Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | Apr. 27, 2017 | |
Entity Information [Line Items] | ||
Entity Registrant Name | ESSEX PROPERTY TRUST INC | |
Entity Central Index Key | 920,522 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 65,598,892 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Essex Portfolio, L.P. [Member] | ||
Entity Information [Line Items] | ||
Entity Registrant Name | ESSEX PORTFOLIO LP | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Rental properties: | ||
Land and land improvements | $ 2,719,064 | $ 2,559,743 |
Buildings and improvements | 10,492,413 | 10,116,563 |
Total rental properties | 13,211,477 | 12,676,306 |
Less: accumulated depreciation | (2,418,793) | (2,311,546) |
Net real estate | 10,792,684 | 10,364,760 |
Real estate under development | 239,685 | 190,505 |
Co-investments | 1,071,258 | 1,161,275 |
Real estate held for sale, net | 0 | 101,957 |
Total real estate | 12,103,627 | 11,818,497 |
Cash and cash equivalents-unrestricted | 84,344 | 64,921 |
Cash and cash equivalents-restricted | 15,908 | 105,381 |
Marketable securities | 138,977 | 139,189 |
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 50,855 | 40,970 |
Prepaid expenses and other assets | 53,716 | 48,450 |
Total assets | 12,447,427 | 12,217,408 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 3,195,129 | 3,246,779 |
Mortgage notes payable, net | 2,231,145 | 2,191,481 |
Lines of credit | 176,233 | 125,000 |
Accounts payable and accrued liabilities | 184,778 | 138,226 |
Construction payable | 35,590 | 35,909 |
Dividends payable | 120,573 | 110,170 |
Distributions in excess of investments in co-investments | 35,534 | 0 |
Other liabilities | 34,027 | 32,922 |
Total liabilities | 6,013,009 | 5,880,487 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 45,415 | 44,684 |
Equity/Capital: | ||
Common stock; $0.0001 par value, 670,000,000 shares authorized; 65,569,521 and 65,527,993 shares issued and outstanding, respectively | 6 | 6 |
Additional paid-in capital | 7,035,178 | 7,029,679 |
Distributions in excess of accumulated earnings | (741,204) | (805,409) |
Accumulated other comprehensive loss, net | (29,959) | (32,098) |
Total stockholders' equity | 6,264,021 | 6,192,178 |
Noncontrolling interest | 124,982 | 100,059 |
Total equity | 6,389,003 | 6,292,237 |
Total liabilities and equity/capital | 12,447,427 | 12,217,408 |
Essex Portfolio, L.P. [Member] | ||
Rental properties: | ||
Land and land improvements | 2,719,064 | 2,559,743 |
Buildings and improvements | 10,492,413 | 10,116,563 |
Total rental properties | 13,211,477 | 12,676,306 |
Less: accumulated depreciation | (2,418,793) | (2,311,546) |
Net real estate | 10,792,684 | 10,364,760 |
Real estate under development | 239,685 | 190,505 |
Co-investments | 1,071,258 | 1,161,275 |
Real estate held for sale, net | 0 | 101,957 |
Total real estate | 12,103,627 | 11,818,497 |
Cash and cash equivalents-unrestricted | 84,344 | 64,921 |
Cash and cash equivalents-restricted | 15,908 | 105,381 |
Marketable securities | 138,977 | 139,189 |
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 50,855 | 40,970 |
Prepaid expenses and other assets | 53,716 | 48,450 |
Total assets | 12,447,427 | 12,217,408 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 3,195,129 | 3,246,779 |
Mortgage notes payable, net | 2,231,145 | 2,191,481 |
Lines of credit | 176,233 | 125,000 |
Accounts payable and accrued liabilities | 184,778 | 138,226 |
Construction payable | 35,590 | 35,909 |
Dividends payable | 120,573 | 110,170 |
Distributions in excess of investments in co-investments | 35,534 | 0 |
Other liabilities | 34,027 | 32,922 |
Total liabilities | 6,013,009 | 5,880,487 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 45,415 | 44,684 |
Equity/Capital: | ||
General Partner | 6,293,980 | 6,224,276 |
Common equity (2,251,920 and 2,237,290 units issued and outstanding, respectively) | 51,496 | 49,436 |
Accumulated other comprehensive loss, net | (27,135) | (29,348) |
Total partners' capital | 6,318,341 | 6,244,364 |
Noncontrolling interest | 70,662 | 47,873 |
Total capital | 6,389,003 | 6,292,237 |
Total liabilities and equity/capital | 12,447,427 | 12,217,408 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Common Equity [Member] | ||
Equity/Capital: | ||
General Partner | 6,293,980 | 6,224,276 |
Total capital | $ 6,293,980 | $ 6,224,276 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2017 | Dec. 31, 2016 |
Related party receivables | $ 10.3 | $ 11.3 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 670,000,000 | 670,000,000 |
Common stock, shares issued (in shares) | 65,569,521 | 65,527,993 |
Common stock, shares outstanding (in shares) | 65,569,521 | 65,527,993 |
Essex Portfolio, L.P. [Member] | ||
Related party receivables | $ 10.3 | $ 11.3 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | ||
Common stock, shares issued (in shares) | 65,569,521 | 65,527,993 |
Common stock, shares outstanding (in shares) | 65,569,521 | 65,527,993 |
