Third Quarter 2026 Earnings Release & Supplemental Data Artizan | Oakland, CA
Third Quarter 2026 Earnings Release & Supplemental Data Artizan | Oakland, CA Third Quarter 2026 Earnings Release and Supplemental Data
Table of Contents Earnings Press Release Pages 1 - 9 Consolidated Operating Results S-1 & S-2 Consolidated Funds from Operations S-3 Consolidated Balance Sheets S-4 Debt Summary S-5 Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit S-6 Ratios Portfolio Summary by County S-7 Operating Income by Quarter S-8 Same-Property Revenue Results by County, S-9 Quarter-to-Date Same-Property Revenue Results by County, S-9.1 Year-to-Date Same-Property Operating Expenses, Quarter and S-10 Year-to-Date Development Pipeline S-11 Capital Expenditures S-12 Co-Investments and Preferred Equity Investments S-13 Summary of Apartment Community Acquisitions and S-14 Dispositions Activity Assumptions for 2026 FFO Guidance Range S-15 Reconciliation of Projected EPS, FFO and Core FFO S-15.1 per diluted share MSA Level Supply Forecast: 2026E – 2027E S-16 Reconciliations of Non-GAAP Financial Measures and S-17.1 – S-17.4 Other Terms
1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800 facsimile 650 655 7810 www.essex.com Table of Contents Essex Announces Third Quarter 2026 Results and Raises Full-Year 2026 Guidance
San Mateo, California —October 27, 2026—Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its third quarter 2026 earnings results and related business activities. Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the three and nine-month periods ended September 30, 2026 are detailed below.
Reported Net Income per diluted share for the third quarter of 2026 of • $1.52, compared to $2.56 in the third quarter of 2025. The decrease was primarily driven by gains on sale of real estate and land recognized in the third quarter of 2025.
Grew Core FFO per diluted share by 0.8% compared to the third quarter of • 2025, exceeding the midpoint of the Company’s guidance range by $0.01 per diluted share, driven by same-property revenue growth.
Achieved same-property revenue and net operating income (“NOI”) growth of 3.0% and 3.1%, respectively, compared to the third quarter of 2025. On a • sequential basis, same-property revenue improved by 1.0%, driven by growth across all regions and continued strength in Northern California.
• Disposed of three apartment communities for a total pro rata contract price of $111.9 million.
Full-Year 2026 Revised Guidance Revised Revised Change at Range Midpoint Midpoint Net Income per diluted share $5.62 - $5.74 $5.68 +$0.10 Core FFO per diluted share $16.10 - $16.22 $16.16 +$0.02 Same-Property Revenue 2.8% to 3.0% 2.9% +0.10% Same-Property Operating Expenses 2.6% to 2.9% 2.8% Unchanged Same-Property NOI 2.8% to 3.2% 3.0% +0.20%
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 revenue on a year-over-year basis for the three and nine-month periods ended September 30, 2026 and on a sequential basis for the three-month period ended September 30, 2026:
The table below illustrates the components that drove the change in same- property revenue on a year-over-year basis for the three and nine-month periods ended September 30, 2026 and on a sequential basis for the three-month period ended September 30, 2026:
Sequential Change Q3 2026 compared to Q2 2026 Revenue Operating NOI Expenses Southern 0.4% 6.4% -2.0% California Northern 1.7% 7.4% -0.7% California Seattle Metro 0.8% 5.6% -1.2% Same-Property 1.0% 6.7% -1.3% Portfolio
Investment Activity Dispositions In August 2026, the Company sold a 76-unit apartment home community located in Seattle, WA, for a contract price of $30.0 million. The Company recorded a gain on sale of real estate and land of $6.8 million in the third quarter, which has been excluded from Total and Core FFO. In August 2026, a joint venture in which the Company owned a 58% interest sold a 268-unit apartment home community located in San Jose, CA, for a contract price of $122.3 million ($70.9 million at pro rata share). In addition, the Company was fully redeemed on a $15.6 million preferred equity investment affiliated with the partnership. The Company recorded a gain on sale of co-investment communities of $5.8 million at pro rata share in the third quarter, which has been excluded from Total and Core FFO.
Other Investments In July 2026, Wesco VII, LLC (“Wesco VII”), a joint venture in which the Company owns a 50% interest, originated two preferred equity investments in two stabilized apartment communities totaling $36.2 million ($18.1 million at pro rata share). Both investments were fully funded at closing and yield an initial preferred return of 11.5%. - 3 - Table of Contents Subsequent to quarter end, the Company acquired a 378-unit apartment home community built in 2024 and located in Oakland, CA. This transaction follows the liquidation of the Company’s $64.2 million subordinated loan interest and payoff of the associated $92.3 million senior mortgage. The Company has not accrued income on this investment since the third quarter of 2025 and will consolidate the community on its financial statements in the fourth quarter of 2026. Balance Sheet and Liquidity Balance Sheet In September 2026, the Company obtained a $275.0 million unsecured term loan which is scheduled to mature in September 2029 with two one-year extension options, exercisable at the Company’s option. The loan is priced at SOFR plus 0.80%. Common Stock and Liquidity In the third quarter of 2026, the Company received net cash proceeds of $16.4 million from the settlement of its forward sale agreements entered in the first quarter of 2025, by issuing 52,600 shares of common stock at a weighted average price of $311.13 per share, net of commissions.As of September 30, 2026, there were no outstanding forward sale agreements and the Company had $883.5 million of available authority remaining under its ATM program. During the third quarter of 2026, the Company did not repurchase any shares through its stock repurchase plan. Year-to-date, the Company has repurchased 254,001 shares of its common stock totaling $61.9 million, including commissions, at an average price per share of $243.76. As of September 30, 2026, the Company had $500.0 million of purchase authority remaining under its stock repurchase plan. As of September 30, 2026, the Company had over $1.7 billion of liquidity via available capacity on its unsecured credit facilities, cash and cash equivalents, and marketable securities. - 4 - Table of Contents
Guidance For the third quarter of 2026,the Company exceeded the midpoint of the guidance range provided in its second quarter 2026 earnings release for Core FFO by $0.01 per diluted share, driven by same-property revenue growth. 2026 Full- Year and Fourth Quarter Guidance
Reflects guidance on a cash basis based on 52,059 apartment homes. On a (1) GAAP basis, the midpoints of the Company’s same-property revenue and NOI guidance are 2.9% and 3.0%, respectively
For additional details regarding the Company’s 2026 FFO guidance range, see page S-15 of the supplemental financial information. Conference Call with Management The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, October 28, 2026 at 9 a.m. PT (12 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.comand select the third quarter 2026 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number13763055. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.comor call (650) 655-7800. 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 255 apartment home communities comprising over 62,000 apartment homes with an additional property in active development. Additional information about the Company can be found on the Company’s website at www.essex.com. This press release and accompanying supplemental financial information has been furnished to the Securities and Exchange Commission electronically on Form 8-K and can be accessed from the Company’s website at www.essex.com. If you are unable to obtain the information via the Web, please contact the Investor Relations Department at (650) 655-7800.
- 5 - Table of Contents FFO Reconciliation FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management has consistently applied the Nareit definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the Nareit definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation. - 6 - Table of Contents
The following table sets forth the Company’s calculation of FFO and Core FFO per diluted share for the three and nine-month periods ended September 30, 2026 and 2025 (dollars in thousands, except for share and per share amounts):
Includes political advocacy costs of $0.3 million and $2.0 million for the three and nine months ended September 30, 2026, respectively, and $1.6 million and $2.0 (1) million for the three and nine months ended September 30, 2025, respectively. During the nine months ended September 30, 2026, the Company reached a settlement to fully resolve its case related to RealPage, Inc. totaling $36.5 million and another litigation matter totaling $19.3 million.
Assumes conversion of all outstanding limited partnership units in (2) Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes DownREIT limited partnership units.
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 - 7 - Table of Contents
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 revenue 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 fourth quarter and full-year 2026 guidance (including net income, Total FFO and Core FFO, same-property growth and related assumptions) and anticipated yield on certain investments. 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: assumptions related to our fourth quarter and full-year 2026 guidance; occupancy rates and rental demand may be adversely affected by competitionand local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; 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 - 8 - Table of Contents 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 co- investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects; estimates of future income from an acquired property may prove to be inaccurate; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations and the anticipated or actual impact of future changes in laws or regulations; unexpected difficulties in leasing of future development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in the Company’s annual report on Form 10-K for the year ended December 31, 2025, quarterly reports on Form 10-Q, and those risk factors and special considerations set forth in the Company’sother filings with the SEC which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. 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 and supplemental financial information, are defined and further explained on pages S-17.1 through S-17.4, “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. Contact Information Loren Rainey Sr. Director, Investor Relations (650) 655-7800 lrainey@essex.com
E S S E X P R O P E R T Y T R U S T, I N C. Consolidated Operating Results (Dollars in thousands, except share and per share amounts)
(1) Refer to page S-17.2, the section titled “Interest Expense, Net” for additional information.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information
ConsolidatedOperating Results - Selected Line Item Detail (Dollars in thousands)
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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 (1) (Dollars in thousands, except share and per share amounts and in footnotes)
Refer to page S-17.2, the section titled “Funds from Operations (“FFO”) (1) and Core FFO” for additional information on the Company’s definition and use of FFO and Core FFO.
Includes political advocacy costs of $0.3 million and $2.0 million for the three and nine months ended September 30, 2026, respectively, and $1.6 million and $2.0 million for the three and nine months ended (2) September 30, 2025, respectively. During the nine months ended September 30, 2026, the Company reached a settlement to fully resolve its case related to RealPage, Inc. totaling $36.5 million and another litigation matter totaling $19.3 million.
Assumes conversion of all outstanding limited partnership units in the (3) Operating Partnership into shares of the Company’s common stock and excludes DownREIT limited partnership units.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information
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)
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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.
The Company has entered into interest rate swaps on $600 million of its aggregate term loan debt. $300 million is swapped to an all-in fixed rate of 4.1% through October 2026, after which $300 million of interest (1) rate swaps will come into effect at an all-in fixed rate of 4.5% through January 2031. An additional $300 million of term loan debt is swapped to an all-in fixed rate of 4.1% through April 2030.
In September 2026, the Company entered into a $275 million unsecured term loan with a maturity date in September 2029 plus two one-year (2) extension options exercisable at the Company’s discretion. The interest rate on the loan is SOFR plus 0.80%, which is based on a tiered rate structure tied to the Operating Partnership’s long-term unsecured credit ratings.
(3) The Company’s secured variable rate exposure is linked to SIFMA which has historically averaged 60% to 70% of the SOFR rate.
The Company has two unsecured line of credit facilities with an aggregate capacity of $1.58 billion. The first unsecured line of credit facility has a capacity of $1.5 billion and a scheduled maturity date (4) in January 2030 plus two 6-month extension options, which are exercisable at the Company’s discretion. The second unsecured line of credit facility has a capacity of $75.0 million, and a scheduled maturity date in July 2028.
