ESSEX PROPERTY TRUST, INC. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

Attached files

file	filename
EX-99.1 - EXHIBIT 99.1 - ESSEX PROPERTY TRUST, INC.	ex99_1.htm
8-K - ESSEX PROPERTY TRUST INC 8-K 5-7-2014 - ESSEX PROPERTY TRUST, INC.	form8k.htm

Exhibit 99.2

Q1 2014 Supplemental

Table of Contents

	Page

Consolidated Operating Results	S-1 – S-2

Consolidated Funds From Operations	S-3

Consolidated Balance Sheets	S-4

Debt Summary – March 31, 2014	S-5

Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – March 31, 2014	S-6

Property Operating Results – Quarters ended March 31, 2014 and 2013	S-7

Revenue by County – Quarters ended March 31, 2014, March 31, 2013, and December 31, 2013	S-8

Development Pipeline – March 31, 2014	S-9

Redevelopment Pipeline and Capital Expenditures – March 31, 2014	S-10

Co-Investments – March 31, 2014	S-11

Summary of Consolidated Co-Investments and Noncontrolling Interest – March 31, 2014	S-12

Assumptions for 2014 FFO Guidance Range	S-13

Summary of Apartment Community Acquisitions and Dispositions Activity	S-14

2014 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions	S-15

Table of Contents

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

Consolidated Operating Results	Three Months Ended
(Dollars in thousands, except share and per share amounts)	March 31,
	2014			2013

Revenues:
Rental and other property	$	159,017		$	145,057
Management and other fees		2,628			2,948
		161,645			148,005

Expenses:
Property operating		51,973			46,326
Depreciation		50,312			46,787
General and administrative		7,075			6,239
Merger expenses		16,059			-
Cost of management and other fees		1,477			1,701
Acquisition and disposition costs		975			387
		127,871			101,440
Earnings from operations		33,774			46,565

Interest expense before amortization		(26,055	)		(25,211	)
Amortization expense		(2,986	)		(2,930	)
Interest and other income		2,879			5,023
Equity income from co-investments		10,526			4,211
Gain on sale of real estate and land		8,268			1,503
Income before discontinued operations		26,406			29,161
Income from discontinued operations		-			542
Net income		26,406			29,703
Net income attributable to noncontrolling interest		(3,126	)		(3,132	)
Net income attributable to controlling interest		23,280			26,571
Dividends to preferred stockholders		(1,368	)		(1,368	)
Net income available to common stockholders	$	21,912		$	25,203

Net income per share - basic	$	0.58		$	0.68

Shares used in income per share - basic		37,685,073			37,003,925

Net income per share - diluted	$	0.58		$	0.68

Shares used in income per share - diluted		37,931,454			37,092,062

See Company's 10-K for additional disclosures

S-1

Table of Contents

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

Consolidated Operating Results	Three Months Ended
Selected Line Item Detail	March 31,
(Dollars in thousands)	2014			2013

Rental and other property
Rental	$	147,994		$	135,512
Other property		11,023			9,545
Rental and other property	$	159,017		$	145,057

Management and other fees
Management	$	1,656		$	2,007
Development and redevelopment		972			941
Management and other fees	$	2,628		$	2,948

Property operating expenses
Real estate taxes	$	15,339		$	14,073
Administrative and insurance		13,056			10,484
Maintenance and repairs		10,221			9,350
Utilities		9,469			8,942
Property management		3,888			3,477
Property operating expenses	$	51,973		$	46,326

Interest and other income
Marketable securities and other interest income	$	2,411		$	1,625
Notes receivable		41			787
Gain from sale of marketable securities and note prepayment		427			2,611
Interest and other income	$	2,879		$	5,023

Equity income from co-investments
Equity loss from co-investments	$	(18	)	$	(41	)
Income from preferred equity investments		3,485			3,829
Gain on sale of co-investment		3,211			-
Co-investment promote income		3,848			-
Income from early redemption of preferred equity investments		-			423
Equity income from co-investments	$	10,526		$	4,211

Noncontrolling interest
Limited partners of Essex Portfolio, L.P.	$	1,417		$	1,501
DownREIT limited partners' distributions		1,144			1,175
Third-party ownership interest		565			456
Noncontrolling interest	$	3,126		$	3,132

See Company's 10-K for additional disclosures

S-2

Table of Contents

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

Consolidated Funds From Operations	Three Months Ended
(Dollars in thousands, except share and per share amounts)	March 31,
	2014			2013			% Change

Funds from operations
Net income available to common stockholders	$	21,912		$	25,203
Adjustments:
Depreciation		50,312			47,144
Gains not included in FFO, net of internal disposition costs		(10,292	)		-
Depreciation add back from unconsolidated co-investments, and add back convertible preferred dividend - Series G		4,760			3,842
Noncontrolling interest related to Operating Partnership units		1,417			1,501
Depreciation attributable to noncontrolling interest		(329	)		(327	)
Funds from operations	$	67,780		$	77,363
FFO per share-diluted	$	1.68		$	1.97			-14.6	%