Essex Portfolio, L.P. [Member] | Limited Partners [Member] | ||
Common stock, shares issued (in shares) | 2,251,920 | 2,237,290 |
Common stock, shares outstanding (in shares) | 2,251,920 | 2,237,290 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||
Rental and other property | $ 333,168 | $ 312,178 |
Management and other fees from affiliates | 2,236 | 2,024 |
Total revenues | 335,404 | 314,202 |
Expenses: | ||
Property operating, excluding real estate taxes | 63,645 | 60,071 |
Real estate taxes | 35,868 | 34,419 |
Depreciation and amortization | 115,503 | 109,707 |
General and administrative | 10,601 | 9,182 |
Acquisition and investment related costs | 556 | 828 |
Total expenses | 226,173 | 214,207 |
Earnings from operations | 109,231 | 99,995 |
Interest expense | (54,583) | (52,466) |
Total return swap income | 2,584 | 3,123 |
Interest and other income | 6,764 | 5,208 |
Equity income from co-investments | 10,899 | 15,068 |
Gain on sale of real estate and land | 26,174 | 20,258 |
Deferred tax expense on gain on sale of real estate and land | 0 | (4,279) |
Gain on remeasurement of co-investment | 86,482 | 0 |
Net income | 187,551 | 86,907 |
Net income attributable to noncontrolling interest | (8,587) | (5,071) |
Net income attributable to controlling interest | 178,964 | 81,836 |
Dividends to preferred stockholders | 0 | (1,314) |
Excess of redemption value of preferred stock over the carrying value | 0 | (2,541) |
Net income available to common stockholders | 178,964 | 77,981 |
Comprehensive income | 189,764 | 84,696 |
Comprehensive income attributable to noncontrolling interest | (8,661) | (4,998) |
Comprehensive income attributable to controlling interest | $ 181,103 | $ 79,698 |
Basic: | ||
Net income available to common stockholders (in dollars per share) | $ 2.73 | $ 1.19 |
Weighted average number of shares outstanding during the period (in shares) | 65,549,484 | 65,405,654 |
Diluted: | ||
Net income available to common stockholders (in dollars per share) | $ 2.72 | $ 1.19 |
Weighted average number of shares outstanding during the period (in shares) | 65,859,490 | 65,557,639 |
Dividends per common share (in dollars per share) | $ 1.75 | $ 1.60 |
Essex Portfolio, L.P. [Member] | ||
Revenues: | ||
Rental and other property | $ 333,168 | $ 312,178 |
Management and other fees from affiliates | 2,236 | 2,024 |
Total revenues | 335,404 | 314,202 |
Expenses: | ||
Property operating, excluding real estate taxes | 63,645 | 60,071 |
Real estate taxes | 35,868 | 34,419 |
Depreciation and amortization | 115,503 | 109,707 |
General and administrative | 10,601 | 9,182 |
Acquisition and investment related costs | 556 | 828 |
Total expenses | 226,173 | 214,207 |
Earnings from operations | 109,231 | 99,995 |
Interest expense | (54,583) | (52,466) |
Total return swap income | 2,584 | 3,123 |
Interest and other income | 6,764 | 5,208 |
Equity income from co-investments | 10,899 | 15,068 |
Gain on sale of real estate and land | 26,174 | 20,258 |
Deferred tax expense on gain on sale of real estate and land | 0 | (4,279) |
Gain on remeasurement of co-investment | 86,482 | 0 |
Net income | 187,551 | 86,907 |
Net income attributable to noncontrolling interest | (2,441) | (2,287) |
Net income attributable to controlling interest | 185,110 | 84,620 |
Dividends to preferred stockholders | 0 | (1,314) |
Excess of redemption value of preferred stock over the carrying value | 0 | (2,541) |
Net income available to common stockholders | 185,110 | 80,765 |
Comprehensive income | 189,764 | 84,696 |
Comprehensive income attributable to noncontrolling interest | (2,441) | (2,287) |
Comprehensive income attributable to controlling interest | $ 187,323 | $ 82,409 |
Basic: | ||
Net income available to common stockholders (in dollars per share) | $ 2.73 | $ 1.19 |
Weighted average number of shares outstanding during the period (in shares) | 67,801,718 | 67,633,519 |
Diluted: | ||
Net income available to common stockholders (in dollars per share) | $ 2.72 | $ 1.19 |
Weighted average number of shares outstanding during the period (in shares) | 68,111,724 | 67,785,504 |
Dividends per common share (in dollars per share) | $ 1.75 | $ 1.60 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Equity - 3 months ended Mar. 31, 2017 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Distributions in Excess of Accumulated Earnings [Member] | AOCI Attributable to Parent [Member] | Noncontrolling Interest [Member] |
Balance at period beginning at Dec. 31, 2016 | $ 6,292,237 | $ 6 | $ 7,029,679 | $ (805,409) | $ (32,098) | $ 100,059 |
Balances (in shares) at Dec. 31, 2016 | 65,528 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 187,551 | 178,964 | 8,587 | |||
Reversal of unrealized gains upon the sale of marketable securities | (1,605) | (1,552) | (53) | |||
Change in fair value of derivatives and amortization of swap settlements | 3,639 | 3,518 | 121 | |||
