Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2021 | Oct. 25, 2021 | |
Entity Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-13106 | |
Entity Registrant Name | ESSEX PROPERTY TRUST, INC. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 77-0369576 | |
Entity Address, Address Line One | 1100 Park Place, Suite 200 | |
Entity Address, City or Town | San Mateo | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 94403 | |
City Area Code | 650 | |
Local Phone Number | 655-7800 | |
Title of 12(b) Security | Common Stock, $.0001 par value (Essex Property Trust, Inc.) | |
Trading Symbol | ESS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 65,087,831 | |
Entity Central Index Key | 0000920522 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Essex Portfolio, L.P. | ||
Entity Information [Line Items] | ||
Entity File Number | 333-44467-01 | |
Entity Registrant Name | ESSEX PORTFOLIO, L.P. | |
Entity Incorporation, State or Country Code | CA | |
Entity Tax Identification Number | 77-0369575 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Rental properties: | ||
Land and land improvements | $ 2,997,904 | $ 2,929,009 |
Buildings and improvements | 12,414,770 | 12,132,736 |
Total rental properties | 15,412,674 | 15,061,745 |
Less: accumulated depreciation | (4,509,243) | (4,133,959) |
Net real estate | 10,903,431 | 10,927,786 |
Real estate under development | 212,426 | 386,047 |
Co-investments | 1,081,861 | 1,018,010 |
Real estate held for sale | 0 | 57,938 |
Total real estate | 12,197,718 | 12,389,781 |
Cash and cash equivalents-unrestricted | 49,910 | 73,629 |
Cash and cash equivalents-restricted | 11,042 | 10,412 |
Marketable securities, net of allowance for credit losses of zero as of both September 30, 2021 and December 31, 2020 | 183,140 | 147,768 |
Notes and other receivables, net of allowance for credit losses of $0.7 million and $0.8 million as of September 30, 2021 and December 31, 2020, respectively (includes related party receivables of $33.9 million and $4.7 million as of September 30, 2021 and December 31, 2020, respectively) | 213,985 | 195,104 |
Operating lease right-of-use assets | 69,756 | 72,143 |
Prepaid expenses and other assets | 63,090 | 47,340 |
Total assets | 12,788,641 | 12,936,177 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 5,405,520 | 5,607,985 |
Mortgage notes payable, net | 640,118 | 643,550 |
Lines of credit | 42,662 | 0 |
Accounts payable and accrued liabilities | 220,428 | 152,855 |
Construction payable | 32,777 | 31,417 |
Dividends payable | 143,036 | 141,917 |
Distributions in excess of investments in co-investments | 29,037 | 0 |
Operating lease liabilities | 71,520 | 74,037 |
Liabilities associated with real estate held for sale | 0 | 29,845 |
Other liabilities | 38,946 | 39,140 |
Total liabilities | 6,624,044 | 6,720,746 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 32,698 | 32,239 |
Equity/Capital: | ||
Common stock; $0.0001 par value, 670,000,000 shares authorized; 65,081,032 and 64,999,015 shares issued and outstanding, respectively | 7 | 6 |
Additional paid-in capital | 6,875,508 | 6,876,326 |
Distributions in excess of accumulated earnings | (917,315) | (861,193) |
Limited Partners: | ||
Accumulated other comprehensive loss, net | (8,968) | (14,729) |
Total stockholders' equity | 5,949,232 | 6,000,410 |
Noncontrolling interest | 182,667 | 182,782 |
Total equity | 6,131,899 | 6,183,192 |
Total liabilities and equity/capital | 12,788,641 | 12,936,177 |
Essex Portfolio, L.P. | ||
Rental properties: | ||
Land and land improvements | 2,997,904 | 2,929,009 |
Buildings and improvements | 12,414,770 | 12,132,736 |
Total rental properties | 15,412,674 | 15,061,745 |
Less: accumulated depreciation | (4,509,243) | (4,133,959) |
Net real estate | 10,903,431 | 10,927,786 |
Real estate under development | 212,426 | 386,047 |
Co-investments | 1,081,861 | 1,018,010 |
Real estate held for sale | 0 | 57,938 |
Total real estate | 12,197,718 | 12,389,781 |
Cash and cash equivalents-unrestricted | 49,910 | 73,629 |
Cash and cash equivalents-restricted | 11,042 | 10,412 |
Marketable securities, net of allowance for credit losses of zero as of both September 30, 2021 and December 31, 2020 | 183,140 | 147,768 |
Notes and other receivables, net of allowance for credit losses of $0.7 million and $0.8 million as of September 30, 2021 and December 31, 2020, respectively (includes related party receivables of $33.9 million and $4.7 million as of September 30, 2021 and December 31, 2020, respectively) | 213,985 | 195,104 |
Operating lease right-of-use assets | 69,756 | 72,143 |
Prepaid expenses and other assets | 63,090 | 47,340 |
Total assets | 12,788,641 | 12,936,177 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 5,405,520 | 5,607,985 |
Mortgage notes payable, net | 640,118 | 643,550 |
Lines of credit | 42,662 | 0 |
Accounts payable and accrued liabilities | 220,428 | 152,855 |
Construction payable | 32,777 | 31,417 |
Dividends payable | 143,036 | 141,917 |
Distributions in excess of investments in co-investments | 29,037 | 0 |
Operating lease liabilities | 71,520 | 74,037 |
Liabilities associated with real estate held for sale | 0 | 29,845 |
Other liabilities | 38,946 | 39,140 |
Total liabilities | 6,624,044 | 6,720,746 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 32,698 | 32,239 |
General Partner: | ||
Common equity (65,081,032 and 64,999,015 units issued and outstanding, respectively) | 5,958,200 | 6,015,139 |
Limited Partners: | ||
Common equity (2,282,464 and 2,294,760 units issued and outstanding, respectively) | 56,385 | 58,184 |
Accumulated other comprehensive loss, net | (5,340) | (11,303) |
Total partners' capital | 6,009,245 | 6,062,020 |
Noncontrolling interest | 122,654 | 121,172 |
Total capital | 6,131,899 | 6,183,192 |
Total liabilities and equity/capital | $ 12,788,641 | $ 12,936,177 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Marketable securities, allowance for credit loss | $ 0 | $ 0 |
Notes and other receivables, allowance for credit loss | 743,000 | 751,000 |
Related party receivables | $ 33,900,000 | $ 4,700,000 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 670,000,000 | 670,000,000 |
Common stock, shares issued (in shares) | 65,081,032 | 64,999,015 |
Common stock, shares outstanding (in shares) | 65,081,032 | 64,999,015 |
Essex Portfolio, L.P. | ||
Marketable securities, allowance for credit loss | $ 0 | $ 0 |
Notes and other receivables, allowance for credit loss | 700,000 | 800,000 |
Related party receivables | $ 33,900,000 | $ 4,700,000 |
Essex Portfolio, L.P. | General Partner | ||
Common stock, shares issued (in shares) | 65,081,032 | 64,999,015 |
Common stock, shares outstanding (in shares) | 65,081,032 | 64,999,015 |
Essex Portfolio, L.P. | Limited Partners | ||
Common stock, shares issued (in shares) | 2,282,464 | 2,294,760 |
Common stock, shares outstanding (in shares) | 2,282,464 | 2,294,760 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Rental and other property | $ 360,620 | $ 368,464 | $ 1,062,253 | $ 1,126,363 |
Management and other fees from affiliates | 2,237 | 2,347 | 6,707 | 7,312 |
Revenues | 362,857 | 370,811 | 1,068,960 | 1,133,675 |
Expenses: | ||||
Property operating, excluding real estate taxes | 69,529 | 68,037 | 197,895 | 197,310 |
Real estate taxes | 45,802 | 44,358 | 135,408 | 132,364 |
Corporate-level property management expenses | 9,068 | 8,619 | 27,120 | 26,024 |
Depreciation and amortization | 130,564 | 130,202 | 387,887 | 395,370 |
General and administrative | 12,712 | 13,310 | 34,746 | 42,244 |
Expensed acquisition and investment related costs | 108 | 2 | 164 | 104 |
Total expenses | 267,783 | 264,528 | 783,220 | 793,416 |
Gain on sale of real estate and land | 42,897 | 22,654 | 142,993 | 39,251 |
Earnings from operations | 137,971 | 128,937 | 428,733 | 379,510 |
Interest expense | (50,019) | (55,430) | (152,639) | (165,024) |
Total return swap income | 2,660 | 2,977 | 8,137 | 7,749 |
Interest and other income | 11,998 | 6,512 | 48,756 | 12,696 |
Equity income from co-investments | 25,433 | 14,960 | 60,692 | 53,514 |
Deferred tax expense on unrealized gain on unconsolidated co-investment | (3,041) | 0 | (5,391) | (1,636) |
Loss on early retirement of debt, net | 0 | (19,114) | (18,982) | (23,820) |
Gain on remeasurement of co-investment | 0 | 0 | 2,260 | 234,694 |
Net income (loss) | 125,002 | 78,842 | 371,566 | 497,683 |
Net income attributable to noncontrolling interest | (6,612) | (5,181) | (19,886) | (24,558) |
Net income available to common stockholders | 118,390 | 73,661 | 351,680 | 473,125 |
Comprehensive income | 125,829 | 80,818 | 377,529 | 494,668 |
Comprehensive income attributable to noncontrolling interest | (6,639) | (5,247) | (20,088) | (24,455) |
Comprehensive income attributable to controlling interest | $ 119,190 | $ 75,571 | $ 357,441 | $ 470,213 |
Basic: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.41 | $ 7.22 |
Weighted average number of shares/common units outstanding during the period (in shares) | 65,048,486 | 65,232,837 | 65,013,477 | 65,561,820 |
Diluted: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.40 | $ 7.21 |
Weighted average number of shares/common units outstanding during the period (in shares) | 65,147,781 | 65,241,428 | 65,075,174 | 65,676,093 |
Essex Portfolio, L.P. | ||||
Revenues: | ||||
Rental and other property | $ 360,620 | $ 368,464 | $ 1,062,253 | $ 1,126,363 |
Management and other fees from affiliates | 2,237 | 2,347 | 6,707 | 7,312 |
Revenues | 362,857 | 370,811 | 1,068,960 | 1,133,675 |
Expenses: | ||||
Property operating, excluding real estate taxes | 69,529 | 68,037 | 197,895 | 197,310 |
Real estate taxes | 45,802 | 44,358 | 135,408 | 132,364 |
Corporate-level property management expenses | 9,068 | 8,619 | 27,120 | 26,024 |
Depreciation and amortization | 130,564 | 130,202 | 387,887 | 395,370 |
General and administrative | 12,712 | 13,310 | 34,746 | 42,244 |
Expensed acquisition and investment related costs | 108 | 2 | 164 | 104 |
Total expenses | 267,783 | 264,528 | 783,220 | 793,416 |
Gain on sale of real estate and land | 42,897 | 22,654 | 142,993 | 39,251 |
Earnings from operations | 137,971 | 128,937 | 428,733 | 379,510 |
Interest expense | (50,019) | (55,430) | (152,639) | (165,024) |
Total return swap income | 2,660 | 2,977 | 8,137 | 7,749 |
Interest and other income | 11,998 | 6,512 | 48,756 | 12,696 |
Equity income from co-investments | 25,433 | 14,960 | 60,692 | 53,514 |
Deferred tax expense on unrealized gain on unconsolidated co-investment | (3,041) | 0 | (5,391) | (1,636) |
Loss on early retirement of debt, net | 0 | (19,114) | (18,982) | (23,820) |
Gain on remeasurement of co-investment | 0 | 0 | 2,260 | 234,694 |
Net income (loss) | 125,002 | 78,842 | 371,566 | 497,683 |
Net income attributable to noncontrolling interest | (2,444) | (2,588) | (7,483) | (8,015) |
Net income available to common stockholders | 122,558 | 76,254 | 364,083 | 489,668 |
Comprehensive income | 125,829 | 80,818 | 377,529 | 494,668 |
Comprehensive income attributable to noncontrolling interest | (2,444) | (2,588) | (7,483) | (8,015) |
Comprehensive income attributable to controlling interest | $ 123,385 | $ 78,230 | $ 370,046 | $ 486,653 |
Basic: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.41 | $ 7.22 |
Weighted average number of shares/common units outstanding during the period (in shares) | 67,336,164 | 67,528,346 | 67,307,259 | 67,858,961 |
Diluted: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.40 | $ 7.21 |
Weighted average number of shares/common units outstanding during the period (in shares) | 67,435,459 | 67,536,937 | 67,368,956 | 67,973,234 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Cumulative Effect, Period Of Adoption, Adjustment | Common Stock | Additional Paid-in Capital | Distributions in Excess of Accumulated Earnings | Distributions in Excess of Accumulated EarningsCumulative Effect, Period Of Adoption, Adjustment | Accumulated Other Comprehensive Loss | Noncontrolling Interest |
Issuance of common stock under: | ||||||||
Cumulative effect upon adoption of ASU No. 2016-13 | $ 6,403,504 | $ (190) | $ 7 | $ 7,121,927 | $ (887,619) | $ (190) | $ (13,888) | $ 183,077 |
Balance at period beginning (in shares) at Dec. 31, 2019 | 66,092 | |||||||
Balance at period beginning at Dec. 31, 2019 | 6,403,504 | $ (190) | $ 7 | 7,121,927 | (887,619) | $ (190) | (13,888) | 183,077 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 497,683 | 473,125 | 24,558 | |||||
Cash flow hedge losses reclassified to earnings | 3,282 | 3,171 | 111 | |||||
Change in fair value of derivatives and amortization of swap settlements | (6,119) | (5,911) | (208) | |||||
Change in fair value of marketable debt securities, net | (178) | (172) | (6) | |||||
Issuance of common stock under: | ||||||||
Stock option and restricted stock plans, net (in shares) | 95 | |||||||
Stock option and restricted stock plans, net | 9,201 | 9,201 | ||||||
Sale of common stock, net | (228) | (228) | ||||||
Equity based compensation costs | 9,294 | 8,956 | 338 | |||||
Retirement of common stock, net (in shares) | (985) | |||||||
Retirement of common stock, net | (222,990) | (222,990) | ||||||
Changes in the redemption value of redeemable noncontrolling interest | 6,691 | 6,888 | (197) | |||||
Changes in noncontrolling interest from acquisition | 1,349 | 1,349 | ||||||
Distributions to noncontrolling interest | (23,689) | (23,689) | ||||||
Redemptions of noncontrolling interest (in shares) | 8 | |||||||
Redemptions of noncontrolling interest | (2,971) | (2,123) | (848) | |||||
Common stock dividends | (407,157) | (407,157) | ||||||
Balance at period end (in shares) at Sep. 30, 2020 | 65,210 | |||||||
Balance at period end at Sep. 30, 2020 | 6,267,482 | $ 7 | 6,921,631 | (821,841) | (16,800) | 184,485 | ||
Issuance of common stock under: | ||||||||
Cumulative effect upon adoption of ASU No. 2016-13 | 6,352,881 | $ 7 | 6,944,805 | (760,028) | (18,710) | 186,807 | ||
Balance at period beginning (in shares) at Jun. 30, 2020 | 65,331 | |||||||
Balance at period beginning at Jun. 30, 2020 | 6,352,881 | $ 7 | 6,944,805 | (760,028) | (18,710) | 186,807 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 78,842 | 73,661 | 5,181 | |||||
Change in fair value of derivatives and amortization of swap settlements | 1,884 | 1,821 | 63 | |||||
Change in fair value of marketable debt securities, net | 92 | 89 | 3 | |||||
Issuance of common stock under: | ||||||||
Sale of common stock, net | (95) | (95) | ||||||
Equity based compensation costs | 2,361 | 2,279 | 82 | |||||
Retirement of common stock, net (in shares) | (121) | |||||||
Retirement of common stock, net | (26,586) | (26,586) | ||||||
Changes in the redemption value of redeemable noncontrolling interest | 2,522 | 2,346 | 176 | |||||
Distributions to noncontrolling interest | (7,677) | (7,677) | ||||||
Redemptions of noncontrolling interest | (1,268) | (1,118) | (150) | |||||
Common stock dividends | (135,474) | (135,474) | ||||||
Balance at period end (in shares) at Sep. 30, 2020 | 65,210 | |||||||
Balance at period end at Sep. 30, 2020 | 6,267,482 | $ 7 | 6,921,631 | (821,841) | (16,800) | 184,485 | ||
Issuance of common stock under: | ||||||||
Cumulative effect upon adoption of ASU No. 2016-13 | 6,267,482 | 7 | 6,921,631 | (821,841) | (16,800) | 184,485 | ||
Cumulative effect upon adoption of ASU No. 2016-13 | 6,183,192 | $ 6 | 6,876,326 | (861,193) | (14,729) | 182,782 | ||
Balance at period beginning (in shares) at Dec. 31, 2020 | 64,999 | |||||||
Balance at period beginning at Dec. 31, 2020 | 6,183,192 | $ 6 | 6,876,326 | (861,193) | (14,729) | 182,782 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 371,566 | 351,680 | 19,886 | |||||
Change in fair value of derivatives and amortization of swap settlements | 5,607 | 5,417 | 190 | |||||
Change in fair value of marketable debt securities, net | 356 | 344 | 12 | |||||
Issuance of common stock under: | ||||||||
Stock option and restricted stock plans, net (in shares) | 112 | |||||||
Stock option and restricted stock plans, net | 12,402 | $ 1 | 12,401 | |||||
Sale of common stock, net | (202) | (202) | ||||||
Equity based compensation costs | 9,495 | 9,172 | 323 | |||||
Retirement of common stock, net (in shares) | (40) | |||||||
Retirement of common stock, net | (9,172) | (9,172) | ||||||
Changes in the redemption value of redeemable noncontrolling interest | (4,922) | (5,499) | 577 | |||||
Contributions from noncontrolling interest | 1,900 | 1,900 | ||||||
Distributions to noncontrolling interest | (22,114) | (22,114) | ||||||
Redemptions of noncontrolling interest (in shares) | 10 | |||||||
Redemptions of noncontrolling interest | (8,407) | (7,518) | (889) | |||||
Common stock dividends | (407,802) | (407,802) | ||||||
Balance at period end (in shares) at Sep. 30, 2021 | 65,081 | |||||||
Balance at period end at Sep. 30, 2021 | 6,131,899 | $ 7 | 6,875,508 | (917,315) | (8,968) | 182,667 | ||
Issuance of common stock under: | ||||||||
Cumulative effect upon adoption of ASU No. 2016-13 | 6,136,703 | $ 7 | 6,862,879 | (899,663) | (9,768) | 183,248 | ||
Balance at period beginning (in shares) at Jun. 30, 2021 | 65,004 | |||||||
