On April 26, 2022, Essex Property Trust, Inc. (the “Company”) issued a press release and supplemental information announcing the Company’s financial results for the quarter ended March 31, 2022. The Company has posted a copy of the press release and supplemental information on the Company’s website at www.essex.com. A copy of the press release and supplemental information is attached hereto as Exhibit 99.1 and incorporated by reference herein.

The information in this report (including Exhibit 99.1) is being furnished pursuant to Item 2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act.

(d) Exhibits.

ESSEX PROPERTY TRUST, INC. 1100 Park Place, Suite 200 San Mateo, CA 94403 INVESTOR RELAT IONS Rylan Burns, GVP of Private Equity & Finance (650) 655-7800 RADIUS 264 Apartment Homes Redwood City, CA FIRST QUARTER 2022 Earnings Release & Supplemental Financial Information

 

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Essex Announces First Quarter 2022 Results and Increases Full-Year 2022 Guidance

San Mateo, California—April 26, 2022—Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its first quarter 2022 earnings results and related business activities.

Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the quarter ended March 31, 2022 are detailed below.

1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800 facsimile 650 655 7810

www.essex.com

Same-Property Operations

Same-property operating results exclude any properties that are not comparable for the periods presented. The table below illustrates the percentage change in same-property gross revenues for the quarter ended March 31, 2022 compared to the quarter ended March 31, 2021, and the sequential percentage change for the quarter ended March 31, 2022 compared to the quarter ended December 31, 2021, by submarket for the Company:

		Q1 2022 vs. Q1 2021								Q1 2022 vs. Q4 2021
Same-Property Revenue Components		$ Amount (in Millions)				% Contribution				$ Amount (in Millions)				% Contribution
Prior-Period Same-Property Revenues		$	334.4							$	347.4
Scheduled Rents			15.3				4.6%				5.2				1.5%
Delinquencies			-0.6				-0.2%				-1.1				-0.3%
Cash Concessions			7.1				2.1%				3.6				1.0%
Vacancy			-1.8				-0.5%				0.6				0.2%
Other Income			1.9				0.6%				0.6				0.2%
Q1 2022 Same-Property Revenues/Change		$	356.3				6.5%			$	356.3				2.6%

Other Investments

In the first quarter of 2022, the Company originated three preferred equity investments totaling $29.5 million at a weighted average return of 10.0%. Two of the preferred equity investments comprising $17.0 million were fully funded at closing, and the third is expected to be fully funded by the third quarter of 2022.

In the first quarter of 2022, the Company received cash proceeds of $106.9 million from the full redemption of two preferred equity investments and partial redemption of two preferred equity investments. The Company recorded approximately $0.9 million of income from a prepayment penalty as the result of an early redemption, which has been excluded from Core FFO.

Subsequent to quarter end, the Company co-launched a new Environmental, Social, and Governance (“ESG”) focused “Housing Impact Fund” to be managed by RET Ventures (“RET”). The fund will focus on improving the environmental and social impact of residential properties by leveraging technologies on both new developments and existing apartment communities. The Company has a total commitment to the fund of $10.0 million.

Development Activity

During the first quarter of 2022, the final phase (“Phase IV”) of the Company’s Station Park Green development comprising 107 apartment homes located in San Mateo, CA, began leasing. As of April 22, 2022, it is 76% leased.

Liquidity and Balance Sheet

Common Stock

In the first quarter of 2022, the Company did not issue any shares of common stock through its equity distribution program or repurchase any shares through its stock repurchase plan.

Guidance

The following table provides a reconciliation of first quarter 2022 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s fourth quarter 2021 earnings release.

The table below provides key changes to the Company’s 2022 full-year assumptions for Net Income, Total FFO, Core FFO, and same-property growth. For additional details regarding the Company’s 2022 assumptions, please see page S-14 of the accompanying supplemental financial information. For the second quarter of 2022, the Company has established a Core FFO guidance range per diluted share of $3.43 to $3.55.

(1)

The revised midpoint of the Company’s same-property revenues and NOI on a GAAP basis are 9.1% and 11.4%, respectively, representing a 85 and 125 basis point increase to the Company’s original guidance midpoints.

Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, April 27, 2022 at 11 a.m. PT (2 p.m. ET), which will be broadcast live via the Internet at www.essex.com, and accessible via phone by dialing toll-free, (877) 407-0784, or toll/international, (201) 689-8560. No passcode is necessary.

A rebroadcast of the live call will be available online for 30 days and digitally for 7 days. To access the replay online, go to www.essex.com and select the first quarter 2022 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13728492. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.com or by calling (650) 655-7800.

Upcoming Events

Corporate Profile

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 253 apartment communities comprising approximately 62,000

The following table sets forth the Company’s calculation of diluted FFO and Core FFO for the three months ended March 31, 2022 and 2021 (dollars in thousands, except for share and per share amounts):

 

Net Operating Income (“NOI”) and Same-Property NOI Reconciliations

NOI and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations

to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented (dollars in thousands):

Safe Harbor Statement Under The Private Litigation Reform Act of 1995:

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward looking statements are statements which are not historical facts, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as “expects,” “assumes,” “anticipates,” “may,” “will,” “intends,” “plans,” “projects,” “believes,” “seeks,” “future,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s expectations related to the continued impact of the COVID-19 pandemic and related variants on the Company’s business, financial condition and results of operations and the impact of any additional measures taken to mitigate the impact of the pandemic, the Company’s intent, beliefs or expectations with respect to the timing of completion of current development and redevelopment projects and the stabilization of such projects, the timing of lease-up and occupancy of its apartment communities, the anticipated operating performance of its apartment communities, the total projected costs of development and redevelopment projects, co-investment activities, qualification as a REIT under the Internal Revenue Code of 1986, as amended, the real estate markets in the geographies in which the Company’s properties are located and in the United States in general, the adequacy of future cash flows to meet anticipated cash needs, its financing activities and the use of proceeds from such activities, the availability of debt and equity financing, general economic conditions including the potential impacts from such economic conditions, including as a result of the COVID-19 pandemic, and governmental measures intended to prevent its spread,  trends affecting the Company’s financial condition or results of operations, changes to U.S. tax laws and regulations in general or specifically related to REITs or real estate, changes to laws and regulations in jurisdictions in which communities the Company owns are located, and other information that is not historical information. While the Company's management believes the assumptions underlying its forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed. Factors that might cause the Company’s

actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the continued impact of the COVID-19 pandemic and related variants, which remains inherently uncertain as to duration and severity, and any additional governmental measures taken to limit its spread and other potential future outbreaks of infectious diseases or other health concerns, which could continue to adversely affect the Company’s business and its tenants, and cause a significant downturn in general economic conditions, the real estate industry, and the markets in which the Company's communities are located; the Company may fail to achieve its business objectives; the actual completion of development and redevelopment projects may be subject to delays; the stabilization dates of such projects may be delayed; the Company may abandon or defer development or redevelopment projects for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; the total projected costs of current development and redevelopment projects may exceed expectations; such development and redevelopment projects may not be completed; development and redevelopment projects and acquisitions may fail to meet expectations; estimates of future income from an acquired property may prove to be inaccurate; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates and operating costs; the Company may be unsuccessful in the management of its relationships with its co-investment partners; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; unexpected difficulties in leasing of development projects; volatility in financial and securities market; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; the Company’s inability to maintain its investment grade credit rating with the rating agencies; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports that the Company files with the SEC from time to time. Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the Company has filed with the SEC may be further amplified by the global impact of the COVID-19 pandemic and related variants and uncertainties regarding ongoing hostilities between Russia and the Ukraine and the related impacts on macroeconomic conditions, including, among other things, interest rates. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this press release.

Definitions and Reconciliations

Non-GAAP financial measures and certain other capitalized terms, as used in this earnings release, are defined and further explained on pages S-18.1 through S-18.4, "Reconciliations of Non-GAAP Financial Measures and Other Terms," of the accompanying supplemental financial information. The supplemental financial information is available on the Company's website at www.essex.com.