The Company has a commercial paper program under which it can issue up to $750 million of unsecured short-term notes, which are backstopped by (5) and reduce the borrowing capacity of the Company’s $1.5 billion unsecured line of credit facility.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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 - September 30, 2026 (Dollars and shares in thousands, except per share amounts)
Public Capita… Bond Data Covenan… Actual Require… ────────────────────────────────────────────────────────────────────────────── Total debt, $ 6,605,8… net Common stock Debt to and Total 33% < 65% potent… Assets: diluti… securi… Common stock 64,338 outsta… Limited Secured partne… 2,184 Debt to 4% < 40% units(… Total Assets: Option… 15 method Total shares of common Interest stock 66,537 Coverag… 509% > 150% and potent… diluti… securi… Common stock price per Unsecur… share $ 269.39 Debt 301% > 150% as of Ratio(2… Septem… 30, 2026 Total Selected equity $ 17,924,… Credit Actual capita… Ratios(… Net Indebte… Divided Total by market $ 24,530,… Adjusted 5.4 capita… EBITDAr… normali… and annuali… Ratio Unencum… of debt NOI to to 26.9 % Adjusted 93% total Total market NOI: capita… Credit Ratings Rating Rating Outlook Agency (1)Refer to page S-17.4 for additio… Moody’s Baa1 Stable informa… on the Company… Public Bond Covenan… (2)Unse… Debt Ratio is unsecur… assets Standa… (exclud… & BBB+ Stable investm… Poor’s in co-inve… divided by unsecur… indebte… (3)Refer to pages S-17.1 to (1)Ass… S-17.4, conver… the of all section outsta… titled limited “Reconc… partne… of units Non-GAAP in the Financi… Operat… Measures Partne… and into Other shares Terms” of the for Compan… additio… common informa… stock. on the Company… Selected Credit Ratios.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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. Portfolio Summary by County as of September 30, 2026
Average monthly rental rate is defined as the total scheduled monthly rental income (actual rent for occupied apartment homes plus market (1) rent for vacant apartment homes) for the quarter ended September 30, 2026, divided by the number of apartment homes as of September 30, 2026.
Represents the percentage of actual NOI for the quarter ended September (2) 30, 2026. See “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-17.3.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-7 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Operating Income by Quarter (1) (Dollars in thousands)
(2) Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2025.
Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, properties undergoing significant construction activities that do not meet our (3) redevelopment criteria, properties subject to upcoming ground lease expirations, two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets, and properties without comparable operating results in the reported periods.
Represents straight-line concessions for residential operating communities. Same-property revenues reflect concessions on a cash (4) basis. Total rental and other property revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP.
(5) Includes other expenses and intercompany eliminations pertaining to self-insurance.
(6) Represents the percentage change in all lease tradeouts, including the impact of leasing incentives.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-8 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Same-Property Revenue Results by County – Third Quarter 2026 vs. Third Quarter 2025 and Second Quarter 2026 (Dollars in thousands, except average monthly rental rates)
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-9 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Same-PropertyRevenue Results by County – Nine months ended September 30, 2026 vs. Nine months ended September 30, 2025 (Dollars in thousands, except average monthly rental rates)
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-9.1 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Same-Property Operating Expenses – Quarter to Date and Year to Date as of September 30, 2026 and 2025 (Dollars in thousands)
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-10 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Development Pipeline – September 30, 2026 (Dollars in millions, except per apartment home amounts in thousands)
For the third quarter of 2026, (1) the Company’s cost includes $1.7 million of capitalized interest and $0.7 million of capitalized overhead.
(2) Net of the estimated allocation to the retail component of the project, as applicable.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-11 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Capital Expenditures - September 30, 2026 (1) (Dollars in thousands, except in footnotes and per apartment home amounts)
Revenue Generating Capital Trailing 4 Expenditures(2) Q3 ‘26 Quarters ────────────────────────────────────────────────────────────────────────────── Same-property portfolio $ 18,924 $ 59,142 Non-same-property portfolio 3,761 9,629 Total revenue generating capital $ 22,685 $ 68,771 expenditures Number of 1,947 3,311 same-property interior renovations Number of total consolidated interior 1,996 3,422 renovations
Non-Revenue Generating Capital Expenditures(3) Q3 ‘26 Trailing 4Quarters ────────────────────────────────────────────────────────────────────────────── Non-revenue generating capital $ 35,585 $ 115,337 expenditures Average apartment homes in 55,528 55,508 quarter Capital expenditures per apartment $ 641 $ 2,078 home
The Company incurred $0.2 million of capitalized interest, $4.7 million (1) of capitalized overhead and less than $0.1 million of co-investment fees related to redevelopment in Q3 2026.
Represents revenue generating expenditures, such as full-scale redevelopments, interior unit turn renovations, enhanced amenities, (2) certain sustainability initiatives that generate higher revenues or expense savings and accessory dwelling units.
Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc. Non-revenue generating capital expenditures does (3) not include costs related to retail, furniture and fixtures, expenditures in which the Company has been reimbursed or expects to be reimbursed, and expenditures incurred due to changes in governmental regulation that the Company would not have incurred otherwise.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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. Co-investments and Preferred Equity Investments - September 30, 2026 (Dollars in thousands, except in footnotes)
As of September 30, 2026, the Company’s investments in Wesco I, Wesco (2) III, and Wesco IV were classified as a liability of $105.3 million due to distributions received in excess of the Company’s investment.
Wesco III, IV and VI have in-place interest rate swaps totaling a gross notional amount of $624.3 million at an average all-in fixed rate of 2.7% which expire in December 2026 and March 2027. (3) Year-to-date, these Wesco entities entered into replacement swaps which take effect at the existing swap maturities totaling a gross notional amount of $496.2 million at an average all-in fixed rate of 5.3% which expire in June 2029.
As of September 30, 2026, the Company’s investment in Expo was classified as a liability of $3.6 million due to distributions received (4) in excess of the Company’s investment. The weighted average Essex ownership percentage excludes our investments in unconsolidated technology co-investments.
As of September 30, 2026, the (5) Company is invested in 9 preferred equity investments, including three preferred equity investments held by Wesco VII, LLC.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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 - Year to date as of September 30, 2026 (Dollars in thousands, except for average monthly rent)
Price (1) per apartment home excludes value allocated to the retail component, as applicable.
The Company sold its interest in a 55-year-old, 101-unit apartment home community and adjacent marina subject to a ground lease for a (2) total contract price of $11.0 million. Due to circumstances associated with the transaction, it has been excluded from the price per apartment home calculations.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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. Assumptions for 2026 FFO Guidance Range (Dollars in thousands, except per share data) The guidance projections below are based on current expectations and are forward-looking. The guidance on this page is given for Net Operating Income (“NOI”) and Total and Core FFO. See pages S-17.1 to S-17.4 for the definitions of non-GAAP financial measures and other terms.
All non-core items are excluded from the 2026 actuals and included in (1) the non-core income and expense section of the FFO reconciliation.
2026 guidance excludes inestimable projected gain/(loss) on sale of real estate and land, gain/(loss) on sale of marketable securities, (2) gain/(loss) on early retirement of debt, and promote income until they are realized within the reporting period presented in the report.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information 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. Reconciliation of Projected EPS, FFO and Core FFO per diluted share With respect to the Company’s guidance regarding its projected FFO and Core FFO, which guidance is set forth in the earnings release and on page S-15 of this supplement, a reconciliation of projected net income per share to projected FFO per share and projected Core FFO per share, as set forth in such guidance, is presented in the table below.
2026 guidance excludes inestimable projected gain/(loss) on sale of real (1) estate and land, gain/(loss) on sale of marketable securities, gain/(loss) on early retirement of debt, and promote income until they are realized within the reporting period presented in the report.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-15.1 Table of Contents 0 MSA Level Data based on Essex Data Analytics forecasts and third-party projections. Residential Supply: Total supply includes the Company’s estimate of multifamily (“MF”) deliveries of properties with 50+ units and excludes student, senior and 100% affordable housing communities. Multifamily estimates incorporate a methodological enhancement (“delay-adjusted supply”) to reflect the anticipated impact of continued construction delays in Essex markets. Single-family (“SF”) estimates are based on trailing single-family permits. Residential Supply Forecast (1) Residential Supply Forecast (1) 2026E 2027E Market Multifamily Supply Total MF/SF Supply Total Supply as a % of Stock Multifamily Supply Total MF/SF Supply Total Supply as a % of Stock Los Angeles 6,300 12,100 0.3% 4,600 11,000 0.3% Orange County 2,500 5,200 0.5% 3,000 5,700 0.5% San Diego 4,900 7,700 0.6% 3,600 6,500 0.5% Ventura 600 1,000 0.3% 200 600 0.2% Southern California 14,300 26,000 0.4% 11,400 23,800 0.4% San Francisco 900 1,300 0.2% 800 1,200 0.2% Oakland 400 2,700 0.3% 100 2,300 0.2% San Jose 1,100 3,000 0.4% 1,200 3,000 0.4% Northern California 2,400 7,000 0.3% 2,100 6,500 0.3% Seattle 4,900 9,300 0.7% 4,100 8,000 0.6% Total 21,600 42,300 0.4% 17,600 38,300 0.4% ESSEX PROPERTY TRUST, INC. MSA Level Supply Forecast: 2026E - 2027E See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-16 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Reconciliations of Non-GAAP Financial Measures and Other Terms Adjusted EBITDAre Reconciliation The National Association of Real Estate Investment Trusts (“Nareit”) defines earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) (September 2017 White Paper) as net income (computed in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”)) before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities. The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength between periods or as compared to different companies. Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and is a component of the credit ratio, “Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized,” presented on page S-6, in the section titled “Selected Credit Ratios,” and it is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges. Adjusted EBITDAre is an important metric in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes that Adjusted EBITDAre is useful to investors, creditors and rating agencies because it allows investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual credit quality. EBITDAre and Adjusted EBITDAre are not recognized measurements under U.S. GAAP. Because not all companies use identical calculations, the Company’s presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. The reconciliations of Net Income available to common stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:
Three Months Ended September 30, (Dollars in thousands) 2026 ─────────────────────────────────────────────────────────────────────── Net income $ 98,069 available to common stockholders Adjustments: Net income attributable to 5,666 noncontrolling interest Interest expense, net(1) 63,416 Depreciation and amortization 152,552 Income tax 30 provision Gain on sale of real estate and land (6,781 ) Gain on sale of co-investment (5,758 ) communities Impairment loss 10,709 Co-investment 21,007 EBITDAre adjustments EBITDAre 338,910 Realized and unrealized losses on 508 marketable securities, net Equity loss from unconsolidated 33 technology co-investments Tax benefit on unconsolidated technology (493 ) co-investments General and administrative and other, 1,504 net Insurance reimbursements and other, net (44 ) Adjusted EBITDAre $ 340,418
(1) Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-17.1 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Reconciliations of Non-GAAP Financial Measures and Other Terms Annualized Turnover Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes. Financial Occupancy Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. New Lease Net Effective Rate Growth and Renewal Net Effective Rate Growth New lease net effective rate growth and renewal net effective rate growth represent the percentage change in all lease tradeouts, including the impact of leasing incentives. Prior to 2026, the rate growth was based on the change in similar term lease tradeouts, including the impact of leasing incentives, and all periods presented have been updated to conform with the current methodology. Disposition Yield Net operating income that the Company anticipates giving up in the next 12 months less an estimate of property management costs allocated to the project divided by the gross sales price of the asset. Acquisition Yield Net operating income that the Company expects to achieve in the next 12 months less an estimate of property management costs allocated to the project and less an estimate for capital expenditures per unit divided by the gross sales price of the asset. Encumbered Encumbered means any mortgage, deed of trust, lien, charge, pledge, security interest, security agreement or other encumbrance of any kind. Funds From Operations (“FFO”) and Core FFO FFO, as defined by Nareit, is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. GAAP and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT’s operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management has consistently applied the Nareit definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the Nareit definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation. The reconciliations of FFO and Core FFO per diluted share are detailed on page S-3 in the section titled “Consolidated Funds From Operations”. Interest Expense, Net Interest expense, net is presented on page S-1 in the section titled “Consolidated Operating Results”. Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges and is presented in the table below:
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-17.2 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Reconciliations of Non-GAAP Financial Measures and Other Terms Net Indebtedness Divided by Adjusted EBITDAre This credit ratio is presented on page S-6 in the section titled “Selected Credit Ratios.” This credit ratio is calculated by dividing net indebtedness by Adjusted EBITDAre, as annualized based on the most recent quarter, and adjusted for estimated net operating income from properties acquired or disposed of during the quarter. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company’s ability to service debt obligations to that of other companies. Net indebtedness is total debt, net less unamortized premiums, discounts, debt issuance costs, unrestricted cash and cash equivalents, and marketable securities. The reconciliation of Adjusted EBITDAre is set forth in “Adjusted EBITDAre Reconciliation” on page S-17.1 The calculation of this credit ratio and a reconciliation of net indebtedness to total debt at pro rata share for co-investments, net is presented in the table below:
September 30, (Dollars in thousands) 2026 ────────────────────────────────────────────────────────────────────────────── Total consolidated debt, net $ 6,605,814 Total debt from co-investments at pro 885,457 rata share Adjustments: Consolidated unamortized premiums, 32,944 discounts, and debt issuance costs Pro rata co-investments unamortized premiums, 5,180 discounts, and debt issuance costs Consolidated cash and cash (72,059 ) equivalents-unrestricted Pro rata co-investment cash and cash (31,713 ) equivalents-unrestricted Marketable securities (102,665 ) Net Indebtedness $ 7,322,958 Adjusted EBITDAre, annualized(1) $ 1,361,672 Other EBITDAre normalization (6,520 ) adjustments, net, annualized(2) Adjusted EBITDAre, normalized and $ 1,355,152 annualized Net Indebtedness Divided by Adjusted 5.4 EBITDAre, normalized and annualized
Adjustments made for properties in lease-up, acquired, or disposed (2) during the most recent quarter and other partial quarter activity, multiplied by four.