Components of the change in FFO
Non-core items:
Acquisition costs		188			387
Gain on sale of marketable securities and note prepayment		(427	)		(2,611	)
Gain on sale of land		(400	)		(1,503	)
Earthquake related and other		1,571			-
Loss on early retirement of debt add back from unconsolidated co-investments		197			-
Merger expenses		16,059			-
Co-investment promote income		(3,848	)		-
Income from early redemption of preferred equity investments		-			(423	)
Core funds from operations		81,120			73,213
Core FFO per share-diluted	$	2.02		$	1.87			8.0	%

Changes in core items:
Same-property NOI	$	7,770
Non-same property NOI		2,114
Management and other fees, net		(96	)
Equity income from co-investments		794
Interest and other income		40
Interest and amortization expense		(900	)
General and administrative		(836	)
Discontinued operations		(899	)
Other items, net		(80	)
	$	7,907

Weighted average number of shares outstanding diluted (1)		40,238,064			39,205,611

(1)	Assumes conversion of the weighted average operating partnership interests in the Operating Partnership into shares of the Company's common stock.

See Company's 10-K for additional disclosures

S-3

Table of Contents

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

Consolidated Balance Sheets

(Dollars in thousands)

	March 31, 2014				December 31, 2013

Real Estate:
Land and land improvements	$	1,354,748			$	1,083,552
Buildings and improvements		5,286,033				4,360,205
		6,640,781				5,443,757
Less: accumulated depreciation		(1,300,793	)			(1,254,886	)
		5,339,988				4,188,871
Real estate under development		308,266				50,430
Co-investments		716,443				677,133
		6,364,697				4,916,434
Cash and cash equivalents		48,671				53,766
Marketable securities		100,348				90,084
Notes and other receivables		36,105				68,255
Other assets		83,221				58,300
Total assets	$	6,633,042			$	5,186,839

Mortgage notes payable	$	1,408,232			$	1,404,080
Unsecured debt		1,410,162				1,410,023
Lines of credit		135,903				219,421
Other liabilities		114,883				148,046
Derivative liabilities		2,109				2,682
Total liabilities		3,071,289				3,184,252

Cumulative convertible preferred stock, carrying value		4,349				4,349

Equity:
Common stock		4				4
Cumulative redeemable preferred stock, liquidation value		73,750				73,750
Additional paid-in-capital		2,505,003				2,345,763
Distributions in excess of accumulated earnings		(498,368	)			(474,426	)
Accumulated other comprehensive loss		(56,395	)			(60,472	)
Total stockholders' equity		2,023,994				1,884,619
Noncontrolling interest		1,533,410		(1)		113,619
Total equity		3,557,404				1,998,238
Total liabilities and equity	$	6,633,042			$	5,186,839

(1) Includes $1.4 billion related to the issuance of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired in the merger with BRE.

See Company's 10-K for additional disclosures

S-4

Table of Contents

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

Debt Summary - March 31, 2014

(Dollars in thousands)

											Scheduled principal payments (excludes lines of credit)

	Percentage					Weighted Average													Weighted			Percentage
	of Total			Balance		Interest			Maturity				Balance Outstanding						Average Interest			of Total
	Debt			Outstanding		Rate			In Years				Secured		Unsecured		Total		Rate			Debt
Mortgage Notes Payable
Fixed rate - secured		42	%	$	1,230,625		6.0	%		4.9		2014	$	-	$	-	$	-		-			-
Variable rate - secured (1)		6	%		177,607		1.5	%		18.8		2015		67,070		-		67,070		5.2	%		2.4	%
Total mortgage notes payable		48	%		1,408,232		5.4	%		6.7		2016		12,319		350,000		362,319		3.3	%		12.9	%
												2017		182,049		190,000		372,049		4.3	%		13.2	%
Unsecured Debt												2018		269,939		-		269,939		5.8	%		9.6	%
Bonds private - fixed rate		16	%		465,000		4.5	%		5.0		2019		264,984		75,000		339,984		5.4	%		12.0	%
Bonds public - fixed rate		20	%		595,162		3.5	%		8.7		2020		396,721		-		396,721		6.4	%		14.1	%
Term loan (2)		12	%		350,000		2.4	%		2.9		2021		47,543		200,000		247,543		5.0	%		8.8	%
		48	%		1,410,162		3.6	%		6.1		2022		-		297,387		297,387		3.7	%		10.5	%
Unsecured Lines of Credit												2023		-		297,775		297,775		3.4	%		10.6	%
Line of credit (3)		4	%		124,000		1.6	%				2024		-		-		-		-			-
Line of credit (4)		-			11,903		1.6	%			Thereafter			167,607		-		167,607		1.5	%		5.9	%
Total lines of credit		4	%		135,903		1.6	%
											Total		$	1,408,232	$	1,410,162	$	2,818,394		4.5	%		100.0	%
Total debt		100	%	$	2,954,297		4.4	%

Capitalized interest for the three months ended March 31, 2014 was approximately $3.4 million.

(1)

Variable rate debt of $167.6 million is tax exempt to the note holders and $156.9 million is subject to interest rate protection agreements.