Rylan Burns

Group VP of Private Equity & Finance

(650) 655-7800

rburns@essex.com

	Page(s)
Consolidated Operating Results	S-1 – S-2
Consolidated Funds From Operations	S-3
Consolidated Balance Sheets	S-4
Debt Summary – March 31, 2022	S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – March 31, 2022	S-6
Portfolio Summary by County – March 31, 2022	S-7
Operating Income by Quarter – March 31, 2022	S-8
Same-Property Revenue Results by County – Quarters ended March 31, 2022 and 2021, and December 31, 2021	S-9
Same-Property Operating Expenses – Quarter ended as of March 31, 2022 and 2021	S-10
Development Pipeline – March 31, 2022	S-11
Capital Expenditures – March 31, 2022	S-12
Co-investments and Preferred Equity Investments – March 31, 2022	S-13
Assumptions for 2022 FFO Guidance Range	S-14
Reconciliation of Projected EPS, FFO and Core FFO per diluted share	S-14.1
Summary of Apartment Community Acquisitions and Dispositions Activity	S-15
Delinquencies, Operating Statistics, and Same-Property Revenue Growth with Concessions on a GAAP basis	S-16
2022 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions	S-17
Return-to-Office, Increased Travel, and the Unwinding of COVID-era Restrictions are Spurring Demand Growth in the Bay Area	S-17.1
Reconciliations of Non-GAAP Financial Measures and Other Terms	S-18.1 – S-18.4

Consolidated Operating Results (Dollars in thousands, except share and per share amounts)		Three Months Ended March 31,
		2022				2021
Revenues:
Rental and other property		$	379,216			$	352,876
Management and other fees from affiliates			2,689				2,249
			381,905				355,125
Expenses:
Property operating			116,100				110,413
Corporate-level property management expenses			10,172				9,013
Depreciation and amortization			133,533				128,587
General and administrative			12,242				9,812
Expensed acquisition and investment related costs			8				15
			272,055				257,840
Gain on sale of real estate and land			-				100,096
Earnings from operations			109,850				197,381
Interest expense, net (1)			(47,833	)			(48,805	)
Interest and other (loss) income			(7,567	)			14,387
Equity income from co-investments			21,171				17,011
Deferred tax benefit (expense) on unconsolidated co-investments			2,754				(508	)
Loss on early retirement of debt, net			-				(2,517	)
Net income			78,375				176,949
Net income attributable to noncontrolling interest			(5,121	)			(8,505	)
Net income available to common stockholders		$	73,254			$	168,444
Net income per share - basic		$	1.12			$	2.59
Shares used in income per share - basic			65,275,775				64,989,620
Net income per share - diluted		$	1.12			$	2.59
Shares used in income per share - diluted			65,339,378				65,114,933

Consolidated Operating Results		Three Months Ended
Selected Line Item Detail		March 31,
(Dollars in thousands)		2022				2021
Rental and other property
Rental income		$	373,425			$	347,305
Other property			5,791				5,571
Rental and other property		$	379,216			$	352,876
Property operating expenses
Real estate taxes		$	47,242			$	45,328
Administrative			22,089				22,271
Maintenance and repairs			22,964				22,013
Utilities			23,805				20,801
Property operating expenses		$	116,100			$	110,413
Interest and other (loss) income
Marketable securities and other income		$	4,785			$	5,356
Gain on sale of marketable securities			12,171				2,611
Provision for credit losses			62				(38	)
Change in unrealized (losses) gains on marketable securities, net			(24,585	)			6,276
Insurance reimbursements, legal settlements, and other, net			-				182
Interest and other (loss) income		$	(7,567	)		$	14,387
Equity income from co-investments
Equity loss from co-investments		$	(1,332	)		$	(1,311	)
Income from preferred equity investments			13,499				13,185
Equity (loss) income from non-core co-investments			(8,844	)			1,627
Loss on early retirement of debt from unconsolidated co-investments			(86	)			(3	)
Co-investment promote income			17,076				-
Income from early redemption of preferred equity investments			858				3,513
Equity income from co-investments		$	21,171			$	17,011
Noncontrolling interest
Limited partners of Essex Portfolio, L.P.		$	2,563			$	5,947
DownREIT limited partners' distributions			2,154				2,124
Third-party ownership interest			404				434
Noncontrolling interest		$	5,121			$	8,505