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:
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-17.3 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C. Reconciliations of Non-GAAP Financial Measures and Other Terms Public Bond Covenants Public Bond Covenants refer to certain covenants set forth in instruments governing the Company’s unsecured indebtedness. These instruments require the Company to meet specified financial covenants, including covenants relating to net worth, fixed charge coverage, debt service coverage, the amounts of total indebtedness and secured indebtedness, leverage and certain investment limitations. These covenants may restrict the Company’s ability to expand or fully pursue its business strategies. The Company’s ability to comply with these covenants may be affected by changes in the Company’s operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting it. The breach of any of these covenants could result in a default under the Company’s indebtedness, which could cause those and other obligations to become due and payable. If any of the Company’s indebtedness is accelerated, the Company may not be able to repay it. For risks related to failure to comply with these covenants, see “Item 1A: Risk Factors - Risks Related to Our Indebtedness and Financings” in the Company’s annual report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission (“SEC”). The ratios set forth on page S-6 in the section titled “Public Bond Covenants” are provided only to show the Company’s compliance with certain specified covenants that are contained in indentures related to the Company’s issuance of Senior Notes, which indentures are filed by the Company with the SEC. See, for example, the indenture and supplemental indenture dated December 12, 2025, filed by the Company as Exhibit 4.1 and Exhibit 4.2 to the Company’s Form 8-K, filed on December 12, 2025. These ratios should not be used for any other purpose, including without limitation to evaluate the Company’s financial condition or results of operations, nor do they indicate the Company’s covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the indentures filed by the Company with the SEC and may differ materially from similar terms used by other companies that present information about their covenant compliance. Same-Property Revenue Growth with Concessions on a GAAP basis
Secured Debt Secured Debt means debt of the Company or any of its subsidiaries which is secured by an encumbrance on any property or assets of the Company or any of its subsidiaries. The Company’s total amount of Secured Debt is set forth on page S-5. Unencumbered NOI to Adjusted Total NOI This ratio is presented on page S-6 in the section titled “Selected Credit Ratios”. Unencumbered NOI means the sum of NOI for those real estate assets which are not subject to an encumbrance securing debt. The ratio of Unencumbered NOI to Adjusted Total NOI for the three months ended September 30, 2026, annualized, is calculated by dividing Unencumbered NOI, annualized for the three months ended September 30, 2026 and as further adjusted for pro forma NOI for properties acquired or sold during the recent quarter, by Adjusted Total NOI as annualized. The calculation and reconciliation of NOI is set forth in “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” above. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company’s ability to service debt obligations to that of other companies. The calculation of this ratio is presented in the table below:
(Dollars Annualized in thousands) Q3 ‘26(1) ─────────────────────────────────────────────────────────────────── NOI $ 1,363,400 Adjustments: Pro forma NOI from real estate assets (1,722 ) sold and/or acquired Other, net(2) (4,722 ) Adjusted Total NOI 1,356,956 Less: Encumbered NOI (92,321 ) Unencumbered NOI $ 1,264,635 Encumbered NOI $ 92,321 Unencumbered NOI 1,264,635 Adjusted Total NOI $ 1,356,956 Unencumbered 93 % NOI to Adjusted Total NOI
(1) This table is based on the amounts for the most recent quarter, multiplied by four.
(2) Includes intercompany eliminations pertaining to self-insurance and other expenses.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-17.4
Full text with the tables
Exhibit 99.1
Third Quarter 2026 Earnings Release & Supplemental Data Artizan | Oakland, CA
Third Quarter 2026 Earnings Release and Supplemental Data
Table of Contents
Earnings Press Release Pages 1 - 9
Consolidated Operating Results S-1 & S-2
Consolidated Funds from Operations S-3
Consolidated Balance Sheets S-4
Debt Summary S-5
Capitalization Data, Public Bond Covenants, Credit Ratings,
and Selected Credit S-6
Ratios
Portfolio Summary by County S-7
Operating Income by Quarter S-8
Same-Property Revenue Results by County, S-9
Quarter-to-Date
Same-Property Revenue Results by County, S-9.1
Year-to-Date
Same-Property Operating Expenses, Quarter and S-10
Year-to-Date
Development Pipeline S-11
Capital Expenditures S-12
Co-Investments and Preferred Equity Investments S-13
Summary of Apartment Community Acquisitions and S-14
Dispositions Activity
Assumptions for 2026 FFO Guidance Range S-15
Reconciliation of Projected EPS, FFO and Core FFO S-15.1
per diluted share
MSA Level Supply Forecast: 2026E – 2027E S-16
Reconciliations of Non-GAAP Financial Measures and S-17.1 – S-17.4
Other Terms
1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800
facsimile 650 655 7810 www.essex.com Table of Contents Essex Announces Third
Quarter 2026 Results and Raises Full-Year 2026 Guidance
San Mateo, California —October 27, 2026—Essex Property Trust, Inc. (NYSE: ESS)
(the “Company”) announced today its third quarter 2026 earnings results and
related business activities. Net Income, Funds from Operations (“FFO”), and Core
FFO per diluted share for the three and nine-month periods ended September 30,
2026 are detailed below.
Three Nine
Months Months
Ended % Ended %
September September
30, 30,
2026 2025 Change 2026 2025 Change
Per
Diluted
Share
Net $1.52 $2.56 -40.6% $4.14 $9.15 -54.8%
Income
Total FFO $3.98 $4.03 -1.2% $11.47 $12.03 -4.7%
Core FFO $4.00 $3.97 0.8% $12.15 $11.96 1.6%
Third Quarter 2026 Highlights:
Reported Net Income per diluted share for the third quarter of 2026 of
• $1.52, compared to $2.56 in the third quarter of 2025. The decrease was
primarily driven by gains on sale
of real estate and land recognized in the third quarter of 2025.
Grew Core FFO per diluted share by 0.8% compared to the third quarter of
• 2025, exceeding the midpoint of the Company’s guidance range by $0.01 per
diluted share, driven by
same-property revenue growth.
Achieved same-property revenue and net operating income (“NOI”) growth of
3.0% and 3.1%, respectively, compared to the third quarter of 2025. On a
• sequential basis, same-property
revenue improved by 1.0%, driven by growth across all regions and
continued strength in Northern California.
• Disposed of three apartment communities for a total pro rata contract
price of $111.9 million.
• Obtained a $275.0 million unsecured term loan priced at SOFR plus 0.80%.
Full-Year 2026 Revised Guidance Revised Revised Change at
Range Midpoint Midpoint
Net Income per diluted share $5.62 - $5.74 $5.68 +$0.10
Core FFO per diluted share $16.10 - $16.22 $16.16 +$0.02
Same-Property Revenue 2.8% to 3.0% 2.9% +0.10%
Same-Property Operating Expenses 2.6% to 2.9% 2.8% Unchanged
Same-Property NOI 2.8% to 3.2% 3.0% +0.20%
1100 Park Place Suite 200 San Mateo California 94403 telephone 650 655 7800
facsimile 650 655 7810 www.essex.com
Table of Contents
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 revenue on a year-over-year basis for the
three and nine-month periods ended September 30, 2026 and on a sequential basis
for the three-month period ended September 30, 2026:
Revenue
Change
Q3 2026 YTD Q3 2026 % of
vs. Q3 2026 vs. Q2 Total
2025 vs. YTD 2026 Q3 2026
2025 Revenu…
South…
Calif…
Los
Angel… 0.5% 1.0% 0.1% 16.7%
County
Orange 2.7% 2.8% 0.8% 10.1%
County
San
Diego 2.1% 1.9% 0.4% 9.8%
County
Ventu… 1.3% 1.6% 0.5% 4.7%
County
Total
South… 1.5% 1.7% 0.4% 41.3%
Calif…
North…
Calif…
Santa
Clara 5.7% 4.9% 2.0% 21.2%
County
Alame… 4.5% 3.7% 0.8% 7.0%
County
San
Mateo 6.6% 5.7% 2.5% 4.6%
County
Contra
Costa 3.0% 2.3% 0.8% 5.1%
County
San 8.0% 6.4% 1.7% 3.1%
Franc…
Total
North… 5.4% 4.6% 1.7% 41.0%
Calif…
Seatt… 1.3% 1.8% 0.8% 17.7%
Metro
Same-… 3.0% 2.9% 1.0% 100.0%
Portf…
The table below illustrates the components that drove the change in same-
property revenue on a year-over-year basis for the three and nine-month periods
ended September 30, 2026 and on a sequential basis for the three-month period
ended September 30, 2026:
Same-Prope… Q3 2026 YTD 2026 Q3 2026
Revenue vs. Q3 2025 vs. YTD vs. Q2 2026
Components 2025
Scheduled 2.5% 2.3% 1.2%
Rents
Delinquency 0.0% 0.0% 0.0%
Cash 0.0% -0.1% -0.1%
Concessions
Vacancy 0.1% 0.1% -0.1%
Other 0.4% 0.6% 0.0%
Income
Q3 2026
Same-Prope… 3.0% 2.9% 1.0%
Revenue
Growth
- 2 - Table of Contents
Ye… Ye…
Ch… Ch…
Q3 YTD
20… 20…
co… co…
to to
Q3 YTD
20… 20…
Re… Op… NOI Re… Op… NOI
Ex… Ex…
S… 1.… 2.… 1.… 1.7% 2.3% 1.…
C…
N… 5.… 1.… 7.… 4.6% 0.3% 6.…
C…
S… 1.… 5.… -0… 1.8% 4.9% 0.…
M…
S… 3.… 2.… 3.… 2.9% 1.9% 3.…
P…
Sequential Change
Q3 2026 compared
to Q2 2026
Revenue Operating NOI
Expenses
Southern 0.4% 6.4% -2.0%
California
Northern 1.7% 7.4% -0.7%
California
Seattle Metro 0.8% 5.6% -1.2%
Same-Property 1.0% 6.7% -1.3%
Portfolio
Financial
Occupancies
Quarter Ended
9/30/2026 6/30/2026 9/30/2025
──────────────────────────────────────────────────────────────────────────────
Southern 96.1% 95.7% 95.8%
California
Northern 96.5% 96.8% 96.3%
California
Seattle 96.1% 96.4% 96.1%
Metro
Same-Proper… 96.3% 96.3% 96.0%
Portfolio
Investment Activity Dispositions In August 2026, the Company sold a 76-unit
apartment home community located in Seattle, WA, for a contract price of $30.0
million. The Company recorded a gain on sale of real estate and land of $6.8
million in the third quarter, which has been excluded from Total and Core FFO.