(2)

The unsecured term loan has a variable interest rate of LIBOR plus 1.05%. The Company has entered into interest rate swap contracts with a notional amount totaling $300 million, which effectively converts the interest rate on $300 million of the term loan to a fixed rate of 2.4%.

(3)

The unsecured line of credit facility is $1 billion and the line matures in December 2017 with one 18-month extension, exercisable at the Company's option. The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.95%.

(4)

The unsecured line of credit facility is $25 million and matures in January 2016. The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.95%.

See Company's 10-K for additional disclosures

S-5

Table of Contents

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

Capitalization Data, Public Bond Covenants, Credit Ratings and Selected Credit Ratios - March 31, 2014

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

Capitalization Data				Public Bond Covenants (1)	Actual			Requirement
Total debt	$	2,954,297
				Debt to Total Assets:		46	%	< 65%
Common stock and potentially dilutive securities
Common stock outstanding		38,392
Limited partnership units (1)(2)		2,176
Options-treasury method		348		Secured Debt to Total Assets:		22	%	< 40%
Total shares of common stock and potentially dilutive securities		40,916

Common stock price per share as of March 31, 2014	$	170.05
				Interest Coverage:		347	%	> 150%
Market value of common stock and potentially dilutive securities	$	6,957,766

Preferred stock	$	73,079		Unsecured Debt Ratio (2) :		243	%	> 150%

Total equity capitalization	$	7,030,845
				Selected Credit Ratios (1)	Actual
Total market capitalization	$	9,985,142
Ratio of debt to total market capitalization		29.6	%	Indebtedness Divided by Adjusted EBITDA (3):		6.8	x

				Unencumbered NOI to Total NOI:		60	%

(1) Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company's common stock. (2) Excludes 8.6 million of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired as part of the merger with BRE.			(1) Excludes 14 properties, or approximately $1.4 billion, contributed to the Operating Partnership at March 31, 2014 by BRE in exchange for OP units. On April 1, 2014, the units were retired by Essex. (2) Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness. (3) Adjusted EBITDA is annualized current quarter NOI adjusted for non-recurring items and proforma NOI for current quarter acquisitions.

Credit Ratings
Rating Agency	Rating	Outlook
Fitch	BBB+	Stable
Moody's	Baa2	Stable
Standard & Poors	BBB	Stable

See Company's 10-K for additional disclosures

S-6

Table of Contents

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

Property Operating Results - Quarters ended March 31, 2014 and 2013

(Dollars in thousands, except per unit amounts)

	Southern California									Northern California									Seattle Metro									Other real estate assets (1)				Total
	2014			2013			% Change			2014			2013			% Change			2014			2013			% Change			2014		2013		2014			2013			% Change

Revenues:
Same-property revenue	$	65,475		$	62,431			4.9	%	$	53,054		$	48,461			9.5	%	$	27,896		$	25,751			8.3	%	$	-	$	-	$	146,425		$	136,643			7.2	%
Non-same property revenue (2)		4,212			2,309						3,890			2,309						745			-						3,745		3,796		12,592			8,414
Total Revenues	$	69,687		$	64,740					$	56,944		$	50,770					$	28,641		$	25,751					$	3,745	$	3,796	$	159,017		$	145,057

Property operating expenses:
Same-property operating expenses
Real estate taxes	$	5,721		$	5,511					$	4,989		$	4,818					$	2,909		$	2,598					$	-	$	-	$	13,619		$	12,927			5.4	%
Administrative and insurance		5,756			5,596						2,984			2,958						1,871			1,834						-		-		10,611			10,388			2.1	%
Maintenance and repairs		4,326			4,111						3,139			2,995						1,803			1,638						-		-		9,268			8,744			6.0	%
Utilities		3,630			3,351						2,978			2,851						2,019			1,980						-		-		8,627			8,182			5.4	%
Management fees		1,421			1,394						1,024			967						750			706						-		-		3,195			3,067			4.2	%
Total same-property operating expenses		20,854			19,963			4.5	%		15,114			14,589			3.6	%		9,352			8,756			6.8	%		-		-		45,320			43,308			4.6	%
Non-same property operating expenses (2)(7)		1,767			1,069						1,477			898						244			-						3,165		1,051		6,653			3,018
Total property operating expenses	$	22,621		$	21,032					$	16,591		$	15,487					$	9,596		$	8,756					$	3,165	$	1,051	$	51,973		$	46,326

Net operating income (NOI):
Same-property NOI	$	44,621		$	42,468			5.1	%	$	37,940		$	33,872			12.0	%	$	18,544		$	16,995			9.1	%	$	-	$	-	$	101,105		$	93,335			8.3	%
Non-same property NOI (2)
Redevelopment communities		1,454			1,240						-			-						-			-						-		-		1,454			1,240
Development communities - 2014 (3)		(13	)		-						-			-						-			-						-		-		(13	)		-
Acquired communities - 2013 (4)		1,004			-						2,413			1,411						501			-						-		-		3,918			1,411
Other real estate assets (1)		-			-						-			-						-			-						580		2,745		580			2,745
Total non-same property NOI (6)		2,445			1,240						2,413			1,411						501			-						580		2,745		5,939			5,396
Total NOI	$	47,066		$	43,708					$	40,353		$	35,283					$	19,045		$	16,995					$	580	$	2,745	$	107,044		$	98,731

