rise 331 2004 2019 94% Emme Emeryville, CA Mid-rise 190 2015 2015 97% Foster's Landing Foster City, CA Garden 490 1987 2014 97% Stevenson Place Fremont, CA Garden 200 1975 2000 97% Mission Peaks Fremont, CA Mid-rise 453 1995 2014 97% Mission Peaks II Fremont, CA Garden 336 1989 2014 97% Paragon Apartments Fremont, CA Mid-rise 301 2013 2014 97% Boulevard Fremont, CA Garden 172 1978 1996 97% Briarwood (8) Fremont, CA Garden 160 1978 2011 96% The Woods (8) Fremont, CA Garden 160 1978 2011 97% The Rexford (16) Fremont, CA Garden 203 1973 2021 97% City Centre (12) Hayward, CA Mid-rise 192 2000 2014 96% City View Hayward, CA Garden 572 1975 1998 95% Lafayette Highlands Lafayette, CA Garden 150 1973 2014 97% 777 Hamilton (17) Menlo Park, CA Mid-rise 195 2017 2019 95% Apex Milpitas, CA Mid-rise 367 2014 2014 97% Regency at Mountain View (6) Mountain View, CA Mid-rise 142 1970 2013 96% Bridgeport (7) Newark, CA Garden 184 1987 1987 98% 28 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) The Landing at Jack London Square Oakland, CA Mid-rise 282 2001 2014 95% The Grand Oakland, CA High-rise 243 2009 2009 95% The Galloway Pleasanton, CA Mid-rise 506 2016 2016 97% Radius Redwood City, CA Mid-rise 264 2015 2015 97% Township Redwood City, CA Mid-rise 132 2014 2019 95% San Marcos Richmond, CA Mid-rise 432 2003 2003 96% 500 Folsom (14) San Francisco, CA High-rise 537 2021 2021 94% Bennett Lofts San Francisco, CA Mid-rise 179 2004 2012 91% Fox Plaza San Francisco, CA High-rise 445 1968 2013 95% MB 360 San Francisco, CA Mid-rise 360 2014 2014 95% Park West San Francisco, CA Mid-rise 126 1958 2012 96% 101 San Fernando San Jose, CA Mid-rise 323 2001 2010 96% 360 Residences (15) San Jose, CA Mid-rise 213 2010 2017 94% Bella Villagio San Jose, CA Mid-rise 231 2004 2010 95% Century Towers (14) San Jose, CA High-rise 376 2017 2017 96% Enso San Jose, CA Mid-rise 183 2014 2015 97% Epic San Jose, CA Mid-rise 769 2013 2013 97% Esplanade San Jose, CA Mid-rise 278 2002 2004 97% Fountains at River Oaks San Jose, CA Mid-rise 226 1990 2014 97% Marquis San Jose, CA Mid-rise 166 2015 2016 97% Meridian at Midtown (15) San Jose, CA Mid-rise 218 2015 2018 96% Mio San Jose, CA Mid-rise 103 2015 2016 97% Palm Valley San Jose, CA Mid-rise 1,100 2008 2014 96% Patina at Midtown (14) San Jose, CA Mid-rise 269 2021 2021 96% Sage at Cupertino (4) San Jose, CA Garden 230 1971 2017 97% Silver (14) San Jose, CA Mid-rise 268 2019 2021 95% The Carlyle (7) San Jose, CA Garden 132 2000 2000 96% The Waterford San Jose, CA Mid-rise 238 2000 2000 97% Willow Lake San Jose, CA Mid-rise 508 1989 2012 97% Lakeshore Landing San Mateo, CA Mid-rise 308 1988 2014 97% Hillsdale Garden (14) San Mateo, CA Garden 697 1948 2006 95% Station Park Green San Mateo, CA Mid-rise 599 2018 2018 97% Deer Valley San Rafael, CA Garden 171 1996 2014 96% Bel Air San Ramon, CA Garden 462 1988 1995 97% Canyon Oaks San Ramon, CA Mid-rise 250 2005 2007 97% Crow Canyon San Ramon, CA Mid-rise 400 1992 2014 97% Foothill Gardens San Ramon, CA Garden 132 1985 1997 97% Mill Creek at Windermere San Ramon, CA Mid-rise 400 2005 2007 96% Twin Creeks San Ramon, CA Garden 44 1985 1997 97% 1000 Kiely Santa Clara, CA Garden 121 1971 2011 97% Le Parc Santa Clara, CA Garden 140 1975 1994 97% Marina Cove (18) Santa Clara, CA Garden 292 1974 1994 97% Mylo Santa Clara, CA Mid-rise 476 2021 2021 96% Riley Square (8) Santa Clara, CA Garden 156 1972 2012 96% Villa Granada Santa Clara, CA Mid-rise 270 2010 2014 97% Chestnut Street Apartments Santa Cruz, CA Garden 96 2002 2008 91% Bristol Commons Sunnyvale, CA Garden 188 1989 1995 97% 29 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) Brookside Oaks (4) Sunnyvale, CA Garden 170 1973 2000 97% Lawrence Station Sunnyvale, CA Mid-rise 336 2012 2014 97% Magnolia Lane (19) Sunnyvale, CA Garden 32 2001 2007 97% Magnolia Square (4) Sunnyvale, CA Garden 156 1963 2007 97% Montclaire Sunnyvale, CA Mid-rise 390 1973 1988 97% Reed Square Sunnyvale, CA Garden 100 1970 2011 97% Solstice Sunnyvale, CA Mid-rise 280 2014 2014 96% Summerhill Park Sunnyvale, CA Garden 100 1988 1988 97% Via Sunnyvale, CA Mid-rise 284 2011 2011 97% Windsor Ridge Sunnyvale, CA Mid-rise 216 1989 1989 97% Vista Belvedere Tiburon, CA Mid-rise 76 1963 2004 95% Verandas (12) Union City, CA Mid-rise 282 1989 2014 97% Agora Walnut Creek, CA Mid-rise 49 2016 2016 96% Brio (4) Walnut Creek, CA Mid-rise 300 2015 2019 97% 23,263 96% Seattle, Washington Metropolitan Area Belcarra Bellevue, WA Mid-rise 296 2009 2014 97% BellCentre Bellevue, WA Mid-rise 249 2001 2014 97% Cedar Terrace Bellevue, WA Garden 180 1984 2005 96% Courtyard off Main Bellevue, WA Mid-rise 110 2000 2010 96% Ellington Bellevue, WA Mid-rise 220 1994 2014 97% Emerald Ridge Bellevue, WA Garden 180 1987 1994 96% Foothill Commons Bellevue, WA Mid-rise 394 1978 1990 97% Palisades, The Bellevue, WA Garden 192 1977 1990 96% Park Highland Bellevue, WA Mid-rise 250 1993 2014 97% Piedmont Bellevue, WA Garden 396 1969 2014 96% Sammamish View Bellevue, WA Garden 153 1986 1994 97% Woodland Commons Bellevue, WA Garden 302 1978 1990 96% Bothell Ridge (5) Bothell, WA Garden 214 1988 2014 96% Canyon Pointe Bothell, WA Garden 250 1990 2003 96% Inglenook Court Bothell, WA Garden 224 1985 1994 97% Pinnacle Sonata Bothell, WA Mid-rise 268 2000 2014 97% Salmon Run at Perry Creek Bothell, WA Garden 132 2000 2000 97% Stonehedge Village Bothell, WA Garden 196 1986 1997 96% Highlands at Wynhaven Issaquah, WA Mid-rise 333 2000 2008 98% Park Hill at Issaquah Issaquah, WA Garden 245 1999 1999 96% Wandering Creek Kent, WA Garden 156 1986 1995 97% Ascent Kirkland, WA Garden 90 1988 2012 97% Bridle Trails Kirkland, WA Garden 108 1986 1997 96% Corbella at Juanita Bay Kirkland, WA Garden 169 1978 2010 96% Evergreen Heights Kirkland, WA Garden 200 1990 1997 97% Slater 116 Kirkland, WA Mid-rise 108 2013 2013 97% Montebello Kirkland, WA Garden 248 1996 2012 97% Martha Lake Apartments (16) Lynwood, WA Mid-rise 155 1991 2021 96% Aviara (19) Mercer Island, WA Mid-rise 166 2013 2014 97% Laurels at Mill Creek Mill Creek, WA Garden 164 1981 1996 97% Monterra in Mill Creek (16) Mill Creek, WA Garden 139 2003 2021 96% 30 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (20) Occupancy (2) Parkwood at Mill Creek Mill Creek, WA Garden 240 1989 2014 97% The Elliot at Mukilteo (4) Mukilteo, WA Garden 301 1981 1997 97% Castle Creek Newcastle, WA Garden 216 1998 1998 97% Elevation Redmond, WA Garden 158 1986 2010 97% Pure Redmond Redmond, WA Mid-rise 105 2016 2019 97% Redmond Hill (8) Redmond, WA Garden 442 1985 2011 97% Shadowbrook Redmond, WA Garden 418 1986 2014 95% The Trails of Redmond Redmond, WA Garden 423 1985 2014 96% Vesta (8) Redmond, WA Garden 440 1998 2011 97% Brighton Ridge Renton, WA Garden 264 1986 1996 96% Fairwood Pond Renton, WA Garden 194 1997 2004 97% Forest View Renton, WA Garden 192 1998 2003 97% Pinnacle on Lake Washington Renton, WA Mid-rise 180 2001 2014 97% 8th & Republican (15) Seattle, WA Mid-rise 211 2016 2017 96% Annaliese Seattle, WA Mid-rise 56 2009 2013 97% The Audrey at Belltown Seattle, WA Mid-rise 137 1992 2014 96% The Bernard Seattle, WA Mid-rise 63 2008 2011 96% Cairns, The Seattle, WA Mid-rise 99 2006 2007 96% Collins on Pine Seattle, WA Mid-rise 76 2013 2014 98% Canvas Seattle, WA Mid-rise 123 2014 2021 96% Domaine Seattle, WA Mid-rise 92 2009 2012 96% Expo (14) Seattle, WA Mid-rise 275 2012 2012 96% Fountain Court Seattle, WA Mid-rise 320 2000 2000 97% Patent 523 Seattle, WA Mid-rise 295 2010 2010 96% Taylor 28 Seattle, WA Mid-rise 197 2008 2014 96% Velo and Ray (15) Seattle, WA Mid-rise 308 2014 2019 96% Vox Apartments Seattle, WA Mid-rise 58 2013 2013 97% Wharfside Pointe Seattle, WA Mid-rise 155 1990 1994 96% 12,525 97% Total/Weighted Average 61,997 96% Footnotes to the Company’s Portfolio Listing as of December 31, 2023 (1) Unless otherwise specified, the Company consolidates each community in accordance with U.S.