In August 2026, a joint venture in which the Company owned a 58% interest sold a
268-unit apartment home community located in San Jose, CA, for a contract price
of $122.3 million ($70.9 million at pro rata share). In addition, the Company
was fully redeemed on a $15.6 million preferred equity investment affiliated
with the partnership. The Company recorded a gain on sale of co-investment
communities of $5.8 million at pro rata share in the third quarter, which has
been excluded from Total and Core FFO.
Other Investments In July 2026, Wesco VII, LLC (“Wesco VII”), a joint venture in
which the Company owns a 50% interest, originated two preferred equity
investments in two stabilized apartment communities totaling $36.2 million
($18.1 million at pro rata share). Both investments were fully funded at closing
and yield an initial preferred return of 11.5%. - 3 - Table of Contents
Subsequent to quarter end, the Company acquired a 378-unit apartment home
community built in 2024 and located in Oakland, CA. This transaction follows the
liquidation of the Company’s $64.2 million subordinated loan interest and payoff
of the associated $92.3 million senior mortgage. The Company has not accrued
income on this investment since the third quarter of 2025 and will consolidate
the community on its financial statements in the fourth quarter of 2026. Balance
Sheet and Liquidity Balance Sheet In September 2026, the Company obtained a
$275.0 million unsecured term loan which is scheduled to mature in September
2029 with two one-year extension options, exercisable at the Company’s option.
The loan is priced at SOFR plus 0.80%. Common Stock and Liquidity In the third
quarter of 2026, the Company received net cash proceeds of $16.4 million from
the settlement of its forward sale agreements entered in the first quarter of
2025, by issuing 52,600 shares of common stock at a weighted average price of
$311.13 per share, net of commissions.As of September 30, 2026, there were no
outstanding forward sale agreements and the Company had $883.5 million of
available authority remaining under its ATM program. During the third quarter of
2026, the Company did not repurchase any shares through its stock repurchase
plan. Year-to-date, the Company has repurchased 254,001 shares of its common
stock totaling $61.9 million, including commissions, at an average price per
share of $243.76. As of September 30, 2026, the Company had $500.0 million of
purchase authority remaining under its stock repurchase plan. As of September
30, 2026, the Company had over $1.7 billion of liquidity via available capacity
on its unsecured credit facilities, cash and cash equivalents, and marketable
securities. - 4 - Table of Contents
Guidance For the third quarter of 2026,the Company exceeded the midpoint of the
guidance range provided in its second quarter 2026 earnings release for Core FFO
by $0.01 per diluted share, driven by same-property revenue growth. 2026 Full-
Year and Fourth Quarter Guidance
Per Diluted Previous Revised Revised Change at
Share Range Range Midpoint Midpoint
Net Income $5.47 - $5.69 $5.62 - $5.74 $5.68 +$0.10
Total FFO $15.37 - $15.59 $15.42 - $15.48 Unchanged
$15.54
Core FFO $16.03 - $16.25 $16.10 - $16.16 +$0.02
$16.22
Q4 2026 Core N/A $3.95 - $4.07 $4.01 N/A
FFO
Same-Property
Portfolio
Growth(1)
Revenue 2.5% to 3.1% 2.8% to 3.0% 2.9% +0.10%
Operating 2.5% to 3.0% 2.6% to 2.9% 2.8% Unchanged
Expenses
Net Operating 2.3% to 3.3% 2.8% to 3.2% 3.0% +0.20%
Income
Reflects guidance on a cash basis based on 52,059 apartment homes. On a
(1) GAAP basis, the midpoints of the Company’s same-property revenue and
NOI guidance are 2.9% and 3.0%,
respectively
For additional details regarding the Company’s 2026 FFO guidance range, see page
S-15 of the supplemental financial information. Conference Call with Management
The Company will host an earnings conference call with management to discuss its
quarterly results on Wednesday, October 28, 2026 at 9 a.m. PT (12 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.comand select the third quarter 2026 earnings link. To
access the replay, dial (844) 512-2921 using the replay pin number13763055. If
you are unable to access the information via the Company’s website, please
contact the Investor Relations Department at investors@essex.comor call (650)
655-7800. 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 255 apartment home
communities comprising over 62,000 apartment homes with an additional property
in active development. Additional information about the Company can be found on
the Company’s website at www.essex.com. This press release and accompanying
supplemental financial information has been furnished to the Securities and
Exchange Commission electronically on Form 8-K and can be accessed from the
Company’s website at www.essex.com. If you are unable to obtain the information
via the Web, please contact the Investor Relations Department at (650) 655-7800.
- 5 - Table of Contents FFO Reconciliation FFO, as defined by the National
Association of Real Estate Investment Trusts (“Nareit”), is generally considered
by industry analysts as an appropriate measure of performance of an equity REIT.
Generally, FFO adjusts the net income of equity REITs for non-cash charges such
as depreciation and amortization of rental properties, impairment charges, gains
on sales of real estate and extraordinary items. Management considers FFO and
FFO which excludes non-core items, which is referred to as “Core FFO,” to be
useful supplemental operating performance measures of an equity REIT because,
together with net income and cash flows, FFO and Core FFO provide investors with
additional bases to evaluate the operating performance and ability of a REIT to
incur and service debt and to fund acquisitions and other capital expenditures
and to pay dividends. By excluding gains or losses related to sales of
depreciated operating properties and land and excluding real estate depreciation
(which can vary among owners of identical assets in similar condition based on
historical cost accounting and useful life estimates), FFO can help investors
compare the operating performance of a real estate company between periods or as
compared to different companies. By further adjusting for items that are not
considered part of the Company’s core business operations, Core FFO allows
investors to compare the core operating performance of the Company to its
performance in prior reporting periods and to the operating performance of other
real estate companies without the effect of items that by their nature are not
comparable from period to period and tend to obscure the Company’s actual
operating results. FFO and Core FFO do not represent net income or cash flows
from operations as defined by U.S. generally accepted accounting principles
(“GAAP”) and are not intended to indicate whether cash flows will be sufficient
to fund cash needs. These measures should not be considered as alternatives to
net income as an indicator of the REIT’s operating performance or to cash flows
as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is
sufficient to fund all cash needs including principal amortization, capital
improvements and distributions to stockholders. FFO and Core FFO also do not
represent cash flows generated from operating, investing or financing activities
as defined under GAAP. Management has consistently applied the Nareit definition
of FFO to all periods presented. However, there is judgment involved and other
REITs’ calculation of FFO may vary from the Nareit definition for this measure,
and thus their disclosures of FFO may not be comparable to the Company’s
calculation. - 6 - Table of Contents
The following table sets forth the Company’s calculation of FFO and Core FFO per
diluted share for the three and nine-month periods ended September 30, 2026 and
2025 (dollars in thousands, except for share and per share amounts):
Three Nine
Mont… Mont…
Ended Ended
Sept… Sept…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Net
inc…
ava… $ 98,0… $ 164,… $ 266,… $ 589,…
to
com…
sto…
Adj…
Dep…
and 152,… 151,… 461,… 454,…
amo…
Gai…
not
inc… (12,… ) (67,… ) (23,… ) (305… )
in
FFO
Imp… 10,7… - 10,7… -
loss
Dep…
and
amo… 12,6… 14,3… 39,0… 43,1…
from
unc…
co-…
Non…
int…
rel…
to 3,330 5,767 9,122 20,8…
Ope…
Par…
uni…
Dep…
att…
to
thi… (39 ) (38 ) (115 ) (122 )
par…
own…
and
oth…
FFO
att…
to
com… $ 264,… $ 268,… $ 763,… $ 802,…
sto…
and
uni…
FFO
per
sha… $ 3.98 $ 4.03 $ 11.47 $ 12.03
–
dil…
Exp…
acq…
and $ - $ 25 $ - $ 25
inv…
rel…
cos…
Tax
(be…
exp…
on (493 ) (1,9… ) 2,758 (2,3… )
unc…
tec…
co-…
Rea…
and
unr…
los…
(ga… 508 (1,6… ) (3,4… ) (4,0… )
on
mar…
sec…
net
Pro…
for - 50 (222 ) 61
cre…
los…
Equ…
loss
(in…
from 33 (4,3… ) (16,… ) (6,0… )
unc…
tec…
co-…
Loss
on
ear… - - - 762
ret…
of
debt
Inc…
from
ear…
red… - (70 ) (179 ) (70 )
of
pre…
equ…
inv…
Gen…
and
adm… 1,504 3,926 62,8… 7,863
and
oth…
net…
Ins…
rei…
and (44 ) (89 ) (342 ) (789 )
oth…
net
Core
FFO
att…
to $ 266,… $ 264,… $ 808,… $ 797,…
com…
sto…
and
uni…
Core
FFO
per $ 4.00 $ 3.97 $ 12.15 $ 11.96
sha…
–
dil…
Wei…
ave…
num…
of 66,4… 66,6… 66,5… 66,6…
sha…
out…
dil…
Includes political advocacy costs of $0.3 million and $2.0 million for
the three and nine months
ended September 30, 2026, respectively, and $1.6 million and $2.0
(1) million for the three and nine months ended September 30, 2025,
respectively. During the nine months ended September 30, 2026, the
Company reached a settlement to fully
resolve its case related to RealPage, Inc. totaling $36.5 million and
another litigation matter totaling $19.3 million.
Assumes conversion of all outstanding limited partnership units in
(2) Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the
Company’s common stock
and excludes DownREIT limited partnership units.
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 - 7 - Table of Contents
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 revenue 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):
Three Nine
Mont… Mont…
Ended Ended
Sept… Sept…
2026 30, 2025 2026 30, 2025
──────────────────────────────────────────────────────────────────────────────
Ear…
from $ 156,… $ 210,… $ 421,… $ 747,…
ope…
Adj…
Cor…
pro… 13,3… 12,2… 40,2… 36,7…
man…
exp…
Dep…
and 152,… 151,… 461,… 454,…
amo…
Man…
and
oth… (2,3… ) (2,3… ) (6,9… ) (7,0… )
fees
from
aff…
Gen…
and 16,5… 18,0… 109,… 51,5…
adm…
Exp…
acq…
and - 25 - 25
inv…
rel…
cos…
Imp… 10,7… - 10,7… -
loss
Gain
on
sale
of (6,7… ) (62,… ) (8,7… ) (299… )
real
est…
and
land
NOI 340,… 327,… 1,02… 983,…
Les…
Non… (27,… ) (23,… ) (85,… ) (70,… )
pro…
NOI
Sam… $ 313,… $ 303,… $ 942,… $ 912,…
NOI
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 fourth quarter and full-year 2026 guidance (including net income,
Total FFO and Core FFO, same-property growth and related assumptions) and
anticipated yield on certain investments. 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:
assumptions related to our fourth quarter and full-year 2026 guidance; occupancy
rates and rental demand may be adversely affected by competitionand local
economic and market conditions; there may be increased interest rates,
inflation, escalated operating costs and possible recessionary impacts; 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 - 8 - Table of Contents 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 co-
investment partners; the Company may fail to achieve its business objectives;
time of actual completion and/or stabilization of development and redevelopment
projects; estimates of future income from an acquired property may prove to be
inaccurate; future cash flows may be inadequate to meet operating requirements
and/or may be insufficient to provide for dividend payments in accordance with
REIT requirements; changes in laws or regulations and the anticipated or actual
impact of future changes in laws or regulations; unexpected difficulties in
leasing of future development projects; volatility in financial and securities
markets; the Company’s failure to successfully operate acquired properties;
unforeseen consequences from cyber-intrusion; government approvals, actions and
initiatives, including the need for compliance with environmental requirements;
and those further risks, special considerations, and other factors referred to
in the Company’s annual report on Form 10-K for the year ended December 31,
2025, quarterly reports on Form 10-Q, and those risk factors and special
considerations set forth in the Company’sother filings with the SEC which may
cause the actual results, performance or achievements of the Company to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. 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 and
supplemental financial information, are defined and further explained on pages
S-17.1 through S-17.4, “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.