Change in fair value of marketable securities, net | 179 | 173 | 6 | |||
Issuance of common stock under: | ||||||
Stock option and restricted stock plans, net | 5,794 | 5,794 | ||||
Stock option and restricted stock plans, net (in shares) | 41 | |||||
Sale of common stock, net | (65) | (65) | ||||
Equity based compensation costs | 1,253 | 1,110 | 143 | |||
Changes in the redemption value of redeemable noncontrolling interest | (731) | (505) | (226) | |||
Contributions from noncontrolling interest | 22,506 | 22,506 | ||||
Distributions to noncontrolling interest | (5,926) | (5,926) | ||||
Redemptions of noncontrolling interest | (1,070) | (835) | (235) | |||
Redemptions of noncontrolling interest (in shares) | 1 | |||||
Common stock dividends | (114,759) | (114,759) | ||||
Balance at period end at Mar. 31, 2017 | $ 6,389,003 | $ 6 | $ 7,035,178 | $ (741,204) | $ (29,959) | $ 124,982 |
Balances (in shares) at Mar. 31, 2017 | 65,570 |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Capital shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Net income | $ 187,551 |
Reversal of unrealized gains upon the sale of marketable securities | (1,605) |
Change in fair value of derivatives and amortization of swap settlements | 3,639 |
Change in fair value of marketable securities, net | 179 |
Issuance of common stock under: | |
Sale of common stock by general partner, net | (65) |
Changes in the redemption value of redeemable noncontrolling interest | (731) |
Contributions from noncontrolling interest | 22,506 |
Distributions to noncontrolling interest | (5,926) |
Redemptions | (1,070) |
Essex Portfolio, L.P. [Member] | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance at period beginning | 6,292,237 |
Net income | 187,551 |
Reversal of unrealized gains upon the sale of marketable securities | (1,605) |
Change in fair value of derivatives and amortization of swap settlements | 3,639 |
Change in fair value of marketable securities, net | 179 |
Issuance of common stock under: | |
General partner's stock based compensation, net | 5,794 |
Sale of common stock by general partner, net | (65) |
Equity based compensation costs | 1,253 |
Changes in the redemption value of redeemable noncontrolling interest | (731) |
Contributions from noncontrolling interest | 22,506 |
Distributions to noncontrolling interest | (1,932) |
Redemptions | (1,070) |
Distributions declared | (118,753) |
Balance at period end | 6,389,003 |
Essex Portfolio, L.P. [Member] | Accumulated Other Comprehensive Loss [Member] | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance at period beginning | (29,348) |
Reversal of unrealized gains upon the sale of marketable securities | (1,605) |
Change in fair value of derivatives and amortization of swap settlements | 3,639 |
Change in fair value of marketable securities, net | 179 |
Issuance of common stock under: | |
Balance at period end | (27,135) |
Essex Portfolio, L.P. [Member] | Noncontrolling Interest [Member] | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance at period beginning | 47,873 |
Net income | 2,441 |
Issuance of common stock under: | |
Changes in the redemption value of redeemable noncontrolling interest | (226) |
Contributions from noncontrolling interest | 22,506 |
Distributions to noncontrolling interest | (1,932) |
Balance at period end | 70,662 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Common Equity [Member] | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance at period beginning | $ 6,224,276 |
Balance at period beginning (in shares) | shares | 65,528 |
Net income | $ 178,964 |
Issuance of common stock under: | |
General partner's stock based compensation, net | $ 5,794 |
General partner's stock based compensation, net (in shares) | shares | 41 |
Sale of common stock by general partner, net | $ (65) |
Equity based compensation costs | 1,110 |
Changes in the redemption value of redeemable noncontrolling interest | (505) |
Redemptions | $ (835) |
Redemptions (in shares) | shares | 1 |
Distributions declared | $ (114,759) |
Balance at period end | $ 6,293,980 |
Balance at period end (in shares) | shares | 65,570 |
Essex Portfolio, L.P. [Member] | Limited Partner [Member] | Common Equity [Member] | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |
Balance at period beginning | $ 49,436 |
Balance at period beginning (in shares) | shares | 2,237 |
Net income | $ 6,146 |
Issuance of common stock under: | |
Equity based compensation costs | $ 143 |
Equity based compensation costs (in shares) | shares | 16 |
Redemptions | $ (235) |
Redemptions (in shares) | shares | (1) |
Distributions declared | $ (3,994) |
Balance at period end | $ 51,496 |
Balance at period end (in shares) | shares | 2,252 |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 187,551 | $ 86,907 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 115,503 | 109,707 |
Amortization of discount on marketable securities and other investments | (3,573) | (3,756) |