Biggest changeFurthermore, as of December 31, 2024, the commercial buildings’ physical occupancy rate was 93% consisting of seven tenants, including the Company. 25 Table of Contents Operating Portfolio The table below describes the Company’s operating portfolio as of December 31, 2024 (See Note 8, “Mortgage Notes Payable” to the Company’s consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K for more information about the Company’s secured mortgage debt and Schedule III thereto for a list of secured mortgage loans related to the Company’s portfolio.): Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Southern California Alpine Village Alpine, CA Garden 301 1971 2002 96% Park Viridian Anaheim, CA Mid-rise 320 2008 2014 96% The Barkley (4)(5) Anaheim, CA Garden 161 1984 2000 96% Bonita Cedars Bonita, CA Garden 120 1983 2002 97% The Village at Toluca Lake Burbank, CA Mid-rise 146 1974 2017 96% Camarillo Oaks Camarillo, CA Garden 564 1985 1996 96% Camino Ruiz Square Camarillo, CA Garden 160 1990 2006 97% Hacienda at Camarillo Oaks Camarillo, CA Garden 73 1984 2023 94% Pinnacle at Otay Ranch I & II Chula Vista, CA Mid-rise 364 2001 2014 96% Mesa Village Clairemont, CA Garden 133 1963 2002 95% Villa Siena Costa Mesa, CA Garden 274 1974 2014 96% Emerald Pointe Diamond Bar, CA Garden 160 1989 2014 97% Regency at Encino Encino, CA Mid-rise 75 1989 2009 95% The Havens Fountain Valley, CA Garden 440 1969 2014 97% Valley Park Fountain Valley, CA Garden 160 1969 2001 96% Capri at Sunny Hills (5) Fullerton, CA Garden 102 1961 2001 93% Haver Hill (6) Fullerton, CA Garden 265 1973 2012 97% Pinnacle at Fullerton Fullerton, CA Mid-rise 192 2004 2014 97% Wilshire Promenade Fullerton, CA Mid-rise 149 1992 1997 96% Montejo Garden Grove, CA Garden 124 1974 2001 97% The Henley I Glendale, CA Mid-rise 83 1974 1999 96% The Henley II Glendale, CA Mid-rise 132 1970 1999 96% Huntington Breakers Huntington Beach, CA Mid-rise 344 1984 1997 97% The Huntington Huntington Beach, CA Garden 276 1975 2012 97% Hillsborough Park La Habra, CA Garden 235 1999 1999 97% Village Green La Habra, CA Garden 272 1971 2014 97% The Palms at Laguna Niguel Laguna Niguel, CA Garden 460 1988 2014 96% Trabuco Villas Lake Forest, CA Mid-rise 132 1985 1997 96% Marbrisa Long Beach, CA Mid-rise 202 1987 2002 95% Pathways at Bixby Village Long Beach, CA Garden 296 1975 1991 97% 5600 Wilshire Los Angeles, CA Mid-rise 284 2008 2014 95% Alessio Los Angeles, CA Mid-rise 624 2001 2014 94% Ashton Sherman Village Los Angeles, CA Mid-rise 264 2014 2016 97% Avant Los Angeles, CA Mid-rise 443 2014 2015 93% The Avery Los Angeles, CA Mid-rise 121 2014 2014 96% Bellerive Los Angeles, CA Mid-rise 63 2011 2011 96% Belmont Station Los Angeles, CA Mid-rise 275 2009 2009 94% Catalina Gardens Los Angeles, CA Mid-rise 128 1987 2014 94% Cochran Apartments Los Angeles, CA Mid-rise 58 1989 1998 96% Emerson Valley Village Los Angeles, CA Mid-rise 144 2012 2016 97% Gas Company Lofts (6) Los Angeles, CA High-rise 251 2004 2013 92% 26 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Marbella Los Angeles, CA Mid-rise 60 1991 2005 96% Pacific Electric Lofts (7) Los Angeles, CA High-rise 314 2006 2012 93% Park Catalina Los Angeles, CA Mid-rise 90 2002 2012 95% Park Place Los Angeles, CA Mid-rise 60 1988 1997 96% Regency Palm Court Los Angeles, CA Mid-rise 116 1987 2014 93% Santee Court Los Angeles, CA High-rise 165 2004 2010 93% Santee Village Los Angeles, CA High-rise 73 2011 2011 93% Skye at Bunker Hill Los Angeles, CA High-rise 456 1968 1998 96% The Blake LA Los Angeles, CA Mid-rise 196 1979 1997 98% Tiffany Court Los Angeles, CA Mid-rise 101 1987 2014 95% Wallace on Sunset Los Angeles, CA Mid-rise 200 2021 2021 91% Wilshire La Brea Los Angeles, CA Mid-rise 478 2014 2014 96% Windsor Court Los Angeles, CA Mid-rise 95 1987 2014 94% Windsor Court Los Angeles, CA Mid-rise 58 1988 1997 96% Aqua at Marina Del Rey Marina Del Rey, CA Mid-rise 500 2001 2014 97% Marina City Club (8) Marina Del Rey, CA Mid-rise 101 1971 2004 97% Mirabella Marina Del Rey, CA Mid-rise 188 2000 2000 95% Mira Monte Mira Mesa, CA Garden 356 1982 2002 97% Hillcrest Park Newbury Park, CA Garden 608 1973 1998 97% Fairway at Big Canyon (9) Newport Beach, CA Mid-rise 74 1972 1999 97% Muse North Hollywood, CA Mid-rise 152 2011 2011 95% Country Villas Oceanside, CA Garden 180 1976 2002 96% Mission Hills Oceanside, CA Garden 282 1984 2005 96% Renaissance at Uptown Orange Orange, CA Mid-rise 460 2007 2014 97% Arbors at Parc Rose (7) Oxnard, CA Mid-rise 373 2001 2011 96% Mariner’s Place Oxnard, CA Garden 105 1987 2000 95% Monterey Villas Oxnard, CA Garden 122 1974 1997 97% Tierra Vista Oxnard, CA Mid-rise 404 2001 2001 96% The Hallie Pasadena, CA Mid-rise 292 1972 1997 96% The Stuart Pasadena, CA Mid-rise 188 2007 2014 97% Villa Angelina Placentia, CA Garden 256 1970 2001 96% Fountain Park Playa Vista, CA Mid-rise 705 2002 2004 93% Highridge (5) Rancho Palos Verdes, CA Mid-rise 255 1972 1997 96% Cortesia Rancho Santa Margarita, CA Garden 308 1999 2014 96% Pinnacle at Talega San Clemente, CA Mid-rise 362 2002 2014 97% Allure at Scripps Ranch San Diego, CA Mid-rise 194 2002 2014 96% Bernardo Crest San Diego, CA Garden 216 1988 2014 97% Cambridge Park San Diego, CA Mid-rise 320 1998 2014 97% Carmel Creek San Diego, CA Garden 348 2000 2014 97% Carmel Landing San Diego, CA Garden 356 1989 2014 97% Carmel Summit San Diego, CA Mid-rise 246 1989 2014 97% CentrePointe San Diego, CA Garden 224 1974 1997 94% Esplanade San Diego, CA Garden 616 1986 2014 96% Form 15 San Diego, CA Mid-rise 242 2014 2016 96% LIVIA at Scripps Ranch (10)(14) San Diego, CA Mid-rise 264 2024 2024 95% Montanosa San Diego, CA Garden 472 1990 2014 97% 27 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Summit Park San Diego, CA Garden 300 1972 2002 96% Essex Skyline (11) Santa Ana, CA High-rise 350 2008 2010 94% Fairhaven (5) Santa Ana, CA Garden 164 1970 2001 96% Parkside Court Santa Ana, CA Mid-rise 210 1986 2014 97% Pinnacle at MacArthur Place Santa Ana, CA Mid-rise 253 2002 2014 96% Hope Ranch Santa Barbara, CA Garden 108 1965 2007 97% Bridgeport Coast (12) Santa Clarita, CA Mid-rise 188 2006 2014 96% Meadowood Simi Valley, CA Garden 320 1986 1996 96% Shadow Point Spring Valley, CA Garden 172 1983 2002 95% The Fairways at Westridge (12) Valencia, CA Mid-rise 234 2004 2014 97% The Vistas of West Hills (12) Valencia, CA Mid-rise 220 2009 2014 97% Allegro Valley Village, CA Mid-rise 97 2010 2010 97% Lofts at Pinehurst, The Ventura, CA Garden 118 1971 1997 97% Pinehurst (13) Ventura, CA Garden 28 1973 2004 97% Woodside Village Ventura, CA Garden 145 1987 2004 97% Passage Buena Vista (14) Vista, CA Garden 179 2020 2021 96% Walnut Heights Walnut, CA Garden 163 1964 2003 95% The Dylan West Hollywood, CA Mid-rise 184 2014 2014 93% The Huxley West Hollywood, CA Mid-rise 187 2014 2014 95% Avondale at Warner Center Woodland Hills, CA Mid-rise 446 1970 1999 96% Reveal Woodland Hills, CA Mid-rise 438 2010 2011 95% Vela (16) Woodland Hills, CA Mid-rise 379 2018 2022 95% 26,484 96% Northern California Belmont Terrace Belmont, CA Mid-rise 71 1974 2006 96% Fourth & U Berkeley, CA Mid-rise 171 2010 2010 94% The Commons Campbell, CA Garden 264 1973 2010 97% Pointe at Cupertino Cupertino, CA Garden 116 1963 1998 97% Connolly Station Dublin, CA Mid-rise 309 2014 2014 96% Avenue 64 Emeryville, CA Mid-rise 224 2007 2014 96% Emme Emeryville, CA Mid-rise 190 2015 2015 94% The Courtyards at 65th Street (15) Emeryville, CA Mid-rise 331 2004 2019 94% Foster’s Landing Foster City, CA Garden 490 1987 2014 97% Boulevard Fremont, CA Garden 172 1978 1996 97% Briarwood (7) Fremont, CA Garden 160 1978 2011 97% Mission Peaks Fremont, CA Mid-rise 453 1995 2014 97% Mission Peaks II Fremont, CA Garden 336 1989 2014 97% Paragon Fremont, CA Mid-rise 301 2013 2014 96% Stevenson Place Fremont, CA Garden 200 1975 2000 96% The Rexford (16) Fremont, CA Garden 203 1973 2021 97% The Woods (7) Fremont, CA Garden 160 1978 2011 95% City Centre (12) Hayward, CA Mid-rise 192 2000 2014 95% City View Hayward, CA Garden 572 1975 1998 95% Lafayette Highlands Lafayette, CA Garden 150 1973 2014 97% 777 Hamilton (17) Menlo Park, CA Mid-rise 195 2017 2019 97% Apex Milpitas, CA Mid-rise 367 2014 2014 96% ARLO Mountain View Mountain View, CA Mid-rise 164 2018 2024 95% 28 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Regency at Mountain View (6) Mountain View, CA Mid-rise 142 1970 2013 97% Bridgeport Newark, CA Garden 184 1987 1987 99% The Grand Oakland, CA High-rise 243 2009 2009 95% The Landing at Jack London Square Oakland, CA Mid-rise 282 2001 2014 94% The Galloway Pleasanton, CA Mid-rise 506 2016 2016 97% Radius Redwood City, CA Mid-rise 264 2015 2015 96% Township Redwood City, CA Mid-rise 132 2014 2019 96% San Marcos Richmond, CA Mid-rise 432 2003 2003 95% 500 Folsom (14) San Francisco, CA High-rise 537 2021 2021 96% Bennett Lofts San Francisco, CA Mid-rise 178 2004 2012 93% Fox Plaza San Francisco, CA High-rise 445 1968 2013 96% MB 360 San Francisco, CA Mid-rise 360 2014 2014 95% Park West San Francisco, CA Mid-rise 126 1958 2012 95% 101 San Fernando San Jose, CA Mid-rise 323 2001 2010 95% 360 Residences (15) San Jose, CA Mid-rise 213 2010 2017 95% Bella Villagio San Jose, CA Mid-rise 231 2004 2010 93% Century Towers San Jose, CA High-rise 376 2017 2017 97% Enso San Jose, CA Mid-rise 183 2014 2015 97% Epic San Jose, CA Mid-rise 769 2013 2013 97% Esplanade San Jose, CA Mid-rise 278 2002 2004 97% Fountains at River Oaks San Jose, CA Mid-rise 226 1990 2014 97% Marquis San Jose, CA Mid-rise 166 2015 2016 97% Meridian at Midtown (15) San Jose, CA Mid-rise 218 2015 2018 96% Mio San Jose, CA Mid-rise 103 2015 2016 97% Palm Valley San Jose, CA Mid-rise 1,100 2008 2014 96% Patina at Midtown San Jose, CA Mid-rise 269 2021 2021 96% Sage at Cupertino (5) San Jose, CA Garden 230 1971 2017 97% Silver (14) San Jose, CA Mid-rise 268 2019 2021 95% The Carlyle San Jose, CA Garden 132 