Contact Information Loren Rainey Sr. Director, Investor Relations (650) 655-7800
lrainey@essex.com
- 9 - 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
(Dollars in thousands, except share and per share amounts)
Three Nine
Mont… Mont…
Ended Ended
Sept… Sept…
30, 30,
Rev… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Ren…
and $ 490,… $ 470… $ 1,4… $ 1,40…
oth…
pro…
Man…
and
oth… 2,344 2,3… 6,9… 7,078
fees
from
aff…
492,… 473… 1,4… 1,40…
Exp…
Pro… 149,… 143… 431… 417,…
ope…
Cor…
pro… 13,3… 12,… 40,… 36,7…
man…
exp…
Dep…
and 152,… 151… 461… 454,…
amo…
Gen…
and 16,5… 18,… 109… 51,5…
adm…
Exp…
acq…
and - 25 - 25
inv…
rel…
cos…
Imp… 10,7… - 10,… -
loss
342,… 325… 1,0… 960,…
Gain
on
sale
of 6,781 62,… 8,7… 299,…
real
est…
and
land
Ear…
from 156,… 210… 421… 747,…
ope…
Int…
exp… (63,… ) (63… ) (19… ) (189… )
net…
Int…
and 686 5,9… 10,… 16,9…
oth…
inc…
Equ…
inc… 9,212 17,… 46,… 39,9…
from
co-…
Tax
ben…
(ex…
on 493 1,9… (2,… ) 2,353
unc…
tec…
co-…
Loss
on
ear… - - - (762 )
ret…
of
debt
Gain
on
rem… - - - 330
of
co-…
Net 103,… 172… 282… 617,…
inc…
Net
inc…
att… (5,6… ) (8,… ) (16… ) (27,… )
to
non…
int…
Net
inc…
ava… $ 98,0… $ 164… $ 266… $ 589,…
to
com…
sto…
Net
inc…
per $ 1.53 $ 2.56 $ 4.15 $ 9.15
sha…
-
bas…
Sha…
used
in
inc… 64,2… 64,… 64,… 64,3…
per
sha…
-
bas…
Net
inc…
per $ 1.52 $ 2.56 $ 4.14 $ 9.15
sha…
-
dil…
Sha…
used
in
inc… 64,3… 64,… 64,… 64,3…
per
sha…
-
dil…
(1) Refer to page S-17.2, the section titled “Interest Expense, Net” for
additional information.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information
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.
ConsolidatedOperating Results - Selected Line Item Detail (Dollars in thousands)
Three Nine
Mont… Mont…
Ren… Ended Ended
and Sept… Sept…
oth… 30, 30,
pro… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Ren… $ 482,… $ 463,… $ 1,43… $ 1,380…
inc…
Oth… 7,576 7,050 21,5… 20,203
pro…
Ren…
and $ 490,… $ 470,… $ 1,45… $ 1,400…
oth…
pro…
Pro…
ope…
exp…
Real
est… $ 53,5… $ 52,0… $ 157,… $ 153,6…
tax…
Uti… 35,0… 32,7… 98,7… 91,075
Per… 28,3… 27,4… 81,8… 80,443
cos…
Mai…
and 17,9… 16,0… 48,7… 46,924
rep…
Adm… 8,341 8,314 25,2… 24,663
Ins…
and 6,277 6,886 20,1… 20,729
oth…
Pro…
ope… $ 149,… $ 143,… $ 431,… $ 417,4…
exp…
Int…
and
oth…
inc…
Mar…
sec…
and $ 1,150 $ 4,218 $ 6,785 $ 12,210
oth…
inc…
Rea…
and
unr…
(lo…
gai… (508 ) 1,658 3,482 4,059
on
mar…
sec…
net
Pro…
for - (50 ) 222 (61 )
cre…
los…
Ins…
rei…
and 44 74 320 789
oth…
net
Int…
and $ 686 $ 5,900 $ 10,8… $ 16,997
oth…
inc…
Equ…
inc…
from
co-…
Equ…
inc…
(lo… $ 478 $ (485 ) $ 3,358 $ (1,008 )
from
co-…
Inc…
from
pre… 3,009 8,616 11,8… 29,728
equ…
inv…
Equ…
(lo…
inc…
from (33 ) 4,393 16,1… 6,005
unc…
tec…
co-…
Ins…
rei…
and - 15 22 -
oth…
net
Gain
on
sale 5,758 5,189 14,9… 5,189
of
co-…
com…
Inc…
from
ear…
red… - 70 179 70
of
pre…
equ…
inv…
Equ…
inc… $ 9,212 $ 17,7… $ 46,5… $ 39,984
from
co-…
Non…
int…
Lim…
par…
of $ 3,330 $ 5,767 $ 9,122 $ 20,827
Ess…
Por…
L.P.
Dow…
lim… 2,297 2,294 6,905 6,972
par…
dis…
Thi…
own… 39 42 128 136
int…
Non… $ 5,666 $ 8,103 $ 16,1… $ 27,935
int…
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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 (1) (Dollars in thousands, except share and
per share amounts and in footnotes)
F…
f…
o…
a… Th… Ni…
to Mo… Mo…
c… En… En…
s… Se… Se…
a… 30, % 30, %
(… 20… 20… Ch… 20… 20… Ch…
──────────────────────────────────────────────────────────────────────────────
N…
i…
a… $ 9… $ 1… $ 2… $ 5…
to
c…
s…
A…
D…
a… 1… 1… 4… 4…
a…
G…
n…
i… (… ) (… ) (… ) (… )
in
F…
I… 1… - 1… -
l…
D…
a…
a… 1… 1… 3… 4…
f…
u…
c…
N…
i…
r…
to 3… 5… 9… 2…
O…
P…
u…
D…
a…
to
t… (… ) (… ) (… ) (… )
p…
o…
a…
o…
F…
f…
o…
a…
to $ 2… $ 2… $ 7… $ 8…
c…
s…
a…
u…
F…
p…
s… $ 3… $ 4… -… $ 1… $ 1… -4…
-
d…
C…
of
t…
c…
in
F…
N…
i…
E…
a…
a… $ - $ 25 $ - $ 25
i…
r…
c…
T…
(…
e…
on (… ) (… ) 2… (… )
u…
t…
c…
R…
a…
u…
l…
(… 5… (… ) (… ) (… )
on
m…
s…
n…
P…
f… - 50 (… ) 61
c…
l…
E…
l…
(…
f… 33 (… ) (… ) (… )
u…
t…
c…
L…
on
e… - - - 7…
r…
of
d…
I…
f…
e…
r… - (… ) (… ) (… )
of
p…
e…
i…
G…
a…
a… 1… 3… 6… 7…
a…
o…
n…
I…
r…
a… (… ) (… ) (… ) (… )
o…
n…
C…
f…
f…
o…
a… $ 2… $ 2… $ 8… $ 7…
to
c…
s…
a…
u…
C…
F…
p… $ 4… $ 3… 0… $ 1… $ 1… 1.…
s…
-
d…
W…
a…
n…
of 6… 6… 6… 6…
s…
o…
-
d…
Refer to page S-17.2, the section titled “Funds from Operations (“FFO”)
(1) and Core FFO” for additional information on the Company’s definition
and use of FFO and Core FFO.
Includes political advocacy costs of $0.3 million and $2.0 million for
the three and nine months ended September 30, 2026, respectively, and
$1.6 million and $2.0 million for the three and nine months ended
(2) September 30, 2025,
respectively. During the nine months ended September 30, 2026, the
Company reached a settlement to fully resolve its case related to
RealPage, Inc. totaling $36.5 million and another litigation matter
totaling $19.3 million.
Assumes conversion of all outstanding limited partnership units in the
(3) Operating Partnership into shares of the Company’s common stock and
excludes DownREIT limited partnership units.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information
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)
September 30, 2026 December 31, 2025
──────────────────────────────────────────────────────────────────────────────
Real estate
investments:
Land and land $ 3,355,893 $ 3,363,169
improvements
Buildings and 15,146,101 15,073,416
improvements
18,501,994 18,436,585
Less: accumulated (6,931,353 ) (6,532,003 )
depreciation
11,570,641 11,904,582
Real estate under 210,654 157,122
development
Co-investments 612,871 630,550
12,394,166 12,692,254
Cash and cash
equivalents, 80,298 85,586
including
restricted cash
Marketable securities 102,665 98,070
Notes and other 94,064 141,591
receivables
Operating lease 31,231 50,833
right-of-use assets
Prepaid expenses and 113,830 90,675
other assets
Total assets $ 12,816,254 $ 13,159,009
Unsecured debt, net $ 5,844,670 $ 6,015,921
Mortgage notes 761,144 784,348
payable, net
Distributions in
excess of investments 108,854 98,837
in co-investments
Operating lease 31,813 51,487
liabilities
Other liabilities 584,250 471,521
Total liabilities 7,330,731 7,422,114
Redeemable
noncontrolling 26,069 28,263
interest
Equity:
Common stock 6 6
Additional paid-in 6,652,282 6,683,514
capital
Distributions in
excess of accumulated (1,381,186 ) (1,148,195 )
earnings
Accumulated other
comprehensive income, 27,426 6,047
net
Total stockholders’ 5,298,528 5,541,372
equity
Noncontrolling 160,926 167,260
interest
Total equity 5,459,454 5,708,632
Total liabilities and $ 12,816,254 $ 13,159,009
equity
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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- September 30, 2026 (Dollars in thousands, EXCEPT IN footnotes)
…
…
…
…
…
…
-
…
…
…
…
…
…
…
…
…
…
… … … …
… … … … …
… … … … … …
… … … … … … … … …
──────────────────────────────────────────────────────────────────────────────
$ … … % … … $ - $ … $ … … % 0… %
… … % … … … … … … % 6… %
… … % … … … … … … % 7… %
… … % … … … … … … % 1… %
… … … … … % 1… %
… … … … … % 1… %
… … % … … … … … … % 9… %
… … % … … - … … … % 5… %
… … % … … … … … … % 8… %
… … … … … % 6… %
… … … … … % 5… %
- … % … … … … … … % 1… %
- … … … … … … … % 1… %
- … % …
…
…
…
…
…
…
… … … … … … % 9… %
…
…
… … … … … % 8… %
…
$ … … % … … $ … $ … $ … … % 1… %
The Company has entered into interest rate swaps on $600 million of its
aggregate term loan debt. $300 million is swapped to an all-in fixed
rate of 4.1% through October 2026, after which $300 million of interest
(1) rate swaps will come
into effect at an all-in fixed rate of 4.5% through January 2031. An
additional $300 million of term loan debt is swapped to an all-in fixed
rate of 4.1% through April 2030.
In September 2026, the Company entered into a $275 million unsecured
term loan with a maturity date in September 2029 plus two one-year
(2) extension options exercisable at the Company’s discretion. The interest
rate on the loan is SOFR
plus 0.80%, which is based on a tiered rate structure tied to the
Operating Partnership’s long-term unsecured credit ratings.
(3) The Company’s secured variable rate exposure is linked to SIFMA which
has historically averaged 60% to 70% of the SOFR rate.
The Company has two unsecured line of credit facilities with an
aggregate capacity of $1.58 billion. The first unsecured line of credit
facility has a capacity of $1.5 billion and a scheduled maturity date
(4) in January 2030 plus two
6-month extension options, which are exercisable at the Company’s
discretion. The second unsecured line of credit facility has a capacity
of $75.0 million, and a scheduled maturity date in July 2028.