Amortization of (premium) discount and debt financing costs, net | (3,309) | (3,795) |
Gain on sale of marketable securities and other investments | (1,605) | (740) |
Company's share of gain on the sales of co-investments | 0 | (7,435) |
Earnings from co-investments | (10,899) | (7,633) |
Operating distributions from co-investments | 12,358 | 9,753 |
Gain on the sale of real estate and land | (26,174) | (20,258) |
Equity-based compensation | 1,253 | 1,490 |
Gain on remeasurement of co-investment | (86,482) | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses, receivables and other assets | (4,536) | 846 |
Accounts payable and accrued liabilities | 42,449 | 35,200 |
Other liabilities | 737 | 324 |
Net cash provided by operating activities | 223,273 | 200,610 |
Additions to real estate: | ||
Acquisitions of real estate and acquisition related capital expenditures | (187,917) | (110,309) |
Redevelopment | (12,240) | (24,151) |
Development acquisitions of and additions to real estate under development | (30,457) | (22,656) |
Capital expenditures on rental properties | (10,885) | (5,688) |
Investments in notes receivable | (8,750) | 0 |
Proceeds from insurance for property losses | 435 | 435 |
Proceeds from dispositions of real estate | 131,230 | 48,008 |
Contributions to co-investments | (120,816) | (50,591) |
Changes in restricted cash and refundable deposits | 89,985 | 59,346 |
Purchases of marketable securities | (20,939) | (1,344) |
Sales and maturities of marketable securities and other investments | 24,903 | 5,045 |
Non-operating distributions from co-investments | 55,025 | 21,146 |
Net cash used in investing activities | (90,426) | (80,759) |
Cash flows from financing activities: | ||
Borrowings under debt agreements | 654,562 | 305,895 |
Repayment of debt | (661,349) | (309,903) |
Additions to deferred charges | (1,014) | (1,037) |
Net proceeds from issuance of common stock | (65) | (134) |
Net proceeds from stock options exercised | 5,794 | 5,232 |
Distributions to noncontrolling interest | (5,425) | (4,858) |
Redemption of noncontrolling interest | (1,070) | (1,089) |
Common stock dividends paid | (104,857) | (95,476) |
Net cash used in financing activities | (113,424) | (101,370) |
Net increase in cash and cash equivalents | 19,423 | 18,481 |
Cash and cash equivalents at beginning of period | 64,921 | 29,683 |
Cash and cash equivalents at end of period | 84,344 | 48,164 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of $3.3 million and $3.1 million capitalized in 2017 and 2016, respectively | 48,397 | 48,109 |
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of DownREIT units in connection with acquisition of real estate | 22,506 | 0 |
Transfers between real estate under development to rental properties, net | 747 | 107,643 |
Transfer from real estate under development to co-investments | 2,080 | 2,338 |
Reclassifications to redeemable noncontrolling interest to or from additional paid in capital and noncontrolling interest | 731 | 751 |
Debt assumed in connection with acquisition | 51,882 | 48,832 |
Essex Portfolio, L.P. [Member] | ||
Cash flows from operating activities: | ||
Net income | 187,551 | 86,907 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 115,503 | 109,707 |
Amortization of discount on marketable securities and other investments | (3,573) | (3,756) |
Amortization of (premium) discount and debt financing costs, net | (3,309) | (3,795) |
Gain on sale of marketable securities and other investments | (1,605) | (740) |
Company's share of gain on the sales of co-investments | 0 | (7,435) |
Earnings from co-investments | (10,899) | (7,633) |
Operating distributions from co-investments | 12,358 | 9,753 |
Gain on the sale of real estate and land | (26,174) | (20,258) |
Equity-based compensation | 1,253 | 1,490 |
Gain on remeasurement of co-investment | (86,482) | 0 |
Changes in operating assets and liabilities: | ||
Prepaid expenses, receivables and other assets | (4,536) | 846 |
Accounts payable and accrued liabilities | 42,449 | 35,200 |
Other liabilities | 737 | 324 |
Net cash provided by operating activities | 223,273 | 200,610 |
Additions to real estate: | ||
Acquisitions of real estate and acquisition related capital expenditures | (187,917) | (110,309) |
Redevelopment | (12,240) | (24,151) |
Development acquisitions of and additions to real estate under development | (30,457) | (22,656) |
Capital expenditures on rental properties | (10,885) | (5,688) |
Investments in notes receivable | (8,750) | 0 |
Proceeds from insurance for property losses | 435 | 435 |
Proceeds from dispositions of real estate | 131,230 | 48,008 |
Contributions to co-investments | (120,816) | (50,591) |
Changes in restricted cash and refundable deposits | 89,985 | 59,346 |
Purchases of marketable securities | (20,939) | (1,344) |
Sales and maturities of marketable securities and other investments | 24,903 | 5,045 |
Non-operating distributions from co-investments | 55,025 | 21,146 |