2000 2000 97% Waterford Place San Jose, CA Mid-rise 238 2000 2000 96% Willow Lake San Jose, CA Mid-rise 508 1989 2012 97% Lakeshore Landing San Mateo, CA Mid-rise 308 1988 2014 96% Station Park Green San Mateo, CA Mid-rise 599 2018 2018 96% Deer Valley San Rafael, CA Garden 171 1996 2014 97% Bel Air San Ramon, CA Garden 462 1988 1995 97% Canyon Oaks San Ramon, CA Mid-rise 250 2005 2007 96% Crow Canyon San Ramon, CA Mid-rise 400 1992 2014 96% Foothill Gardens San Ramon, CA Garden 132 1985 1997 97% Mill Creek at Windermere San Ramon, CA Mid-rise 400 2005 2007 96% Twin Creeks San Ramon, CA Garden 44 1985 1997 97% 1000 Kiely Santa Clara, CA Garden 121 1971 2011 97% Le Parc Santa Clara, CA Garden 140 1975 1994 97% Marina Cove (18) Santa Clara, CA Garden 292 1974 1994 97% Mylo Santa Clara, CA Mid-rise 476 2021 2021 97% Riley Square (7) Santa Clara, CA Garden 156 1972 2012 96% Villa Granada Santa Clara, CA Mid-rise 270 2010 2014 97% Chestnut Street Santa Cruz, CA Garden 96 2002 2008 96% 29 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Bristol Commons Sunnyvale, CA Garden 188 1989 1995 97% Brookside Oaks (5) Sunnyvale, CA Garden 170 1973 2000 97% Lawrence Station Sunnyvale, CA Mid-rise 336 2012 2014 97% Magnolia Lane (19) Sunnyvale, CA Garden 32 2001 2007 97% Magnolia Square (5) Sunnyvale, CA Garden 156 1963 2007 97% Maxwell Sunnyvale Sunnyvale, CA Mid-rise 75 2022 2024 95% Montclaire Sunnyvale, CA Mid-rise 390 1973 1988 96% Reed Square Sunnyvale, CA Garden 100 1970 2011 97% Solstice Sunnyvale, CA Mid-rise 280 2014 2014 97% Summerhill Park Sunnyvale, CA Garden 100 1988 1988 96% Via Sunnyvale, CA Mid-rise 284 2011 2011 97% Windsor Ridge Sunnyvale, CA Mid-rise 216 1989 1989 97% Vista Belvedere Tiburon, CA Mid-rise 76 1963 2004 95% Verandas (12) Union City, CA Mid-rise 282 1989 2014 97% Agora Walnut Creek, CA Mid-rise 49 2016 2016 97% Brio (5) Walnut Creek, CA Mid-rise 300 2015 2019 97% 22,804 96% Seattle, Washington Metropolitan Area Belcarra Bellevue, WA Mid-rise 296 2009 2014 96% BellCentre Bellevue, WA Mid-rise 249 2001 2014 97% Cedar Terrace Bellevue, WA Garden 180 1984 2005 97% Courtyard off Main Bellevue, WA Mid-rise 110 2000 2010 96% Ellington Bellevue, WA Mid-rise 220 1994 2014 96% Emerald Ridge Bellevue, WA Garden 180 1987 1994 96% Foothill Commons Bellevue, WA Mid-rise 394 1978 1990 97% Palisades, The Bellevue, WA Garden 192 1977 1990 96% Park Highland Bellevue, WA Mid-rise 250 1993 2014 96% Piedmont Bellevue, WA Garden 396 1969 2014 96% Sammamish View Bellevue, WA Garden 153 1986 1994 97% Woodland Commons Bellevue, WA Garden 302 1978 1990 97% Bothell Ridge Bothell, WA Garden 214 1988 2014 96% Canyon Pointe Bothell, WA Garden 250 1990 2003 97% Inglenook Court Bothell, WA Garden 224 1985 1994 96% Pinnacle Sonata Bothell, WA Mid-rise 268 2000 2014 97% Salmon Run at Perry Creek Bothell, WA Garden 132 2000 2000 97% Stonehedge Village Bothell, WA Garden 196 1986 1997 98% Highlands at Wynhaven Issaquah, WA Mid-rise 333 2000 2008 97% Park Hill at Issaquah Issaquah, WA Garden 245 1999 1999 97% Wandering Creek Kent, WA Garden 156 1986 1995 97% Ascent Kirkland, WA Garden 90 1988 2012 97% Bridle Trails Kirkland, WA Garden 108 1986 1997 97% Corbella at Juanita Bay Kirkland, WA Garden 169 1978 2010 97% Evergreen Heights Kirkland, WA Garden 200 1990 1997 97% Montebello Kirkland, WA Garden 248 1996 2012 97% Slater 116 Kirkland, WA Mid-rise 108 2013 2013 97% Martha Lake (16) Lynwood, WA Mid-rise 155 1991 2021 97% Aviara (19) Mercer Island, WA Mid-rise 166 2013 2014 97% 30 Table of Contents Apartment Year Year Communities (1) Location Type Homes Built Acquired (2) Occupancy (3) Laurels at Mill Creek Mill Creek, WA Garden 164 1981 1996 96% Monterra in Mill Creek (16) Mill Creek, WA Garden 139 2003 2021 97% Parkwood at Mill Creek Mill Creek, WA Garden 240 1989 2014 97% The Elliot at Mukilteo (5) Mukilteo, WA Garden 301 1981 1997 97% Castle Creek Newcastle, WA Garden 216 1998 1998 97% Elevation Redmond, WA Garden 158 1986 2010 97% Pure Redmond Redmond, WA Mid-rise 105 2016 2019 97% Redmond Hill (7) Redmond, WA Garden 442 1985 2011 97% Shadowbrook Redmond, WA Garden 418 1986 2014 97% The Trails of Redmond Redmond, WA Garden 423 1985 2014 97% Vesta (7) Redmond, WA Garden 440 1998 2011 97% Brighton Ridge Renton, WA Garden 264 1986 1996 95% Fairwood Pond Renton, WA Garden 194 1997 2004 96% Forest View Renton, WA Garden 192 1998 2003 97% Pinnacle on Lake Washington Renton, WA Mid-rise 180 2001 2014 97% 8th & Republican (15) Seattle, WA Mid-rise 211 2016 2017 97% Annaliese Seattle, WA Mid-rise 56 2009 2013 98% The Bernard Seattle, WA Mid-rise 63 2008 2011 97% Cairns, The Seattle, WA Mid-rise 99 2006 2007 96% Collins on Pine Seattle, WA Mid-rise 76 2013 2014 96% Canvas Seattle, WA Mid-rise 123 2014 2021 96% Domaine Seattle, WA Mid-rise 92 2009 2012 96% Expo (14) Seattle, WA Mid-rise 275 2012 2012 97% Fountain Court Seattle, WA Mid-rise 320 2000 2000 97% Patent 523 Seattle, WA Mid-rise 295 2010 2010 97% Taylor 28 Seattle, WA Mid-rise 197 2008 2014 97% The Audrey at Belltown Seattle, WA Mid-rise 137 1992 2014 97% Velo and Ray (15) Seattle, WA Mid-rise 308 2014 2019 96% Vox Seattle, WA Mid-rise 58 2013 2013 96% Wharfside Pointe Seattle, WA Mid-rise 155 1990 1994 96% Beaumont Woodinville, WA Mid-rise 344 2009 2024 93% 12,869 97% Total: 62,157 Weighted Average: 96% Footnotes to the Company’s Portfolio Listing as of December 31, 2024 (1) Unless otherwise specified, the Company consolidates each community in accordance with U.S.
The communities have an average of approximately 246 apartment homes, with a mix of studio, one-, two- and some three-bedroom apartment homes. A wide variety of amenities are available at the Company’s communities, including covered parking, fireplaces, swimming pools, clubhouses with fitness facilities, playground areas and dog parks. The Company hires, trains and supervises on-site service and maintenance personnel.
The communities have an average of approximately 244 apartment homes, with a mix of studio, one-, two- and some three-bedroom apartment homes. A wide variety of amenities are available at the Company’s communities, including covered parking, fireplaces, swimming pools, clubhouses with fitness facilities, playground areas and dog parks. The Company hires, trains and supervises on-site service and maintenance personnel.
(17) This community is owned by BEX IV, LLC ("BEX IV"). The Company has a 50.1% interest in BEX IV, which is accounted for using the equity method of accounting. (18) A portion of this community on which 84 apartment homes are presently located is subject to a ground lease, which, unless extended, will expire in 2028.
The Company has a 50.1% interest in BEX IV, which is accounted for using the equity method of accounting. (18) A portion of this community on which 84 apartment homes are presently located is subject to a ground lease, which, unless extended, will expire in 2028.
(12) This community is owned by Wesco IV, LLC ("Wesco IV") The Company has a 65.1% interest in Wesco IV, which is accounted for using the equity method of accounting. (13) This community is subject to a ground lease, which, unless extended, will expire in 2028. (14) The Company has an interest in a single asset entity owning this community.
The Company has a 65.1% interest in Wesco IV, which is accounted for using the equity method of accounting. (13) This community is subject to a ground lease, which, unless extended, will expire in 2028. (14) The Company has an interest in a single asset entity owning this community. (15) This community is owned by Wesco V, LLC (“Wesco V”).
The Company’s apartment communities accounted for 98.9% of the Company’s revenues for the year ended December 31, 2023. Occupancy Rates Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income.
The Company’s apartment communities accounted for 99.0% of the Company’s revenues for the year ended December 31, 2024. Occupancy Rates Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income.
The Company has a 50% interest in BEXAEW, which is accounted for using the equity method of accounting. (6) This community is owned by Wesco III, LLC ("Wesco III"). The Company has a 50% interest in Wesco III, which is accounted for using the equity method of accounting. (7) This community is owned by BEX II, LLC ("BEX II").
The Company has a 50% interest in Wesco III, which is accounted for using the equity method of accounting. (7) This community is owned by Wesco I, LLC (“Wesco I”).
Communities The Company’s communities are primarily urban and suburban high density wood frame communities comprising of three to seven stories above grade construction with structured parking situated on 1-10 acres of land with densities averaging between 30-80+ units per acre. As of December 31, 2023, the Company’s communities include 104 garden-style, 138 mid-rise, and 10 high-rise communities.
Communities The Company’s communities are primarily urban and suburban high density wood frame communities comprising of two to seven stories above grade construction with structured parking situated on 1-20 acres of land with densities of approximately 10 to 80+ units per acre. As of December 31, 2024, the Company’s communities include 103 garden-style, 142 mid-rise, and 10 high-rise communities.
(15) This community is owned by Wesco V, LLC ("Wesco V"). The Company has a 50% interest in Wesco V, which is accounted for using the equity method of accounting. (16) This community is owned by Wesco VI, LLC ("Wesco VI"). The Company has a 50% interest in Wesco VI, which is accounted for using the equity method of accounting.
The Company has a 50% interest in Wesco V, which is accounted for using the equity method of accounting. (16) This community is owned by Wesco VI, LLC (“Wesco VI”). The Company has a 50% interest in Wesco VI, which is accounted for using the equity method of accounting. (17) This community is owned by BEX IV, LLC (“BEX IV”).