The Company has a commercial paper program under which it can issue up
to $750 million of unsecured short-term notes, which are backstopped by
(5) and reduce the borrowing capacity of the Company’s $1.5 billion
unsecured line of credit
facility.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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 - September 30, 2026 (Dollars and shares in thousands, except per share
amounts)
Public
Capita… Bond
Data Covenan… Actual Require…
──────────────────────────────────────────────────────────────────────────────
Total
debt, $ 6,605,8…
net
Common
stock Debt to
and Total 33% < 65%
potent… Assets:
diluti…
securi…
Common
stock 64,338
outsta…
Limited Secured
partne… 2,184 Debt to 4% < 40%
units(… Total
Assets:
Option… 15
method
Total
shares
of
common Interest
stock 66,537 Coverag… 509% > 150%
and
potent…
diluti…
securi…
Common
stock
price
per Unsecur…
share $ 269.39 Debt 301% > 150%
as of Ratio(2…
Septem…
30,
2026
Total Selected
equity $ 17,924,… Credit Actual
capita… Ratios(…
Net
Indebte…
Divided
Total by
market $ 24,530,… Adjusted 5.4
capita… EBITDAr…
normali…
and
annuali…
Ratio Unencum…
of debt NOI to
to 26.9 % Adjusted 93%
total Total
market NOI:
capita…
Credit
Ratings
Rating Rating Outlook
Agency
(1)Refer
to page
S-17.4
for
additio…
Moody’s Baa1 Stable informa…
on the
Company…
Public
Bond
Covenan…
(2)Unse…
Debt
Ratio is
unsecur…
assets
Standa… (exclud…
& BBB+ Stable investm…
Poor’s in
co-inve…
divided
by
unsecur…
indebte…
(3)Refer
to pages
S-17.1
to
(1)Ass… S-17.4,
conver… the
of all section
outsta… titled
limited “Reconc…
partne… of
units Non-GAAP
in the Financi…
Operat… Measures
Partne… and
into Other
shares Terms”
of the for
Compan… additio…
common informa…
stock. on the
Company…
Selected
Credit
Ratios.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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.
Portfolio Summary by County as of September 30, 2026
…
…
──────────────────────────────────────────────────────────────────────────────
… … - … … … … … % …
… … - … … … … … % …
… … - … … … … … % …
… … - … … … … … % …
… … - … … … … … % …
… … - … … … … … % …
… … - … … … … … % …
… … … … … … … … % …
… - - … … - … … % …
… … - … … … … … % …
… … … … … … … … % …
… … - … … … … … % …
… … … … … … … … % …
Average monthly rental rate is defined as the total scheduled monthly
rental income (actual rent for occupied apartment homes plus market
(1) rent for vacant apartment homes) for the quarter ended September 30,
2026, divided by the
number of apartment homes as of September 30, 2026.
Represents the percentage of actual NOI for the quarter ended September
(2) 30, 2026. See “Net Operating Income (“NOI”) and Same-Property NOI
Reconciliations” on page S-17.3.
(3) Includes development communities with no rental income.
(4) At Company’s pro rata share.
(5) Includes one community in Santa Cruz County.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-7 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Operating Income by Quarter (1) (Dollars in thousands)
…
…
…
… A… Q3 Q2 Q1 Q4 Q3
… H… ‘… ‘… ‘… ‘… ‘…
──────────────────────────────────────────────────────────────────────────────
… 5… $ 4… $ 4… $ 4… $ 4… $ 4…
… 2… 2… 2… 2… 1… 1…
… 1… 1… 1… 1… 1… 2…
…
…
… - (… ) (… ) (… ) 9… 3…
…
…
…
… 5… 4… 4… 4… 4… 4…
…
…
…
…
…
…
… 1… 1… 1… 1… 1…
… 8… 7… 8… 6… 5…
…
… 3… 4… 3… 4… 5…
…
…
… 1… 1… 1… 1… 1…
…
…
…
…
…
…
… 3… 3… 3… 3… 3…
… 1… 1… 1… 1… 8…
…
… 1… 1… 1… 1… 1…
…
…
… (… ) (… ) (… ) 9… 3…
…
… $ 3… $ 3… $ 3… $ 3… $ 3…
…
…
…
… 70 % 71 % 71 % 70 % 70 %
…
… 42 % 40 % 33 % 35 % 44 %
…
… 9… % 9… % 9… % 9… % 9… %
…
…
…
a
% 0… % 0… % 0… % 0… % 0… %
…
…
…
…
…
…
…
…
… -… % 1… % -… % -… % -… %
…
… 5… % 4… % 3… % 4… % 4… %
… 3… % 3… % 1… % 1… % 2… %
(1) Includes consolidated communities only.
(2) Acquisitions include properties acquired which did not have comparable
stabilized results as of January 1, 2025.
Non-residential/other, net consists of revenues generated from retail
space, commercial properties, held for sale properties, disposition
properties, properties undergoing significant construction activities
that do not meet our
(3) redevelopment criteria, properties subject to upcoming ground lease
expirations, two communities located in the California counties of
Santa Barbara and Santa Cruz, which the Company does not consider its
core markets, and properties
without comparable operating results in the reported periods.
Represents straight-line concessions for residential operating
communities. Same-property revenues reflect concessions on a cash
(4) basis. Total rental and other property revenues reflect concessions on
a straight-line basis in
accordance with U.S. GAAP.
(5) Includes other expenses and intercompany eliminations pertaining to
self-insurance.
(6) Represents the percentage change in all lease tradeouts, including the
impact of leasing incentives.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-8 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Same-Property Revenue Results by
County – Third Quarter 2026 vs. Third Quarter 2025 and Second Quarter 2026
(Dollars in thousands, except average monthly rental rates)
──────────────────────────────────────────────────────────────────────────────
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-9 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Same-PropertyRevenue Results by
County – Nine months ended September 30, 2026 vs. Nine months ended September
30, 2025 (Dollars in thousands, except average monthly rental rates)
──────────────────────────────────────────────────────────────────────────────
…
…
…
…
…
…
…
…
…
…
…
…
…
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-9.1 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Same-Property Operating Expenses – Quarter to Date and Year to Date as of
September 30, 2026 and 2025 (Dollars in thousands)
Bas…
on
52,…
apa…
hom…
Sam… % of
ope… % Oper…
exp… Q3 ‘26 Q3 ‘25 Change Expe…
──────────────────────────────────────────────────────────────────────────────
Real
est… $ 47,8… $ 47,1… 1.6 % 35.0 %
tax…
Uti… 31,6… 30,2… 4.7 % 23.2 %
Per… 25,9… 25,4… 1.6 % 19.0 %
cos…
Mai…
and 16,4… 14,8… 10.7 % 12.0 %
rep…
Adm… 6,719 6,716 0.0 % 4.9 %
Ins…
and 8,117 8,604 -5.7 % 5.9 %
oth…
Tot…
sam… $ 136,… $ 133,… 2.8 % 100.0 %
ope…
exp…
Sam… % of
ope… YTD YTD % Opera…
exp… 2026 2025 Chan… Expen…
──────────────────────────────────────────────────────────────────────────────
Real
est… $ 140,9… $ 140,1… 0.6 % 35.7 %
tax…
Uti… 89,646 83,939 6.8 % 22.7 %
Per… 75,019 74,631 0.5 % 19.0 %
cos…
Mai…
and 44,531 43,490 2.4 % 11.3 %
rep…
Adm… 19,672 19,622 0.3 % 5.0 %
Ins…
and 25,175 25,791 -2.4 % 6.3 %
oth…
Tot…
sam… $ 395,0… $ 387,5… 1.9 % 100.0 %
ope…
exp…
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-10 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Development Pipeline – September 30, 2026 (Dollars in millions, except per
apartment home amounts in thousands)
… …
… … … … …
… … … … … … … … … …
% … … … … … … … … …
──────────────────────────────────────────────────────────────────────────────
… … - $ … $ … $ … $ … … …
… …
… - … … … $ …
… - - … - …
… - $ … $ … $ …
For the third quarter of 2026,
(1) the Company’s cost includes $1.7 million of capitalized interest and
$0.7 million of capitalized overhead.
(2) Net of the estimated allocation to the retail component of the project,
as applicable.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-11 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Capital Expenditures - September 30,
2026 (1) (Dollars in thousands, except in footnotes and per apartment home
amounts)
Revenue Generating Capital Trailing 4
Expenditures(2) Q3 ‘26 Quarters
──────────────────────────────────────────────────────────────────────────────
Same-property portfolio $ 18,924 $ 59,142
Non-same-property portfolio 3,761 9,629
Total revenue generating capital $ 22,685 $ 68,771
expenditures
Number of 1,947 3,311
same-property interior renovations
Number
of total consolidated interior 1,996 3,422
renovations
Non-Revenue Generating
Capital
Expenditures(3) Q3 ‘26 Trailing 4Quarters
──────────────────────────────────────────────────────────────────────────────
Non-revenue generating
capital $ 35,585 $ 115,337
expenditures
Average apartment homes in 55,528 55,508
quarter
Capital
expenditures per apartment $ 641 $ 2,078
home
The Company incurred $0.2 million of capitalized interest, $4.7 million
(1) of capitalized overhead and less than $0.1 million of co-investment
fees related to redevelopment in Q3 2026.
Represents revenue generating expenditures, such as full-scale
redevelopments, interior unit turn renovations, enhanced amenities,
(2) certain sustainability
initiatives that generate higher revenues or expense savings and
accessory dwelling units.
Represents roof
replacements, paving, building and mechanical systems, exterior
painting, siding, etc. Non-revenue generating capital expenditures does
(3) not include costs related to retail, furniture and fixtures,
expenditures in which the Company has been
reimbursed or expects to be reimbursed, and expenditures incurred due
to changes in governmental regulation that the Company would not have
incurred otherwise.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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.
Co-investments and Preferred Equity Investments - September 30, 2026 (Dollars in
thousands, except in footnotes)
…
… …
… … … … …
… … … … … …
… … … … … … … …
… … … … … … … …
──────────────────────────────────────────────────────────────────────────────
… … $ … $ … $ … … % … $ … …
… … … … … … % … … …
… … … … … … % … … …
… $ … $ … $ … … % … $ … …
…
…
…
…
…
…
$ … …
… ) …
… ) …
… ) …
- …
… …
$ … …
… …
… … …
… … …
… … …
… … …
…
$ … …
- …
$ … … % … $ … …
$ … $ … …
(1) Represents the year-to-date annual weighted average borrowing rate.
As of September 30, 2026, the Company’s investments in Wesco I, Wesco
(2) III, and Wesco IV were classified as a liability
of $105.3 million due to distributions received in excess of the
Company’s investment.
Wesco III, IV and VI have in-place interest rate swaps totaling a gross
notional amount of $624.3 million at an average
all-in fixed rate of 2.7% which expire in December 2026 and March 2027.
(3) Year-to-date, these Wesco entities entered into replacement swaps which
take effect at the existing swap maturities totaling a gross notional
amount of $496.2 million at
an average all-in fixed rate of 5.3% which expire in June 2029.
As of September 30, 2026, the Company’s investment in Expo was
classified as a liability of $3.6 million due to distributions received
(4) in
excess of the Company’s investment. The weighted average Essex
ownership percentage excludes our investments in unconsolidated
technology co-investments.
