RewordedRisk Factors
The 10-K against last year's
107 changes: 10 added, 12 removed, 80 reworded, 5 quiet changes
10-K 0000920522-26-000003 (2026-02-20) vs 10-K 0000920522-25-000024 (2025-02-21) Not compared: Legal Proceedings, Accounting Policies.
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Marked against last year's 10-K:
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Risk Factors 301 words changed in this paragraph; it is 65% similar to last year's version.
We are subject to laws and regulations relating to the handling of personal information and we rely on information technology to sustain our operations. Any material failure, inadequacy, interruption or breach of the Company’s privacy or information systems, or those of our vendors or other third parties, could materially adversely affect the Company’s business, financial condition and results of operations. We rely on information technology hardware, software, networks and systems (collectively, “IT Systems”), some of which are provided by vendors, to process, transmit and store personal information, tenant and lease data, and other electronic information (collectively, “Confidential Information”), and to manage or support a variety of business processes, including financial transactions and records. Our business requires us and some of our vendors to use and store personal and other sensitive information of our tenants and employees, and our collection, use and other processing of personal information is governed by certain federal and state laws and regulations. Privacy and cybersecurity laws continue to evolve, with several a number of states passing new data privacy laws that govern the processing of information about state residents, and laws may be inconsistent from one jurisdiction to another. The Company endeavors to comply with privacy laws and regulations applicable to it, including the California Consumer Privacy Act (“CCPA”) and Washington State’s “My Health My Data Act”, which governs govern the collection, use, retention, disclosure and security of personal information about California residents. The CCPA requires the Company to, among other things, provide certain disclosures to California and Washington residents, promptly respond to certain requests related to their data, and contractually impose certain obligations on vendors. respectively. Compliance with existing and future laws and regulations related to data privacy and protection may increase the Company’s operating costs and adversely impact the Company’s ability to market the Company’s properties and services, and any failure of our systems in place to comply with such laws and regulations could harm our business, reputation and financial condition. Although we have taken steps to abide by applicable privacy and cybersecurity laws, and strive to protect the security of our IT Systems and Confidential Information, the compliance and security measures put in place by the Company and its vendors cannot guarantee perfect compliance or provide absolute security, and the Company and its vendors’ IT Systems may be vulnerable to numerous and evolving cybersecurity threats and risks that threaten the confidentiality, integrity and availability of our IT Systems and Confidential Information, including through social engineering/phishing, malware (including ransomware), distributed denial-of-service attempts, data theft, account takeovers, social engineering/phishing, technological error, employee error, malfeasance by insiders, misconfigurations, “bugs”, or other vulnerabilities in Company, or vendor, IT Systems. These threats may be amplified by emerging artificial intelligence technologies, which are expected to pose new or unknown cybersecurity risks and challenges, including as integrated into our or any third party’s operations, products and services, and can also come from diverse threat actors, such as state-sponsored organizations, opportunistic hackers and hacktivists. Any incident could compromise the Company’s or our vendors’ IT Systems (or the IT Systems of third parties that facilitate the Company’s or such vendors’ business activities), and the Confidential Information stored by or on behalf of the Company or such vendors could be accessed, misused, publicly disclosed, corrupted, lost, or stolen, resulting in fraud, including wire fraud related to Company assets or tenant payments, access to company funds, or other harm. Moreover, if there is a compliance failure, or if a cybersecurity
Source: Item 1A, 10-K 0000920522-26-000003 vs Item 1A, 10-K 0000920522-25-000024
MD&A 183 words changed in this paragraph; it is 52% similar to last year's version.
In August 2024, the Company entered into the 2024 ATM Program. In connection with the 2024 ATM Program, the Company may also enter into related forward sale agreements whereby, at the Company's discretion, it may sell shares of its common stock under the 2024 ATM Program under forward sale agreements. The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date. Furthermore, it would permit the Company, at its election, to settle the agreements by issuing common stock in exchange for net proceeds at the then-applicable forward sale price specified by the agreement or, alternatively, to settle the agreements in whole or in part through the delivery or receipt of common stock or cash. Issuances of shares under these forward sale agreements are classified as equity transactions. Accordingly, no amounts relating to the forward sale agreements are recorded in the consolidated financial statements until settlement occurs. Prior to any settlements, the only impact to the consolidated financial statements is the inclusion of incremental shares, if any, within the calculation of diluted earnings per share and diluted earnings per unit using the treasury stock method. The actual forward price per share to be received by the Company upon settlement will be determined on the applicable settlement date based on adjustments made to the initial forward price to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s common stock over the term of the forward sale agreement.
Source: Item 7, 10-K 0000920522-26-000003 vs Item 7, 10-K 0000920522-25-000024
Every change, by type
Sentences and paragraphs added, removed or reworded
Sentences and paragraphs of ESS's Risk Factors and MD&A, 10-K 2026-02-20 against 10-K 2025-02-21. Each links to the text at sec.gov.