Properties The Company’s portfolio as of December 31, 2023 (including communities owned by unconsolidated joint ventures, but excluding communities underlying preferred equity investments) was comprised of 252 stabilized operating apartment communities (comprising 61,997 apartment homes), of which 26,209 apartment homes are located in Southern California, 23,263 apartment homes are located in Northern California, and 12,525 apartment homes are located in the Seattle metropolitan area.
Properties The Company’s portfolio as of December 31, 2024 (including communities owned by unconsolidated joint ventures, but excluding communities underlying preferred equity investments) was comprised of 255 stabilized operating apartment communities (comprising 62,157 apartment homes), of which 26,484 apartment homes are located in Southern California, 22,804 apartment homes are located in Northern California, and 12,869 apartment homes are located in the Seattle metropolitan area.
Commercial Buildings The Company owns three commercial buildings (totaling approximately 283,000 square feet) located in California and Washington, of which the Company occupied an aggregate of approximately 35,000 square feet as of December 31, 2023.
Commercial Buildings The Company owns two operating commercial buildings (totaling approximately 185,000 square feet) located in California and Washington, of which the Company occupied an aggregate of approximately 50,000 square feet as of December 31, 2024.
(3) The community is subject to a ground lease, which, unless extended, will expire in 2083. (4) Each of these communities is part of a DownREIT structure in which the Company is the general partner or manager and the other limited partners or members are granted rights of redemption for their interests. (5) This community is owned by BEXAEW.
(5) Each of these communities is part of a DownREIT structure in which the Company is the general partner or manager and the other limited partners or members are granted rights of redemption for their interests. (6) This community is owned by Wesco III, LLC (“Wesco III”).
(9) This community is subject to a ground lease, which, unless extended, will expire in 2067. 31 Table of Contents (10) This community is subject to a ground lease, which, unless extended, will expire in 2027. (11) The Company has a 97% interest and a former Executive Vice President of the Company has a 3% interest in this community.
(10) The community is subject to a ground lease, which, unless extended, will expire in 2086. (11) The Company has a 97% interest and a former Executive Vice President of the Company has a 3% interest in this community. (12) This community is owned by Wesco IV, LLC (“Wesco IV”).
(19) The community is subject to a ground lease, which, unless extended, will expire in 2070. (20) Represents the initial year the joint venture or consolidated community was acquired.
(19) The community is subject to a ground lease, which, unless extended, will expire in 2070.
GAAP. (2) For communities, occupancy rates are based on financial occupancy for the year ended December 31, 2023, except for communities that were stabilized during the year, in which case physical occupancy as of December 31, 2023 was used. For an explanation of how financial occupancy is calculated, see "Occupancy Rates" in this Item 2.
GAAP. (2) Represents the initial year the joint venture or consolidated community was acquired. (3) For communities, occupancy rates are based on financial occupancy for the year ended December 31, 2024, except for communities that were stabilized during the year, in which case physical occupancy was used.
The Company has a 50% interest in BEX II, which is accounted for using the equity method of accounting. (8) This community is owned by Wesco I, LLC ("Wesco I"). The Company has a 58% interest in Wesco I, which is accounted for using the equity method of accounting.
The Company has a 58% interest in Wesco I, which is accounted for using the equity method of accounting. 31 Table of Contents (8) This community is subject to a ground lease, which, unless extended, will expire in 2067. (9) This community is subject to a ground lease, which, unless extended, will expire in 2027.
Removed
Furthermore, as of December 31, 2023, the commercial buildings' physical occupancy rate was 90% consisting of 7 tenants, including the Company. 25 Table of Contents Operating Portfolio The table below describes the Company’s operating portfolio as of December 31, 2023.
Added
For an explanation of how financial occupancy is calculated, see “Occupancy Rates” in this Item 2. (4) The community is subject to a ground lease, which, unless extended, will expire in 2083.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeItem 3. Legal Proceedings The information regarding lawsuits, other proceedings and claims, set forth in Note 17, "Commitments and Contingencies", to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K is incorporated by reference into this Item 3.
Biggest changeItem 3. Legal Proceedings The information regarding lawsuits, other proceedings and claims, set forth in Note 17, “Commitments and Contingencies”, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K is incorporated by reference into this Item 3.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

17 edited+3 added−1 removed6 unchanged
Biggest changeFor each share of common stock issued by Essex in connection with such awards, the Operating Partnership issued OP Units to Essex as required by the Operating Partnership's partnership agreement, for an aggregate of 22,236 and 11,707 OP Units during the years ended December 31, 2023 and 2022, respectively.
Biggest changeFor each share of common stock issued by Essex in connection with such awards, the Operating Partnership issued OP Units to Essex as required by the Operating Partnership’s partnership agreement, for an aggregate of 13,217 and 22,236 OP Units during the years ended December 31, 2024 and 2023, respectively. 35 Table of Contents During the years ended December 31, 2024 and 2023, Essex issued an aggregate of 7,448 and 13,684 shares of its common stock in connection with the exchange of OP Units by limited partners into shares of common stock.
Issuer Purchases of Equity Securities In September 2022, the Company's Board of Directors approved a new stock repurchase plan to allow the Company to acquire shares of common stock up to an aggregate value of $500.0 million. The plan supersedes the Company's previous common stock repurchase plan announced in December 2015.
Issuer Purchases of Equity Securities In September 2022, the Company’s Board of Directors approved a stock repurchase plan to allow the Company to acquire shares of common stock up to an aggregate value of $500.0 million. The plan supersedes the Company’s previous common stock repurchase plan announced in December 2015.
For a copy of the plan, contact Computershare, LLC at (312) 360-5354. 33 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The information required by this section is incorporated herein by reference from our Proxy Statement, relating to our 2024 Annual Meeting of Shareholders, under the headings "Equity Compensation Plans," to be filed with the SEC within 120 days of December 31, 2023.
For a copy of the plan, contact Computershare, LLC at (312) 360-5354. 33 Table of Contents Securities Authorized for Issuance under Equity Compensation Plans The information required by this section is incorporated herein by reference from our Proxy Statement, relating to our 2025 Annual Meeting of Shareholders, under the heading “Equity Compensation Plans,” to be filed with the SEC within 120 days of December 31, 2024.
Unregistered Sales of Equity Securities During the years ended December 31, 2023 and 2022, 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 years ended December 31, 2023 and 2022, Essex issued an aggregate of zero and 76,246 shares of its common stock upon the exercise of stock options, respectively.
Unregistered Sales of Equity Securities During the years ended December 31, 2024 and 2023, 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 years ended December 31, 2024 and 2023, Essex issued an aggregate of 56,304 and zero shares of its common stock upon the exercise of stock options, respectively.
During the years ended December 31, 2023 and 2022, the Company did not issue or sell any shares of common stock pursuant to the 2021 ATM Program. As of December 31, 2023, there were no outstanding forward sale agreements. 35 Table of Contents
During the years ended December 31, 2024 and 2023, the Company did not issue or sell any shares of common stock pursuant to the 2024 ATM Program and 2021 ATM Program. As of December 31, 2024, there were no outstanding forward sale agreements. 36 Table of Contents
As of February 21, 2024, there were 62 holders of record of OP Units, including Essex. Return of Capital Under provisions of the Code, the portion of the cash dividend, if any, that exceeds earnings and profits is considered a return of capital.
As of February 19, 2025, there were 62 holders of record of OP Units, including Essex. Return of Capital Under provisions of the Code, the portion of the cash dividend, if any, that exceeds earnings and profits is considered a return of capital.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The shares of the Company’s common stock are traded on the New York Stock Exchange under the symbol "ESS". There is no established public trading market for the Operating Partnership's limited partnership units ("OP Units").
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information The shares of the Company’s common stock are traded on the New York Stock Exchange under the symbol “ESS.” There is no established public trading market for the Operating Partnership’s limited partnership units (“OP Units”).
For each share of common stock issued by Essex in connection with such exchange, the Operating Partnership issued OP Units to Essex as required by the Operating Partnership's partnership agreement, for an aggregate of 13,684 and 8,310 OP Units during the years ended December 31, 2023 and 2022, respectively.
For each share of common stock issued by Essex in connection with such exchange, the Operating Partnership issued OP Units to Essex as required by the Operating Partnership’s partnership agreement, for an aggregate of 7,448 and 13,684 OP Units during the years ended December 31, 2024 and 2023, respectively.
During the years ended December 31, 2023 and 2022, Essex issued an aggregate of 22,236 and 11,707 shares of its common stock in connection with restricted stock awards for no cash consideration, respectively.
During the years ended December 31, 2024 and 2023, Essex issued an aggregate of 13,217 and 22,236 shares, respectively, of its common stock in connection with restricted stock awards for no cash consideration.
Holders The approximate number of holders of record of the shares of Essex's common stock was 1,043 as of February 21, 2024. This number does not include stockholders whose shares are held in investment accounts by other entities. Essex believes the actual number of stockholders is greater than the number of holders of record.
Holders The approximate number of holders of record of the shares of Essex’s common stock was 973 as of February 19, 2025. This number does not include stockholders whose shares are held in investment accounts by other entities. Essex believes the actual number of stockholders is greater than the number of holders of record.
The status of the cash dividends distributed for the years ended December 31, 2023, 2022, and 2021 related to common stock are as follows: 2023 2022 2021 Common Stock Ordinary income 88.46 % 80.17 % 70.92 % Capital gain 8.32 % 16.78 % 22.07 % Unrecaptured section 1250 capital gain 3.22 % 3.05 % 7.01 % 100.00 % 100.00 % 100.00 % Dividends and Distributions Future dividends/distributions by Essex and the Operating Partnership will be at the discretion of the Board of Directors of Essex and will depend on the actual cash flows from operations of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code, applicable legal restrictions and such other factors as the Board of Directors deems relevant.
Cash dividends distributed for the years ended December 31, 2024, 2023 and 2022 related to common stock were classified for federal income tax purposes as follows: Year Ended December 31, 2024 2023 2022 Common Stock Ordinary income 98.19 % 88.46 % 80.17 % Capital gain 1.81 % 8.32 % 16.78 % Unrecaptured section 1250 capital gain — % 3.22 % 3.05 % 100.00 % 100.00 % 100.00 % Dividends and Distributions Future dividends/distributions by Essex and the Operating Partnership will be at the discretion of the Board of Directors of Essex and will depend on the actual cash flows from operations of the Company, its financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code, applicable legal restrictions and such other factors as the Board of Directors deems relevant.
The Board of Directors declared a dividend/distribution for the fourth quarter of 2023 of $2.31 per share. The dividend/distribution was paid on January 12, 2024 to stockholders/unitholders of record as of January 2, 2024.
The Board of Directors declared a dividend/distribution for the fourth quarter of 2024 of $2.45 per share. The dividend/distribution was paid on January 15, 2025 to stockholders/unitholders of record as of January 2, 2025.
The graph and other information furnished under the above caption "Performance Graph" in this Part II Item 5 of this Form 10-K shall not be deemed to be "soliciting material" or to be "filed" with the SEC or subject to Regulation 14A or 14C, or to the liabilities of the Exchange Act.
The graph and other information furnished under the above caption “Performance Graph” in this Part II Item 5 of this Form 10-K shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, or to the liabilities of the Exchange Act.
Essex contributed the proceeds from the option exercises of no amount and $19.5 million to the Operating Partnership in exchange for an aggregate of zero and 76,246 OP Units, as required by the Operating Partnership’s partnership agreement, during the years ended December 31, 2023 and 2022, respectively.