Same-property operating margin		68	%		68	%					72	%		70	%					66	%		66	%									69	%		68	%

Annualized same-property turnover percentage		45	%		45	%					45	%		46	%					39	%		37	%									44	%		43	%

Average same-property concessions per turn (5)	$	117		$	148					$	173		$	178					$	126		$	133									$	137		$	155

Reconciliation of apartment units at end of period

Same-property apartment units		12,914									8,840									6,537													28,291

Consolidated apartment units		13,870			13,656						9,430			9,431						6,703			6,720										30,003			29,807
Joint venture		1,870			1,788						1,592			1,236						1,157			1,512										4,619			4,536
Under development		571			492						1,780			1,728						-			-										2,351			2,220
Total apartment units at end of period		16,311			15,936						12,802			12,395						7,860			8,232										36,973			36,563

Percentage of total		44	%		44	%					35	%		34	%					21	%		22	%									100	%		100	%

Average same-property financial occupancy		96.4	%		96.5	%					96.5	%		96.5	%					96.5	%		96.6	%									96.5	%		96.5	%

(1)	Other real estate assets consists mainly of retail space, commercial properties, boat slips, and properties sold during 2014. Their operating results are classified in non-same property results.

(2)	Includes properties which subsequent to January 1, 2013 were either acquired or in a stage of development or redevelopment without stabilized operations.

(3)	In March 2014, the Company purchased The Avery, a development community that is in lease up.

(4)	Acquired communities during 2013 includes Annaliese, Fox Plaza, Slater 116, Vox, and Domain.

(5)	Average same-property concessions per turn is the dollar amount per unit resulting from the same-property concessions divided by the product of the same property turnover percentage for the quarter times the same-property apartment units.

(6)	Non-same property NOI excludes operating results related to 14 BRE properties contributed to the Operating Partnership on March 31, 2014.

(7)	Other real estate asset expenses for the quarter ended March 31, 2014, includes $1.6 million related to earthquake and flood damage at two communities.

See Company's 10-K for additional disclosures

S-7

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

Revenue by County - Quarters ended March 31, 2014, March 31, 2013 and December 31, 2013

(Dollars in thousands, except average property rental rates)

										Three months ended					Three months ended
			Average Property Rental Rates							March 31, 2014					March 31, 2013
Region	Units		QTD 2014		QTD 2013		% Change			Property Revenue		Financial Occupancy			Property Revenue		Financial Occupancy			Property Revenue % Change			Property Revenue December 31, 2013		Sequential % Change

Southern California
Los Angeles County		4,439	$	1,865	$	1,783		4.6	%	$	25,237		96.5	%	$	24,106		96.7	%		4.7	%	$	25,019		0.9	%
Ventura County		2,898		1,442		1,384		4.2	%		13,016		96.9	%		12,446		96.9	%		4.6	%		12,815		1.6	%
Orange County		2,887		1,889		1,795		5.2	%		16,467		95.8	%		15,644		96.4	%		5.3	%		16,290		1.1	%
San Diego County		2,067		1,273		1,222		4.2	%		8,186		96.2	%		7,828		96.2	%		4.6	%		8,092		1.2	%
Santa Barbara County		347		1,750		1,670		4.8	%		1,892		99.6	%		1,779		97.6	%		6.4	%		1,892		0.0	%
Riverside County		276		791		798		-0.9	%		677		95.7	%		628		89.5	%		7.8	%		668		1.3	%
Total same-property		12,914		1,655		1,582		4.6	%		65,475		96.4	%		62,431		96.5	%		4.9	%		64,776		1.1	%
Los Angeles County		577		1,727							2,385					2,309
San Diego County		379		1,895							1,827					-
Non-same property		956		1,794							4,212					2,309

Northern California
Santa Clara County		4,279		2,075		1,907		8.8	%		26,992		96.6	%		24,710		96.6	%		9.2	%		26,479		1.9	%
Contra Costa County		1,720		1,772		1,647		7.6	%		9,305		96.3	%		8,619		96.4	%		8.0	%		9,094		2.3	%
Alameda County		1,542		1,757		1,582		11.1	%		8,504		97.3	%		7,644		97.1	%		11.3	%		8,278		2.7	%
San Mateo County		768		2,146		1,960		9.5	%		5,106		96.7	%		4,655		97.2	%		9.7	%		5,004		2.0	%
San Francisco MSA		301		2,235		1,995		12.0	%		1,968		93.4	%		1,741		92.1	%		13.0	%		1,996		-1.4	%
Other		230		1,683		1,572		7.1	%		1,179		96.3	%		1,092		95.8	%		8.0	%		1,163		1.4	%
Total same-property		8,840		1,962		1,799		9.1	%		53,054		96.5	%		48,461		96.5	%		9.5	%		52,014		2.0	%
San Francisco MSA		590		2,271							3,890					2,309
Non-same property		590		2,271							3,890					2,309