Balance at period beginning at Jun. 30, 2021 | 6,136,703 | $ 7 | 6,862,879 | (899,663) | (9,768) | 183,248 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income | 125,002 | 118,390 | 6,612 | |||||
Change in fair value of derivatives and amortization of swap settlements | 728 | 704 | 24 | |||||
Change in fair value of marketable debt securities, net | 99 | 96 | 3 | |||||
Issuance of common stock under: | ||||||||
Stock option and restricted stock plans, net (in shares) | 68 | |||||||
Stock option and restricted stock plans, net | 15,572 | 15,572 | ||||||
Sale of common stock, net | (118) | (118) | ||||||
Equity based compensation costs | 1,628 | 1,573 | 55 | |||||
Changes in the redemption value of redeemable noncontrolling interest | 1,673 | 1,253 | 420 | |||||
Distributions to noncontrolling interest | (7,257) | (7,257) | ||||||
Redemptions of noncontrolling interest (in shares) | 9 | |||||||
Redemptions of noncontrolling interest | (6,089) | (5,651) | (438) | |||||
Common stock dividends | (136,042) | (136,042) | ||||||
Balance at period end (in shares) at Sep. 30, 2021 | 65,081 | |||||||
Balance at period end at Sep. 30, 2021 | 6,131,899 | $ 7 | 6,875,508 | (917,315) | (8,968) | 182,667 | ||
Issuance of common stock under: | ||||||||
Cumulative effect upon adoption of ASU No. 2016-13 | $ 6,131,899 | $ 7 | $ 6,875,508 | $ (917,315) | $ (8,968) | $ 182,667 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||||
Common stock dividends (in dollars per share) | $ 2.09 | $ 2.0775 | $ 6.27 | $ 6.2325 |
Condensed Consolidated Statem_4
Condensed Consolidated Statement of Capital (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2019 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Net income | $ 125,002 | $ 78,842 | $ 371,566 | $ 497,683 | |
Cash flow hedge losses reclassified to earnings | 3,282 | ||||
Change in fair value of derivatives and amortization of swap settlements | 728 | 1,884 | 5,607 | (6,119) | |
Change in fair value of marketable debt securities, net | 99 | 92 | 356 | (178) | |
Issuance of common stock under: | |||||
Sale of common stock by general partner, net | (118) | (95) | (202) | (228) | |
Retirement of common units, net | (26,586) | (9,172) | (222,990) | ||
Accounting standards update | Accounting Standards Update 2016-13 [Member] | ||||
Changes in the redemption value of redeemable noncontrolling interest | 1,673 | 2,522 | (4,922) | 6,691 | |
Contributions from noncontrolling interest | 1,900 | ||||
Changes in noncontrolling interest from acquisition | 1,349 | ||||
Distributions to noncontrolling interest | (7,257) | (7,677) | (22,114) | (23,689) | |
Redemptions | (6,089) | (1,268) | (8,407) | (2,971) | |
Essex Portfolio, L.P. | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning | 6,136,703 | 6,352,881 | 6,183,192 | 6,403,504 | |
Net income | 125,002 | 78,842 | 371,566 | 497,683 | |
Cash flow hedge losses reclassified to earnings | 3,282 | ||||
Change in fair value of derivatives and amortization of swap settlements | 728 | 1,884 | 5,607 | (6,119) | |
Change in fair value of marketable debt securities, net | 99 | 92 | 356 | (178) | |
Issuance of common stock under: | |||||
General partner's stock based compensation, net | 15,572 | 12,402 | 9,201 | ||
Sale of common stock by general partner, net | (118) | (95) | (202) | (228) | |
Equity based compensation costs | 1,628 | 2,361 | 9,495 | 9,294 | |
Retirement of common units, net | (26,586) | (9,172) | (222,990) | ||
Accounting standards update | Accounting Standards Update 2016-13 [Member] | ||||
Cumulative effect upon adoption of ASU No. 2016-13 | 6,131,899 | 6,267,482 | 6,131,899 | 6,267,482 | $ 6,403,504 |
Changes in the redemption value of redeemable noncontrolling interest | 1,673 | 2,522 | (4,922) | 6,691 | |
Contributions from noncontrolling interest | 1,900 | ||||
Changes in noncontrolling interest from acquisition | 1,349 | ||||
Distributions to noncontrolling interest | (2,488) | (2,908) | (7,756) | (9,381) | |
Redemptions | (6,089) | (1,268) | (8,407) | (2,971) | |
Distributions declared | (140,811) | (140,243) | (422,160) | (421,465) | |
Balance at period end | $ 6,131,899 | $ 6,267,482 | $ 6,131,899 | $ 6,267,482 | 6,403,504 |
Essex Portfolio, L.P. | Common Equity | General Partner | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning (in shares) | 65,004 | 65,331 | 64,999 | 66,092 | |
Balance at period beginning | $ 5,963,223 | $ 6,184,784 | $ 6,015,139 | $ 6,234,315 | |
Net income | $ 118,390 | 73,661 | $ 351,680 | $ 473,125 | |
Issuance of common stock under: | |||||
General partner's stock based compensation, net (in shares) | 68 | 112 | 95 | ||
General partner's stock based compensation, net | $ 15,572 | $ 12,402 | $ 9,201 | ||
Sale of common stock by general partner, net | (118) | (95) | (202) | (228) | |
Equity based compensation costs | 1,573 | $ 2,279 | $ 9,172 | $ 8,956 | |
Retirement of common units, net (in shares) | (121) | (40) | (985) | ||
Retirement of common units, net | $ (26,586) | $ (9,172) | $ (222,990) | ||
Cumulative effect upon adoption of ASU No. 2016-13 | 5,958,200 | 6,099,797 | 5,958,200 | 6,099,797 | $ 6,234,315 |
Changes in the redemption value of redeemable noncontrolling interest | $ 1,253 | 2,346 | $ (5,499) | $ 6,888 | |
Redemptions (in shares) | 9 | 10 | 8 | ||
Redemptions | $ (5,651) | (1,118) | $ (7,518) | $ (2,123) | |
Distributions declared | $ (136,042) | $ (135,474) | $ (407,802) | $ (407,157) | |
Balance at period end (in shares) | 65,081 | 65,210 | 65,081 | 65,210 | 66,092 |
Balance at period end | $ 5,958,200 | $ 6,099,797 | $ 5,958,200 | $ 6,099,797 | $ 6,234,315 |
Essex Portfolio, L.P. | Common Equity | Limited Partners | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning (in shares) | 2,294 | 2,296 | 2,295 | 2,302 | |
Balance at period beginning | $ 56,950 | $ 61,437 | $ 58,184 | $ 57,359 | |
Net income | 4,168 | 2,593 | 12,403 | $ 16,543 | |
Issuance of common stock under: | |||||
Equity based compensation costs (in shares) | 2 | ||||
Equity based compensation costs | 55 | 82 | 323 | $ 338 | |
Cumulative effect upon adoption of ASU No. 2016-13 | 56,385 | 59,441 | 56,385 | 59,441 | $ 57,359 |
Changes in the redemption value of redeemable noncontrolling interest | $ 141 | 98 | $ 129 | $ (318) | |
Redemptions (in shares) | (12) | (13) | (8) | ||
Redemptions | $ (160) | $ (296) | $ (173) | ||
Distributions declared | $ (4,769) | $ (4,769) | $ (14,358) | $ (14,308) | |
Balance at period end (in shares) | 2,282 | 2,296 | 2,282 | 2,296 | 2,302 |
Balance at period end | $ 56,385 | $ 59,441 | $ 56,385 | $ 59,441 | $ 57,359 |
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning | (6,167) | (15,423) | (11,303) | (10,432) | |
Cash flow hedge losses reclassified to earnings | 3,282 | ||||
Change in fair value of derivatives and amortization of swap settlements | 728 | 1,884 | 5,607 | (6,119) | |
Change in fair value of marketable debt securities, net | 99 | 92 | 356 | (178) | |
Issuance of common stock under: | |||||
Cumulative effect upon adoption of ASU No. 2016-13 | (5,340) | (13,447) | (5,340) | (13,447) | (10,432) |
Balance at period end | (5,340) | (13,447) | (5,340) | (13,447) | (10,432) |
Essex Portfolio, L.P. | Noncontrolling Interest | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning | 122,697 | 122,083 | 121,172 | 122,262 | |
Net income | 2,444 | 2,588 | 7,483 | 8,015 | |
Issuance of common stock under: | |||||
Cumulative effect upon adoption of ASU No. 2016-13 | 122,654 | 121,691 | 122,654 | 121,691 | 122,262 |
Changes in the redemption value of redeemable noncontrolling interest | 279 | 78 | 448 | 121 | |
Contributions from noncontrolling interest | 1,900 | ||||
Changes in noncontrolling interest from acquisition | 1,349 | ||||
Distributions to noncontrolling interest | (2,488) | (2,908) | (7,756) | (9,381) | |
Redemptions | (278) | (150) | (593) | (675) | |
Balance at period end | $ 122,654 | $ 121,691 | $ 122,654 | 121,691 | 122,262 |
Essex Portfolio, L.P. | Cumulative Effect, Period Of Adoption, Adjustment | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning | (190) | ||||
Issuance of common stock under: | |||||
Cumulative effect upon adoption of ASU No. 2016-13 | (190) | ||||
Balance at period end | (190) | ||||
Essex Portfolio, L.P. | Cumulative Effect, Period Of Adoption, Adjustment | Common Equity | General Partner | |||||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||||
Balance at period beginning | $ (190) | ||||
Issuance of common stock under: | |||||
Cumulative effect upon adoption of ASU No. 2016-13 | (190) | ||||
Balance at period end | $ (190) |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Capital (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Essex Portfolio, L.P. | ||||
Distribution declared (in dollars per share) | $ 2.09 | $ 2.0775 | $ 6.27 | $ 6.2325 |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||||
Net income | $ 125,002 | $ 78,842 | $ 371,566 | $ 497,683 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Straight-lined rents | 8,734 | (15,485) | |||
Depreciation and amortization | 387,887 | 395,370 | |||
Amortization of discount on marketable securities | 0 | (6,598) | |||
Amortization of discount and debt financing costs, net | 7,987 | 5,177 | |||
Gain on sale of marketable securities | (2,499) | (124) | |||
Income from early redemption of notes receivable | (4,747) | 0 | |||
Provision for credit losses | (110) | 100 | |||
Unrealized gains on equity securities recognized through income | (23,772) | (2,215) | |||
Earnings from co-investments | (60,692) | (53,514) | |||
Operating distributions from co-investments | 78,360 | 41,202 | |||
Accrued interest from notes and other receivables | (12,253) | (1,574) | |||
Gain on the sale of real estate and land | (142,993) | (39,251) | |||
Equity-based compensation | 5,399 | 4,923 | |||
Loss on early retirement of debt, net | 0 | 19,114 | 18,982 | 23,820 | |
Gain on remeasurement of co-investment | 0 | 0 | (2,260) | (234,694) | |
Changes in operating assets and liabilities: | |||||
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets | 2,470 | (5,088) | |||
Accounts payable, accrued liabilities, and operating lease liabilities | 62,699 | 43,095 | |||
Other liabilities | 5,119 | 610 | |||
Net cash provided by operating activities | 699,877 | 653,437 | |||
Additions to real estate: | |||||
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired | (105,469) | (459,355) | |||
Redevelopment | (39,092) | (41,592) | |||
Development acquisitions of and additions to real estate under development | (45,381) | (90,273) | |||
Capital expenditures on rental properties | (81,063) | (64,269) | |||
Investments in notes receivable | (102,012) | (20,431) | |||
Collections of notes and other receivables | 88,744 | 98,711 | |||
Proceeds from insurance for property losses | 591 | 612 | |||
Proceeds from dispositions of real estate | 297,454 | 280,246 | |||
Contributions to co-investments | (223,175) | (61,056) | |||
Changes in refundable deposits | (8,356) | 96 | |||
Purchases of marketable securities | (23,740) | (38,909) | |||
Sales and maturities of marketable securities | 14,995 | 56,890 | |||
Non-operating distributions from co-investments | 131,297 | 37,342 | |||
Net cash used in investing activities | (95,207) | (301,988) | |||
Cash flows from financing activities: | |||||
Proceeds from unsecured debt and mortgage notes | 745,505 | 1,452,808 | |||
Payments on unsecured debt and mortgage notes | (952,608) | (587,057) | |||
Proceeds from lines of credit | 601,435 | 1,038,426 | |||
Repayments of lines of credit | (558,773) | (1,093,426) | |||
Retirement of common stock | (9,172) | (222,990) | |||
Additions to deferred charges | (8,237) | (13,761) | |||
Payments related to debt prepayment penalties | (18,342) | (19,605) | |||
Net proceeds from issuance of common stock | (202) | (228) | |||
Net proceeds from stock options exercised | 17,847 | 14,865 | |||
Payments related to tax withholding for share-based compensation | (5,445) | (5,664) | |||
Contributions from noncontrolling interest | 1,900 | 0 | |||
Distributions to noncontrolling interest | (21,979) | (23,302) | |||
Redemption of noncontrolling interest | (8,407) | (2,971) | |||
Redemption of redeemable noncontrolling interest | (4,463) | 0 | |||
Common stock dividends paid | (406,818) | (400,563) | |||
Net cash (used in) provided by financing activities | (627,759) | 136,532 | |||
Net (decrease) increase in unrestricted and restricted cash and cash equivalents | (23,089) | 487,981 | |||
Unrestricted and restricted cash and cash equivalents at beginning of period | 84,041 | 81,094 | $ 81,094 | ||
Unrestricted and restricted cash and cash equivalents at end of period | 60,952 | 569,075 | 60,952 | 569,075 | 84,041 |
Supplemental disclosure of cash flow information: | |||||
Cash paid for interest (net of $5.0 million and $12.3 million capitalized in 2021 and 2020, respectively) | 147,371 | 160,927 | |||
Operating cash flows from operating leases | 5,225 | 5,192 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||
Transfers between real estate under development and rental properties, net | 222,055 | 252,946 | |||
Transfer from real estate under development to co-investments | 1,853 | 1,387 | |||
Reclassifications to (from) redeemable noncontrolling interest to/from additional paid in capital and noncontrolling interest | 4,922 | (6,691) | |||
Essex Portfolio, L.P. | |||||
Cash flows from operating activities: | |||||
Net income | 125,002 | 78,842 | 371,566 | 497,683 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
Straight-lined rents | 8,734 | (15,485) | |||
Depreciation and amortization | 387,887 | 395,370 | |||
Amortization of discount on marketable securities | 0 | (6,598) | |||
Amortization of discount and debt financing costs, net | 7,987 | 5,177 | |||
Gain on sale of marketable securities | (2,499) | (124) | |||
Income from early redemption of notes receivable | (4,747) | 0 | |||
Provision for credit losses | (110) | 100 | |||
Unrealized gains on equity securities recognized through income | (23,772) | (2,215) | |||
Earnings from co-investments | (60,692) | (53,514) | |||
Operating distributions from co-investments | 78,360 | 41,202 | |||
Accrued interest from notes and other receivables | (12,253) | (1,574) | |||
Gain on the sale of real estate and land | (142,993) | (39,251) | |||
Equity-based compensation | 5,399 | 4,923 | |||
Loss on early retirement of debt, net | 0 | 19,114 | 18,982 | 23,820 | |
Gain on remeasurement of co-investment | 0 | 0 | (2,260) | (234,694) | |
Changes in operating assets and liabilities: | |||||
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets | 2,470 | (5,088) | |||
Accounts payable, accrued liabilities, and operating lease liabilities | 62,699 | 43,095 | |||
Other liabilities | 5,119 | 610 | |||
Net cash provided by operating activities | 699,877 | 653,437 | |||
Additions to real estate: | |||||
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired | (105,469) | (459,355) | |||
Redevelopment | (39,092) | (41,592) | |||
Development acquisitions of and additions to real estate under development | (45,381) | (90,273) | |||
Capital expenditures on rental properties | (81,063) | (64,269) | |||
Investments in notes receivable | (102,012) | (20,431) | |||
Collections of notes and other receivables | 88,744 | 98,711 | |||
Proceeds from insurance for property losses | 591 | 612 | |||
Proceeds from dispositions of real estate | 297,454 | 280,246 | |||
Contributions to co-investments | (223,175) | (61,056) | |||
Changes in refundable deposits | (8,356) | 96 | |||
Purchases of marketable securities | (23,740) | (38,909) | |||
Sales and maturities of marketable securities | 14,995 | 56,890 | |||
Non-operating distributions from co-investments | 131,297 | 37,342 | |||
Net cash used in investing activities | (95,207) | (301,988) | |||
Cash flows from financing activities: | |||||
Proceeds from unsecured debt and mortgage notes | 745,505 | 1,452,808 | |||
Payments on unsecured debt and mortgage notes | (952,608) | (587,057) | |||
Proceeds from lines of credit | 601,435 | 1,038,426 | |||
Repayments of lines of credit | (558,773) | (1,093,426) | |||
Retirement of common stock | (9,172) | (222,990) | |||
Additions to deferred charges | (8,237) | (13,761) | |||
Payments related to debt prepayment penalties | (18,342) | (19,605) | |||
Net proceeds from issuance of common stock | (202) | (228) | |||
Net proceeds from stock options exercised | 17,847 | 14,865 | |||
Payments related to tax withholding for share-based compensation | (5,445) | (5,664) | |||
Contributions from noncontrolling interest | 1,900 | 0 | |||
Distributions to noncontrolling interest | (6,323) | (6,287) | |||
Redemption of noncontrolling interest | (8,407) | (2,971) | |||
Redemption of redeemable noncontrolling interest | (4,463) | 0 | |||
Common stock dividends paid | (422,474) | (417,578) | |||
Net cash (used in) provided by financing activities | (627,759) | 136,532 | |||
Net (decrease) increase in unrestricted and restricted cash and cash equivalents | (23,089) | 487,981 | |||
Unrestricted and restricted cash and cash equivalents at beginning of period | 84,041 | 81,094 | 81,094 | ||