Consolidated Funds From Operations (1)		Three Months Ended
(Dollars in thousands, except share and per share amounts and in footnotes)		March 31,
		2022				2021				% Change
Funds from operations attributable to common stockholders and unitholders (FFO)
Net income available to common stockholders		$	73,254			$	168,444
Adjustments:
Depreciation and amortization			133,533				128,587
Gains not included in FFO			-				(100,096	)
Depreciation and amortization from unconsolidated co-investments			18,115				14,729
Noncontrolling interest related to Operating Partnership units			2,563				5,947
Depreciation attributable to third party ownership and other (2)			(353	)			(129	)
Funds from operations attributable to common stockholders and unitholders		$	227,112			$	217,482
FFO per share-diluted		$	3.36			$	3.23				4.0%
Components of the change in FFO
Non-core items:
Expensed acquisition and investment related costs		$	8			$	15
Deferred tax (benefit) expense on unconsolidated co-investments (3)			(2,754	)			508
Gain on sale of marketable securities			(12,171	)			(2,611	)
Change in unrealized losses (gains) on marketable securities, net			24,585				(6,276	)
Provision for credit losses			(62	)			38
Equity loss (income) from non-core co-investments (4)			8,844				(1,627	)
Loss on early retirement of debt, net			-				2,517
Loss on early retirement of debt from unconsolidated co-investments			86				3
Co-investment promote income			(17,076	)			-
Income from early redemption of preferred equity investments			(858	)			(3,513	)
General and administrative and other, net			448				257
Insurance reimbursements, legal settlements, and other, net			-				(182	)
Core funds from operations attributable to common stockholders and unitholders		$	228,162			$	206,611
Core FFO per share-diluted		$	3.37			$	3.07				9.8%
Weighted average number of shares outstanding diluted (5)			67,621,842				67,272,839

(1)	Refer to page S-18.2, the section titled "Funds from Operations ("FFO") and Core FFO" for additional information on the Company's definition and use of FFO and Core FFO.

(2)	The Company consolidates certain co-investments. The noncontrolling interest's share of net operating income in these investments for the three months ended March 31, 2022 was $0.7 million.

(3)	Represents deferred tax (benefit) expense related to net unrealized gains or losses on technology co-investments.

(4)	Represents the Company's share of co-investment loss (income) from technology co-investments.

(5)	Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company's common stock and excludes DownREIT limited partnership units.

		March 31, 2022				December 31, 2021
Real Estate:
Land and land improvements		$	3,032,678			$	3,032,678
Buildings and improvements			12,651,423				12,597,249
			15,684,101				15,629,927
Less: accumulated depreciation			(4,779,581	)			(4,646,854	)
			10,904,520				10,983,073
Real estate under development			112,815				111,562
Co-investments			1,144,542				1,177,802
			12,161,877				12,272,437
Cash and cash equivalents, including restricted cash			108,553				58,638
Marketable securities			169,702				191,829
Notes and other receivables			205,420				341,033
Operating lease right-of-use assets			68,158				68,972
Prepaid expenses and other assets			56,591				64,964
Total assets		$	12,770,301			$	12,997,873
Unsecured debt, net		$	5,308,841			$	5,307,196
Mortgage notes payable, net			637,778				638,957
Lines of credit			98,000				341,257
Distributions in excess of investments in co-investments			28,846				35,545
Operating lease liabilities			69,801				70,675
Other liabilities			449,090				393,069
Total liabilities			6,592,356				6,786,699
Redeemable noncontrolling interest			39,738				34,666
Equity:
Common stock			7				7
Additional paid-in capital			6,930,072				6,915,981
Distributions in excess of accumulated earnings			(987,333	)			(916,833	)
Accumulated other comprehensive income (loss), net			14,237				(5,552	)
Total stockholders' equity			5,956,983				5,993,603
Noncontrolling interest			181,224				182,905
Total equity			6,138,207				6,176,508
Total liabilities and equity		$	12,770,301			$	12,997,873

														Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
																	Unsecured				Secured				Total				Weighted Average Interest Rate				Percentage of Total Debt
						Weighted Average
		Balance Outstanding				Interest Rate				Maturity in Years
Unsecured Debt, net
Bonds public - fixed rate		$	5,350,000				3.3	%			8.4			2022			$	-			$	42,284			$	42,284				3.6	%			0.7	%
Unamortized net discounts and debt issuance costs			(41,159	)			-				-			2023				300,000				2,945				302,945				3.4	%			5.1	%
			5,308,841				3.3	%			8.4			2024				400,000				3,109				403,109				4.0	%			6.7	%
Mortgage Notes Payable, net														2025				500,000				133,054				633,054				3.5	%			10.6	%
Fixed rate - secured			412,846				3.5	%			4.1			2026				450,000				99,405				549,405				3.5	%			9.2	%
Variable rate - secured (1)			224,175				1.1	%			15.9			2027				350,000				153,955				503,955				3.3	%			8.4	%
Unamortized premiums and debt issuance costs, net			757				-				-			2028				450,000				68,332				518,332				2.2	%			8.7	%
Total mortgage notes payable			637,778				2.7	%			8.2			2029				500,000				1,456				501,456				4.1	%			8.4	%
														2030				550,000				1,592				551,592				3.1	%			9.2	%
Unsecured Lines of Credit														2031				600,000				1,740				601,740				2.3	%			10.0	%
Line of credit (2)			98,000				1.1	%			N/A			2032				650,000				1,903				651,903				2.6	%			10.9	%
Line of credit (3)			-				1.1	%			N/A			Thereafter				600,000				127,246				727,246				3.2	%			12.1	%
Total lines of credit			98,000				1.1	%			N/A			Subtotal				5,350,000				637,021				5,987,021				3.2	%			100.0	%
														Debt Issuance Costs				(31,761	)			(1,394	)			(33,155	)		NA				NA
Total debt, net		$	6,044,619				3.2	%			8.4			(Discounts)/Premiums				(9,398	)			2,151				(7,247	)		NA				NA
														Total			$	5,308,841			$	637,778			$	5,946,619				3.2	%			100.0	%

(1)	$224.2 million of variable rate debt is tax exempt to the note holders.

(2)

This unsecured line of credit facility has a capacity of $1.2 billion, with a scheduled maturity date in September 2025 with three 6-month extensions, 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 0.775%. Subsequent to quarter end, the borrowing spread will be reduced by 2.5 basis points to LIBOR plus 0.75% as a result of achieving the Enhanced Sustainability Metric Target for 2021 as defined by the facility's sustainability-linked pricing component.

(3)	This unsecured line of credit facility has a capacity $35.0 million, with a scheduled maturity date in February 2023. 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 0.775%.

Capitalization Data

Public Bond Covenants (1)

Actual

Requirement

Total debt, net

$

6,044,619

Debt to Total Assets:

34%

< 65%

Common stock and potentially dilutive securities

Common stock outstanding

65,332

Limited partnership units (1)

2,282

Options-treasury method

64

Secured Debt to Total Assets:

4%

< 40%

Total shares of common stock and potentially dilutive securities

67,678

Common stock price per share as of March 31, 2022

$

345.48

Interest Coverage:

528%

> 150%

Total equity capitalization

$

23,381,395

Total market capitalization

$

29,426,014

Unsecured Debt Ratio (2):

283%

> 150%

Ratio of debt to total market capitalization

20.5

%

Selected Credit Ratios (3)

Actual

Credit Ratings

Rating Agency

Rating

Outlook

Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized:

6.1

Moody's

Baa1

Stable

Standard & Poor's

BBB+

Stable

Unencumbered NOI to Adjusted Total NOI:

94%

(1)    Assumes conversion of all outstanding limited partnership units in the Operating Partnership into shares of the Company's common stock.

(1)   Refer to page S-18.4 for additional information on the Company's Public Bond Covenants.

(2)   Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.

(3)    Refer to pages S-18.1 to S-18.4, the section titled "Reconciliations of Non-GAAP Financial Measures and Other Terms" for additional information on the Company's Selected Credit Ratios.