RewordedRisk Factors
Existing and future eviction moratoria, rent control or rent stabilization laws and regulations, fee transparency requirements, along with similar laws and regulations that expand tenants’ rights or impose additional costs on landlords, including any such laws or regulations imposed on the housing industry in response to natural disasters and/or media attention on the housing industry, disasters, national and global pandemic or other any other health crisis, or local or national states of emergency, may reduce rental revenues or increase operating costs and thus such laws and regulations may materially adversely affect our stock price, business, financial condition and results of operations.
RewordedRisk Factors
The Company has entered into, and may continue in the future to enter into, certain co-investments, including joint ventures or partnerships through which it owns an indirect economic interest in less than 100% of the community or land or other investments owned directly by the joint venture or partnership.
RewordedRisk Factors
In the event that Fannie Mae and Freddie Mac discontinue providing liquidity to our sector, have their mandates changed or reduced or be disbanded or reorganized by the government or if there is reduced government support for multifamily housing more generally, it may adversely affect interest rates, capital availability, development of multifamily communities and the value of multifamily residential real estate and, as a result, may adversely affect the Company and its growth and operations.
RewordedRisk Factors
Privacy and cybersecurity risks have generally increased in recent years because of the proliferation of new techniques and tools that circumvent security tools, evade detection and remove forensic evidence, such as artificial intelligence, and the increased sophistication, techniques and activities of threat actors; actors, and the broader adoption of remote and hybrid work arrangements that introduce additional security vulnerabilities due to off-network access; accordingly, the Company may be unable to anticipate these techniques or implement adequate preventative measures.
RewordedRisk Factors
Competitive housing in a particular area and fluctuations in cost of owner-occupied single- and multifamily homes caused by a decrease in housing prices, mortgage interest rates and/or government programs to promote home ownership or create additional rental and/or other types of housing, or an increase in desire for more space due to work-from-home needs or increased time spent at home, housing could materially adversely affect the Company’s ability to retain its tenants, lease apartment homes and increase or maintain rents.
RewordedRisk Factors
Real estate investments are illiquid and, in our markets, can at times be difficult to sell at prices we find acceptable, which may limit our ability to promptly reduce our portfolio in response to changes in economic or other conditions and otherwise may materially adversely affect our financial condition and results of operations.
RewordedRisk Factors
The Company endeavors to comply with privacy laws and regulations applicable to it, including the California Consumer Privacy Act (“CCPA”) and Washington State’s “My Health My Data Act”, which governs govern the collection, use, retention, disclosure and security of personal information about California residents. and Washington residents, respectively.
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RewordedRisk Factors
As a result of climate change, we may experience extreme weather, an increase in frequency and severity of natural disasters, changes in precipitation, temperature, wildfire and drought exposure, and impacts of sea-level rise, rising sea-levels, all of which may result in physical damage, damage to our communities, a decrease in demand for our communities located in these areas or affected by these conditions, damage to our properties, disruption of services at our properties communities or increased costs associated with water or energy use and maintaining or insuring our communities.
RewordedRisk Factors
We rely on, or may rely on in the future, certain key software vendors vendors, including artificial intelligence platforms, to support business practices critical to our operations, including the collection and understanding of rent rent, leads and leasing, and ancillary income, including artificial intelligence platforms, communication with our tenants, interaction and evaluation and/or qualification of our prospective tenants, and to provide us with data.
RewordedRisk Factors
Marcus and his affiliated entities may have a conflict of interest potentially compete with the Company, Company in acquiring and/or developing apartment communities, which may be detrimental to the interests of Essex’s stockholders and the Operating Partnership’s unitholders.
RewordedRisk Factors
If Essex pays a stock dividend that is taxable for U.S. federal income tax purposes, and a U.S. stockholder sells the stock it receives as a dividend in order to pay applicable taxes, the sales proceeds may be less than the amount included in income with respect to the dividend, depending on the market price of our stock at the time of the sale.
RewordedMD&A
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 short and long-term impact of the January 2025 California wildfires, including in relation to regulation, insurance, tenant demand and other factors; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; including from tariffs imposed by the current presidential administration and the threat of such tariffs; geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; the Company’s inability to maintain its investment grade credit rating with the rating agencies; the Company may be unsuccessful in the management of its relationships with its
RewordedMD&A
These increases in to interest expense were partially offset by various debt that was paid off, matured, or due to regular principal payments amortization during and various debts that matured or were paid off, after 2024, primarily due to the pay off payoff of the $300.0 million of senior unsecured notes due May 1, 2023 and $400.0 million of senior unsecured notes due May 1, 2024 during and after 2023, $500.0 million of senior unsecured notes due April 1, 2025, which resulted in a decrease in interest expense of $14.3 $19.9 million for 2024. in 2025.