Essex contributed the proceeds from the option exercises of $12.3 million to the Operating Partnership in exchange for an aggregate of 56,304 OP Units, as required by the Operating Partnership’s partnership agreement, during the year ended December 31, 2024.
Issuance of Registered Equity Securities During the year ended December 31, 2023, the Company did not issue any shares of common stock under the 2021 ATM Program. As of December 31, 2023, there were no outstanding forward sale agreements, and $900.0 million of shares remain available to be sold under the 2021 ATM Program.
As of December 31, 2024, there were no outstanding forward sale agreements, and $900.0 million of shares remained available to be sold under the 2024 ATM Program.
This comparison assumes that the value of the investment in the common stock and each index was $100 on December 31, 2018 and that all dividends were reinvested. 34 Table of Contents Period Ending Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Essex Property Trust, Inc. $ 100.00 $ 125.92 $ 103.14 $ 157.18 $ 97.83 $ 119.33 FTSE NAREIT Equity Apartments Index $ 100.00 $ 126.32 $ 106.94 $ 174.97 $ 119.06 $ 126.05 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 (1) Common stock performance data is provided by S&P Global Market Intelligence.
This comparison assumes that the value of the investment in the common stock and each index was $100 on December 31, 2019 and that all dividends were reinvested. 34 Table of Contents Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Essex Property Trust, Inc. $ 100.00 $ 81.91 $ 124.83 $ 77.69 $ 94.76 $ 112.16 FTSE NAREIT Equity Apartments Index $ 100.00 $ 84.66 $ 138.51 $ 94.25 $ 99.78 $ 120.22 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 (1) Common stock performance data is provided by S&P Global Market Intelligence.
During the year ended December 31, 2023, the Company repurchased and retired 437,026 shares of its common stock totaling $95.7 million, including commissions, at an average price of $218.88 per share. As of December 31, 2023, the Company had $302.7 million of purchase authority remaining under the stock repurchase plan.
During the year ended December 31, 2024, the Company did not repurchase any shares. As of December 31, 2024, the Company had $302.7 million of purchase authority remaining under the stock repurchase plan.
Removed
During the years ended December 31, 2023 and 2022, Essex issued an aggregate of 13,684 and 8,310 shares of its common stock in connection with the exchange of OP Units by limited partners into shares of common stock.
Added
Issuance of Registered Equity Securities In August 2024, the Company entered into 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.
Added
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.
Added
The 2024 ATM Program replaced the 2021 ATM Program, which was terminated upon the establishment of the 2024 ATM Program. During the year ended December 31, 2024, the Company did not issue any shares of common stock under the 2024 ATM Program or the 2021 ATM Program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+16 added−21 removed47 unchanged
Biggest changeThe 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. 47 Table of Contents 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: potential future outbreaks of infectious diseases or other health concerns, which could adversely affect the Company's business and its tenants, and cause a significant downturn in general economic conditions, the real estate industry, and the markets in which the Company's communities are located; the Company may fail to achieve its business objectives; the actual completion of development and redevelopment projects may be subject to delays; the stabilization dates of such projects may be delayed; the Company may abandon or defer development or redevelopment projects for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; the total projected costs of current development and redevelopment projects may exceed expectations; such development and redevelopment projects may not be completed; development and redevelopment projects and acquisitions may fail to meet expectations; estimates of future income from an acquired property may prove to be inaccurate; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the Company may be unsuccessful in the management of its relationships with its co-investment partners; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; unexpected difficulties in leasing of development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; the Company’s inability to maintain our investment grade credit rating with the rating agencies; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors discussed in Item 1A, Risk Factors, of this Form 10-K, 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.
Biggest changeFactors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the short and long-term impact of the January 2025 California wildfires, including in relation to regulation, insurance, tenant demand and other factors; 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; 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 48 Table of Contents co-investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects; 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; 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 discussed in Item 1A, Risk Factors, of this Form 10-K, 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.
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.
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.
The judgments regarding the existence of impairment indicators are based on monitoring investment market conditions and performance for operating properties including the net operating income for the most recent 12 month period, monitoring estimated costs for properties under development, the Company's ability to hold and its intent with regard to each asset, and each property's remaining useful life.
The judgments regarding the existence of impairment indicators are based on monitoring investment market conditions and performance for operating properties including the net operating income for the most recent 44 Table of Contents 12 month period, monitoring estimated costs for properties under development, the Company’s ability to hold and its intent with regard to each asset, and each property’s remaining useful life.
The Company expects that cash from operations and/or its lines of credit will fund such expenditures. 42 Table of Contents Development and Predevelopment 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 expects that cash from operations and/or its lines of credit will fund such expenditures. Development and Predevelopment 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.
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.
GAAP do not reflect the underlying economic realities. 45 Table of Contents (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 foregoing macroeconomic conditions have not negatively impacted the Company's ability to access traditional funding sources on the same or reasonably similar terms as were available in recent periods prior to the pandemic, as demonstrated by the Company's financing activity during the year ended December 31, 2023 discussed in the “Liquidity and Capital Resources" section below.
The foregoing macroeconomic conditions have not negatively impacted the Company’s ability to access traditional funding sources on the same or reasonably similar terms as were available in recent periods prior to the pandemic, as demonstrated by the Company’s financing activity during the year ended December 31, 2024 discussed in the “Liquidity and Capital Resources” section below.
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.
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.
Essex is the sole general partner of the Operating Partnership and, as of December 31, 2023, had an approximately 96.6% 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.
Essex is the sole general partner of the Operating Partnership and, as of December 31, 2024, had an approximately 96.5% 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.
(4) Assumes conversion of all outstanding OP Units into shares of the Company's common stock and excludes DownREIT limited partnership units. 46 Table of Contents 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 consolidated statements of income.
(6) Assumes conversion of all outstanding OP Units into shares of the Company’s common stock and excludes DownREIT limited partnership units. 47 Table of Contents 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 consolidated statements of income.
Essex also guarantees some of the Operating Partnership’s debt, as discussed further in Notes 7 and 8 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
Essex also guarantees some of the Operating Partnership’s debt, as discussed further in Note 7, “Unsecured Debt”, and Note 8, “Mortgage Notes Payable”, to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
The Company has four total return swap contracts, with an aggregate notional amount of $222.7 million, that effectively converts $222.7 million of fixed mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index ("SIFMA") plus a spread.
The Company has four total return swap contracts, with an aggregate notional amount of $220.8 million, that effectively converts $220.8 million of fixed mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index (“SIFMA”) plus a spread.
The Company bases its accounting estimates on historical experience 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.
The Company bases its accounting estimates on historical experience, current market conditions and various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates made by management and those estimates could be different under different assumptions or conditions.
The underlying interest rate is based on a tiered rate structure tied to the Company's credit ratings, adjusted for the Company's sustainability metric grid, and was at Adjusted SOFR plus 0.75% as of December 31, 2023. This facility is scheduled to mature in July 2024.
The underlying interest rate on the $75.0 million line is based on a tiered rate structure tied to the Company’s credit ratings, adjusted for the Company’s sustainability metric adjustment feature, and was at the Adjusted SOFR plus 0.765% as of December 31, 2024. This facility is scheduled to mature in July 2026.
The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date should the Company elect to settle such forward sale agreement, in whole or in part, in shares of common stock.
The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date.
Comparison of Year Ended December 31, 2022 to the Year Ended December 31, 2021 For the comparison of the years ended December 31, 2022 and December 31, 2021, refer to Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations" on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023 under the subheading "Comparison of Year Ended December 31, 2022 to the Year Ended December 31, 2021." Liquidity and Capital Resources The following table sets forth the Company’s cash flows for 2023, 2022 and 2021 ($ in thousands): For the year ended December 31, 2023 2022 2021 Cash flow provided by (used in): Operating activities $ 980,064 $ 975,649 $ 905,259 Investing activities $ (145,140) $ 145,958 $ (397,397) Financing activities $ (477,271) $ (1,137,564) $ (533,265) Essex’s business is operated primarily through the Operating Partnership.
Comparison of Year Ended December 31, 2023 to the Year Ended December 31, 2022 For the comparison of the years ended December 31, 2023 and December 31, 2022, refer to Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, on Form 10-K for the fiscal year ended December 31, 2023, filed with the SEC on February 23, 2024 under the subheading “Comparison of Year Ended December 31, 2023 to the Year Ended December 31, 2022.” Liquidity and Capital Resources The following table sets forth the Company’s cash flows for the periods presented ($ in thousands): Year Ended December 31, 2024 2023 2022 Cash flow provided by (used in): Operating activities $ 1,068,305 $ 980,064 $ 975,649 Investing activities $ (973,051) $ (145,140) $ 145,958 Financing activities $ (419,742) $ (477,271) $ (1,137,564) Essex’s business is operated primarily through the Operating Partnership.
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 whether the Company’s rental properties may be impaired.
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.
Additionally, there was a $1.4 million decrease in capitalized interest in 2023, due to a decrease in development activity as compared to the same period in 2022.
Additionally, there was a $0.6 million decrease in capitalized interest in 2024, due to a decrease in development activity as compared to the same period in 2023.
These increases in interest expense were partially offset by regular principal payments and various debts that matured or were paid off, primarily due to the pay down of the $300.0 million of senior unsecured notes due May 1, 2023 and decreased borrowing on the Company's unsecured lines of credit during and after 2022, which resulted in a decrease in interest expense of $9.6 million for 2023.
These increases in interest expense were partially offset by regular principal payments and various debts that matured or were paid off, primarily due to the pay off of the $300.0 million of senior unsecured notes due May 1, 2023 and $400.0 million of senior unsecured notes due May 1, 2024 during and after 2023, which resulted in a decrease in interest expense of $14.3 million for 2024.
The reasonable likelihood that the estimate could have a material impact on the financial condition of the Company is based on the total consideration exchanged for real estate during any given year. The Company periodically assesses the carrying value of its real estate investments for indicators of impairment.
The reasonable likelihood that the estimate could have a material impact on the financial condition of the Company is based on the total consideration exchanged for real estate during any given year. The Company periodically assesses its real estate investments for events or changes in circumstances that indicate the carrying value may not be recoverable.
In the event that economic disruptions occur, the Company may further utilize other resources such as its cash reserves, lines of credit, or decreased investment in redevelopment activities to supplement operating cash flows. The Company is carefully monitoring and managing its cash position in light of ongoing conditions and levels of operations.
In the event that economic disruptions occur, the Company may further utilize other resources such as its cash reserves, lines of credit, or decreased investment in redevelopment activities to supplement operating cash flows.
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. 44 Table of Contents 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.
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.
Essex issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses from operating as a public company which are fully reimbursed by the Operating Partnership. 40 Table of Contents Essex itself does not hold any indebtedness, and its only material asset is its ownership of partnership interests of the Operating Partnership.
Essex issues public equity from time to time, but does not otherwise generate any capital itself or conduct any business itself, other than incurring certain expenses from operating as a public company which are fully reimbursed by the Operating Partnership.
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): 2023 2022 2021 Earnings from operations $ 584,342 $ 595,229 $ 529,995 Adjustments: Corporate-level property management expenses 45,872 40,704 36,211 Depreciation and amortization 548,438 539,319 520,066 Management and other fees from affiliates (11,131) (11,139) (9,138) General and administrative 63,474 56,577 51,838 Expensed acquisition and investment related costs 595 2,132 203 Casualty Loss 433 — — Gain on sale of real estate and land (59,238) (94,416) (142,993) NOI 1,172,785 1,128,406 986,182 Less: Non Same-Property NOI (54,179) (56,058) (45,149) Same-Property NOI $ 1,118,606 $ 1,072,348 $ 941,033 Forward-Looking Statements Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Annual Report on Form 10-K 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.