Seattle Metro
King County		6,072		1,369		1,273		7.5	%		26,409		96.5	%		24,402		96.6	%		8.2	%		26,115		1.1	%
Snohomish County		465		990		919		7.7	%		1,487		97.6	%		1,349		96.8	%		10.2	%		1,435		3.6	%
Total same-property		6,537		1,342		1,247		7.7	%		27,896		96.5	%		25,751		96.6	%		8.3	%		27,550		1.3	%
King County		166		1,622							745					-
Non-same property		166		1,622							745					-

Other real estate assets											3,745					3,796

Total same-property revenue		28,291	$	1,678	$	1,572		6.8	%	$	146,425		96.5	%	$	136,643		96.5	%		7.2	%	$	144,340		1.4	%

Total non-same property revenue		1,712	$	1,941						$	12,592				$	8,414

See Company's 10-K for additional disclosures

S-8

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

Development Pipeline - March 31, 2014

(Dollars in millions, except per unit amounts in thousands)

		Ownership %			Estimated Units		Estimated Retail sq. feet		Incurred to Date		Remaining Costs		Estimated Total Cost		Essex Share of Estimated Total Cost				Apartment Cost per Unit		Construction Start		Initial Occupancy		Stabilized Operations
Development Projects - Consolidated
Project Name	Location
Emme	Emeryville, CA		100	%		190		-	$	40	$	22	$	62	$	62			$	326		Q3 2012		Q3 2014		Q1 2015
Avery (1)	Valley Village, CA		100	%		121		-		37		1		38		38				314		Q3 2012		Q1 2014		Q2 2014
Total Development Projects - Consolidated						311		-		77		23		100		100				322

Other Development Projects - Consolidated
Project Name	Location
City Centre	Moorpark, CA		100	%		200		-		12		-		12		12
Other Projects	various		100	%		-		-		3		-		3		3
Real Estate under Development transferred from BRE on 3/31/14 (2)			100	%		-		-		252		253		505		505
Total Other Development Projects - Consolidated						200		-		267		253		520		520
Total Development Pipeline - Consolidated						511		-		344		276		620		620

Development Projects - Joint Venture
Project Name	Location
Epic - Phase II	San Jose, CA		55	%		289		-		88		9		97		54				336		Q1 2012		Q4 2013		Q2 2014
Epic - Phase III	San Jose, CA		55	%		200		-		36		60		96		53				480		Q3 2013		Q3 2015		Q1 2016
The Huxley	West Hollywood, CA		50	%		187		18,200		75		-		75		38		(3)		339		Q4 2011		Q1 2014		Q3 2014
The Dylan	West Hollywood, CA		50	%		184		12,750		70		5		75		38		(3)		363		Q4 2011		Q2 2014		Q4 2014
Mosso I	San Francisco, CA		55	%		181		5,030		78		22		100		55		(3)		538		Q2 2012		Q2 2014		Q1 2015
Mosso II	San Francisco, CA		55	%		282		4,270		128		22		150		82		(3)		525		Q2 2012		Q3 2014		Q2 2015
Park 20	San Mateo, CA		55	%		197		-		53		23		76		42				386		Q3 2012		Q3 2014		Q1 2015
One South Market	San Jose, CA		55	%		312		6,000		41		104		145		80		(3)		458		Q2 2013		Q3 2015		Q2 2016
The Village	Walnut Creek, CA		50	%		49		35,000		40		41		81		41		(3)		769		Q3 2013		Q3 2015		Q1 2016
Total Development Projects - Joint Venture						1,881		81,250		609		286		895		483			$	439

Grand Total - Development Pipeline						2,392		81,250	$	953	$	562	$	1,515		1,103
Essex Cost Incurred to Date																(670	)
Essex Remaining Commitment															$	433

(1)	The Company purchased this property in March 2014 after it obtained a certificate of occupancy.

(2)	The real estate under development was transferred on March 31, 2014 as part of the Operating Partnership unit trade that occurred one day prior to the close of the merger with BRE.

(3)	Excludes the estimated allocation to retail square feet.

See Company's 10-K for additional disclosures

S-9

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

Redevelopment Pipeline and Capital Expenditures - March 31, 2014

(Dollars in thousands, except per unit amounts)

			Total		Estimated		Estimated				NOI
			Incurred		Remaining		Total		Project		For the three months ended
Region/Project Name	Units		To Date		Cost		Cost		Start		2014		2013

Same-property - Redevelopment Projects (1) (2)
Southern California
The Hamptons, Glendale, CA		215	$	73	$	19,408	$	19,481		Q1 2014
The Monterras, Pasadena, CA		292		691		25,692		26,383		Q1 2014
Total Same-Property - Redevelopment Projects		507	$	764	$	45,100	$	45,864			$	1,792	$	1,794


Same-Property Redevelopment Vacancy Loss											$	441	$	431

Non-same property - Redevelopment Projects
Southern California
Bunker Hill Towers, Los Angeles		456		4,189		71,955		76,144		Q3 2013
Total Non-Same Property - Redevelopment Projects		456	$	4,189	$	71,955	$	76,144			$	1,454	$	1,240

(1)	Redevelopment activities are ongoing at these communities, but the communities have stabilized operations, therefore results are classified in same-property operations.