Net cash used in investing activities | (90,426) | (80,759) |
Cash flows from financing activities: | ||
Borrowings under debt agreements | 654,562 | 305,895 |
Repayment of debt | (661,349) | (309,903) |
Additions to deferred charges | (1,014) | (1,037) |
Net proceeds from issuance of common stock | (65) | (134) |
Net proceeds from stock options exercised | 5,794 | 5,232 |
Distributions to noncontrolling interest | (5,425) | (1,528) |
Redemption of noncontrolling interest | (1,070) | (1,089) |
Common stock dividends paid | (104,857) | (98,806) |
Net cash used in financing activities | (113,424) | (101,370) |
Cash acquired from consolidation of co-investment | 0 | 0 |
Net increase in cash and cash equivalents | 19,423 | 18,481 |
Cash and cash equivalents at beginning of period | 64,921 | 29,683 |
Cash and cash equivalents at end of period | 84,344 | 48,164 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of $3.3 million and $3.1 million capitalized in 2017 and 2016, respectively | 48,397 | 48,109 |
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of DownREIT units in connection with acquisition of real estate | 22,506 | 0 |
Transfers between real estate under development to rental properties, net | 747 | 107,643 |
Transfer from real estate under development to co-investments | 2,080 | 2,338 |
Reclassifications to redeemable noncontrolling interest to or from additional paid in capital and noncontrolling interest | 731 | 751 |
Debt assumed in connection with acquisition | $ 51,882 | $ 48,832 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Interest capitalized | $ 3.3 | $ 3.1 |
Essex Portfolio, L.P. [Member] | ||
Interest capitalized | $ 3.3 | $ 3.1 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (“Essex” or the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. and subsidiaries (the “Operating Partnership,” which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2016 . All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation. The unaudited condensed consolidated financial statements for the three months ended March 31, 2017 and 2016 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner in the Operating Partnership, with a 96.7% general partnership interest as of March 31, 2017 . Total Operating Partnership limited partnership units outstanding were 2,251,920 and 2,237,290 as of March 31, 2017 and December 31, 2016 , respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $521.4 million and $520.2 million , as of March 31, 2017 and December 31, 2016 , respectively. As of March 31, 2017 , the Company owned or had ownership interests in 246 stabilized apartment communities, aggregating 59,860 apartment homes, excluding the Company’s ownership in preferred interest co-investments, (collectively, the “Communities”, and individually, a “Community”), one operating commercial building and five active developments (collectively, the “Portfolio”). The Communities are located in Southern California (Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, "Revenue from Contracts with Customers." The new standard provides a single comprehensive revenue recognition model for contracts with customers (excluding certain contracts, such as lease contracts) to improve comparability within industries. The new standard requires an entity to recognize revenue to reflect the transfer of goods or services to customers at an amount the entity expects to be paid in exchange for those goods and services and provide enhanced disclosures, all to provide more comprehensive guidance for transactions such as service revenue and contract modifications. In August 2015, the FASB deferred the effective date of the new standard by one year, and it is now effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The new standard may be applied using either a full retrospective or a modified approach upon adoption. The Company does not expect that this amendment will have a material effect on its consolidated results of operations or financial position. In January 2016, the FASB issued ASU No. 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities", which requires changes to the classification and measurement of investments in certain equity securities and to the presentation of certain fair value changes for financial liabilities measured at fair value. The new standard will be effective for the Company beginning on January 1, 2018 and early adoption is permitted. The Company does not expect that this amendment will have a material effect on its consolidated results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02 "Leases", which requires an entity that is a lessee to classify leases as either finance or operating and to recognize a lease liability and a right-of-use asset for all leases that have a duration of greater than 12 months. Leases of 12 months or less will be accounted for similar to existing guidance for operating leases today. For lessors, accounting for leases under the new standard will be substantially the same as existing guidance for sales-type leases, direct financing leases, and operating leases, but eliminates current real estate specific provisions and changes the treatment of initial direct costs. The new standard will be effective for the Company beginning on January 1, 2019 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a modified retrospective approach. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In June 2016, the FASB issued ASU No. 2016-13 "Measurement of Credit Losses on Financial Instruments", which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities, and other financial instruments. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Currently, U.S. GAAP requires entities to write down credit losses only when losses are probable and loss reversals are not permitted. The new standard will be effective for the Company beginning on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which requires entities to adhere to a uniform classification and presentation of certain cash receipts and cash payments in the statement of cash flows. The amendments in this update provide guidance on eight specific cash flow issues. The new standard will be effective for the Company beginning on January 1, 2018 and early adoption is permitted. The Company does not expect the impact of the other items identified in this amendment to be material on its consolidated results of operations or financial position. In November 2016, the FASB issued ASU No. 2016-18 "Statement of Cash Flows", which requires entities to include restricted cash and restricted cash equivalents in the reconciliation of beginning-of-period to the end-of-period of cash and cash equivalents in the statement of cash flows. This new standard seeks to eliminate the current diversity in practice in how changes in restricted cash and restricted cash equivalents is presented in the statement of cash flows. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company does not expect the impact of the other items identified in this amendment to be material on its consolidated results of operations or financial position. In January 2017, the FASB issued ASU No. 2017-01 "Business Combinations: Clarifying the Definition of a Business", which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Currently, U.S. GAAP does not specify the minimum inputs and processes required for an integrated set of assets and activities to meet the definition of a business, causing a broad interpretation of the definition of a business. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In February 2017, the FASB issued ASU No. 2017-05 "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets", which adds guidance for partial sales of nonfinanical assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. This new standard reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. Partial sales of nonfinancial assets are common in the real estate industry and include transactions in which the seller retains an equity interest in the entity that owns the assets or has an equity interest in the buyer. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. Marketable Securities The Company reports its available for sale securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds, Level 2 for the unsecured bonds and Level 3 for investments in mortgage backed securities, as defined by the FASB standard for fair value measurements), and any unrealized gain or loss is recorded as other comprehensive income. Realized gains and losses, interest income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statements of income and comprehensive income. As of March 31, 2017 and December 31, 2016 , marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities, and investment funds that invest in U.S. treasury or agency securities. As of March 31, 2017 and December 31, 2016 , the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost. The discount on the mortgage backed securities is being amortized to interest income based on an estimated yield and the maturity date of the securities. As of March 31, 2017 and December 31, 2016 , marketable securities consist of the following ($ in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Available for sale: Investment-grade unsecured bonds $ 13,540 $ 99 $ 13,639 Investment funds - U.S. treasuries 10,273 (24 ) 10,249 Common stock and stock funds 17,147 (27 ) 17,120 Held to maturity: Mortgage backed securities 97,969 — 97,969 Total - Marketable securities $ 138,929 $ 48 $ 138,977 December 31, 2016 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Available for sale: Investment-grade unsecured bonds $ 19,604 $ (73 ) $ 19,531 Investment funds - U.S. treasuries 10,022 (22 ) 10,000 Common stock and stock funds 13,696 1,569 15,265 Held to maturity: Mortgage backed securities 94,393 — 94,393 Total - Marketable securities $ 137,715 $ 1,474 $ 139,189 