As of September 30, 2026, the
(5) Company is invested in 9 preferred equity investments, including three
preferred equity investments held by Wesco VII, LLC.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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 - Year to
date as of September 30, 2026 (Dollars in thousands, except for average monthly
rent)
A…
P…
N…
N…
E…
n…
i…
u…
j…
v…
h…
a…
a…
a…
c…
y…
to T…
d… C…
as P…
of at P…
S… Es… P… p… A…
3… Ap… Ye… Ow… R… A… M…
2… Lo… Ho… Bu… Pe… E… Da… S… H… R…
──────────────────────────────────────────────────────────────────────────────
D…
T…
C… P…
P… Ap… Ye… Es… P… p…
N… Lo… Ho… Bu… Ow… E… Da… at A…
Pe… P… H…
R…
S…
M… San
at Jo… 218 20… 50% JV Ju… $ 52… $ 460
M… CA
Q2 218 $ 52… $ 460
20…
C… Se…
on WA 76 20… 10… E… Au… $ 30… $ 375
P…
San
S… Jo… 268 20… 58% JV Au… 70… 456
CA
M… Ma…
C… Del 101 19… 10… E… Au… 11… N/A
C… Re…
CA
Q3 445 $ 11… $ 429
20…
20… 663 $ 16… $ 439
To…
Price
(1) per apartment home excludes value allocated to the retail component, as
applicable.
The Company sold its interest in a 55-year-old, 101-unit apartment home
community and adjacent marina subject to a ground lease for a
(2) total contract price of $11.0 million. Due to circumstances associated
with the transaction, it has been excluded from the price per apartment
home calculations.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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. Assumptions for 2026 FFO Guidance
Range (Dollars in thousands, except per share data) The guidance projections
below are based on current expectations and are forward-looking. The guidance on
this page is given for Net Operating Income (“NOI”) and Total and Core FFO. See
pages S-17.1 to S-17.4 for the definitions of non-GAAP financial measures and
other terms.
Nine 2026
Months Full-… Comme…
Ended Guida… about
Septe… Range 2026
30, Low High Full-…
2026(… End End Guida…
──────────────────────────────────────────────────────────────────────────────
Inclu…
a
range
of
same-…
Total NOI
NOI growth
from $ 1,027… $ 1,372… $ 1,378… of
Cons… 2.8%
Comm… to
3.2%.
Refle…
inves…
activ…
throu…
Octob…
Mana… 6,975 8,900 9,500
Fees
Inte…
Expe…
Inclu…
new
Inte… $275
expe… milli…
befo… (197,… ) (267,… ) (266,… ) term
capi… loan
inte… and
YTD
inves…
activ…
Inte… 4,651 6,400 7,000
capi…
Net
inte… (193,… ) (260,… ) (259,… )
expe…
Recu…
Inco…
and
Expe…
Inte…
and 6,785 7,900 8,500
other
inco…
Refle…
FFO year-…
from 54,292 68,400 69,400 inves…
co-i… and
redem…
activ…
Gene…
and (46,8… ) (62,0… ) (64,0… )
admi…
Corp…
prop… (40,2… ) (53,4… ) (54,0… )
mana…
expe…
Non-… (7,148 ) (9,900 ) (9,300 )
inte…
Total
recu…
inco… (33,1… ) (49,0… ) (49,4… )
and
expe…
Non-…
Inco…
and
Expe…
Tax
expe…
on (2,758 ) (2,758 ) (2,758 )
unco…
co-i…
Real…
and
unre…
gains 3,482 3,482 3,482
on
mark…
secu…
net
Prov…
for 222 222 222
cred…
loss…
Equi…
inco…
from 16,154 16,154 16,154
unco…
tech…
co-i…
Inco…
from
early
rede… 179 179 179
of
pref…
equi…
inve…
Gene…
and
admi… (62,8… ) (62,8… ) (62,8… )
and
othe…
net
Insu…
reim…
and 342 342 342
othe…
net
Total
non-…
inco… (45,2… ) (45,2… ) (45,2… )
and
expe…
Funds
from $ 763,2… $ 1,026… $ 1,034…
Oper…
Funds
from
Oper… $ 11.47 $ 15.42 $ 15.54
per
dilu…
Share
%
Chan…
- -4.7 % -3.5 % -2.8 %
Funds
from
Oper…
Core
Funds
from
Oper… $ 808,4… $ 1,071… $ 1,079…
(exc…
non-…
item…
Core
Funds
from
Oper… $ 12.15 $ 16.10 $ 16.22
per
dilu…
Share
%
Chan…
-
Core 1.6 % 1.0 % 1.8 %
Funds
from
Oper…
EPS - $ 4.14 $ 5.62 $ 5.74
Dilu…
Refle…
YTD
Weig… share
aver… repur…
shar… and
outs… 66,548 66,550 66,550 settl…
- of
FFO outst…
calc… forwa…
sale
agree…
All non-core items are excluded from the 2026 actuals and included in
(1) the
non-core income and expense section of the FFO reconciliation.
2026 guidance excludes inestimable projected gain/(loss) on sale of
real estate and land, gain/(loss) on sale of marketable securities,
(2) gain/(loss) on early retirement of debt, and promote income until they
are
realized within the reporting period presented in the report.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information 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. Reconciliation of Projected EPS, FFO
and Core FFO per diluted share With respect to the Company’s guidance regarding
its projected FFO and Core FFO, which guidance is set forth in the earnings
release and on page S-15 of this supplement, a reconciliation of projected net
income per share to projected FFO per share and projected Core FFO per share, as
set forth in such guidance, is presented in the table below.
E…
-
d…
C…
f…
G…
s…
c…
I…
L…
D…
a…
a…
N…
i…
r…
to
O…
P…
u…
G…
on 20…
s… Ni… 4.… Gu… 1.… 1.… 5.… 5.…
of Mo… (0… Ra… (0… (0… (0… (0…
r… En… 0.… 4th - - 0.… 0.…
e… Se… 7.… Qu… 2.… 2.… Fu… 10… 10…
a… 30, 0.… ) 20… 0.… 0.… 20… 0.… ) 0.… )
l… 20… (0… ) Low - ) Hi… - ) Low (0… ) H… (0… )
──────────────────────────────────────────────────────────────────────────────
F…
p…
s… $ 11… $ 3.… $ 4.… $ 15… $ 15…
-
d…
E…
a…
a… - - - - -
i…
r…
c…
T…
e…
on 0.… - - 0.… 0.…
u…
c…
R…
a…
u…
g… (0… ) - - (0… ) (0… )
on
m…
s…
n…
P…
f… - - - - -
c…
l…
E…
i…
f… (0… ) - - (0… ) (0… )
u…
t…
c…
L…
on
e…
r… - - - - -
of
d…
n…
I…
f…
e…
r… - - - - -
of
p…
e…
i…
G…
a…
a… 0.… - - 0.… 0.…
a…
o…
n…
I…
r…
a… (0… ) - - (0… ) (0… )
o…
n…
C…
F…
p… $ 12… $ 3.… $ 4.… $ 16… $ 16…
s…
-
d…
2026 guidance excludes inestimable projected gain/(loss) on sale of
real
(1) estate and land, gain/(loss) on sale of marketable securities,
gain/(loss) on early retirement of debt, and promote income until they
are realized within the reporting period presented in the report.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-15.1 Table of Contents 0 MSA Level Data based on Essex Data
Analytics forecasts and third-party projections. Residential Supply: Total
supply includes the Company’s estimate of multifamily (“MF”) deliveries of
properties with 50+ units and excludes student, senior and 100% affordable
housing communities. Multifamily estimates incorporate a methodological
enhancement (“delay-adjusted supply”) to reflect the anticipated impact of
continued construction delays in Essex markets. Single-family (“SF”) estimates
are based on trailing single-family permits. Residential Supply Forecast (1)
Residential Supply Forecast (1) 2026E 2027E Market Multifamily Supply Total
MF/SF Supply Total Supply as a % of Stock Multifamily Supply Total MF/SF Supply
Total Supply as a % of Stock Los Angeles 6,300 12,100 0.3% 4,600 11,000 0.3%
Orange County 2,500 5,200 0.5% 3,000 5,700 0.5% San Diego 4,900 7,700 0.6% 3,600
6,500 0.5% Ventura 600 1,000 0.3% 200 600 0.2% Southern California 14,300 26,000
0.4% 11,400 23,800 0.4% San Francisco 900 1,300 0.2% 800 1,200 0.2% Oakland 400
2,700 0.3% 100 2,300 0.2% San Jose 1,100 3,000 0.4% 1,200 3,000 0.4% Northern
California 2,400 7,000 0.3% 2,100 6,500 0.3% Seattle 4,900 9,300 0.7% 4,100
8,000 0.6% Total 21,600 42,300 0.4% 17,600 38,300 0.4% ESSEX PROPERTY TRUST,
INC. MSA Level Supply Forecast: 2026E - 2027E See Company’s Form 10-K and Form
10-Qs filed with the SEC for additional information S-16 Table of Contents
E S S E X P R O P E R T Y T R U S T, I N C. Reconciliations of Non-GAAP
Financial Measures and Other Terms Adjusted EBITDAre Reconciliation The National
Association of Real Estate Investment Trusts (“Nareit”) defines earnings before
interest, taxes, depreciation and amortization for real estate (“EBITDAre”)
(September 2017 White Paper) as net income (computed in accordance with U.S.
generally accepted accounting principles (“U.S. GAAP”)) before interest expense,
income taxes, depreciation and amortization expense, and further adjusted for
gains and losses from sales of depreciated operating properties, impairment
write-downs of depreciated operating properties, impairment write-downs of
investments in unconsolidated entities caused by a decrease in value of
depreciated operating properties within the joint venture and adjustments to
reflect the Company’s share of EBITDAre of investments in unconsolidated
entities. The Company believes that EBITDAre is useful to investors, creditors
and rating agencies as a supplemental measure of the Company’s ability to incur
and service debt because it is a recognized measure of performance by the real
estate industry, and by excluding gains or losses related to sales or impairment
of depreciated operating properties, EBITDAre can help compare the Company’s
credit strength between periods or as compared to different companies. Adjusted
EBITDAre represents EBITDAre further adjusted for non-comparable items and is a
component of the credit ratio, “Net Indebtedness Divided by Adjusted EBITDAre,
normalized and annualized,” presented on page S-6, in the section titled
“Selected Credit Ratios,” and it is not intended to be a measure of free cash
flow for management’s discretionary use, as it does not consider certain cash
requirements such as income tax payments, debt service requirements, capital
expenditures and other fixed charges. Adjusted EBITDAre is an important metric
in evaluating the credit strength of the Company and its ability to service its
debt obligations. The Company believes that Adjusted EBITDAre is useful to
investors, creditors and rating agencies because it allows investors to compare
the Company’s credit strength to prior reporting periods and to other companies
without the effect of items that by their nature are not comparable from period
to period and tend to obscure the Company’s actual credit quality. EBITDAre and
Adjusted EBITDAre are not recognized measurements under U.S. GAAP. Because not
all companies use identical calculations, the Company’s presentation of EBITDAre
and Adjusted EBITDAre may not be comparable to similarly titled measures of
other companies. The reconciliations of Net Income available to common
stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:
Three
Months Ended
September 30,
(Dollars in thousands) 2026
───────────────────────────────────────────────────────────────────────
Net income $ 98,069
available to common stockholders
Adjustments:
Net income attributable to 5,666
noncontrolling interest
Interest expense, net(1) 63,416
Depreciation and amortization 152,552
Income tax 30
provision
Gain on sale of real estate and land (6,781 )
Gain on sale of co-investment (5,758 )
communities
Impairment loss 10,709
Co-investment 21,007
EBITDAre adjustments
EBITDAre 338,910
Realized and unrealized losses on 508
marketable securities, net
Equity loss from unconsolidated 33
technology co-investments
Tax benefit on unconsolidated technology (493 )
co-investments
General and administrative and other, 1,504
net
Insurance reimbursements and other, net (44 )
Adjusted EBITDAre $ 340,418
(1) Interest expense, net includes items such as gains on
derivatives and the amortization of deferred charges.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-17.1 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms Annualized
Turnover Annualized turnover is defined as the number of apartment homes turned
over during the quarter, annualized, divided by the total number of apartment
homes. Financial Occupancy Financial occupancy is defined as the percentage
resulting from dividing actual rental income by total scheduled rental income.