(2)

The Company incurred $0.4 million of vacancy loss for the same-property portfolio, and $0.6 million of vacancy loss for the total portfolio during the three months ended March 31, 2014. The Company completed the redevelopment of interiors totaling 240 units for the same-property portfolio and 285 units for the total portfolio, during the three months ended March 31, 2014.

Non-revenue Generating Capital Expenditures		Q1 2014		Q4 2013		Q3 2013		Q2 2013		Q1 2013		Q4 2012		Q3 2012

Non-revenue generating capital expenditures	$	4,416	$	5,153	$	9,536	$	8,330	$	4,019	$	14,715	$	8,736
Average apartment units in quarter		29,886		29,833		29,646		29,338		28,900		28,269		27,815
Capital expenditures per apartment unit in the quarter	$	148	$	173	$	322	$	284	$	139	$	521	$	314
Capital expenditures per apartment unit-trailing four quarters	$	918	$	906	$	1,235	$	1,220	$	1,153	$	1,079	$	1,004

See Company's 10-K for additional disclosures

S-10

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

Co-investments - March 31, 2014	Essex					Total				Essex		Weighted			Remaining		For the Quarter
(Dollars in thousands)	Ownership					Undepreciated		Debt		Book		Average			Term of		Ended March 31,
	Percentage			Units		Book Value		Amount		Value		Borrowing Rate			Debt/(in Years)		2014			2013

Operating Non-consolidated Joint Ventures																	Net Operating Income

Essex Apartment Value Fund II, L.P. (Fund II) (1)		28.2	%		96	$	14,421	$	6,297	$	7,235		5.6	%		0.4	$	305		$	4,416
Wesco I, LLC (2)		50.0	%		2,713		672,617		368,832		136,495		4.0	%		9.2		8,939			8,229
Wesco III, LLC (2)		50.0	%		657		165,008		87,712		38,928		2.7	%		6.0		1,956			629
Expo		50.0	%		275		64,690		45,000		11,877		3.6	%		6.4		1,157			385
Total Operating Non-consolidated Joint Ventures					3,741	$	916,736	$	507,841		194,535		3.8	%		8.3	$	12,357		$	13,659

																	Essex Portion of NOI and Expenses
Essex portion of NOI																	$	6,112		$	5,867
Essex portion of depreciation																		(4,706	)		(3,788	)
Essex portion of interest expense and other																		(2,443	)		(2,120	)
Essex portion of gain and promote income (Fund II)																		7,059			-
Essex portion of net income (loss) from operating co-investments																	$	6,022		$	(41	)

Development Joint Ventures (3) (4)		50/55	%		2,470	$	784,989	$	109,100		378,200		1.5	%		32.7	$	1,019		$	-

												Weighted Average Preferred Return			Weighted Average Expected Term		Income from Preferred Equity Investments
																	Equity Investments
Preferred Equity Investments											143,708		10.0	%		3.8	$	3,485		$	4,252

Total Co-investments										$	716,443						$	10,526		$	4,211

(1)

The Company has a 28.2% interest as a general partner and limited partner in Fund II, and may earn promote income if Fund II exceeds certain financial return benchmarks. As of Q1 2014, 13 of the 14 properties in Fund II were sold. The remaining property is expected to be sold in 2014.

(2)

The Company has a 50% interest in Wesco I and III and the Company may earn promote income if the co-investment exceeds certain financial benchmarks.

(3)

The Company has interests in nine development co-investments, which are detailed on S-9. NOI generated from the lease-up of Epic Phase 1 and 2 and Connolly Station are included in Development Joint Ventures.

(4)

The Huxley and The Dylan have a combined $109.1 million of long-term tax-exempt bond debt that are subject to total return swaps that mature in 2016.

See Company's 10-K for additional disclosures

S-11

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

Summary of Consolidated Co-Investments and Noncontrolling Interest - March 31, 2014

(Dollars in thousands)

The Company enters into co-investment transactions with third party developers, owners and investors of apartment communities. In accordance with GAAP, the Company consolidates certain of these co-investment transactions, resulting in noncontrolling interests corresponding to the ownership interest of the third-party developer, owner or investor.

The following table summarizes the consolidated co-investments and noncontrolling interest:

									Operations for the year ended
	Balance as of March 31, 2014								March 31, 2014
	Investment in		Related		Noncontrolling		DownREIT				Operating
	Real Estate		Debt		Interest		Units Outstanding (1)		Revenue		Expenses		NOI

Noncontrolling Interest - DownREIT:
Barkley Apartments	$	8,225	$	16,466	$	1,696		74,248	$	683	$	233	$	450
Avery (2)		36,509		10,000		2,568		58,884		-		-		-
Brookside Oaks		31,478		19,565		2,239		80,903		1,037		195		842
Capri at Sunny Hills		15,594		-		2,945		158,665		654		177		477
Hidden Valley (3)		36,635		30,033		6,089		62,647		1,428		433		995
Highridge Apartments		29,835		44,807		2,826		270,158		1,739		397		1,342
Montejo Apartments		7,774		13,000		1,216		29,319		488		125		363
The Elliot at Mukilteo		15,396		10,750		1,212		100,713		932		327		605
Magnolia Square		30,697		18,044		6,356		57,231		1,016		258		758
Fairhaven Apartments		12,475		16,871		2,951		67,728		686		183		503
Valley Park Apartments		13,142		22,071		53		3,831		780		295		485
Villa Angelina Apartments		19,111		26,907		1,593		43,552		1,070		272		798