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): Year Ended December 31, 2024 2023 2022 Earnings from operations $ 703,095 $ 584,342 $ 595,229 Adjustments: Corporate-level property management expenses 48,218 45,872 40,704 Depreciation and amortization 580,220 548,438 539,319 Management and other fees from affiliates (10,265) (11,131) (11,139) General and administrative 98,902 63,474 56,577 Expensed acquisition and investment related costs 72 595 2,132 Casualty loss — 433 — Gain on sale of real estate and land (175,583) (59,238) (94,416) NOI 1,244,659 1,172,785 1,128,406 Less: Non Same-Property NOI (96,666) (53,485) (59,321) Same-Property NOI $ 1,147,993 $ 1,119,300 $ 1,069,085 Forward-Looking Statements Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and elsewhere in this Annual Report on Form 10-K 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.
The 2021 ATM Program replaced the prior equity distribution agreement entered into in September 2018 (the "2018 ATM Program"), which was terminated upon the establishment of the 2021 ATM Program. For the years ended December 31, 2023 and 2022, the Company did not sell any shares of its common stock through the 2021 ATM Program.
The 2024 ATM Program replaced the 2021 ATM Program, which was terminated upon the establishment of the 2024 ATM Program. For the years ended December 31, 2024, 2023 and 2022, the Company did not sell any shares of common stock through the 2024 ATM Program nor 2021 ATM Program.
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. 45 Table of Contents The table below is a reconciliation of net income available to common stockholders to FFO and Core FFO for the years ended December 31, 2023, 2022, and 2021.
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. 46 Table of Contents 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).
As of and for the years ended December 31, 2023 2022 2021 ($ in thousands, except per share amounts) OTHER DATA: Funds from operations attributable to common stockholders and unitholders: Net income available to common stockholders $ 405,825 $ 408,315 $ 488,554 Adjustments: Depreciation and amortization 548,438 539,319 520,066 Gains not included in FFO (59,238) (111,839) (145,253) Casualty loss 433 — — Impairment loss from unconsolidated co-investments 33,700 2,105 — Depreciation and amortization from unconsolidated co-investments 71,745 72,585 61,059 Noncontrolling interest related to Operating Partnership units 14,284 14,297 17,191 Depreciation attributable to third party ownership and other (1) (1,474) (1,421) (571) Funds from operations attributable to common stockholders and unitholders $ 1,013,713 $ 923,361 $ 941,046 Non-core items: Expensed acquisition and investment related costs 595 2,132 203 Tax expense (benefit) on unconsolidated co-investments (2) 697 (10,236) 15,668 Realized and unrealized (gains) losses on marketable securities, net (10,006) 45,547 (36,504) Provision for credit losses 70 (381) 141 Equity (income) loss from non-core co-investments (3) (1,685) 38,045 (55,602) Loss on early retirement of debt, net — 2 19,010 Loss on early retirement of debt from unconsolidated co-investment — 988 25 Co-investment promote income — (17,076) — Income from early redemption of preferred equity investments and notes receivable (285) (1,669) (8,469) General and administrative and other, net 6,629 2,536 1,026 Insurance reimbursements, legal settlements, and other, net (9,821) (5,392) (35,234) Core funds from operations attributable to common stockholders and unitholders $ 999,907 $ 977,857 $ 841,310 Weighted average number of shares outstanding, diluted (FFO) (4) 66,514 67,375 67,335 Funds from operations attributable to common stockholders and unitholders per share - diluted $ 15.24 $ 13.70 $ 13.98 Core funds from operations attributable to common stockholders and unitholders per share - diluted $ 15.03 $ 14.51 $ 12.49 (1) The Company consolidates certain co-investments.
Year Ended December 31, 2024 2023 2022 Net income available to common stockholders $ 741,522 $ 405,825 $ 408,315 Adjustments: Depreciation and amortization 580,220 548,438 539,319 Gains not included in FFO (386,138) (59,238) (111,839) Casualty loss — 433 — Impairment loss from unconsolidated co-investments 3,726 33,700 2,105 Depreciation and amortization from unconsolidated co-investments 66,943 71,745 72,585 Noncontrolling interest related to Operating Partnership units 26,414 14,284 14,297 Depreciation attributable to third party ownership and other (1) 31,191 (1,474) (1,421) Funds from operations attributable to common stockholders and unitholders $ 1,063,878 $ 1,013,713 $ 923,361 FFO per share-diluted $ 15.99 $ 15.24 $ 13.70 Non-core items: Expensed acquisition and investment related costs $ 72 $ 595 $ 2,132 Tax (benefit) expense on unconsolidated co-investments (2) (929) 697 (10,236) Realized and unrealized (gains) losses on marketable securities, net (8,347) (10,006) 45,547 Provision for credit losses (179) 70 (381) Equity (income) loss from non-core co-investments (3) (10,344) (1,685) 38,045 Loss on early retirement of debt, net — — 2 Loss on early retirement of debt from unconsolidated co-investment — — 988 Co-investment promote income (1,531) — (17,076) Income from early redemption of preferred equity investments and notes receivable — (285) (1,669) General and administrative and other, net (4) 39,341 6,629 2,536 Insurance reimbursements, legal settlements, and other, net (5) (43,794) (9,821) (5,392) Core funds from operations attributable to common stockholders and unitholders $ 1,038,167 $ 999,907 $ 977,857 Core FFO per share-diluted $ 15.60 $ 15.03 $ 14.51 Weighted average number of shares outstanding, diluted (6) 66,533,908 66,514,456 67,374,526 (1) The Company consolidates certain co-investments.
Variable Interest Entities In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidated the Operating Partnership, 18 DownREIT entities (comprising nine communities) and six co-investments as of December 31, 2023 and 2022. The Company consolidates these entities because it is deemed the primary beneficiary.
Variable Interest Entities In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidated the Operating Partnership, 18 DownREIT entities (comprising nine communities) and five co-investments as of December 31, 2024. As of December 31, 2023, the Company consolidated the Operating Partnership, 18 DownREIT entities (comprising nine communities) and six co-investments.
Noncontrolling interests in these entities were $121.1 million and $121.5 million as of December 31, 2023 and 2022, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE.
Noncontrolling interests in these entities were $105.1 million and $121.1 million as of December 31, 2024 and 2023, respectively. The Company’s financial risk in each VIE is limited to its equity investment in the VIE. As of December 31, 2024, the Company was not deemed to be the primary beneficiary of any other VIEs.
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.
Critical Accounting Estimates The preparation of 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.
As of December 31, 2023, the Company’s mortgage notes payable totaled $887.2 million, net of unamortized premiums and debt issuance costs, which consisted of $665.7 million in fixed rate debt at an average interest rate of 4.3% and maturity dates ranging from 2025 to 2033 and $221.5 million of tax-exempt variable rate demand notes with a weighted average interest rate of 4.6%.
As of December 31, 2024, the Company’s mortgage notes payable totaled $989.9 million, net of unamortized premiums and debt issuance costs, which consisted of $674.1 million in fixed rate debt at an average interest rate of 4.3% with maturity dates ranging from 2025 to 2033 and $315.8 million of variable rate debt at an average interest rate of 4.2% with maturity dates ranging from 2026 to 2046.
Property operating expenses, excluding real estate taxes increased by $16.3 million or 5.8% to $299.7 million in 2023 compared to $283.4 million in 2022, primarily due to increases of $5.1 million in utilities expenses, $4.7 million in maintenance and repairs expenses, $4.1 million in administrative expenses, and $2.4 million in personnel costs. 2023 Same-Property operating expenses, excluding real estate taxes, increased by $18.0 million or 6.6% to $292.0 million in 2023 compared to $274.0 million in 2022, primarily due to increases of $5.7 million in utilities expenses, $5.1 million in maintenance 39 Table of Contents and repairs expenses, $4.1 million in insurance and other expenses, $2.7 million in personnel costs, and $0.5 million in administrative expenses.
Property operating expenses, excluding real estate taxes increased by $26.4 million or 8.8% to $326.1 million in 2024 compared to $299.7 million in 2023, primarily due to increases of $10.6 million in utilities expenses, $7.8 million in administrative expenses, $7.3 million in personnel costs, and $0.7 million in maintenance and repairs expenses. 2024 Same-Property operating expenses, excluding real estate taxes, increased by $19.5 million or 6.7% to $308.8 million in 2024 compared to $289.3 million in 2023, primarily due to increases of $7.5 million in utilities expenses, $6.9 million in insurance and other expenses, $4.5 million in personnel costs, and $1.3 million in administrative expenses, offset by a decrease of $0.7 million in maintenance and repairs expenses.
At December 31, 2023, the Company had $391.7 million of unrestricted cash and cash equivalents and $87.8 million in marketable 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 2024.
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 41 Table of Contents meet all of its anticipated cash needs during 2025.
RESULTS OF OPERATIONS Comparison of Year Ended December 31, 2023 to the Year Ended December 31, 2022 The Company’s average financial occupancy for the Company’s stabilized apartment communities or "2023 Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2023 and 2022) increased 30 basis points to 96.4% in 2023 from 96.1% in 2022.
RESULTS OF OPERATIONS Comparison of Year Ended December 31, 2024 to the Year Ended December 31, 2023 The average financial occupancy for the Company’s 2024 Same-Property portfolio (stabilized properties consolidated by the Company for the years ended December 31, 2024 and 2023) was 96.1% and 96.5% for the years ended December 31, 2024 and 2023, respectively.
The aggregate carrying and fair value of the total return swaps was zero at both December 31, 2023 and 2022. Hedge ineffectiveness related to cash flow hedges, which is reported in current year income as interest expense, net was zero for the years ended December 31, 2023, 2022, and 2021.
The Company had no interest rate cap agreements as of December 31, 2024 and 2023, respectively. Hedge ineffectiveness related to cash flow hedges, which is reported in current year income as interest expense, net was zero for the years ended December 31, 2024, 2023 and 2022.
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.
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.
Same-Property operating expenses are projected to increase in 2024 by 3.5% to 5.0%. 37 Table of Contents The Company’s consolidated operating communities are as follows: As of As of December 31, 2023 December 31, 2022 Apartment Homes % Apartment Homes % Southern California 21,986 43 % 22,151 43 % Northern California 19,245 37 % 19,230 37 % Seattle Metro 10,341 20 % 10,341 20 % Total 51,572 100 % 51,722 100 % Co-investments, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.
The Company’s consolidated operating communities as of December 31, 2024 and 2023 were as follows: December 31, 2024 December 31, 2023 Apartment Homes % Apartment Homes % Southern California 23,817 44 % 21,986 43 % Northern California 19,747 36 % 19,245 37 % Seattle Metro 10,899 20 % 10,341 20 % Total 54,463 100 % 51,572 100 % 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.
The Company’s unsecured lines of credit and unsecured debt agreements contain debt covenants related to limitations on indebtedness and liabilities and maintenance of minimum levels of consolidated earnings before depreciation, interest and amortization.
The Company’s unsecured lines of credit and unsecured debt agreements contain debt covenants related to limitations on indebtedness and liabilities and maintenance of minimum levels of consolidated earnings before depreciation, interest and amortization. The Company was in compliance with the debt covenants as of December 31, 2024 and 2023. The Company pays quarterly dividends from cash available for distribution.
As of December 31, 2023, the Company owned or had ownership interests in 252 operating apartment communities, comprising 61,997 apartment homes, excluding the Company's ownership in preferred equity co-investments, loan investments, three operating commercial buildings, and a development pipeline comprised of one unconsolidated joint venture project.