RewordedMD&A
Expensed acquisition and investment related costs $ 25 $ 72 $ 595 $ 2,132 Tax (benefit) expense on unconsolidated technology co-investments (2) (2,096) (929) 697 (10,236) Realized and unrealized (gains) losses gains on marketable securities, net (3,809) (8,347) (10,006) 45,547 Provision for credit losses 26 (179) 70 (381) Equity (income) loss income from non-core unconsolidated technology co-investments (3) (6,552) (10,344) (1,685) 38,045 Loss on early retirement of debt, net debt 762 — — 2 Loss on early retirement of debt from unconsolidated co-investment co-investments 122 — — 988 Co-investment promote income — (1,531) — (17,076) Income from early redemption of preferred equity investments and notes receivable (70) — (285) (1,669) General and administrative and other, net (4) (1) 10,004 39,341 6,629 2,536 Insurance reimbursements, legal settlements, and other, net (5) (2) (808) (43,794) (9,821) (5,392) Core funds from operations attributable to common stockholders and unitholders $ 1,062,740 $ 1,038,167 $ 999,907 $ 977,857 Core FFO per share-diluted $ 15.94 $ 15.60 $ 15.03 $ 14.51 Weighted average number of shares outstanding, diluted (6) (3) 66,669,649 66,533,908 66,514,456 67,374,526
RewordedMD&A
Campbell, The increase was primarily due to acquisitions Parc at Pruneyard, ViO, 1250 Lakeside, and the consolidation of Hacienda at Camarillo Oaks Artizan and TENTEN Downtown in 2023, 2025, as well as the acquisitions of ARLO Mountain View, Maxwell Sunnyvale, and Beaumont, and along with the Company’s acquisition of the Company’s its joint venture partner’s interests in the BEXAEW and BEX II portfolios, Patina at Midtown, and Century Towers in 2024.
RewordedMD&A
The increase was primarily attributable to increases an increase of 1.9% 2.3% in average rental rates from $2,605 $2,638 for 2023 2024 to $2,655 $2,699 for 2024, 0.8% in other property income, 2025 and 0.9% 0.5% from a decrease in delinquencies, partially offset by a decrease of 0.4% in occupancy. delinquencies.
RewordedMD&A
Depreciation and amortization expense increased by $31.8 $27.3 million or 5.8% 4.7% to $607.5 million in 2025 compared to $580.2 million in 2024 compared to $548.4 million in 2023, 2024, primarily due to acquisitions in 2023 2024 and 2024. 2025 identified in the Non-Same Property revenues section above.
RewordedMD&A
A total of $220.8 $258.8 million of variable rate debt is tax-exempt demand notes which are subject to total return swaps and $95.0 million of variable rate mortgage notes payable has an interest rate swap that effectively converts $47.5 million to an all-in fixed rate of 2.83%. swaps.
RewordedMD&A
As of December 31, 2024, 2025, the Company’s development and predevelopment pipeline was comprised of one consolidated development project and various consolidated predevelopment projects, with total incurred costs of $52.7 $157.1 million, and estimated remaining project costs of approximately $200.9 million, for total estimated project costs of $358.0 million.
RewordedMD&A
The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were $970.6 million and $242.5 million, respectively, as of December 31, 2025, and $893.0 million and $319.1 million, respectively, as of December 31, 2024, and $956.7 million and $324.5 million, respectively, as of December 31, 2023. 2024.
RewordedMD&A
Depreciation and amortization 607,542 580,220 548,438 539,319 Gains not included in FFO (305,043) (386,138) (59,238) (111,839) Casualty loss — — 433 — Impairment loss from unconsolidated co-investments 12,634 3,726 33,700 2,105 Depreciation and amortization from unconsolidated co-investments 56,848 66,943 71,745 72,585 Noncontrolling interest related to Operating Partnership units 23,649 26,414 14,284 14,297 Depreciation attributable to third party ownership and other (1) (160) 31,191 (1,474) (1,421) Funds from operations attributable to common stockholders and unitholders $ 1,065,136 $ 1,063,878 $ 1,013,713 $ 923,361 FFO per share-diluted $ 15.98 $ 15.99 $ 15.24 $ 13.70 Non-core items:
RewordedMD&A
As of December 31, 2024, 2025, the Company owned or had ownership interests in 255 259 operating apartment communities, comprising 62,157 63,077 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, and two operating commercial buildings. buildings and a development pipeline comprised of one consolidated project and various predevelopment projects.
RewordedMD&A
As of December 31, 2024, there were no outstanding forward purchase agreements, and 2025, $900.0 million of shares of common stock remained available to be sold under the 2024 ATM Program. Program, pending the settlement of outstanding forward sale agreements.