Unrestricted and restricted cash and cash equivalents at end of period | $ 60,952 | $ 569,075 | 60,952 | 569,075 | $ 84,041 |
Supplemental disclosure of cash flow information: | |||||
Cash paid for interest (net of $5.0 million and $12.3 million capitalized in 2021 and 2020, respectively) | 147,371 | 160,927 | |||
Operating cash flows from operating leases | 5,225 | 5,192 | |||
Supplemental disclosure of noncash investing and financing activities: | |||||
Transfers between real estate under development and rental properties, net | 222,055 | 252,946 | |||
Transfer from real estate under development to co-investments | 1,853 | 1,387 | |||
Reclassifications to (from) redeemable noncontrolling interest to/from additional paid in capital and noncontrolling interest | $ 4,922 | $ (6,691) |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Interest capitalized | $ 5 | $ 12.3 |
Essex Portfolio, L.P. | ||
Interest capitalized | $ 5 | $ 12.3 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. ("Essex" or the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2020. All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2021 and 2020 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.6% general partnership interest as of both September 30, 2021 and December 31, 2020. Total Operating Partnership limited partnership units ("OP Units," and the holders of such OP Units, "Unitholders") outstanding were 2,282,464 and 2,294,760 as of September 30, 2021 and December 31, 2020, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $729.8 million and $544.8 million as of September 30, 2021 and December 31, 2020, respectively. As of September 30, 2021, the Company owned or had ownership interests in 246 operating apartment communities, aggregating 60,799 apartment homes, excluding the Company’s ownership interest in preferred interest co-investments, loan investments, three operating commercial buildings, and a development pipeline comprised of two consolidated projects and one unconsolidated joint venture project. The operating apartment communities are located in Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas. Accounting Pronouncements Adopted in the Current Year In January 2021, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2021-01 "Reference Rate Reform (Topic 848): Scope." The amendments in ASU No. 2021-01 provide optional expedients to the current guidance on contract modifications and hedge accounting from the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance generally can be applied to applicable contract modifications through December 31, 2022. The Company adopted this new guidance in January 2021 on a prospective basis. This adoption did not have a material impact on the Company's consolidated results of operations or financial position. Revenues and Gains on Sale of Real Estate Revenues from tenants renting or leasing apartment homes are recorded when due from tenants and are recognized monthly as they are earned which generally approximates a straight-line basis, else, adjustments are made to conform to a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 9 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. See Note 3, Revenues, for additional information regarding such revenues. The Company also generates other property-related revenue associated with the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned. Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized is determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed. The Company recognizes any gains on sales of real estate when it transfers control of a property and when it is probable that the Company will collect substantially all of the related consideration. Marketable Securities The Company reports its equity securities and available for sale debt securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds and Level 2 for the unsecured debt, as defined by the FASB standard for fair value measurements). As of both September 30, 2021 and December 31, 2020, $2.5 million of equity securities were presented within common stock and stock funds in the tables below, which represent investments measured at fair value, using net asset value as a practical expedient, and are not categorized in the fair value hierarchy. Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, interest income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statements of income and comprehensive income. As of September 30, 2021 and December 31, 2020, equity securities and available for sale debt securities consisted primarily of investment-grade unsecured debt, and common stock and stock funds. As of September 30, 2021 and December 31, 2020, marketable securities consisted of the following ($ in thousands): September 30, 2021 Cost Gross Carrying Value Equity securities: Investment funds - debt securities $ 61,885 $ 24 $ 61,909 Common stock and stock funds 80,079 39,734 119,813 Debt securities: Available for sale Investment-grade unsecured debt 1,050 368 1,418 Total - Marketable securities $ 143,014 $ 40,126 $ 183,140 December 31, 2020 Cost Gross Carrying Value Equity securities: Investment funds - debt securities $ 49,646 $ 985 $ 50,631 Common stock and stock funds 81,074 15,001 96,075 Debt securities: Available for sale Investment-grade unsecured debt 1,050 12 1,062 Total - Marketable securities $ 131,770 $ 15,998 $ 147,768 The Company uses the specific identification method to determine the cost basis of a debt security sold and to reclassify amounts from accumulated other comprehensive income for such securities. For the three months ended September 30, 2021 and 2020, the proceeds from sales and maturities of marketable securities totaled $0.1 million and $52.6 million, respectively, which resulted in zero realized loss and $91 thousand in realized gains, respectively, for such periods. For the nine months ended September 30, 2021 and 2020, the proceeds from sales and maturities of marketable securities totaled $15.0 million and $56.9 million, respectively, which resulted in $2.5 million and $0.1 million in realized gains, respectively, for such periods. For the three and nine months ended September 30, 2021, the portion of equity security unrealized gains that were recognized in income totaled $7.1 million and $23.8 million, respectively, and were included in interest and other income on the Company's condensed consolidated statements of income and comprehensive income. For the three and nine months ended September 30, 2020, the portion of equity security unrealized gains or losses that were recognized in income totaled $3.3 million and $2.2 million in gains, respectively, and were included in interest and other income on the Company's condensed consolidated statements of income and comprehensive income. 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 September 30, 2021. As of December 31, 2020, the Company consolidated the Operating Partnership, 17 DownREIT entities (comprising nine communities) and five co-investments. The Company consolidates these entities because it is deemed the primary beneficiary. The Company 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 $909.1 million and $323.3 million, respectively, as of September 30, 2021 and $898.5 million and $326.8 million, respectively, as of December 31, 2020. Noncontrolling interests in these entities were $122.4 million and $120.8 million as of September 30, 2021 and December 31, 2020, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of September 30, 2021 and December 31, 2020, the Company did not have any VIEs of which it was not deemed to be the primary beneficiary. Equity-based Compensation The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, "Equity Based Compensation Plans," in the Company’s annual report on Form 10-K for the year ended December 31, 2020) are being amortized over the expected service periods. Fair Value of Financial Instruments Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of September 30, 2021 and December 31, 2020, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.7 billion and $5.5 billion at September 30, 2021 and December 31, 2020, respectively, was approximately $6.1 billion and $6.0 billion, respectively. Management has estimated that the fair value of the Company’s $366.4 million and $775.1 million of variable rate debt at September 30, 2021 and December 31, 2020, respectively, was approximately $364.3 million and $770.1 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of September 30, 2021 and December 31, 2020 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of September 30, 2021 and December 31, 2020. Capitalization of Costs The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $5.6 million and $6.1 million during the three months ended September 30, 2021 and 2020, respectively, and $17.5 million and $24.9 million for the nine months ended September 30, 2021 and 2020, respectively. The Company capitalizes leasing commissions associated with the lease-up of development communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented. Co-investments The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects. Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of income equal to the amount by which the fair value of the Company's previously owned co-investment interest exceeds its carrying value. A majority of the co-investments, excluding most preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments. Changes in Accumulated Other Comprehensive Loss, Net by Component Essex Property Trust, Inc. ($ in thousands): Change in fair Unrealized Total Balance at December 31, 2020 $ (14,771) $ 42 $ (14,729) Other comprehensive income before reclassification 5,406 344 5,750 Amounts reclassified from accumulated other comprehensive loss 11 — 11 Other comprehensive income 5,417 344 5,761 Balance at September 30, 2021 $ (9,354) $ 386 $ (8,968) Essex Portfolio, L.P. ($ in thousands): Change in fair Unrealized Total Balance at December 31, 2020 $ (11,346) $ 43 $ (11,303) Other comprehensive income before reclassification 5,595 356 5,951 Amounts reclassified from accumulated other comprehensive loss 12 — 12 Other comprehensive income 5,607 356 5,963 Balance at September 30, 2021 $ (5,739) $ 399 $ (5,340) Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income. Redeemable Noncontrolling Interest The carrying value of redeemable noncontrolling interests in the accompanying condensed consolidated balance sheets was $32.7 million and $32.2 million as of September 30, 2021 and December 31, 2020, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances. The changes to the redemption value of redeemable noncontrolling interests for the nine months ended September 30, 2021 is as follows ($ in thousands): Balance at December 31, 2020 $ 32,239 Reclassification due to change in redemption value and other 4,922 Redemptions (4,463) Balance at September 30, 2021 $ 32,698 Cash, Cash Equivalents and Restricted Cash Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2021 December 31, 2020 September 30, 2020 December 31, 2019 Cash and cash equivalents - unrestricted $ 49,910 $ 73,629 $ 558,446 $ 70,087 Cash and cash equivalents - restricted 11,042 10,412 10,629 11,007 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 60,952 $ 84,041 $ 569,075 $ 81,094 Accounting Estimates The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a real estate investment trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions. |
Significant Transactions During
Significant Transactions During the Nine Months Ended September 30, 2021 and Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Significant Transactions During the Nine Months Ended September 30, 2021 and Subsequent Events | Significant Transactions During the Nine Months Ended September 30, 2021 and Subsequent Events Significant Transactions Acquisitions In September 2021, the Company acquired 7 South Linden, a commercial property located in South San Francisco, CA for $33.5 million. The property is fully leased to two commercial tenants. The Company is currently pursuing entitlements to construct an apartment community on the property. In September 2021, Wesco VI, LLC ("Wesco VI"), a new joint venture with one of the Company's institutional partners, acquired Martha Lake Apartments, a 155 unit apartment home community located in Lynwood, WA, for a total contract price of $53.0 million. The property is encumbered by a $29.2 million related party bridge loan from the Company, with an interest rate of 2.15% and is scheduled to mature in December 2021. See the "Co-Investments" section below for further details related to the creation of Wesco VI. See Note 6, Related Party Transactions, for additional details. In September 2021, the Company acquired Third & Broad, a fully-leased single tenant commercial property located in downtown Seattle, WA for $52.5 million. The Company will hold the property for future apartment development. In June 2021, the Company acquired its joint venture partner, BEX III, LLC's ("BEX III") 50.0% interest in The Village at Toluca Lake, a community totaling 145 homes located in Burbank, CA, for total consideration of $31.8 million. Concurrent with the closing of the acquisition, the Company repaid $29.5 million in mortgage debt that encumbered the property. As a result of this acquisition, the Company realized a gain on remeasurement of co-investment of $2.3 million upon consolidation. Dispositions In August 2021, the Company sold Devonshire, a non-core apartment community with 276 apartment homes, located in Hemet, CA, for a total contract price of $54.5 million. The Company recognized a $42.9 million gain on sale. In February 2021, the Company sold Hidden Valley, a 324 apartment home community located in Simi Valley, CA, for a total contract price of $105.0 million. The Company recognized a $69.2 million gain on sale. In conjunction with the sale, the Company repaid $29.7 million of mortgage debt that encumbered the property. In February 2021, the Company sold Park 20, a 197 apartment home community located in San Mateo, CA, for a total contract price of $113.0 million. The Company recognized an immaterial gain on sale. In February 2021, the Company sold Axis 2300, a 115 apartment home community located in Irvine, CA, for a total contract price of $57.5 million. The Company recognized a $30.8 million gain on sale. Co-Investments Joint Ventures In September 2021, the Company formed a new joint venture entity, Wesco VI, with an institutional partner. Each partner has a 50.0% ownership interest and an initial equity commitment of $150.0 million. The joint venture is unconsolidated for financial reporting purposes. Preferred Equity Investments In September 2021, the Company originated a preferred equity investment totaling $26.2 million in one multifamily community located in Southern California. The investment has an initial preferred return of 12.5% and is scheduled to mature in September 2026. In August 2021, the Company originated a preferred equity investment totaling $11.0 million in one multifamily community located in Washington. The investment has an initial preferred return of 11.5% and is scheduled to mature in August 2026. In January 2021, the Company originated a preferred equity investment totaling $20.0 million in one multifamily community located in Washington. The investment has an initial preferred return of 10.0% and is scheduled to mature in January 2026. In August 2021, the Company received cash of $21.6 million, for the partial redemption of a preferred equity investment in a joint venture that holds property located in Northern California. In March 2021, the Company received cash of $10.0 million for the full redemption of a preferred equity investment in a joint venture that holds property located in Southern California. In March 2021, the Company received cash of $110.2 million, including an early redemption fee of $3.5 million for the full redemption of a preferred equity investment in a joint venture that holds property located in Southern California. Notes Receivable In September 2021, the Company provided a $29.2 million related party bridge loan to Wesco VI. The note receivable accrues interest at 2.15% and is scheduled to mature in December 2021. The bridge loan is classified within notes and other receivables in the accompanying condensed consolidated balance sheets. See Note 6, Related Party Transactions for additional details. In March 2021, the Company provided a $52.5 million related party bridge loan to Wesco I, LLC ("Wesco I") in connection with the payoff of a debt related to one of its properties located in Southern California. The note receivable accrued interest at 2.55% and was paid off in July 2021. In June 2021, the Company received cash of $36.5 million, including an early redemption fee of $4.7 million, for the full redemption of a mezzanine loan on a property located in Northern California. Common Stock During the three months ended March 31, 2021, the Company repurchased and retired 40,000 shares totaling $9.2 million, including commissions. The Company did not repurchase any shares subsequent to March 31, 2021. As of September 30, 2021, the Company had $214.5 million of purchase authority remaining under its $250.0 million stock repurchase plan. Senior Unsecured Debt In March 2021, the Operating Partnership issued $450.0 million of senior unsecured notes due on March 1, 2028 with a coupon rate of 1.700% per annum (the "2028 Notes"), which are payable on March 1 and September 1 of each year, beginning on September 1, 2021. The 2028 Notes were offered to investors at a price of 99.423% of par value. The 2028 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. The Company used the net proceeds of this offering to repay upcoming debt maturities, including all or a portion of certain unsecured term loans, and for general corporate and working capital purposes. In June 2021, the Operating Partnership issued $300.0 million of senior unsecured notes due on June 15, 2031 with a coupon rate of 2.550% per annum (the "2031 Notes"), which are payable on June 15 and December 15 of each year, beginning on December 15, 2021. The 2031 Notes were offered to investors at a price of 99.367% of par value. The 2031 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. The Company used the net proceeds of this offering to repay upcoming debt maturities, including to fund the redemption of $300.0 million aggregate principal amount (plus the make-whole amount and accrued and unpaid interest) of its outstanding 3.375% senior unsecured notes due January 2023, and for other general corporate and working capital purposes. Subsequent Events In October 2021, Wesco VI acquired Monterra, a 139 unit apartment home community in Mill Creek, WA, near Martha Lake, for a total contract price of $55.0 million. In October 2021, the Company committed to fund a $50.0 million mezzanine loan in a multifamily development community located in Northern California, with an initial 11.0% interest rate and a maturity date of October 2025, with options to extend for up to two years. The investment will fund concurrent with the senior construction loan which is scheduled to begin funding in the second half of 2022. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Disaggregated Revenue The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Rental income $ 355,591 $ 362,073 $ 1,046,218 $ 1,108,658 Other property 5,029 6,391 16,035 17,705 Management and other fees from affiliates 2,237 2,347 6,707 7,312 Total revenues $ 362,857 $ 370,811 $ 1,068,960 $ 1,133,675 The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Southern California $ 150,807 $ 136,651 $ 434,926 $ 426,987 Northern California 145,807 147,081 435,883 457,655 Seattle Metro 60,280 60,617 178,180 184,310 Other real estate assets (1) 3,726 24,115 13,264 57,411 Total rental and other property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 (1) Other real estate assets consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line rent adjustments for concessions. Executive management does not evaluate such operating performance geographically. The following table presents the Company’s rental and other property revenues disaggregated by current property category status ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Same-property (1) $ 325,153 $ 316,639 $ 957,908 $ 986,945 Acquisitions (2) 14,789 14,237 42,410 40,491 Development (3) 8,055 5,461 22,485 13,956 Redevelopment 4,340 4,277 13,079 14,774 Non-residential/other, net (4) 11,319 13,119 35,721 52,491 Straight line rent concession (5) (3,036) 14,731 (9,350) 17,706 Total rental and other property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 (1) Properties that have comparable stabilized results as of January 1, 2020 and are consolidated by the Company for the three and nine months ended September 30, 2021 and 2020. A community is generally considered to have reached stabilized operations once it achieves an initial occupancy of 90%. (2) Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2020. (3) Development includes properties developed which did not have stabilized results as of January 1, 2020. (4) Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, and two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets. (5) Same-property revenues reflect concessions on a cash basis. Total rental and other property revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP. Deferred Revenues and Remaining Performance Obligations When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $2.6 million and $3.1 million as of September 30, 2021 and December 31, 2020, respectively, and was included in accounts payable and accrued liabilities within the accompanying condensed consolidated balance sheets. The amount of revenue recognized for the nine months ended September 30, 2021 that was included in the December 31, 2020 deferred revenue balance was $0.5 million, which was included in interest and other income within the condensed consolidated statements of income and comprehensive income. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the revenue recognition accounting standard. As of September 30, 2021, the Company had $2.6 million of remaining performance obligations. The Company expects to recognize approximately 7% of these remaining performance obligations in 2021, an additional 55% through 2023, and the remaining balance thereafter. |
Co-investments
Co-investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Co-investments | Co-investments The Company has joint ventures and preferred equity investments in co-investments which are accounted for under the equity method. The co-investments, including BEXAEW, LLC ("BEXAEW"), BEX II, LLC ("BEX II"), BEX IV, LLC (""BEX IV"), 500 Folsom, Wesco I, Wesco III, LLC ("Wesco III"), Wesco IV, LLC ("Wesco IV"), Wesco V, LLC ("Wesco V"), and Wesco VI, own, operate, and develop apartment communities. The carrying values of the Company's co-investments as of September 30, 2021 and December 31, 2020 are as follows ($ in thousands, except parenthetical amounts): Weighted Average Company Ownership Percentage (1) September 30, 2021 December 31, 2020 Ownership interest in: Wesco I (2) , Wesco III, Wesco IV, Wesco V, and Wesco VI 52 % 138,745 178,322 BEXAEW, BEX II, BEX III (3), BEX IV, and 500 Folsom (4) 50 % 273,557 152,309 Other 46 % 58,504 27,635 Total operating and other co-investments, net 470,806 358,266 Total development co-investments 50 % 9,965 157,433 Total preferred interest co-investments (includes related party investments of $87.5 million and $81.4 million as of September 30, 2021 and December 31, 2020, respectively) 572,053 502,311 Total co-investments, net $ 1,052,824 $ 1,018,010 (1) Weighted average Company ownership percentages are as of September 30, 2021. (2) As of September 30, 2021, the Company's investment in Wesco I was classified as a liability of $29.0 million. (3) In June 2021, the Company purchased the additional 50% interest in BEX III. (4) 500 Folsom had not stabilized as of December 31, 2020. Its carrying value was included in the development co-investments balance as of December 31, 2020. The combined summarized financial information of co-investments is as follows ($ in thousands): September 30, 2021 December 31, 2020 Combined balance sheets: (1) Rental properties and real estate under development $ 4,216,981 $ 4,242,611 Other assets 228,721 200,777 Total assets $ 4,445,702 $ 4,443,388 Debt $ 2,705,882 $ 2,611,365 Other liabilities 221,022 189,515 Equity 1,518,798 1,642,508 Total liabilities and equity $ 4,445,702 $ 4,443,388 Company's share of equity $ 1,052,824 $ 1,018,010 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Combined statements of income: (1) Property revenues $ 71,195 $ 76,581 $ 211,359 $ 226,125 Property operating expenses (27,588) (28,047) (81,932) (79,621) Net operating income 43,607 48,534 129,427 146,504 Interest expense (15,347) (19,369) (48,012) (59,700) General and administrative (3,331) (5,161) (11,641) (12,636) Depreciation and amortization (32,290) (29,732) (96,812) (86,947) Net loss $ (7,361) $ (5,728) $ (27,038) $ (12,779) Company's share of net income (2) $ 25,433 $ 14,960 $ 60,692 $ 53,514 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $2.4 million and $2.2 million for the three months ended September 30, 2021 and 2020, respectively, and $7.0 million and $6.4 million for the nine months ended September 30, 2021 and 2020, respectively. |
Notes and Other Receivables
Notes and Other Receivables | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Notes and Other Receivables | Notes and Other Receivables Notes and other receivables consist of the following as of September 30, 2021 and December 31, 2020 ($ in thousands): September 30, 2021 December 31, 2020 Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018) $ 15,337 $ 14,216 Notes receivable, secured, bearing interest at 10.50%, due February 2023 (Originated March 2020) 16,591 15,299 Note receivable, secured, bearing interest at 11.00%, due October 2023 (Originated April 2020) (1) — 25,461 Notes receivable, secured, bearing interest at 9.00%, due December 2023 (Originated November 2020) 84,896 79,827 Notes receivable, secured, bearing interest at 11.50%, due November 2024 (Originated November 2020) 28,850 15,423 Related party note receivable, secured, bearing interest at 2.15%, due December 2021 (Originated September 2021) (2) 29,157 — Notes and other receivables from affiliates (3) 4,744 4,744 Straight line rent receivables (4) 16,464 25,214 Other receivables 18,689 15,671 Allowance for credit losses (743) (751) Total notes and other receivables $ 213,985 $ 195,104 (1) In June 2021, the Company received cash of $36.5 million, including an early redemption fee of $4.7 million, from the payoff of this note receivable. (2) See Note 6, Related Party Transactions, for additional details. (3) These amounts consist of short-term loans outstanding and due from various joint ventures as of September 30, 2021 and December 31, 2020. See Note 6, Related Party Transactions, for additional details. (4) These amounts are receivables from lease concessions recorded on a straight-line basis for the Company's operating properties. The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands): Mezzanine Loans Bridge Loans Total Balance at December 31, 2020 $ 751 $ — $ 751 Provision for credit losses (23) 15 (8) Balance at September 30, 2021 $ 728 $ 15 $ 743 No loans were placed on nonaccrual status or charged off during the nine months ended September 30, 2021 or 2020. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company charges certain fees relating to its co-investments for asset management, property management, development and redevelopment services. These fees from affiliates totaled $2.7 million and $3.0 million during the three months ended September 30, 2021 and 2020, respectively, and $7.5 million and $8.7 million during the nine months ended September 30, 2021 and 2020, respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of approximately $0.5 million and $0.6 million against general and administrative expenses for the three months ended September 30, 2021 and 2020, and $0.8 million and $1.4 million for the nine months ended September 30, 2021 and 2020, respectively. The Company’s Chairman and founder, Mr. George M. Marcus, is the Chairman of the Marcus & Millichap Company ("MMC"), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Co-Chairman of Marcus & Millichap, Inc. ("MMI"), and Mr. Marcus owns a controlling interest in MMI, a national brokerage firm listed on the New York Stock Exchange. For the three and nine months ended September 30, 2021, the Company did not pay any brokerage commissions related to real estate transactions to MMC and its affiliates. For the three and nine months ended September 30, 2020, the Company paid brokerage commissions totaling zero and $0.2 million, respectively, to MMC and its affiliates related to real estate transactions. In September 2021, the Company provided a $29.2 million related party bridge loan to Wesco VI in connection with the acquisition of Martha Lake Apartments. The note receivable accrues interest at 2.15% and is scheduled to mature in December 2021. The bridge loan is classified within notes and other receivables in the accompanying condensed consolidated balance sheets and had an outstanding balance of $29.2 million as of September 30, 2021. In March 2021, the Company provided a $52.5 million related party bridge loan to Wesco I in connection with the payoff of a debt related to one of its properties located in Southern California. The note receivable accrued interest at 2.55% and was paid off in July 2021. In November 2019, the Company provided an $85.5 million related party bridge loan to Wesco V in connection with the acquisition of Velo and Ray, a 308 unit apartment home community located in Seattle, WA. The note receivable accrued interest at LIBOR plus 1.30% and was scheduled to mature in February 2020, but was paid off in January 2020. The bridge loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets. In June 2019, the Company acquired Brio, a 300 unit apartment home community located in Walnut Creek, CA. The Company issued DownREIT units to an affiliate of MMC, based on a contract price of $164.9 million. The property was encumbered by $98.7 million of mortgage debt which was assumed by the Company at the time of acquisition. As a result of this transaction, the Company consolidated the property, based on a VIE analysis performed by the Company. In February 2019, the Company funded a $24.5 million preferred equity investment in an entity whose sponsor is an affiliate of MMC, which owns a multifamily development community located in Mountain View, CA. The investment has an initial preferred return of 11.0% and is scheduled to mature in February 2024. In October 2018, the Company funded a $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268 apartment home community development located in Burlingame, CA. This investment accrues interest based on an initial 12.0% preferred return. The investment is scheduled to mature in April 2024. In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400 apartment home community located in Ventura, CA. This investment accrues interest based on a 10.25% preferred return. The investment is scheduled to mature in May 2023. As of September 30, 2021, the Company had funded $23.4 million of the commitment. The remaining committed amount will be funded if and when requested by the sponsors. In March 2017, the Company converted its existing $15.3 million preferred equity investment in Sage at Cupertino, a 230 apartment home community located in San Jose, CA, into a 40.5% common equity ownership interest in the property. The Company issued DownREIT units to the other members, including an MMC affiliate, based on an estimated property valuation of $90.0 million. At the time of the conversion, the property was encumbered by $52.0 million of mortgage debt. As a result of this transaction, the Company consolidates the property, based on a consolidation analysis performed by the Company. As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of September 30, 2021 and December 31, 2020, $33.9 million and $4.7 million, respectively, of short-term loans remained outstanding due from joint venture affiliates and is classified within notes and other receivables in the accompanying condensed consolidated balance sheets. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Essex does not have indebtedness as debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities. Debt consists of the following ($ in thousands): September 30, 2021 December 31, 2020 Weighted Average Unsecured bonds private placement - fixed rate $ — $ 199,950 0.0 Term loan - variable rate 99,969 549,380 0.4 Bonds public offering - fixed rate 5,305,551 4,858,655 8.9 Unsecured debt, net (1) 5,405,520 5,607,985 Lines of credit (2) 42,662 — Mortgage notes payable, net (3) 640,118 643,550 8.7 Total debt, net $ 6,088,300 $ 6,251,535 Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering 3.3 % 3.4 % Weighted average interest rate on variable rate term loan 1.1 % 1.7 % Weighted average interest rate on lines of credit 1.0 % 1.0 % Weighted average interest rate on mortgage notes payable 2.6 % 2.7 % (1) Includes unamortized discount of $10.4 million and $10.1 million and unamortized debt issuance costs of $34.1 million and $31.9 million, as of September 30, 2021 and December 31, 2020, respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of September 30, 2021, excludes unamortized debt issuance costs of $4.6 million and $3.7 million as of September 30, 2021 and December 31, 2020, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of September 30, 2021, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.775%, which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of September 2025 with three six (3) Includes total unamortized premium of $2.8 million and $3.9 million, reduced by unamortized debt issuance costs of $1.5 million and $1.8 million, as of September 30, 2021 and December 31, 2020, respectively. The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit, as of September 30, 2021 are as follows ($ in thousands): Remaining in 2021 $ 893 2022 143,188 2023 302,945 2024 403,109 2025 633,054 Thereafter 4,605,629 Total $ 6,088,818 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's segment disclosures present the measure used by the chief operating decision makers for purposes of assessing each segment's performance. The Company's chief operating decision makers are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company's reportable operating segments. NOI represents total property revenues less direct property operating expenses. The executive management team generally evaluates the Company's operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California, and Seattle Metro. Excluded from segment revenues and NOI are management and other fees from affiliates and interest and other income. Non-segment revenues and NOI included in the following schedule also consist of revenues generated from commercial properties and properties that have been sold. Other non-segment assets include items such as real estate under development, co-investments, real estate held for sale, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets. The revenues and NOI for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2021 and 2020 ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues: Southern California $ 150,807 $ 136,651 $ 434,926 $ 426,987 Northern California 145,807 147,081 435,883 457,655 Seattle Metro 60,280 60,617 178,180 184,310 Other real estate assets 3,726 24,115 13,264 57,411 Total property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 Net operating income: Southern California $ 103,660 $ 91,639 $ 300,761 $ 295,402 Northern California 98,948 102,559 299,489 329,338 Seattle Metro 39,876 41,216 119,041 126,422 Other real estate assets 2,805 20,655 9,659 45,527 Total net operating income 245,289 256,069 728,950 796,689 Management and other fees from affiliates 2,237 2,347 6,707 7,312 Corporate-level property management expenses (9,068) (8,619) (27,120) (26,024) Depreciation and amortization (130,564) (130,202) (387,887) (395,370) General and administrative (12,712) (13,310) (34,746) (42,244) Expensed acquisition and investment related costs (108) (2) (164) (104) Gain on sale of real estate and land 42,897 22,654 142,993 39,251 Interest expense (50,019) (55,430) (152,639) (165,024) Total return swap income 2,660 2,977 8,137 7,749 Interest and other income 11,998 6,512 48,756 12,696 Equity income from co-investments 25,433 14,960 60,692 53,514 Deferred tax expense on unrealized gain on unconsolidated co-investment (3,041) — (5,391) (1,636) Loss on early retirement of debt, net — (19,114) (18,982) (23,820) Gain on remeasurement of co-investment — — 2,260 234,694 Net income $ 125,002 $ 78,842 $ 371,566 $ 497,683 Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2021 and December 31, 2020 ($ in thousands): September 30, 2021 December 31, 2020 Assets: Southern California $ 3,949,224 $ 3,981,650 Northern California 5,489,918 5,408,019 Seattle Metro 1,369,129 1,403,678 Other real estate assets 95,160 134,439 Net reportable operating segment - real estate assets 10,903,431 10,927,786 Real estate under development 212,426 386,047 Co-investments 1,081,861 1,018,010 Real estate held for sale — 57,938 Cash and cash equivalents, including restricted cash 60,952 84,041 Marketable securities 183,140 147,768 Notes and other receivables 213,985 195,104 Operating lease right-of-use assets 69,756 72,143 Prepaid expenses and other assets 63,090 47,340 Total assets $ 12,788,641 $ 12,936,177 |
Net Income Per Common Share and
Net Income Per Common Share and Net Income Per Common Unit | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share and Net Income Per Common Unit | Net Income Per Common Share and Net Income Per Common Unit ($ in thousands, except share and unit data): Essex Property Trust, Inc. Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common stockholders $ 118,390 65,048,486 $ 1.82 $ 73,661 65,232,837 $ 1.13 Effect of Dilutive Securities: Stock options — 99,295 — 8,591 Diluted: Net income available to common stockholders $ 118,390 65,147,781 $ 1.82 $ 73,661 65,241,428 $ 1.13 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common stockholders $ 351,680 65,013,477 $ 5.41 $ 473,125 65,561,820 $ 7.22 Effect of Dilutive Securities: Stock options — 61,697 — 20,026 DownREIT units — — 587 94,247 Diluted: Net income available to common stockholders $ 351,680 65,075,174 $ 5.40 $ 473,712 65,676,093 $ 7.21 The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,287,678 and 2,295,510, which include vested 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended September 30, 2021 and 2020, respectively, and 2,291,725 and 2,297,141 for the nine months ended September 30, 2021 and 2020, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $4.2 million and $2.6 million for the three months ended September 30, 2021 and 2020, respectively, and $12.4 million and $16.5 million for the nine months ended September 30, 2021 and 2020, respectively. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents. Stock options of zero and 493,567 for the three months ended September 30, 2021 and 2020, respectively, and 116,380 and 299,046 for the nine months ended September 30, 2021 and 2020, respectively, were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive. Essex Portfolio, L.P. Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common unitholders $ 122,558 67,336,164 $ 1.82 $ 76,254 67,528,346 $ 1.13 Effect of Dilutive Securities: Stock options — 99,295 — 8,591 Diluted: Net income available to common unitholders $ 122,558 67,435,459 $ 1.82 $ 76,254 67,536,937 $ 1.13 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common unitholders $ 364,083 67,307,259 $ 5.41 $ 489,668 67,858,961 $ 7.22 Effect of Dilutive Securities: Stock options — 61,697 — 20,026 DownREIT units — — 587 94,247 Diluted: Net income available to common unitholders $ 364,083 67,368,956 $ 5.40 $ 490,255 67,973,234 $ 7.21 Stock options of 0 and 493,567 for the three months ended September 30, 2021 and 2020, respectively, 116,380 and 299,046 for the nine months ended September 30, 2021 and 2020, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the periods ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of September 30, 2021 and December 31, 2020, the aggregate carrying value of the interest rate swap contracts were a liability of zero and $2.4 million, respectively. As of September 30, 2021 and December 31, 2020, the swap contracts were presented in the condensed consolidated balance sheets as an asset of zero for both periods and a liability of zero and $2.4 million, respectively, and were included in other liabilities on the condensed consolidated balance sheets. The Company has four total return swap contracts, with an aggregate notional amount of $224.5 million, that effectively convert $224.5 million of 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 total return swaps provide fair market value protection on the mortgage notes payable to the counterparties during the initial period of the total return swap until the Company's option to call the mortgage notes at par can be exercised. The Company can currently call all of its total return swaps, with $224.5 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting and had a carrying and fair value of zero at both September 30, 2021 and December 31, 2020. These total return swaps are scheduled to mature between November 2022 and December 2024. The realized gains of $2.7 million and $3.0 million for the three months ended September 30, 2021 and 2020, respectively, and $8.1 million and $7.7 million for the nine months ended September 30, 2021 and 2020, respectively, were reported in the condensed consolidated statements of income and comprehensive income as total return swap income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits have not had a material adverse effect on the Company's financial condition, results of operations or cash flows. While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company. The Company is subject to various federal, state, and local environmental and other laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new, changed or expired laws or regulations on its current portfolio or on other assets that the Company may acquire in the future, |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation Policy | The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. ("Essex" or the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2020. All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. |
Accounting Pronouncements Adopted in the Current Year | Accounting Pronouncements Adopted in the Current Year In January 2021, the Financial Accounting Standards Board (the "FASB") issued ASU No. 2021-01 "Reference Rate Reform (Topic 848): Scope." The amendments in ASU No. 2021-01 provide optional expedients to the current guidance on contract modifications and hedge accounting from the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance generally can be applied to applicable contract modifications through December 31, 2022. The Company adopted this new guidance in January 2021 on a prospective basis. This adoption did not have a material impact on the Company's consolidated results of operations or financial position. |
Revenues and Gains on Sale of Real Estate | Revenues and Gains on Sale of Real Estate Revenues from tenants renting or leasing apartment homes are recorded when due from tenants and are recognized monthly as they are earned which generally approximates a straight-line basis, else, adjustments are made to conform to a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 9 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. See Note 3, Revenues, for additional information regarding such revenues. The Company also generates other property-related revenue associated with the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned. Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized is determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed. The Company recognizes any gains on sales of real estate when it transfers control of a property and when it is probable that the Company will collect substantially all of the related consideration. |
Marketable Securities | Marketable Securities The Company reports its equity securities and available for sale debt securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds and Level 2 for the unsecured debt, as defined by the FASB standard for fair value measurements). As of both September 30, 2021 and December 31, 2020, $2.5 million of equity securities were presented within common stock and stock funds in the tables below, which represent investments measured at fair value, using net asset value as a practical expedient, and are not categorized in the fair value hierarchy. Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, interest income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statements of income and comprehensive income. |
Variable Interest Entities | 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 September 30, 2021. As of December 31, 2020, the Company consolidated the Operating Partnership, 17 DownREIT entities (comprising nine communities) and five co-investments. The Company consolidates these entities because it is deemed the primary beneficiary. The Company 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 $909.1 million and $323.3 million, respectively, as of September 30, 2021 and $898.5 million and $326.8 million, respectively, as of December 31, 2020. Noncontrolling interests in these entities were $122.4 million and $120.8 million as of September 30, 2021 and December 31, 2020, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of September 30, 2021 and December 31, 2020, the Company did not have any VIEs of which it was not deemed to be the primary beneficiary. |
Equity-based Compensation | Equity-based Compensation The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, "Equity Based Compensation Plans," in the Company’s annual report on Form 10-K for the year ended December 31, 2020) are being amortized over the expected service periods. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of September 30, 2021 and December 31, 2020, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.7 billion and $5.5 billion at September 30, 2021 and December 31, 2020, respectively, was approximately $6.1 billion and $6.0 billion, respectively. Management has estimated that the fair value of the Company’s $366.4 million and $775.1 million of variable rate debt at September 30, 2021 and December 31, 2020, respectively, was approximately $364.3 million and $770.1 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of September 30, 2021 and December 31, 2020 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of September 30, 2021 and December 31, 2020. |
Capitalization of Costs | Capitalization of Costs The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $5.6 million and $6.1 million during the three months ended September 30, 2021 and 2020, respectively, and $17.5 million and $24.9 million for the nine months ended September 30, 2021 and 2020, respectively. The Company capitalizes leasing commissions associated with the lease-up of development communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented. |
Co-investments | Co-investments The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects. Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of income equal to the amount by which the fair value of the Company's previously owned co-investment interest exceeds its carrying value. A majority of the co-investments, excluding most preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments. |
Changes in Accumulated Other Comprehensive Loss | Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt. |
Accounting Estimates | Accounting Estimates The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a real estate investment trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions. |
Organization and Basis of Pre_3
Organization and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of Marketable Securities | As of September 30, 2021 and December 31, 2020, marketable securities consisted of the following ($ in thousands): September 30, 2021 Cost Gross Carrying Value Equity securities: Investment funds - debt securities $ 61,885 $ 24 $ 61,909 Common stock and stock funds 80,079 39,734 119,813 Debt securities: Available for sale Investment-grade unsecured debt 1,050 368 1,418 Total - Marketable securities $ 143,014 $ 40,126 $ 183,140 December 31, 2020 Cost Gross Carrying Value Equity securities: Investment funds - debt securities $ 49,646 $ 985 $ 50,631 Common stock and stock funds 81,074 15,001 96,075 Debt securities: Available for sale Investment-grade unsecured debt 1,050 12 1,062 Total - Marketable securities $ 131,770 $ 15,998 $ 147,768 |
Changes in Accumulated Other Comprehensive Income (Loss) | Changes in Accumulated Other Comprehensive Loss, Net by Component Essex Property Trust, Inc. ($ in thousands): Change in fair Unrealized Total Balance at December 31, 2020 $ (14,771) $ 42 $ (14,729) Other comprehensive income before reclassification 5,406 344 5,750 Amounts reclassified from accumulated other comprehensive loss 11 — 11 Other comprehensive income 5,417 344 5,761 Balance at September 30, 2021 $ (9,354) $ 386 $ (8,968) Essex Portfolio, L.P. ($ in thousands): Change in fair Unrealized Total Balance at December 31, 2020 $ (11,346) $ 43 $ (11,303) Other comprehensive income before reclassification 5,595 356 5,951 Amounts reclassified from accumulated other comprehensive loss 12 — 12 Other comprehensive income 5,607 356 5,963 Balance at September 30, 2021 $ (5,739) $ 399 $ (5,340) |
Schedule of Changes to the Redemption Value of Noncontrolling Interests | The changes to the redemption value of redeemable noncontrolling interests for the nine months ended September 30, 2021 is as follows ($ in thousands): Balance at December 31, 2020 $ 32,239 Reclassification due to change in redemption value and other 4,922 Redemptions (4,463) Balance at September 30, 2021 $ 32,698 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2021 December 31, 2020 September 30, 2020 December 31, 2019 Cash and cash equivalents - unrestricted $ 49,910 $ 73,629 $ 558,446 $ 70,087 Cash and cash equivalents - restricted 11,042 10,412 10,629 11,007 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 60,952 $ 84,041 $ 569,075 $ 81,094 |