As of December 31, 2024, the Company owned or had ownership interests in 255 operating apartment communities, comprising 62,157 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, and two operating commercial buildings.
In response, market interest rates have increased significantly during this time. The long-term impact of these developments will largely depend on future laws that may be enacted, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.
The long-term impact of these developments will largely depend on the impact on job growth, the broader economy, and reactions by consumers, companies, governmental entities and capital markets.
In connection with the 2021 ATM Program, the Company may also enter into related forward sale agreements, and may sell shares of its common stock pursuant to these agreements.
Issuance of Common Stock In August 2024, the Company entered into 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 noncontrolling interest's share of net operating income in these investments for the twelve months ended December 31, 2023 was $3.3 million. (2) Represents tax related to net unrealized gains or losses on technology co-investments. (3) Represents the Company's share of co-investment or loss from technology co-investments.
(2) Represents tax related to net unrealized gains or losses on technology co-investments. (3) Represents the Company’s share of co-investment income or loss from technology co-investments. (4) Includes political advocacy costs of $33.3 million, $4.1 million, and $1.9 million for the years ended December 31, 2024, 2023 and 2022 respectively.
Seattle Metro Region : As of December 31, 2023, this region represented 20% of the Company’s consolidated operating apartment homes. Same-Property revenues increased 4.0% in 2023 as compared to 2022. In 2024, the Company projects new residential supply of 11,700 apartment homes and single family homes, which represents 0.9% of the total housing stock.
Seattle Metro Region : As of December 31, 2024, this region represented 20% of the Company’s consolidated operating apartment homes. 2024 Same-Property revenues increased 2.9% in 2024 as compared to 2023.
By region, the Company's operating results for 2023 and 2022 and projection for 2024 new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing) and 2024 estimated Same-Property revenue growth are as follows: Southern California Region : As of December 31, 2023, this region represented 43% of the Company’s consolidated operating apartment homes.
The Company’s apartment communities are predominately 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 (Seattle metropolitan area) By region, the Company’s operating results for 2024 and 2023 and projection for 2025 new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing) are as follows: Southern California Region : As of December 31, 2024, this region represented 44% of the Company’s consolidated operating apartment homes.
Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were approximately $956.7 million and $324.5 million, respectively, as of December 31, 2023, and $939.4 million and $324.3 million, respectively, as of December 31, 2022.
The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were $893.0 million and $319.1 million, respectively, as of December 31, 2024, and $956.7 million and $324.5 million, respectively, as of December 31, 2023.
Interest expense increased by $8.1 million or 4.0% to $212.9 million in 2023 compared to $204.8 million in 2022 , primarily due to borrowing on the $300.0 million unsecured term loan in April 2023, the $298.0 million of 10-year secured loans closed in July 2023, and higher average interest rates resulting in an increase in interest expense of $16.3 million.
The increase was also due to borrowing on the $300.0 million unsecured term loan in April 2023, the $298.0 million of 10-year secured loans closed in July 2023, and increased borrowing on the Company’s unsecured lines of credit in 2024 resulting in a $16.2 million increase in interest expense.
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. 38 Table of Contents 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.
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 liquidity of Essex is dependent on the Operating Partnership’s ability to make sufficient distributions to Essex. The primary cash requirement of Essex is its payment of dividends to its stockholders.
As of December 31, 2024, Essex owned a 96.5% general partner interest and the limited partners owned the remaining 3.5% interest in the Operating Partnership. The liquidity of Essex is dependent on the Operating Partnership’s ability to make sufficient distributions to Essex. The primary cash requirement of Essex is its payment of dividends to its stockholders.
As of December 31, 2023, the Company's development pipeline was comprised of one unconsolidated joint venture project under development aggregating 264 apartment homes and various predevelopment projects, with total incurred costs of $114.0 million.
As of December 31, 2024, the Company’s development and predevelopment pipeline was comprised of various consolidated predevelopment projects, with total incurred costs of $52.7 million.
Concurrently, geopolitical tensions and regional conflicts have increased uncertainty during 2022 and 2023. Inflation has caused an increase in consumer prices, thereby reducing purchasing power and elevating the risks of a recession. Due to increased inflation, the U.S. Federal Reserve raised the federal funds rate a total of seven times during 2022 and four times in 2023.
Market Considerations Elevated inflation in recent years has caused an increase in consumer prices, thereby reducing purchasing power and elevating the risks of a recession. In response to increased inflation, the U.S. Federal Reserve raised the federal funds rate throughout 2022 and 2023 resulting in a significant increase of market interest rates. In the second half of 2024, the U.S.
As of December 31, 2023 and 2022, the swap contracts were presented in the consolidated balance sheets as an asset of $4.3 million and $5.6 million, respectively, and were included in prepaid expenses and other assets on the consolidated balance sheets.
The aggregate carrying and fair value of the total return swaps was zero at both December 31, 2024 and 2023. 42 Table of Contents As of December 31, 2024 and 2023 the aggregate carrying value of the interest rate swap contracts are an asset of $5.5 million and $4.3 million, respectively, and is included in prepaid expenses and other assets in the consolidated balance sheets.
As of December 31, 2023, the Company had $5.1 billion of fixed rate public bonds outstanding at an average interest rate of 3.3% with maturity dates ranging from 2024 to 2050.
As of December 31, 2024, Moody’s Investor Service and Standard and Poor’s (“S&P”) credit agencies rated Essex Property Trust, Inc. and Essex Portfolio, L.P. Baa1/Stable and BBB+/Stable, respectively. As of December 31, 2024, the Company had $5.2 billion of fixed rate public bonds outstanding at an average interest rate of 3.4% with maturity dates ranging from 2025 to 2050.
The Company can currently call all four of the total return swaps, with $222.7 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting. As of December 31, 2023 and 2022, the aggregate carrying value of the interest rate swap contracts were an asset of $4.3 million and $5.6 million, respectively.
The Company can currently call all four of the total return swaps, with $220.8 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting.
Capital Expenditures Non-revenue generating capital expenditures are improvements and upgrades that extend the useful life of the property. For the year ended December 31, 2023, non-revenue generating capital expenditures totaled approximately $2,531 per apartment home.
For the year ended December 31, 2024, non-revenue generating capital expenditures averaged approximately $2,109 per apartment home.
As of December 31, 2023, there was no amount outstanding on the $1.2 billion unsecured line of credit. The underlying interest rate is based on a tiered rate structure tied to the Company's credit ratings, adjusted for the Company's sustainability metric grid, and was at Adjusted SOFR plus 0.75% as of December 31, 2023.
The underlying interest rate is based on a tiered rate structure tied to the Company’s credit ratings, adjusted for the Company’s sustainability metric adjustment feature, and was at the Adjusted SOFR plus 0.765% as of December 31, 2024. This facility is scheduled to mature in January 2029, with two six-month extensions, exercisable at the Company’s option.
Estimated remaining project costs are approximately $12.0 million, $6.5 million of which represents the Company's share of the estimated remaining costs, for total estimated project costs of $126.0 million. 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 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 or sale.
Alternative Capital Sources The Company utilizes co-investments as an alternative source of capital for acquisitions of both operating and development communities. As of December 31, 2023, the Company had an interest in 264 apartment homes in communities actively under development with joint ventures for total estimated costs of $102.0 million.
Alternative Capital Sources The Company utilizes co-investments as an alternative source of capital for acquisitions of both operating and development communities.
The increase was primarily attributable to an increase of 4.5% in average rental rates from $2,493 for 2022 to $2,604 for 2023. 2023 Non-Same Property Revenues decreased by $3.8 million or 4.7% to $76.4 million in 2023 compared to $80.2 million in 2022.
The increase was primarily attributable to increases of 1.9% in average rental rates from $2,605 for 2023 to $2,655 for 2024, 0.8% in other property income, and 0.9% from a decrease in delinquencies, partially offset by a decrease of 0.4% in occupancy. 2024 Non-Same Property Revenues increased by $54.4 million or 74.3% to $127.7 million in 2024 compared to $73.3 million in 2023.
Northern California Region : As of December 31, 2023, this region represented 37% of the Company’s consolidated operating apartment homes. Same-Property revenues increased 4.0% in 2023 as compared to 2022. In 2024, the Company projects new residential supply of 10,500 apartment homes and single family homes, which represents 0.4% of the total housing stock.
Revenues for “2024 Same-Properties” (as defined below), or “Same-Property revenues,” increased 4.0% in 2024 as compared to 2023. Northern California Region : As of December 31, 2024, this region represented 36% of the Company’s consolidated operating apartment homes. 2024 Same-Property revenues increased 2.6% in 2024 as compared to 2023.
Essex’s principal funding requirement is the payment of dividends on its common stock. Essex’s sole source of funding for its dividend payments is distributions it receives from the Operating Partnership. As of December 31, 2023, Essex owned a 96.6% general partner interest and the limited partners owned the remaining 3.4% interest in the Operating Partnership.
Essex itself does not hold any indebtedness, and its only material asset is its ownership of partnership interests of the Operating Partnership. Essex’s principal funding requirement is the payment of dividends on its common stock. Essex’s sole source of funding for its dividend payments is distributions it receives from the Operating Partnership.
As of December 31, 2023, there were no outstanding forward purchase agreements, and $900.0 million of shares of common stock remain available to be sold under the 2021 ATM Program. For the year ended December 31, 2021, the Company did not issue any shares of its common stock through the 2021 ATM Program or through the 2018 ATM Program.
As of December 31, 2024, there were no outstanding forward purchase agreements, and $900.0 million of shares of common stock remained available to be sold under the 2024 ATM Program. Capital Expenditures Non-revenue generating capital expenditures are improvements and upgrades that extend the useful life of the property.
Real estate taxes increased by $1.9 million or 1.0% to $185.8 million in 2023 compared to $183.9 million in 2022, primarily due to an increase of approximately 2% in California real estate taxes, partially offset by a decrease from 2022 in real estate taxes in the Seattle metro region. 2023 Same-Property real estate taxes increased by $2.1 million or 1.3% to $171.3 million in 2023 compared to $169.2 million in 2022 primarily due to an increase of approximately 2% in California real estate taxes, partially offset by a decrease from 2022 in real estate taxes in the Seattle metro region.
Real estate taxes increased by $7.6 million or 4.1% to $193.4 million in 2024 compared to $185.8 million in 2023, primarily due to increases in tax rates in California and the Seattle Metro region and due to the purchase of Hacienda at Camarillo Oaks in 2023 and acquisitions in 2024. 2024 Same-Property real estate taxes increased by $3.4 million or 1.9% to $179.8 million in 2024 compared to $176.4 million in 2023 primarily due to increases in tax rates in California and the Seattle Metro region.
Equity income from co-investments decreased by $15.4 million or 59.2% to $10.6 million in 2023 compared to $26.0 million in 2022, primarily due to a decrease of $17.1 million in co-investment promote income, an increase of $31.6 million in impairment losses from unconsolidated co-investments offset by an increase of $39.7 million in equity income from non-core co-investments.
Interest and other income increased by $34.7 million or 74.9% to $81.0 million in 2024 compared to $46.3 million in 2023, primarily due to increases of $34.8 million in legal settlements and $1.3 million in interest income, offset by a decrease of $1.7 million in realized and unrealized gains on marketable securities. 40 Table of Contents Equity income from co-investments increased by $37.6 million or 354.7% to $48.2 million in 2024 compared to $10.6 million in 2023, primarily due to a decrease of $30.0 million in impairment losses from unconsolidated co-investments, increases of $8.7 million in equity income from non-core co-investments, $1.5 million in co-investment promote income, and a decrease of $4.8 million in equity loss from co-investments.