	$	256,871	$	228,514		31,744		1,007,879	$	10,513	$	2,895	$	7,618

Other Components of Noncontrolling Interest:
Hillsdale Garden Apartments (4)	$	107,180				21,269			$	4,599	$	1,447	$	3,152
Operating Partnership Units and Other						60,581
Units from BRE Asset Contribution (5)						1,419,816
Total Noncontrolling Interest					$	1,533,410

(1)	Generally, DownREIT units are redeemed for cash at a value equal to Essex's common stock.

(2)

Avery was acquired on March 28, 2014 as the replacement property for Brentwood which completed a 1031 exchange transaction. Attributable to the 1031 exchange, the partnership underlying the noncontrolling interest remains in place. The Avery is in lease-up and therefore had no NOI during the period.

(3)	The DownREIT has a 75% interest in this community and a joint venture partner has a 25% interest.

(4)	The Company has an 81.5% interest in this community and the joint venture partner has an 18.5% interest.

(5)	Includes 8.6 million of Operating Partnership Units issued to BRE Properties on March 31, 2014 for the contribution of 14 properties to the Operating Partnership. On April 1, 2014, the units were retired as part of the merger with BRE.

See Company's 10-K for additional disclosures

S-12

Table of Contents

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

Assumptions for 2014 FFO Guidance Range

Q1 2014 Earnings Results Supplement

Includes the Impact from BRE Properties as of April 1, 2014

($'s in thousands, except share and per share data)

				Changes to Guidance Including BRE Merger						2014 Revised Guidance Range for ESS
	ESS
	Standalone			Low			High			Low			High
	2014 Midpoint			End			End			End			End			Changes from Original 2014 Guidance
Net Operating Income ("NOI")
Total NOI from consolidated communities	$	442,000			187,700			191,700			626,700			636,700		Includes NOI from the BRE properties, including the negative impact from Ave 64 redevelopment, the acquisition of Piedmont in May 2014, and Q1 '14 operating results for ESS

Accretion from external growth, net of dispositions		500			-			-			500			500

Management Fees		10,650			2,000			2,200			12,100			13,400		Reflects mgmt. fees from the three co-investments formed in the BRE merger

Interest Expense
Interest and amortization expense, before capitalized interest		(132,800	)		(53,700	)		(52,300	)		(189,200	)		(186,600	)	Updated for assumed debt from BRE at the effective interest rate on April 1 and $400M unsecured note offering in April
Projected interest capitalized		12,700			9,300			10,300			19,900			22,100		Reflects capitalized interest on developments acquired from BRE, including the impact from MB360
Net interest expense		(120,100	)		(44,400	)		(42,000	)		(169,300	)		(164,500	)

Recurring Income and Expenses
Interest and other income		9,800			-			-			9,400			10,200
FFO from co-investments		36,700			13,400			14,800			49,600			52,000		Reflects the three co-investments formed as part of the BRE merger
General and administrative expense		(25,500	)		(7,400	)		(8,400	)		(32,400	)		(34,400	)	Includes incremental G&A related to the merger
Cost of management and other fees		(6,800	)		(700	)		(700	)		(7,500	)		(7,500	)
Preferred dividends and non-controlling interest		(14,000	)		-			-			(14,000	)		(14,000	)
		200			5,300			5,700			5,100			6,300

Non-Core Income and Expenses
Promote income from co-investment		4,000			-			-			4,000			7,000
Gains on sales of marketable securities, land, note prepayment		-			-			-			827			827
Earthquake related and other		-			-			-			(1,571	)		(1,571	)
Loss on early retirement of debt		-			-			-			(197	)		(197	)
Merger expenses		-			(72,000	)		(68,000	)		(73,000	)		(67,000	)	Excludes BRE merger cost of $35 million
Acquisition costs		(1,300	)		-			-			(1,100	)		(1,600	)
		2,700			(72,000	)		(68,000	)		(71,041	)		(62,541	)

Funds from Operations	$	335,950			78,600			89,600			404,059			429,859

Funds from Operations per diluted Share	$	8.32									6.93			7.37

% Change - Funds from Operations		9.6	%								-8.7	%		-2.9	%

Funds from Operations excluding non-core items	$	333,250									475,100			492,400

Core Funds from Operations per diluted Share	$	8.25									8.15			8.45

% Change - Core Funds from Operations		8.5	%								7.2	%		11.1	%

Weighted average shares outstanding		40,400			23,100			23,100			58,300			58,300		Includes the 23.1M shares issued in the BRE merger and equity issued through April 2014

See Company's 10-K for additional disclosures

S-13

Table of Contents

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

Summary of Apartment Community Acquisitions and Dispositions Activity

Quarter ended March 31, 2014 and Q2 2014 to date

(Dollars in thousands)