Schedule of Restricted Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2021 December 31, 2020 September 30, 2020 December 31, 2019 Cash and cash equivalents - unrestricted $ 49,910 $ 73,629 $ 558,446 $ 70,087 Cash and cash equivalents - restricted 11,042 10,412 10,629 11,007 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 60,952 $ 84,041 $ 569,075 $ 81,094 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Rental income $ 355,591 $ 362,073 $ 1,046,218 $ 1,108,658 Other property 5,029 6,391 16,035 17,705 Management and other fees from affiliates 2,237 2,347 6,707 7,312 Total revenues $ 362,857 $ 370,811 $ 1,068,960 $ 1,133,675 The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Southern California $ 150,807 $ 136,651 $ 434,926 $ 426,987 Northern California 145,807 147,081 435,883 457,655 Seattle Metro 60,280 60,617 178,180 184,310 Other real estate assets (1) 3,726 24,115 13,264 57,411 Total rental and other property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 (1) Other real estate assets consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line rent adjustments for concessions. Executive management does not evaluate such operating performance geographically. The following table presents the Company’s rental and other property revenues disaggregated by current property category status ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Same-property (1) $ 325,153 $ 316,639 $ 957,908 $ 986,945 Acquisitions (2) 14,789 14,237 42,410 40,491 Development (3) 8,055 5,461 22,485 13,956 Redevelopment 4,340 4,277 13,079 14,774 Non-residential/other, net (4) 11,319 13,119 35,721 52,491 Straight line rent concession (5) (3,036) 14,731 (9,350) 17,706 Total rental and other property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 (1) Properties that have comparable stabilized results as of January 1, 2020 and are consolidated by the Company for the three and nine months ended September 30, 2021 and 2020. A community is generally considered to have reached stabilized operations once it achieves an initial occupancy of 90%. (2) Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2020. (3) Development includes properties developed which did not have stabilized results as of January 1, 2020. (4) Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, and two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets. (5) Same-property revenues reflect concessions on a cash basis. Total rental and other property revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP. |
Co-investments (Tables)
Co-investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Summary of Co-Investments | The carrying values of the Company's co-investments as of September 30, 2021 and December 31, 2020 are as follows ($ in thousands, except parenthetical amounts): Weighted Average Company Ownership Percentage (1) September 30, 2021 December 31, 2020 Ownership interest in: Wesco I (2) , Wesco III, Wesco IV, Wesco V, and Wesco VI 52 % 138,745 178,322 BEXAEW, BEX II, BEX III (3), BEX IV, and 500 Folsom (4) 50 % 273,557 152,309 Other 46 % 58,504 27,635 Total operating and other co-investments, net 470,806 358,266 Total development co-investments 50 % 9,965 157,433 Total preferred interest co-investments (includes related party investments of $87.5 million and $81.4 million as of September 30, 2021 and December 31, 2020, respectively) 572,053 502,311 Total co-investments, net $ 1,052,824 $ 1,018,010 (1) Weighted average Company ownership percentages are as of September 30, 2021. (2) As of September 30, 2021, the Company's investment in Wesco I was classified as a liability of $29.0 million. (3) In June 2021, the Company purchased the additional 50% interest in BEX III. (4) 500 Folsom had not stabilized as of December 31, 2020. Its carrying value was included in the development co-investments balance as of December 31, 2020. |
Summarized Financial Information for Co-Investments Accounted For Under the Equity Method | The combined summarized financial information of co-investments is as follows ($ in thousands): September 30, 2021 December 31, 2020 Combined balance sheets: (1) Rental properties and real estate under development $ 4,216,981 $ 4,242,611 Other assets 228,721 200,777 Total assets $ 4,445,702 $ 4,443,388 Debt $ 2,705,882 $ 2,611,365 Other liabilities 221,022 189,515 Equity 1,518,798 1,642,508 Total liabilities and equity $ 4,445,702 $ 4,443,388 Company's share of equity $ 1,052,824 $ 1,018,010 Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Combined statements of income: (1) Property revenues $ 71,195 $ 76,581 $ 211,359 $ 226,125 Property operating expenses (27,588) (28,047) (81,932) (79,621) Net operating income 43,607 48,534 129,427 146,504 Interest expense (15,347) (19,369) (48,012) (59,700) General and administrative (3,331) (5,161) (11,641) (12,636) Depreciation and amortization (32,290) (29,732) (96,812) (86,947) Net loss $ (7,361) $ (5,728) $ (27,038) $ (12,779) Company's share of net income (2) $ 25,433 $ 14,960 $ 60,692 $ 53,514 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $2.4 million and $2.2 million for the three months ended September 30, 2021 and 2020, respectively, and $7.0 million and $6.4 million for the nine months ended September 30, 2021 and 2020, respectively. |
Notes and Other Receivables (Ta
Notes and Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Receivables [Abstract] | |
Notes and Other Receivables | Notes and other receivables consist of the following as of September 30, 2021 and December 31, 2020 ($ in thousands): September 30, 2021 December 31, 2020 Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018) $ 15,337 $ 14,216 Notes receivable, secured, bearing interest at 10.50%, due February 2023 (Originated March 2020) 16,591 15,299 Note receivable, secured, bearing interest at 11.00%, due October 2023 (Originated April 2020) (1) — 25,461 Notes receivable, secured, bearing interest at 9.00%, due December 2023 (Originated November 2020) 84,896 79,827 Notes receivable, secured, bearing interest at 11.50%, due November 2024 (Originated November 2020) 28,850 15,423 Related party note receivable, secured, bearing interest at 2.15%, due December 2021 (Originated September 2021) (2) 29,157 — Notes and other receivables from affiliates (3) 4,744 4,744 Straight line rent receivables (4) 16,464 25,214 Other receivables 18,689 15,671 Allowance for credit losses (743) (751) Total notes and other receivables $ 213,985 $ 195,104 (1) In June 2021, the Company received cash of $36.5 million, including an early redemption fee of $4.7 million, from the payoff of this note receivable. (2) See Note 6, Related Party Transactions, for additional details. (3) These amounts consist of short-term loans outstanding and due from various joint ventures as of September 30, 2021 and December 31, 2020. See Note 6, Related Party Transactions, for additional details. (4) These amounts are receivables from lease concessions recorded on a straight-line basis for the Company's operating properties. |
Schedule of Allowance for Credit Loss | The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands): Mezzanine Loans Bridge Loans Total Balance at December 31, 2020 $ 751 $ — $ 751 Provision for credit losses (23) 15 (8) Balance at September 30, 2021 $ 728 $ 15 $ 743 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of Debt and Lines of Credit | Debt consists of the following ($ in thousands): September 30, 2021 December 31, 2020 Weighted Average Unsecured bonds private placement - fixed rate $ — $ 199,950 0.0 Term loan - variable rate 99,969 549,380 0.4 Bonds public offering - fixed rate 5,305,551 4,858,655 8.9 Unsecured debt, net (1) 5,405,520 5,607,985 Lines of credit (2) 42,662 — Mortgage notes payable, net (3) 640,118 643,550 8.7 Total debt, net $ 6,088,300 $ 6,251,535 Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering 3.3 % 3.4 % Weighted average interest rate on variable rate term loan 1.1 % 1.7 % Weighted average interest rate on lines of credit 1.0 % 1.0 % Weighted average interest rate on mortgage notes payable 2.6 % 2.7 % (1) Includes unamortized discount of $10.4 million and $10.1 million and unamortized debt issuance costs of $34.1 million and $31.9 million, as of September 30, 2021 and December 31, 2020, respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of September 30, 2021, excludes unamortized debt issuance costs of $4.6 million and $3.7 million as of September 30, 2021 and December 31, 2020, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of September 30, 2021, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.775%, which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of September 2025 with three six (3) Includes total unamortized premium of $2.8 million and $3.9 million, reduced by unamortized debt issuance costs of $1.5 million and $1.8 million, as of September 30, 2021 and December 31, 2020, respectively. |
Summary of Aggregate Scheduled Principal Payments | The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit, as of September 30, 2021 are as follows ($ in thousands): Remaining in 2021 $ 893 2022 143,188 2023 302,945 2024 403,109 2025 633,054 Thereafter 4,605,629 Total $ 6,088,818 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Reconciliation of Revenues and Operating Profit (Loss) From Segments to Consolidated | The revenues and NOI for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2021 and 2020 ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Revenues: Southern California $ 150,807 $ 136,651 $ 434,926 $ 426,987 Northern California 145,807 147,081 435,883 457,655 Seattle Metro 60,280 60,617 178,180 184,310 Other real estate assets 3,726 24,115 13,264 57,411 Total property revenues $ 360,620 $ 368,464 $ 1,062,253 $ 1,126,363 Net operating income: Southern California $ 103,660 $ 91,639 $ 300,761 $ 295,402 Northern California 98,948 102,559 299,489 329,338 Seattle Metro 39,876 41,216 119,041 126,422 Other real estate assets 2,805 20,655 9,659 45,527 Total net operating income 245,289 256,069 728,950 796,689 Management and other fees from affiliates 2,237 2,347 6,707 7,312 Corporate-level property management expenses (9,068) (8,619) (27,120) (26,024) Depreciation and amortization (130,564) (130,202) (387,887) (395,370) General and administrative (12,712) (13,310) (34,746) (42,244) Expensed acquisition and investment related costs (108) (2) (164) (104) Gain on sale of real estate and land 42,897 22,654 142,993 39,251 Interest expense (50,019) (55,430) (152,639) (165,024) Total return swap income 2,660 2,977 8,137 7,749 Interest and other income 11,998 6,512 48,756 12,696 Equity income from co-investments 25,433 14,960 60,692 53,514 Deferred tax expense on unrealized gain on unconsolidated co-investment (3,041) — (5,391) (1,636) Loss on early retirement of debt, net — (19,114) (18,982) (23,820) Gain on remeasurement of co-investment — — 2,260 234,694 Net income $ 125,002 $ 78,842 $ 371,566 $ 497,683 |
Reconciliation of Assets from Segment to Consolidated | Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2021 and December 31, 2020 ($ in thousands): September 30, 2021 December 31, 2020 Assets: Southern California $ 3,949,224 $ 3,981,650 Northern California 5,489,918 5,408,019 Seattle Metro 1,369,129 1,403,678 Other real estate assets 95,160 134,439 Net reportable operating segment - real estate assets 10,903,431 10,927,786 Real estate under development 212,426 386,047 Co-investments 1,081,861 1,018,010 Real estate held for sale — 57,938 Cash and cash equivalents, including restricted cash 60,952 84,041 Marketable securities 183,140 147,768 Notes and other receivables 213,985 195,104 Operating lease right-of-use assets 69,756 72,143 Prepaid expenses and other assets 63,090 47,340 Total assets $ 12,788,641 $ 12,936,177 |
Net Income Per Common Share a_2
Net Income Per Common Share and Net Income Per Common Unit (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Net Income Per Share and Net Income Per Unit [Line Items] | |
Schedule of Net Income Per Common Share | Essex Property Trust, Inc. Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common stockholders $ 118,390 65,048,486 $ 1.82 $ 73,661 65,232,837 $ 1.13 Effect of Dilutive Securities: Stock options — 99,295 — 8,591 Diluted: Net income available to common stockholders $ 118,390 65,147,781 $ 1.82 $ 73,661 65,241,428 $ 1.13 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common stockholders $ 351,680 65,013,477 $ 5.41 $ 473,125 65,561,820 $ 7.22 Effect of Dilutive Securities: Stock options — 61,697 — 20,026 DownREIT units — — 587 94,247 Diluted: Net income available to common stockholders $ 351,680 65,075,174 $ 5.40 $ 473,712 65,676,093 $ 7.21 |
Essex Portfolio, L.P. | |
Net Income Per Share and Net Income Per Unit [Line Items] | |
Schedule of Net Income Per Common Share | Essex Portfolio, L.P. Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common unitholders $ 122,558 67,336,164 $ 1.82 $ 76,254 67,528,346 $ 1.13 Effect of Dilutive Securities: Stock options — 99,295 — 8,591 Diluted: Net income available to common unitholders $ 122,558 67,435,459 $ 1.82 $ 76,254 67,536,937 $ 1.13 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Income Weighted- Per Income Weighted- Per Basic: Net income available to common unitholders $ 364,083 67,307,259 $ 5.41 $ 489,668 67,858,961 $ 7.22 Effect of Dilutive Securities: Stock options — 61,697 — 20,026 DownREIT units — — 587 94,247 Diluted: Net income available to common unitholders $ 364,083 67,368,956 $ 5.40 $ 490,255 67,973,234 $ 7.21 |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Narrative (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021USD ($)communitybuildingpartnershipprojectapartmentinvestmentshares | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)communitybuildingpartnershipprojectapartmentinvestmentshares | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($)investmentcommunitypartnershipshares | |
Real Estate Properties [Line Items] | |||||
Apartment communities owned (in communities) | community | 246 | 246 | |||
Apartment units owned (in apartments) | apartment | 60,799 | 60,799 | |||
Ownership interest, number of commercial buildings (in commercial buildings) | building | 3 | 3 | |||
Ownership interest, number of active development projects (in projects) | project | 2 | 2 | |||
Ownership interest, number of unconsolidated joint venture projects (in projects) | project | 1 | 1 | |||
Equity securities | $ 2,500,000 | $ 2,500,000 | $ 2,500,000 | ||
Sales and maturities of marketable securities | 100,000 | $ 52,600,000 | 15,000,000 | $ 56,900,000 | |
Marketable securities, realized gain (loss) | $ 0 | 91,000 | 2,500,000 | 100,000 | |
Unrealized gains on equity securities recognized through income | $ 23,772,000 | 2,215,000 | |||
DownREIT limited partnerships consolidated by company (in partnerships) | partnership | 18 | 18 | 17 | ||
Communities within DownREIT partnerships (in communities) | community | 9 | 9 | 9 | ||
Number of previously consolidated co-investments considered VIE (in investments) | investment | 6 | 6 | 5 | ||
Assets related to variable interest entities net of intercompany eliminations | $ 909,100,000 | $ 909,100,000 | $ 898,500,000 | ||
Liabilities related to variable interest entities net of intercompany eliminations | 323,300,000 | 323,300,000 | 326,800,000 | ||
Noncontrolling interest in variable interest entity | 122,400,000 | 122,400,000 | 120,800,000 | ||
Fixed rate debt carrying amount | 5,700,000,000 | 5,700,000,000 | 5,500,000,000 | ||
Fixed rate debt fair value | 6,100,000,000 | 6,100,000,000 | 6,000,000,000 | ||
Variable rate debt, carrying amount | 366,400,000 | 366,400,000 | 775,100,000 | ||
Variable rate debt fair value | 364,300,000 | 364,300,000 | 770,100,000 | ||
Capitalized internal costs related to development and redevelopment projects | 5,600,000 | 6,100,000 | 17,500,000 | 24,900,000 | |
Redeemable noncontrolling interest | $ 32,698,000 | $ 32,698,000 | $ 32,239,000 | ||
Maximum | |||||
Real Estate Properties [Line Items] | |||||
Apartment lease term | 12 months | 12 months | |||
Minimum | |||||
Real Estate Properties [Line Items] | |||||
Apartment lease term | 9 months | 9 months | |||
Interest And Other Income (Expense) | |||||
Real Estate Properties [Line Items] | |||||
Unrealized gains on equity securities recognized through income | $ 7,100,000 | $ 3,300,000 | $ 23,800,000 | 2,200,000 | |
Essex Portfolio, L.P. | |||||
Real Estate Properties [Line Items] | |||||
Operating Partnership units outstanding (in shares) | shares | 2,282,464 | 2,282,464 | 2,294,760 | ||
Redemption value of operating partnership units outstanding | $ 729,800,000 | $ 729,800,000 | $ 544,800,000 | ||
Unrealized gains on equity securities recognized through income | 23,772,000 | $ 2,215,000 | |||
Redeemable noncontrolling interest | $ 32,698,000 | $ 32,698,000 | $ 32,239,000 | ||
Partnership Interest | |||||
Real Estate Properties [Line Items] | |||||
Ownership interest in partnership | 96.60% | 96.60% |
Organization and Basis of Pre_5
Organization and Basis of Presentation - Summary of Financial Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Equity securities: | |||
Gross Unrealized Gain (Loss) | $ 23,772 | $ 2,215 | |
Carrying Value | 2,500 | $ 2,500 | |
Available for sale | |||
Equity and Debt Securities, Amortized Cost | 143,014 | 131,770 | |
Equity and Debt Securities, Gross Unrealized Gain (Loss) | 40,126 | 15,998 | |
Equity and Debt Securities, Marketable Securities | 183,140 | 147,768 | |
Investment funds - debt securities | |||
Equity securities: | |||
Cost | 61,885 | 49,646 | |
Gross Unrealized Gain (Loss) | 24 | 985 | |
Carrying Value | 61,909 | 50,631 | |
Common stock and stock funds | |||
Equity securities: | |||
Cost | 80,079 | 81,074 | |
Gross Unrealized Gain (Loss) | 39,734 | 15,001 | |