Actual rental income represents contractual rental income pursuant to leases
without considering delinquency and concessions. Total scheduled rental income
represents the value of all apartment homes, with occupied apartment homes
valued at contractual rental rates pursuant to leases and vacant apartment homes
valued at estimated market rents. New Lease Net Effective Rate Growth and
Renewal Net Effective Rate Growth New lease net effective rate growth and
renewal net effective rate growth represent the percentage change in all lease
tradeouts, including the impact of leasing incentives. Prior to 2026, the rate
growth was based on the change in similar term lease tradeouts, including the
impact of leasing incentives, and all periods presented have been updated to
conform with the current methodology. Disposition Yield Net operating income
that the Company anticipates giving up in the next 12 months less an estimate of
property management costs allocated to the project divided by the gross sales
price of the asset. Acquisition Yield Net operating income that the Company
expects to achieve in the next 12 months less an estimate of property management
costs allocated to the project and less an estimate for capital expenditures per
unit divided by the gross sales price of the asset. Encumbered Encumbered means
any mortgage, deed of trust, lien, charge, pledge, security interest, security
agreement or other encumbrance of any kind. Funds From Operations (“FFO”) and
Core FFO FFO, as defined by Nareit, is generally considered by industry analysts
as an appropriate measure of performance of an equity REIT. Generally, FFO
adjusts the net income of equity REITs for non-cash charges such as depreciation
and amortization of rental properties, impairment charges, gains on sales of
real estate and extraordinary items. Management considers FFO and FFO which
excludes non-core items, which is referred to as “Core FFO,” to be useful
supplemental operating performance measures of an equity REIT because, together
with net income and cash flows, FFO and Core FFO provide investors with
additional bases to evaluate the operating performance and ability of a REIT to
incur and service debt and to fund acquisitions and other capital expenditures
and to pay dividends. By excluding gains or losses related to sales of
depreciated operating properties and land and excluding real estate depreciation
(which can vary among owners of identical assets in similar condition based on
historical cost accounting and useful life estimates), FFO can help investors
compare the operating performance of a real estate company between periods or as
compared to different companies. By further adjusting for items that are not
considered part of the Company’s core business operations, Core FFO allows
investors to compare the core operating performance of the Company to its
performance in prior reporting periods and to the operating performance of other
real estate companies without the effect of items that by their nature are not
comparable from period to period and tend to obscure the Company’s actual
operating results. FFO and Core FFO do not represent net income or cash flows
from operations as defined by U.S. GAAP and are not intended to indicate whether
cash flows will be sufficient to fund cash needs. These measures should not be
considered as alternatives to net income as an indicator of the REIT’s operating
performance or to cash flows as a measure of liquidity. FFO and Core FFO do not
measure whether cash flow is sufficient to fund all cash needs including
principal amortization, capital improvements and distributions to stockholders.
FFO and Core FFO also do not represent cash flows generated from operating,
investing or financing activities as defined under GAAP. Management has
consistently applied the Nareit definition of FFO to all periods presented.
However, there is judgment involved and other REITs’ calculation of FFO may vary
from the Nareit definition for this measure, and thus their disclosures of FFO
may not be comparable to the Company’s calculation. The reconciliations of FFO
and Core FFO per diluted share are detailed on page S-3 in the section titled
“Consolidated Funds From Operations”. Interest Expense, Net Interest expense,
net is presented on page S-1 in the section titled “Consolidated Operating
Results”. Interest expense, net includes items such as gains on derivatives and
the amortization of deferred charges and is presented in the table below:
(Dol… Three Sept… Sept… Nine Sept… Sep…
in Mont… 30, 30, Mont… 30, 30,
thou… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Int… $ 64,7… $ 64,6… $ 197,… $ 192…
exp…
Adj…
Tot…
ret… (1,3… ) (1,3… ) (4,1… ) (3,… )
swap
inc…
Int…
exp… $ 63,4… $ 63,3… $ 193,… $ 189…
net
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-17.2 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms Net Indebtedness
Divided by Adjusted EBITDAre This credit ratio is presented on page S-6 in the
section titled “Selected Credit Ratios.” This credit ratio is calculated by
dividing net indebtedness by Adjusted EBITDAre, as annualized based on the most
recent quarter, and adjusted for estimated net operating income from properties
acquired or disposed of during the quarter. This ratio is presented by the
Company because it provides rating agencies and investors an additional means of
comparing the Company’s ability to service debt obligations to that of other
companies. Net indebtedness is total debt, net less unamortized premiums,
discounts, debt issuance costs, unrestricted cash and cash equivalents, and
marketable securities. The reconciliation of Adjusted EBITDAre is set forth in
“Adjusted EBITDAre Reconciliation” on page S-17.1 The calculation of this credit
ratio and a reconciliation of net indebtedness to total debt at pro rata share
for co-investments, net is presented in the table below:
September 30,
(Dollars in thousands) 2026
──────────────────────────────────────────────────────────────────────────────
Total consolidated debt, net $ 6,605,814
Total debt from co-investments at pro 885,457
rata share
Adjustments:
Consolidated unamortized premiums, 32,944
discounts, and debt issuance costs
Pro rata
co-investments unamortized premiums, 5,180
discounts, and debt issuance costs
Consolidated cash and cash (72,059 )
equivalents-unrestricted
Pro rata co-investment cash and cash (31,713 )
equivalents-unrestricted
Marketable securities (102,665 )
Net Indebtedness $ 7,322,958
Adjusted EBITDAre, annualized(1) $ 1,361,672
Other EBITDAre normalization (6,520 )
adjustments, net, annualized(2)
Adjusted EBITDAre, normalized and $ 1,355,152
annualized
Net Indebtedness Divided by Adjusted 5.4
EBITDAre, normalized and annualized
(1) Based
on the amount for the most recent quarter, multiplied by four.
Adjustments made for properties in lease-up, acquired, or disposed
(2) during the most recent quarter and other partial quarter activity,
multiplied by four.
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:
(Dol… Three Sept… Sept… Nine Sept… Sep…
in Mont… 30, 30, Mont… 30, 30,
thou… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Ear…
from $ 156,… $ 210,… $ 421,… $ 747…
ope…
Adj…
Cor…
pro… 13,3… 12,2… 40,2… 36,…
man…
exp…
Dep…
and 152,… 151,… 461,… 454…
amo…
Man…
and
oth… (2,3… ) (2,3… ) (6,9… ) (7,… )
fees
from
aff…
Gen…
and 16,5… 18,0… 109,… 51,…
adm…
Exp…
acq…
and - 25 - 25
inv…
rel…
cos…
Imp… 10,7… - 10,7… -
loss
Gain
on
sale
of (6,7… ) (62,… ) (8,7… ) (29… )
real
est…
and
land
NOI 340,… 327,… 1,02… 983…
Les…
Non… (27,… ) (23,… ) (85,… ) (70… )
NOI
Sam… $ 313,… $ 303,… $ 942,… $ 912…
NOI
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-17.3 Table of Contents E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms Public Bond
Covenants Public Bond Covenants refer to certain covenants set forth in
instruments governing the Company’s unsecured indebtedness. These instruments
require the Company to meet specified financial covenants, including covenants
relating to net worth, fixed charge coverage, debt service coverage, the amounts
of total indebtedness and secured indebtedness, leverage and certain investment
limitations. These covenants may restrict the Company’s ability to expand or
fully pursue its business strategies. The Company’s ability to comply with these
covenants may be affected by changes in the Company’s operating and financial
performance, changes in general business and economic conditions, adverse
regulatory developments or other events adversely impacting it. The breach of
any of these covenants could result in a default under the Company’s
indebtedness, which could cause those and other obligations to become due and
payable. If any of the Company’s indebtedness is accelerated, the Company may
not be able to repay it. For risks related to failure to comply with these
covenants, see “Item 1A: Risk Factors - Risks Related to Our Indebtedness and
Financings” in the Company’s annual report on Form 10-K and other reports filed
by the Company with the Securities and Exchange Commission (“SEC”). The ratios
set forth on page S-6 in the section titled “Public Bond Covenants” are provided
only to show the Company’s compliance with certain specified covenants that are
contained in indentures related to the Company’s issuance of Senior Notes, which
indentures are filed by the Company with the SEC. See, for example, the
indenture and supplemental indenture dated December 12, 2025, filed by the
Company as Exhibit 4.1 and Exhibit 4.2 to the Company’s Form 8-K, filed on
December 12, 2025. These ratios should not be used for any other purpose,
including without limitation to evaluate the Company’s financial condition or
results of operations, nor do they indicate the Company’s covenant compliance as
of any other date or for any other period. The capitalized terms in the
disclosure are defined in the indentures filed by the Company with the SEC and
may differ materially from similar terms used by other companies that present
information about their covenant compliance. Same-Property Revenue Growth with
Concessions on a GAAP basis
(Doll… Three Septe… Sept… Nine Sept… Septe…
in Mont… 30, 30, Months 30, 30,
milli… Ended 2026 2025 Ended 2026 2025
──────────────────────────────────────────────────────────────────────────────
Repo…
rent… $ 450.0 $ 436.7 $ 1,33… $ 1,300…
reve…
Stra…
rent
impa… (0.1 ) 0.3 (0.5 ) 0.2
to
rent…
reve…
GAAP
rent… $ 449.9 $ 437.0 $ 1,33… $ 1,300…
reve…
%
chan…
- 3.0 % 2.9 %
repo…
rent…
reve…
%
chan…
- 2.9 % 2.8 %
GAAP
rent…
reve…
(1) Same-property rental
revenue reflects concessions on a cash basis.
Secured Debt Secured Debt means debt of the Company or any of its subsidiaries
which is secured by an encumbrance on any property or assets of the Company or
any of its subsidiaries. The Company’s total amount of Secured Debt is set forth
on page S-5. Unencumbered NOI to Adjusted Total NOI This ratio is presented on
page S-6 in the section titled “Selected Credit Ratios”. Unencumbered NOI means
the sum of NOI for those real estate assets which are not subject to an
encumbrance securing debt. The ratio of Unencumbered NOI to Adjusted Total NOI
for the three months ended September 30, 2026, annualized, is calculated by
dividing Unencumbered NOI, annualized for the three months ended September 30,
2026 and as further adjusted for pro forma NOI for properties acquired or sold
during the recent quarter, by Adjusted Total NOI as annualized. The calculation
and reconciliation of NOI is set forth in “Net Operating Income (“NOI”) and
Same-Property NOI Reconciliations” above. This ratio is presented by the Company
because it provides rating agencies and investors an additional means of
comparing the Company’s ability to service debt obligations to that of other
companies. The calculation of this ratio is presented in the table below:
(Dollars Annualized
in thousands) Q3 ‘26(1)
───────────────────────────────────────────────────────────────────
NOI $ 1,363,400
Adjustments:
Pro forma NOI from real estate assets (1,722 )
sold and/or acquired
Other, net(2) (4,722 )
Adjusted Total NOI 1,356,956
Less: Encumbered NOI (92,321 )
Unencumbered NOI $ 1,264,635
Encumbered NOI $ 92,321
Unencumbered NOI 1,264,635
Adjusted Total NOI $ 1,356,956
Unencumbered 93 %
NOI to Adjusted Total NOI
(1) This table is based on the amounts for the most recent quarter,
multiplied by four.
(2) Includes intercompany eliminations pertaining to self-insurance and
other expenses.
See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional
information S-17.4