The tax-exempt variable rate demand notes have maturity dates ranging from 2027 to 2046. $222.7 million is subject to total return swaps. As of December 31, 2023, the Company had two unsecured lines of credit aggregating $1.24 billion, including a $1.2 billion unsecured line of credit and a $35.0 million working capital unsecured line of credit.
As of December 31, 2024, the Company had two unsecured lines of credit aggregating $1.28 billion, including a $1.2 billion unsecured line of credit and a $75.0 million working capital unsecured line of credit. As of December 31, 2024, there was $75.0 million outstanding on the $1.2 billion unsecured line of credit.
This facility is scheduled to mature in January 2027, with two six-month extensions, exercisable at the Company's option. As of December 31, 2023, there was no amount outstanding on the Company's $35.0 million working capital unsecured line of credit.
As of December 31, 2024, there was $62.9 million outstanding on the Company’s $75.0 million working capital unsecured line of credit.
The increase was partially offset by the sale of Anavia in 2022 and CBC and The Sweeps in 2023. Gain on sale of real estate and land of $59.2 million in 2023 was attributable to the sale of CBC and The Sweeps apartment home community and the sale of a land parcel.
Gain on sale of real estate and land of $175.6 million in 2024 was attributable to the sale of Hillsdale Garden in 2024.
The regional breakdown of the Company’s 2023 Same-Property portfolio for financial occupancy for the years ended December 31, 2023 and 2022 is as follows: Years ended December 31, 2023 2022 Southern California 96.3 % 96.2 % Northern California 96.5 % 96.1 % Seattle Metro 96.6 % 95.8 % The following table provides a breakdown of revenue amounts, including the revenues attributable to 2023 Same-Properties.
The regional breakdown of the Company’s 2024 Same-Property portfolio for financial occupancy for the years ended December 31, 2024 and 2023 was as follows: Year Ended December 31, 2024 2023 Southern California 95.8 % 96.3 % Northern California 96.3 % 96.5 % Seattle Metro 96.7 % 96.6 % 39 Table of Contents The following table provides a breakdown of property revenue amounts, including the revenues attributable to 2024 Same-Properties ($ in thousands): Number of Apartment Homes Year Ended December 31, Dollar Change Percentage Change 2024 2023 2024 Same-Properties: Southern California 21,573 $ 697,394 $ 670,475 $ 26,919 4.0 % Northern California 18,273 648,843 632,440 16,403 2.6 % Seattle Metro 10,341 290,294 282,092 8,202 2.9 % Total 2024 Same-Property Revenues 50,187 1,636,531 1,585,007 51,524 3.3 % 2024 Non-Same Property Revenues 127,654 73,257 54,397 74.3 % Total Property Revenues $ 1,764,185 $ 1,658,264 $ 105,921 6.4 % 2024 Same-Property Revenues increased by $51.5 million or 3.3%.
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.
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.
At December 31, 2023, the Company had operating lease commitments of $155.1 million for ground, building and garage leases with maturity dates ranging from 2025 to 2083. $7.3 million of this commitment is due within the next twelve months.
As of December 31, 2024, the Company had an interest in 7,694 apartment homes in operating communities with joint ventures and technology co-investments for a total book value of $379.5 million. 43 Table of Contents Real Estate and Other Commitments The following table summarizes the Company’s unfunded real estate and other future commitments as of December 31, 2024 ($ in thousands): Number of Properties Investment Remaining Commitment Joint ventures : Preferred equity investments 1 $ 85,000 $ 35,000 Non-core co-investments — 86,000 34,465 $ 171,000 $ 69,465 As of December 31, 2024, the Company had operating lease commitments of $125.1 million for ground, building and garage leases with maturity dates ranging from 2025 to 2083. $6.4 million of these commitments are due within the next twelve months.
Removed
The Company’s apartment communities are predominately 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 (Seattle metropolitan area) As of December 31, 2023, the Company’s development pipeline was comprised of one unconsolidated joint venture project under development aggregating 264 apartment homes and various predevelopment projects, with total incurred costs of $114.0 million.
Added
In each of these regions, projected 2025 growth in new residential supply of apartment homes and single family homes is expected to be 1% or less of the total housing stock.
Removed
The estimated remaining project costs are approximately $12.0 million, $6.5 million of which represents the Company's share of the estimated remaining costs, for total estimated project costs of $126.0 million. As of December 31, 2023, the Company also had an ownership interest in three operating commercial buildings (totaling approximately 283,000 square feet).
Added
The communities previously held in the BEXAEW, BEX II, Patina at Midtown, and Century 38 Table of Contents Towers co-investments, which were consolidated in 2024, are excluded from the table as December 31, 2023 but included in the table as of December 31, 2024.
Removed
Revenues for "2023 Same-Properties" (as defined below), or "Same-Property revenues," increased 4.9% in 2023 as compared to 2022. In 2024, the Company projects new residential supply of 27,400 apartment homes and single family homes, which represents 0.4% of the total housing stock.
Added
Federal Reserve lowered the federal funds rate in conjunction with the softening of U.S. inflation and short term market interest rates have declined. Concurrently, geopolitical tensions and regional conflicts have increased uncertainty during recent years.
Removed
In total, the Company projects an increase in 2024 Same-Property revenues of between 0.7% to 2.7%.
Added
The increase was primarily due to acquisitions of Hacienda at Camarillo Oaks in 2023, as well as the acquisitions of ARLO Mountain View, Maxwell Sunnyvale, and Beaumont, and the acquisition of the Company’s joint venture partner’s interests in the BEXAEW and BEX II portfolios, Patina at Midtown, and Century Towers in 2024.
Removed
Market Considerations The Company is emerging from restrictions resulting from the COVID-19 pandemic and continues to comply with the stated intent of local, county, state and federal laws, some of which limit rent increases during times of emergency and impair the ability to collect unpaid rent during certain timeframes and in various regions in which our communities are located, impacting the Company and its properties.
Added
The increases were partially offset by the sale of Hillsdale Garden in 2024.
Removed
Primarily as a result of the impact of the COVID-19 pandemic, the Company's cash delinquencies as a percentage of scheduled rental income for the Company’s stabilized apartment communities or "Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2023 and 2022) have generally remained higher than the pre-pandemic historical average of 0.35% since the second quarter of 2020.
Added
Depreciation and amortization expense increased by $31.8 million or 5.8% to $580.2 million in 2024 compared to $548.4 million in 2023, primarily due to acquisitions in 2023 and 2024. These increases were offset by the sale of CBC and The Sweeps in 2023 and Hillsdale Garden in 2024.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table represents scheduled principal payments ($ in thousands): For the Years Ended December 31, ($ in thousands, except for interest rates) 2024 2025 2026 2027 2028 Thereafter Total Fair value Fixed rate debt $ 402,177 $ 632,035 $ 548,291 $ 419,558 $ 517,000 $ 3,198,000 $ 5,717,061 $ 5,299,805 Average interest rate 4.0 % 3.5 % 3.5 % 3.8 % 2.2 % 3.3 % Variable rate debt (1) $ 932 $ 1,019 $ 1,114 $ 384,397 $ 1,332 $ 133,937 $ 522,731 $ 519,003 Average interest rate 4.7 % 4.7 % 4.7 % 4.2 % 4.7 % 4.6 % (1) $222.7 million of variable rate debt is tax exempt to the note holders.
Biggest changeThe following table represents scheduled principal payments ($ in thousands): Year Ended December 31, 2025 2026 2027 2028 2029 Thereafter Total Fair value Fixed rate debt $ 643,035 $ 548,291 $ 419,558 $ 517,000 $ 500,000 $ 3,248,000 $ 5,875,884 $ 5,489,008 Average interest rate 3.5 % 3.5 % 3.8 % 2.2 % 4.1 % 3.5 % Variable rate debt (1) $ 1,019 $ 159,059 $ 384,397 $ 1,332 $ 76,456 $ 132,481 $ 754,744 $ 749,386 Average interest rate 4.2 % 4.9 % 4.1 % 4.2 % 5.7 % 4.2 % (1) $220.8 million of variable rate debt is tax exempt to the note holders.
The table incorporates only those exposures that exist as of December 31, 2023. It does not consider those exposures or positions that could arise after that date. As a result, the Company’s ultimate realized gain or loss, with respect to interest rate fluctuations and hedging strategies would depend on the exposures that arise prior to settlement. Item 8.
The table incorporates only those exposures that exist as of December 31, 2024. It does not consider those exposures or positions that could arise after that date. As a result, the Company’s ultimate realized gain or loss, with respect to interest rate fluctuations and hedging strategies would depend on the exposures that arise prior to settlement. Item 8.
The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of December 31, 2023.
The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of December 31, 2024 ($ in thousands).
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. Management has estimated the fair value of the Company’s $5.7 billion of fixed rate debt at December 31, 2023, to be $5.3 billion.
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. Management has estimated the fair value of the Company’s $5.9 billion of fixed rate debt as of December 31, 2024, to be $5.5 billion.
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.
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.
The Company’s interest rate swap was designated as a cash flow hedge as of December 31, 2023. 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 December 31, 2023.
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 December 31, 2024.
These derivatives do not qualify for hedge accounting. 48 Table of Contents Interest Rate Sensitive Liabilities The Company is exposed to interest rate changes primarily as a result of its lines of credit and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company’s real estate investment portfolio and operations.
Interest Rate Sensitive Liabilities The Company is exposed to interest rate changes primarily as a result of its lines of credit and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company’s real estate investment portfolio and operations.
Management has estimated the fair value of the Company’s $522.7 million of variable rate debt at December 31, 2023, to be $519.0 million based on the terms of existing mortgage notes payable and variable rate demand notes compared to those available in the marketplace.
Management has estimated the fair value of the Company’s $754.7 million of variable rate debt as of December 31, 2024, to be $749.4 million 49 Table of Contents based on the terms of existing mortgage notes payable and variable rate demand notes compared to those available in the marketplace.
Notional Amount Maturity Date Range Carrying and Estimated Fair Value Estimated Carrying Value +50 -50 ($ in thousands) Basis Points Basis Points Cash flow hedges: Interest rate swaps $ 300,000 2026 $ 4,274 $ 7,961 $ 502 Total cash flow hedges $ 300,000 2026 $ 4,274 $ 7,961 $ 502 Additionally, the Company has entered into total return swap contracts, with an aggregate notional amount of $222.7 million that effectively convert $222.7 million of fixed mortgage notes payable to a floating interest rate based on the SIFMA plus a spread and have a carrying value of zero at December 31, 2023.
Notional Amount Maturity Date Carrying and Estimated Fair Value Estimated Carrying Value +50 -50 Basis Points Basis Points Cash flow hedges: Interest rate swaps $ 347,500 2026 $ 5,467 $ 8,185 $ 2,732 Total cash flow hedges $ 347,500 2026 $ 5,467 $ 8,185 $ 2.732 Additionally, the Company has entered into total return swap contracts, with an aggregate notional amount of $220.8 million that effectively convert $220.8 million of fixed mortgage notes payable to a floating interest rate based on the SIFMA plus a spread and have a carrying value of zero as of December 31, 2024.
As of December 31, 2023, the Company had one interest rate swap contract to mitigate the risk of changes in the interest-related cash outflows on $300.0 million of the unsecured term loan. As of December 31, 2023, the Company also had $222.7 million of secured variable rate indebtedness.
As of December 31, 2024, the Company had two interest rate swap contracts to mitigate the risk of changes in the interest-related cash outflows on the Company’s $300.0 million unsecured term loan and $47.5 million of variable rate mortgage notes payable. The Company’s interest rate swap was designated as a cash flow hedge as of December 31, 2024.

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