Acquisitions				Essex
				Ownership							Purchase		Price per		Average
Property Name	Location	Units		Percentage			Ownership			Date	Price		Unit		Rent


The Avery	Los Angeles, CA		121		100	%	EPLP			Mar-14		35,000		289		2,386
	Q1 2014 Total		121								$	35,000	$	289

Piedmont	Bellevue, WA		396		100	%	EPLP			May-14		76,750		194		1,386
	Q2 2014 to date		396								$	76,750	$	194

Dispositions				Essex
				Ownership							Sales		Price per
		Units		Percentage			Ownership			Date	Price		Unit

Vista Capri			106		100.0	%	EPLP			Jan-14		14,350		135
Davey Glen			69		28.2	%	Fund II			Mar-14		23,750		344
	Q1 2014 Total		175								$	38,100	$	218

BRE Properties Contributed to Joint Ventures as of April 1, 2014							Essex
	Location			Units			Ownership Percentage			Ownership	MSA		Purchase Price

Regency at Palm Court	Los Angeles, CA				116			50.0	%	Wesco III	Los Angeles
The Summit	Chino Hills, CA				125			50.0	%	Wesco III	Los Angeles
Windsor Court	Los Angeles, CA				95			50.0	%	Wesco III	Los Angeles
		Wesco III Total			336
Bridgeport Coast	Santa Clarita, CA				188			50.0	%	Wesco IV	Los Angeles
City Centre	Hayward, CA				192			50.0	%	Wesco IV	San Francisco
Fairways at Westridge	Valencia, CA				234			50.0	%	Wesco IV	Los Angeles
Verandas	Union City, CA				282			50.0	%	Wesco IV	San Francisco
Vistas of West Hills	Valencia, CA				220			50.0	%	Wesco IV	Los Angeles
		Wesco IV Total			1,116
Ballinger Commons	Seattle, WA				485			50.0	%	AEW	Seattle
Bothell Ridge	Bothell, WA				214			50.0	%	AEW	Seattle
Canyon Creek	Northridge, CA				200			50.0	%	AEW	Los Angeles
City Walk	Seattle, WA				102			50.0	%	AEW	Seattle
Enclave at Town Square	Chino Hills, CA				124			50.0	%	AEW	Los Angeles
Esplanade	San Diego, CA				616			50.0	%	AEW	San Diego
Parkside Court	Santa Ana, CA				210			50.0	%	AEW	Orange County
The Havens	Fountain Valley, CA				440			50.0	%	AEW	Orange County
The Heights	Chino Hills, CA				332			50.0	%	AEW	Los Angeles
		AEW Total			2,723
		Total Joint Ventures			4,175								$	888,000

See Company's 10-K for additional disclosures

S-14

Table of Contents

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

2014 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions

	Residential Supply ⁽¹⁾												Job Forecast ⁽²⁾					Market Forecast ⁽³⁾
Market	New MF Supply		New SF Supply		Total Supply		% of MF Supply to MF Stock			% of Total Supply to Total Stock			Est. New Jobs Dec- Dec		% Growth			Estimated Rent Growth

Los Angeles		9,000		3,300		12,300		0.6	%		0.4	%		75,500		1.9	%		5.3	%
Ventura		650		1,200		1,850		1.0	%		0.7	%		4,800		1.7	%		4.3	%
Orange		3,250		3,500		6,750		0.8	%		0.6	%		28,700		2.0	%		4.6	%
San Diego		2,500		2,500		5,000		0.6	%		0.4	%		23,400		1.8	%		3.7	%
So. Cal.		15,400		10,500		25,900		0.7	%		0.5	%		132,400		1.9	%		4.7	%

San Jose		4,300		1,800		6,100		1.7	%		0.9	%		26,500		2.8	%		7.9	%
San Francisco		4,500		525		5,025		1.2	%		0.7	%		26,200		2.5	%		6.4	%
Oakland		2,000		2,900		4,900		0.6	%		0.5	%		20,300		2.0	%		5.4	%
No. Cal.		10,800		5,225		16,025		1.3	%		0.7	%		73,000		2.5	%		6.8	%

Seattle		8,500		6,500		15,000		1.9	%		1.3	%		39,000		2.6	%		5.4	%

Weighted Average (4)		34,700		22,225		56,925		1.1	%		0.7	%		244,400		2.2	%		5.6	%

All data are based on Essex Property Trust, Inc. forecasts.

U.S. Economic Assumptions: 2014 G.D.P. Growth: 2.8% , 2014 Job Growth: 1.8%

(1) New Residential Supply: MF (multifamily) reflects the Company's internal estimate of actual multifamily deliveries; SF (single family) is based on 12 month single family trailing permits reported by the US Census Bureau.

(2) Job Forecast: refers to the difference between total non-farm industry employment (not seasonally adjusted) projected through Dec 2014 over estimated Dec 2013, expressed as total new jobs and growth rates.

(3) Market Forecast: the estimated rent growth represents the forecasted change in effective market rents for Q4 2014 vs Q4 2013 (excludes submarkets not targeted by Essex).

(4) Weighted Average: markets weighted by economic rent in the Company's portfolio.

See Company's 10-K for additional disclosures

S-15

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