Carrying Value | 119,813 | 96,075 | |
Investment-grade unsecured debt | |||
Available for sale | |||
Cost | 1,050 | 1,050 | |
Gross Unrealized Gain (Loss) | 368 | 12 | |
Carrying Value | $ 1,418 | $ 1,062 |
Organization and Basis of Pre_6
Organization and Basis of Presentation - Accumulated Other Comprehensive Loss (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | $ 6,183,192 |
Balance at period end | 6,131,899 |
Accumulated Other Comprehensive Loss, Net | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (14,729) |
Other comprehensive income before reclassification | 5,750 |
Amounts reclassified from accumulated other comprehensive loss | 11 |
Other comprehensive income | 5,761 |
Balance at period end | (8,968) |
Change in fair value and amortization of swap settlements | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (14,771) |
Other comprehensive income before reclassification | 5,406 |
Amounts reclassified from accumulated other comprehensive loss | 11 |
Other comprehensive income | 5,417 |
Balance at period end | (9,354) |
Unrealized gain on available for sale securities | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | 42 |
Other comprehensive income before reclassification | 344 |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Other comprehensive income | 344 |
Balance at period end | 386 |
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss, Net | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (11,303) |
Other comprehensive income before reclassification | 5,951 |
Amounts reclassified from accumulated other comprehensive loss | 12 |
Other comprehensive income | 5,963 |
Balance at period end | (5,340) |
Essex Portfolio, L.P. | Change in fair value and amortization of swap settlements | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (11,346) |
Other comprehensive income before reclassification | 5,595 |
Amounts reclassified from accumulated other comprehensive loss | 12 |
Other comprehensive income | 5,607 |
Balance at period end | (5,739) |
Essex Portfolio, L.P. | Unrealized gain on available for sale securities | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | 43 |
Other comprehensive income before reclassification | 356 |
Amounts reclassified from accumulated other comprehensive loss | 0 |
Other comprehensive income | 356 |
Balance at period end | $ 399 |
Organization and Basis of Pre_7
Organization and Basis of Presentation - Redeemable Noncontrolling Interest (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Beginning balance | $ 32,239 |
Reclassification due to change in redemption value and other | 4,922 |
Redemptions | (4,463) |
Ending balance | $ 32,698 |
Organization and Basis of Pre_8
Organization and Basis of Presentation - Cash, Cash Equivalents and Restricted Cash And Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents-unrestricted | $ 49,910 | $ 73,629 | $ 558,446 | $ 70,087 |
Cash and cash equivalents-restricted | 11,042 | 10,412 | 10,629 | 11,007 |
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows | $ 60,952 | $ 84,041 | $ 569,075 | $ 81,094 |
Significant Transactions Duri_2
Significant Transactions During the Nine Months Ended September 30, 2021 and Subsequent Events (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | |||||||||||
Oct. 27, 2021USD ($)apartment | Sep. 30, 2021USD ($)commercial_leaseapartment | Aug. 31, 2021USD ($)apartment | Jun. 30, 2021USD ($)apartment | Mar. 31, 2021USD ($) | Feb. 28, 2021USD ($)apartment | Jan. 31, 2021USD ($) | Sep. 30, 2021USD ($) | Mar. 31, 2021USD ($)shares | Sep. 30, 2020USD ($) | Dec. 31, 2022USD ($) | Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Other Commitments [Line Items] | |||||||||||||||
Gain on remeasurement of co-investment | $ 0 | $ 0 | $ 2,260,000 | $ 234,694,000 | |||||||||||
Revenue from disposition | 2,237,000 | 2,347,000 | 6,707,000 | 7,312,000 | |||||||||||
Co-investments | $ 1,052,824,000 | 1,052,824,000 | $ 1,052,824,000 | 1,052,824,000 | $ 1,018,010,000 | ||||||||||
Commitments to acquire equity method investment | $ 26,200,000 | $ 11,000,000 | $ 20,000,000 | ||||||||||||
Preferred return rate | 12.50% | 11.50% | 10.00% | ||||||||||||
Notes receivable, early redemption fee received | 4,747,000 | 0 | |||||||||||||
Shares repurchased during period (in shares) | shares | 0 | ||||||||||||||
Note receivable, secured, bearing interest at 11.00%, due October 2023 (Originated April 2020) | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Proceeds from redemption of notes receivable | $ 36,500,000 | ||||||||||||||
Notes receivable, early redemption fee received | 4,700,000 | ||||||||||||||
Mezzanine Loans | Forecast | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Receivable with imputed interest, face amount | $ 50,000,000 | ||||||||||||||
Receivable with imputed interest, effective yield (interest rate) | 11.00% | ||||||||||||||
Option to extend | 2 years | ||||||||||||||
Affiliated Entity | Related party bridge loan - Wesco VI | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Notes receivable | $ 29,200,000 | 29,200,000 | $ 29,200,000 | 29,200,000 | |||||||||||
Interest rate | 2.15% | ||||||||||||||
Affiliated Entity | Related party bridge loan - Wesco I | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Notes receivable | $ 52,500,000 | $ 52,500,000 | |||||||||||||
Interest rate | 2.55% | ||||||||||||||
Common Stock | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Shares repurchased and retired during period (in shares) | shares | 40,000 | ||||||||||||||
Shares repurchased and retired during period, value | $ 9,200,000 | ||||||||||||||
Purchase authority remaining under stock repurchase plan | $ 214,500,000 | 214,500,000 | 214,500,000 | 214,500,000 | |||||||||||
Stock repurchase plan amount | 250,000,000 | 250,000,000 | 250,000,000 | 250,000,000 | |||||||||||
Commercial Property 7 South Linden, South San Francisco, CA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Payments to acquire real estate | $ 33,500,000 | ||||||||||||||
Number of commercial leases | commercial_lease | 2 | ||||||||||||||
Wesco VI, LLC | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Limited partnership interest in partnership investments | 50.00% | ||||||||||||||
Co-investments | $ 150,000,000 | 150,000,000 | $ 150,000,000 | 150,000,000 | |||||||||||
Commercial Property Third & Broad, Seattle, WA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Payments to acquire real estate | 52,500,000 | ||||||||||||||
Preferred Equity Investment Property in Northern California | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Proceeds from partial redemption of co-investment | $ 21,600,000 | ||||||||||||||
Preferred Equity Investment Property in Southern California | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Proceeds from partial redemption of co-investment | $ 10,000,000 | ||||||||||||||
Joint Venture That Holds Property in Southern California | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Proceeds from partial redemption of co-investment | 110,200,000 | ||||||||||||||
Early redemption fee | 3,500,000 | ||||||||||||||
Essex Portfolio, L.P. | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Gain on remeasurement of co-investment | 0 | 0 | 2,260,000 | 234,694,000 | |||||||||||
Revenue from disposition | $ 2,237,000 | $ 2,347,000 | 6,707,000 | 7,312,000 | |||||||||||
Notes receivable, early redemption fee received | $ 4,747,000 | $ 0 | |||||||||||||
Essex Portfolio, L.P. | Senior Notes | 2028 Notes | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Debt issued | $ 450,000,000 | $ 450,000,000 | |||||||||||||
Interest rate | 1.70% | 1.70% | |||||||||||||
Debt offering price, percentage of par value | 99.423% | 99.423% | |||||||||||||
Essex Portfolio, L.P. | Senior Notes | 2031 Notes | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Debt issued | $ 300,000,000 | ||||||||||||||
Interest rate | 2.55% | ||||||||||||||
Debt offering price, percentage of par value | 99.367% | ||||||||||||||
Essex Portfolio, L.P. | Senior Notes | 2023 Notes | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Debt issued | $ 300,000,000 | ||||||||||||||
Interest rate | 3.375% | ||||||||||||||
The Village at Toluca Lake | Joint Venture Partner, BEX III | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Payments to acquire real estate | $ 31,800,000 | ||||||||||||||
Investment interest acquired | 50.00% | ||||||||||||||
Repayments of debt | $ 29,500,000 | ||||||||||||||
Gain on remeasurement of co-investment | $ 2,300,000 | ||||||||||||||
The Village at Toluca Lake | Apartment Building | Joint Venture Partner, BEX III | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of units acquired | apartment | 145 | ||||||||||||||
Devonshire, Hemet, CA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Revenue from disposition | 54,500,000 | ||||||||||||||
Gain on sale of properties | $ 42,900,000 | ||||||||||||||
Devonshire, Hemet, CA | Apartment Building | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of apartment units | apartment | 276 | ||||||||||||||
Hidden Valley, Simi Valley, CA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Repayments of debt | $ 29,700,000 | ||||||||||||||
Revenue from disposition | 105,000,000 | ||||||||||||||
Gain on sale of properties | $ 69,200,000 | ||||||||||||||
Hidden Valley, Simi Valley, CA | Apartment Building | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of apartment units | apartment | 324 | ||||||||||||||
Park 20, San Mateo, CA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Revenue from disposition | $ 113,000,000 | ||||||||||||||
Park 20, San Mateo, CA | Apartment Building | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of apartment units | apartment | 197 | ||||||||||||||
Axis 2300, Irvine, CA | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Revenue from disposition | $ 57,500,000 | ||||||||||||||
Gain on sale of properties | $ 30,800,000 | ||||||||||||||
Axis 2300, Irvine, CA | Apartment Building | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of apartment units | apartment | 115 | ||||||||||||||
Martha Lake Apartment | Wesco VI, LLC | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Payments to acquire real estate | $ 53,000,000 | ||||||||||||||
Martha Lake Apartment | Apartment Building | Wesco VI, LLC | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of units acquired | apartment | 155 | ||||||||||||||
Monterra in Mill Creek | Wesco VI, LLC | Subsequent Event | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Payments to acquire real estate | $ 55,000,000 | ||||||||||||||
Monterra in Mill Creek | Apartment Building | Wesco VI, LLC | Subsequent Event | |||||||||||||||
Other Commitments [Line Items] | |||||||||||||||
Number of units acquired | apartment | 139 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)community | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)community | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | $ 360,620 | $ 368,464 | $ 1,062,253 | $ 1,126,363 | |
Management and other fees from affiliates | 2,237 | 2,347 | 6,707 | 7,312 | |
Revenues | $ 362,857 | 370,811 | $ 1,068,960 | 1,133,675 | |
Occupancy threshold for classification as stabilized | 90.00% | 90.00% | |||
Apartment communities owned (in communities) | community | 246 | 246 | |||
Deferred revenue | $ 2,600 | $ 2,600 | $ 3,100 | ||
Deferred revenue, revenue recognized | 500 | ||||
Deferred revenue balance from contracts with remaining performance obligations | 2,600 | 2,600 | |||
Rental income | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 355,591 | 362,073 | 1,046,218 | 1,108,658 | |
Other property | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 5,029 | 6,391 | 16,035 | 17,705 | |
Rental and other property revenues | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 360,620 | 368,464 | 1,062,253 | 1,126,363 | |
Rental and other property revenues | Same-property | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 325,153 | 316,639 | 957,908 | 986,945 | |
Rental and other property revenues | Acquisitions | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 14,789 | 14,237 | 42,410 | 40,491 | |
Rental and other property revenues | Development | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 8,055 | 5,461 | 22,485 | 13,956 | |
Rental and other property revenues | Redevelopment | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 4,340 | 4,277 | 13,079 | 14,774 | |
Rental and other property revenues | Non-residential/other, net | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | $ 11,319 | 13,119 | $ 35,721 | 52,491 | |
Apartment communities owned (in communities) | community | 2 | 2 | |||
Rental and other property revenues | Straight line rent concession | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | $ (3,036) | 14,731 | $ (9,350) | 17,706 | |
Rental and other property revenues | Operating Segments | Southern California | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 150,807 | 136,651 | 434,926 | 426,987 | |
Rental and other property revenues | Operating Segments | Northern California | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 145,807 | 147,081 | 435,883 | 457,655 | |
Rental and other property revenues | Operating Segments | Seattle Metro | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | 60,280 | 60,617 | 178,180 | 184,310 | |
Rental and other property revenues | Other real estate assets | |||||
Disaggregation of Revenue [Line Items] | |||||
Rental and other property | $ 3,726 | $ 24,115 | $ 13,264 | $ 57,411 |
Revenues - Deferred Revenues an
Revenues - Deferred Revenues and Remaining Performance Obligations (Details) | Sep. 30, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligations due per period | 7.00% |
Expected timing of performance obligation satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligations due per period | 55.00% |
Expected timing of performance obligation satisfaction, period | 2 years |
Co-investments - Summary of Inv
Co-investments - Summary of Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 1,052,824 | $ 1,018,010 |
Distributions in excess of investments in co-investments | 29,037 | 0 |
Total operating and other co-investments, net | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 470,806 | 358,266 |
Wesco I (2), Wesco III, Wesco IV, Wesco V, and Wesco VI | ||
Schedule of Equity Method Investments [Line Items] | ||
Weighted average company ownership percentage | 52.00% | |
Co-investments | $ 138,745 | 178,322 |
BEXAEW, BEX II, BEX III, BEX IV, and 500 Folsom | ||
Schedule of Equity Method Investments [Line Items] | ||
Weighted average company ownership percentage | 50.00% | |
Co-investments | $ 273,557 | 152,309 |
Other | ||
Schedule of Equity Method Investments [Line Items] | ||
Weighted average company ownership percentage | 46.00% | |
Co-investments | $ 58,504 | 27,635 |
Total development co-investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Weighted average company ownership percentage | 50.00% | |
Co-investments | $ 9,965 | 157,433 |
Total preferred interest co-investments | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | 572,053 | 502,311 |
Total preferred interest co-investments | Investments in Majority-owned Subsidiaries | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 87,500 | $ 81,400 |
Co-investments - Combined Finan
Co-investments - Combined Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | |
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | ||||||||
Rental properties and real estate under development | $ 212,426 | $ 212,426 | $ 386,047 | |||||
Total assets | 12,788,641 | 12,788,641 | 12,936,177 | |||||
Debt | 6,624,044 | 6,624,044 | 6,720,746 | |||||
Other liabilities | 38,946 | 38,946 | 39,140 | |||||
Equity | 6,131,899 | $ 6,267,482 | 6,131,899 | $ 6,267,482 | $ 6,136,703 | 6,183,192 | $ 6,352,881 | $ 6,403,504 |
Total liabilities and equity/capital | 12,788,641 | 12,788,641 | 12,936,177 | |||||
Equity Method Investment, Summarized Financial Information [Abstract] | ||||||||
Property revenues | 362,857 | 370,811 | 1,068,960 | 1,133,675 | ||||
Interest expense | (50,019) | (55,430) | (152,639) | (165,024) | ||||
General and administrative | (12,712) | (13,310) | (34,746) | (42,244) | ||||
Net income (loss) | 125,002 | 78,842 | 371,566 | 497,683 | ||||
Total co-investment | Affiliated Entity | ||||||||
Equity Method Investment, Summarized Financial Information [Abstract] | ||||||||
Company's share of net income | 2,400 | 2,200 | 7,000 | 6,400 | ||||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Total co-investment | ||||||||
Equity Method Investment, Financial Statement, Reported Amounts [Abstract] | ||||||||
Rental properties and real estate under development | 4,216,981 | 4,216,981 | 4,242,611 | |||||
Other assets | 228,721 | 228,721 | 200,777 | |||||
Total assets | 4,445,702 | 4,445,702 | 4,443,388 | |||||
Debt | 2,705,882 | 2,705,882 | 2,611,365 | |||||
Other liabilities | 221,022 | 221,022 | 189,515 | |||||
Equity | 1,518,798 | 1,518,798 | 1,642,508 | |||||
Total liabilities and equity/capital | 4,445,702 | 4,445,702 | 4,443,388 | |||||
Company's share of equity | 1,052,824 | 1,052,824 | $ 1,018,010 | |||||
Equity Method Investment, Summarized Financial Information [Abstract] | ||||||||
Property revenues | 71,195 | 76,581 | 211,359 | 226,125 | ||||
Property operating expenses | (27,588) | (28,047) | (81,932) | (79,621) | ||||
Net operating income | 43,607 | 48,534 | 129,427 | 146,504 | ||||
Interest expense | (15,347) | (19,369) | (48,012) | (59,700) | ||||
General and administrative | (3,331) | (5,161) | (11,641) | (12,636) | ||||
Depreciation and amortization | (32,290) | (29,732) | (96,812) | (86,947) | ||||
Net income (loss) | (7,361) | (5,728) | (27,038) | (12,779) | ||||
Company's share of net income | $ 25,433 | $ 14,960 | $ 60,692 | $ 53,514 |
Notes and Other Receivables (De
Notes and Other Receivables (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Notes and other receivables, allowance for credit loss | $ (743) | $ (751) | ||
Total notes and other receivables | 213,985 | 195,104 | ||
Notes receivable, early redemption fee received | 4,747 | $ 0 | ||
Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 15,337 | 14,216 | ||
Stated interest rate | 9.90% | |||
Notes receivable, secured, bearing interest at 10.50%, due February 2023 (Originated March 2020) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 16,591 | 15,299 | ||
Stated interest rate | 10.50% | |||
Note receivable, secured, bearing interest at 11.00%, due October 2023 (Originated April 2020) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 0 | 25,461 | ||
Stated interest rate | 11.00% | |||
Proceeds from redemption of notes receivable | $ 36,500 | |||
Notes receivable, early redemption fee received | $ 4,700 | |||
Notes receivable, secured, bearing interest at 9.00%, due December 2023 (Originated November 2020) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 84,896 | 79,827 | ||
Stated interest rate | 9.00% | |||
Notes receivable, secured, bearing interest at 11.50%, due November 2024 (Originated November 2020) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 28,850 | 15,423 | ||
Stated interest rate | 11.50% | |||
Related party note receivable, secured, bearing interest at 2.15%, due December 2021 (Originated September 2021) | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 29,157 | 0 | ||
Stated interest rate | 2.15% | |||
Notes and other receivables from affiliates | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 4,744 | 4,744 | ||
Straight line rent receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | 16,464 | 25,214 | ||
Other receivables | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Note receivables | $ 18,689 | $ 15,671 |
Notes and Other Receivables - A
Notes and Other Receivables - Allowance for Credit Loss (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | $ 751 | |
Provision for credit losses | 110 | $ (100) |
Ending balance | 743 | |
Mezzanine and Bridge Loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 751 | |
Provision for credit losses | (8) | |
Ending balance | 743 | |
Mezzanine Loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 751 | |
Provision for credit losses | (23) | |
Ending balance | 728 | |
Bridge Loans | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Beginning balance | 0 | |
Provision for credit losses | 15 | |
Ending balance | $ 15 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 41 Months Ended | ||||||||||||
Sep. 30, 2021USD ($) | Aug. 31, 2021USD ($) | Mar. 31, 2021USD ($) | Jan. 31, 2021USD ($) | Nov. 30, 2019USD ($)apartment | Jun. 30, 2019USD ($)apartment | Feb. 28, 2019USD ($) | Oct. 31, 2018USD ($)apartment | May 31, 2018USD ($)apartment | Mar. 31, 2017USD ($)unit | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||||||
Payments to acquire preferred equity investments | $ 223,175,000 | $ 61,056,000 | ||||||||||||||
Preferred return rate | 12.50% | 11.50% | 10.00% | |||||||||||||
Commitment to fund preferred equity investment | $ 26,200,000 | $ 11,000,000 | $ 20,000,000 | |||||||||||||
Co-investments | 1,081,861,000 | $ 1,081,861,000 | 1,081,861,000 | $ 1,081,861,000 | $ 1,018,010,000 | |||||||||||
Membership Interest In Sage At Cupertino | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Number of units acquired | unit | 230 | |||||||||||||||
Co-investments | $ 15,300,000 | |||||||||||||||
Investment interest acquired | 40.50% | |||||||||||||||
Contract price | $ 90,000,000 | |||||||||||||||
Encumbrance | $ 52,000,000 | |||||||||||||||
Affiliated Entity | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Management and other fees from affiliates | 2,700,000 | $ 3,000,000 | 7,500,000 | 8,700,000 | ||||||||||||
Development and redevelopment fees | 500,000 | 600,000 | 800,000 | 1,400,000 | ||||||||||||
Short-term loans outstanding and due from affiliates | 33,900,000 | 33,900,000 | 33,900,000 | 33,900,000 | $ 4,700,000 | |||||||||||
Affiliated Entity | Apartment Home Community In Seattle, WA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Number of units acquired | apartment | 308 | |||||||||||||||
Affiliated Entity | Related party bridge loan - Wesco VI | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Notes receivable | $ 29,200,000 | 29,200,000 | 29,200,000 | 29,200,000 | ||||||||||||
Interest rate | 2.15% | |||||||||||||||
Affiliated Entity | Related party bridge loan - Wesco I | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Notes receivable | $ 52,500,000 | |||||||||||||||
Interest rate | 2.55% | |||||||||||||||
Affiliated Entity | Related party bridge loan - Wesco V | Apartment Home Community In Seattle, WA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Notes receivable | $ 85,500,000 | |||||||||||||||
Interest rate | 1.30% | |||||||||||||||
Chairman and founder | Multifamily development community in Mountain View, CA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Payments to acquire preferred equity investments | $ 24,500,000 | |||||||||||||||
Preferred return rate | 11.00% | |||||||||||||||
Chairman and founder | Apartment home community development development in Burlingame, CA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Number of units acquired | apartment | 268 | |||||||||||||||
Payments to acquire preferred equity investments | $ 18,600,000 | |||||||||||||||
Preferred return rate | 12.00% | |||||||||||||||
Chairman and founder | Marcus & Millichap Company (MMC) | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Brokerage commissions | $ 0 | $ 0 | $ 0 | $ 200,000 | ||||||||||||
Chairman and founder | Marcus & Millichap Company (MMC) | Brio, Walnut Creek, CA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Number of units acquired | apartment | 300 | |||||||||||||||
Payments to acquire real estate | $ 164,900,000 | |||||||||||||||
Debt assumed in connection with acquisition | $ 98,700,000 | |||||||||||||||
Chairman and founder | Marcus & Millichap Company (MMC) | Apartment home community in Ventura, CA | ||||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||||
Number of units acquired | apartment | 400 | |||||||||||||||
Preferred return rate | 10.25% | |||||||||||||||
Commitment to fund preferred equity investment | $ 26,500,000 | |||||||||||||||
Commitment funded amount | $ 23,400,000 |
Debt - Debt Summary (Details)
Debt - Debt Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 5,405,520 | $ 5,607,985 |
Lines of credit | 42,662 | 0 |
Mortgage notes payable, net | 640,118 | 643,550 |
Total debt | 6,088,300 | 6,251,535 |
Unsecured bonds private placement - fixed rate | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 0 | 199,950 |
Weighted average maturity | 0 years | |
Term loan - variable rate | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 99,969 | $ 549,380 |
Weighted average interest rate | 1.10% | 1.70% |
Weighted average maturity | 4 months 24 days | |
Bonds public offering - fixed rate | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 5,305,551 | $ 4,858,655 |
Weighted average interest rate | 3.30% | 3.40% |
Weighted average maturity | 8 years 10 months 24 days | |
Lines of credit | ||
Debt Instrument [Line Items] | ||
Lines of credit | $ 42,662 | $ 0 |
Weighted average interest rate | 1.00% | 1.00% |
Mortgage notes payable, net | ||
Debt Instrument [Line Items] | ||
Mortgage notes payable, net | $ 640,118 | $ 643,550 |
Weighted average interest rate | 2.60% | 2.70% |
Weighted average maturity | 8 years 8 months 12 days |
Debt - Narrative (Details)
Debt - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($)instrumentextension | Dec. 31, 2020USD ($) | |
Unsecured debt | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ 10,400,000 | $ 10,100,000 |
Unamortized debt issuance expense | 34,100,000 | 31,900,000 |
Lines of credit | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance expense | $ 4,600,000 | 3,700,000 |
Number of lines of unsecured credit (in instruments) | instrument | 2 | |
Aggregate borrowing capacity | $ 1,240,000,000 | |
Number of extension options (in extensions) | extension | 3 | |
Extension period | 6 months | |
Lines of credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.775% | |
Lines of credit | Working capital line of credit | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | $ 35,000,000 | |
Lines of credit | Working capital line of credit | LIBOR | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.775% | |
Mortgage notes payable, net | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ (2,800,000) | (3,900,000) |
Unamortized debt issuance expense | $ 1,500,000 | $ 1,800,000 |
Debt - Future Principal Payment
Debt - Future Principal Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 893 |
2022 | 143,188 |
2023 | 302,945 |
2024 | 403,109 |
2025 | 633,054 |
Thereafter | 4,605,629 |
Long-term debt | $ 6,088,818 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Number of reportable segments | segment | 3 | |||||
Number of operating segments | segment | 3 | |||||
Net operating income | $ 245,289 | $ 256,069 | $ 728,950 | $ 796,689 | ||
Corporate-level property management expenses | (9,068) | (8,619) | (27,120) | (26,024) | ||
Depreciation and amortization | (130,564) | (130,202) | (387,887) | (395,370) | ||
General and administrative | (12,712) | (13,310) | (34,746) | (42,244) | ||
Expensed acquisition and investment related costs | (108) | (2) | (164) | (104) | ||
Gain on sale of real estate and land | 42,897 | 22,654 | 142,993 | 39,251 | ||
Interest expense | (50,019) | (55,430) | (152,639) | (165,024) | ||
Total return swap income | 2,660 | 2,977 | 8,137 | 7,749 | ||
Interest and other income | 11,998 | 6,512 | 48,756 | 12,696 | ||
Equity income from co-investments | 25,433 | 14,960 | 60,692 | 53,514 | ||
Deferred tax expense on unrealized gain on unconsolidated co-investment | (3,041) | 0 | (5,391) | (1,636) | ||
Loss on early retirement of debt, net | 0 | (19,114) | (18,982) | (23,820) | ||
Gain on remeasurement of co-investment | 0 | 0 | 2,260 | 234,694 | ||
Net income (loss) | 125,002 | 78,842 | 371,566 | 497,683 | ||
Net reportable operating segment - real estate assets | 10,903,431 | 10,903,431 | $ 10,927,786 | |||
Real estate under development | 212,426 | 212,426 | 386,047 | |||
Co-investments | 1,081,861 | 1,081,861 | 1,018,010 | |||
Real estate held for sale | 0 | 0 | 57,938 | |||
Cash and cash equivalents, including restricted cash | 60,952 | 569,075 | 60,952 | 569,075 | 84,041 | $ 81,094 |
Marketable securities | 183,140 | 183,140 | 147,768 | |||
Notes and other receivables | 213,985 | 213,985 | 195,104 | |||
Operating lease right-of-use assets | 69,756 | 69,756 | 72,143 | |||
Prepaid expenses and other assets | 63,090 | 63,090 | 47,340 | |||
Total assets | 12,788,641 | 12,788,641 | 12,936,177 | |||
Rental and Other Property Revenues | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 360,620 | 368,464 | 1,062,253 | 1,126,363 | ||
Management and Other Fees From Affiliates Income | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 2,237 | 2,347 | 6,707 | 7,312 | ||
Operating Segments | Southern California | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Net operating income | 103,660 | 91,639 | 300,761 | 295,402 | ||
Net reportable operating segment - real estate assets | 3,949,224 | 3,949,224 | 3,981,650 | |||
Operating Segments | Southern California | Rental and Other Property Revenues | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 150,807 | 136,651 | 434,926 | 426,987 | ||
Operating Segments | Northern California | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Net operating income | 98,948 | 102,559 | 299,489 | 329,338 | ||
Net reportable operating segment - real estate assets | 5,489,918 | 5,489,918 | 5,408,019 | |||
Operating Segments | Northern California | Rental and Other Property Revenues | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 145,807 | 147,081 | 435,883 | 457,655 | ||
Operating Segments | Seattle Metro | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Net operating income | 39,876 | 41,216 | 119,041 | 126,422 | ||
Net reportable operating segment - real estate assets | 1,369,129 | 1,369,129 | 1,403,678 | |||
Operating Segments | Seattle Metro | Rental and Other Property Revenues | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | 60,280 | 60,617 | 178,180 | 184,310 | ||
Other real estate assets | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Net operating income | 2,805 | 20,655 | 9,659 | 45,527 | ||
Net reportable operating segment - real estate assets | 95,160 | 95,160 | $ 134,439 | |||
Other real estate assets | Rental and Other Property Revenues | ||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||
Total revenues | $ 3,726 | $ 24,115 | $ 13,264 | $ 57,411 |
Net Income Per Common Share a_3
Net Income Per Common Share and Net Income Per Common Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Basic: | ||||
Net income available to common stockholders/unitholders | $ 118,390 | $ 73,661 | $ 351,680 | $ 473,125 |
Weighted average common shares/units (in shares) | 65,048,486 | 65,232,837 | 65,013,477 | 65,561,820 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.41 | $ 7.22 |
Effect of Dilutive Securities: | ||||
Stock options (in shares) | 99,295 | 8,591 | 61,697 | 20,026 |
DownREIT units (in shares) | 0 | 94,247 | ||
Diluted: | ||||
Net income available to common stockholders/unitholders | $ 118,390 | $ 73,661 | $ 351,680 | $ 473,712 |
Weighted average common shares/units (in shares) | 65,147,781 | 65,241,428 | 65,075,174 | 65,676,093 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.40 | $ 7.21 |
Essex Portfolio, L.P. | ||||
Basic: | ||||
Net income available to common stockholders/unitholders | $ 122,558 | $ 76,254 | $ 364,083 | $ 489,668 |
Weighted average common shares/units (in shares) | 67,336,164 | 67,528,346 | 67,307,259 | 67,858,961 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.41 | $ 7.22 |
Effect of Dilutive Securities: | ||||
Stock options (in shares) | 99,295 | 8,591 | 61,697 | 20,026 |
DownREIT units (in shares) | 0 | 94,247 | ||
Diluted: | ||||
Net income available to common stockholders/unitholders | $ 122,558 | $ 76,254 | $ 364,083 | $ 490,255 |
Weighted average common shares/units (in shares) | 67,435,459 | 67,536,937 | 67,368,956 | 67,973,234 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.82 | $ 1.13 | $ 5.40 | $ 7.21 |
DownREIT Units | ||||
Effect of Dilutive Securities: | ||||
Income effect of Dilutive Securities | $ 0 | $ 587 | ||
DownREIT Units | Essex Portfolio, L.P. | ||||
Effect of Dilutive Securities: | ||||
Income effect of Dilutive Securities | $ 0 | $ 587 | ||
Convertible units | ||||
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 2,287,678 | 2,295,510 | 2,291,725 | 2,297,141 |
Income allocated to convertible OP Units | $ 4,200 | $ 2,600 | $ 12,400 | $ 16,500 |
Stock options | ||||
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 493,567 | 116,380 | 299,046 |
Stock options | Essex Portfolio, L.P. | ||||
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 0 | 493,567 | 116,380 | 299,046 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Details) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)instrument | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Derivative [Line Items] | |||||
Total return swap income | $ 2,660,000 | $ 2,977,000 | $ 8,137,000 | $ 7,749,000 | |
Multifamily Housing Mortgage Revenue Bonds | |||||
Derivative [Line Items] | |||||
Bond subject to interest rate caps | 224,500,000 | 224,500,000 | |||
Total Return Swap, Callable | |||||
Derivative [Line Items] | |||||
Total return swap income | 2,700,000 | $ 3,000,000 | 8,100,000 | $ 7,700,000 | |
Designated as Hedging Instrument | Interest Rate Swap | |||||
Derivative [Line Items] | |||||
Aggregate carrying value of the interest rate swap contracts, liability | 0 | 0 | $ 2,400,000 | ||
Aggregate carrying value of the interest rate swap contracts, asset | 0 | 0 | 0 | ||
Not Designated as Hedging Instrument | Total Return Swap, Callable | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 224,500,000 | 224,500,000 | |||
Derivative, fair value, net | $ 0 | $ 0 | $ 0 | ||
Not Designated as Hedging Instrument | Total Return Swap, Callable | Multifamily Housing Mortgage Revenue Bonds | |||||
Derivative [Line Items] | |||||
Number of derivative instruments | instrument | 4 | 4 |