The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold. For the three months ended March 31, 2017 and 2016 , the proceeds from sales of available for sale securities totaled $24.9 million and $5.0 million , respectively, which resulted in $1.6 million realized gains and $0.7 million realized gains, respectively. Variable Interest Entities In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidates the Operating Partnership, 20 DownREIT limited partnerships (comprising twelve communities), and 9 co-investments. The Company consolidates these entities because it is deemed the primary beneficiary. The Company has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the 9 consolidated co-investments and 20 DownREIT limited partnerships, net of intercompany eliminations, were approximately $1.1 billion and $351.1 million , respectively, as of March 31, 2017 and $989.3 million and $288.1 million , respectively, as of December 31, 2016 . Noncontrolling interests in these entities was $75.7 million and $52.9 million as of March 31, 2017 and December 31, 2016 , respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2017 and December 31, 2016 , the Company did not have any other VIEs of which it was deemed to be the primary beneficiary and did not have any VIEs of which it was not deemed to be the primary beneficiary. Equity-based Compensation The cost of share and unit based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 12, “Equity Based Compensation Plans,” in the Company’s Form 10-K for the year ended December 31, 2016 ) are being amortized over the expected service periods. Fair Value of Financial Instruments Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of March 31, 2017 and December 31, 2016 , because interest rates, yields, and other terms for these instruments are consistent with yields and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s $4.8 billion of fixed rate debt, including unsecured debt, at March 31, 2017 is approximately $4.9 billion and the Company’s variable rate debt at March 31, 2017 and December 31, 2016 approximates its fair value based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of March 31, 2017 and December 31, 2016 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of March 31, 2017 and December 31, 2016. At March 31, 2017 , the Company’s investments in mortgage backed securities had a carrying value of $98.0 million and the Company estimated the fair value to be approximately $111.6 million . At December 31, 2016 , the Company’s investments in mortgage backed securities had a carrying value of $94.4 million and the Company estimated the fair value to be approximately $108.8 million . The Company determines the fair value of the mortgage backed securities based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing these securities. Assumptions such as estimated default rates and discount rates are used to determine expected, discounted cash flows to estimate the fair value. Capitalization of Costs The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of employee compensation and totaled $5.2 million and $4.5 million during the three months ended March 31, 2017 and 2016 , respectively. The Company capitalizes leasing commissions associated with the lease-up of development communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented. Co-investments The Company owns investments in joint ventures (“co-investments”) in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects. Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the condensed consolidated statement of income and comprehensive income equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments. The Company reports investments in co-investments where accumulated distributions have exceeded the Company’s investment as distributions in excess of investments in co-investments in the accompanying condensed consolidated balance sheets. The net investment of one of the Company’s co-investments is less than zero as a result of financing distributions in excess of the Company's investment in that co-investment. Changes in Accumulated Other Comprehensive Loss, Net by Component Essex Property Trust, Inc. ($ in thousands) Change in fair value and amortization of swap settlements Unrealized gains on available for sale securities Total Balance at December 31, 2016 $ (32,963 ) $ 865 $ (32,098 ) Other comprehensive income before reclassification 5,496 173 5,669 Amounts reclassified from accumulated other comprehensive loss (1,978 ) (1,552 ) (3,530 ) Other comprehensive income (loss) 3,518 (1,379 ) 2,139 Balance at March 31, 2017 $ (29,445 ) $ (514 ) $ (29,959 ) Changes in Accumulated Other Comprehensive Loss, by Component Essex Portfolio, L.P. ($ in thousands): Change in fair value and amortization of swap settlements Unrealized gains on available for sale securities Total Balance at December 31, 2016 $ (30,161 ) $ 813 $ (29,348 ) Other comprehensive income before reclassification 5,685 179 5,864 Amounts reclassified from accumulated other comprehensive loss (2,046 ) (1,605 ) (3,651 ) Other comprehensive income (loss) 3,639 (1,426 ) 2,213 Balance at March 31, 2017 $ (26,522 ) $ (613 ) $ (27,135 ) Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statement of income and comprehensive income. Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of income and comprehensive income. Redeemable Noncontrolling Interest The carrying value of redeemable noncontrolling interest in the accompanying condensed consolidated balance sheets was $45.4 million and $44.7 million as of March 31, 2017 and December 31, 2016 , respectively. The manner of redemption of these noncontrolling interests is outside of the Company’s control as the limited partners may elect to receive Company common stock or cash. The changes to the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2017 is as follows ($ in thousands): 2017 Balance at January 1, $ 44,684 Reclassification due to change in redemption value and other 731 Redemptions — Additions — Balance at March 31, $ 45,415 Accounting Estimates The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing, and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a Real Estate Investment Trust (“REIT”). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions. |
Significant Transactions During
Significant Transactions During the First Quarter of 2017 and Subsequent Event | 3 Months Ended |
Mar. 31, 2017 | |
Business Combinations [Abstract] | |
Significant Transactions During the First Quarter of 2017 and Subsequent Event | Significant Transactions During the First Quarter of 2017 and Subsequent Event Significant Transactions Acquisitions In January 2017, the Company purchased its joint venture partner's 50.0% interest in Palm Valley, for a contract price of $183.0 million . Prior to the purchase, an approximately $220.0 million mortgage encumbered the property. Concurrent with the closing of the acquisition, the entire mortgage balance was repaid and the property is now unencumbered. Palm Valley has 1,098 apartment homes, within four communities, and is located in San Jose, CA. As a result of this acquisition, the Company realized a gain on remeasurement of co-investment of $86.5 million upon consolidation. In March 2017, the Company converted its existing $15.3 million preferred equity investment in Sage at Cupertino, a 230 apartment home community located in San Jose, CA, into a 40.5% common equity ownership interest in the property. The Company issued DownREIT units to the other members, including an affiliate of the Marcus & Millichap Company, based on an estimated property valuation of $90.0 million . See Note 5, Related Party Transactions, for additional details. The property is encumbered by $52.0 million of mortgage debt. As a result of this transaction, the Company consolidates the property, based on a VIE analysis performed by the Company. The consolidated fair value of acquired communities listed in the preceding paragraphs above were included on the Company's condensed consolidated balance sheet as follows: $ 169.5 million was included in land and land improvements, $ 365.7 million was included in buildings and improvements, and $ 3.2 million was included in prepaid expenses and other assets, within the Company's condensed consolidated balance sheets. Dispositions In January 2017, the Company sold Jefferson at Hollywood, a 270 apartment home community, located in Los Angeles, CA, for $132.5 million , resulting in a gain of $26.2 million . Preferred Equity Investments In March 2017, the Company made a commitment to fund a $21.5 million preferred equity investment in a limited liability company that wholly owns two apartment home buildings that are under development, one of which is a 142 unit development located in Fullerton, CA and the other a 170 unit development located in Irvine, CA. This investment will accrue interest based on an 11% compounded preferred return for the first 30 months, after which the rate may decrease to 9.5% upon completion of the developments and if certain loan-to-value thresholds are met. The investment is scheduled to mature in March 2020. As of March 31, 2017, the Company has funded $2.0 million of the $21.5 million commitment. Senior Unsecured Debt In March 2017, the Company paid off $300 million of 5.500% senior unsecured notes, at maturity. Subsequent Event In April 2017, the Company issued $350 million of 10 -year 3.625% senior unsecured notes. The interest is paid semi-annually in arrears on May 1 and November 1 of each year commencing on November 1, 2017 until the maturity date of May 1, 2027. The Company used the net proceeds of this offering to repay indebtedness under its unsecured lines of credit and for other general corporate and working capital purposes. |
Co-investments
Co-investments | 3 Months Ended |
Mar. 31, 2017 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Co-investments | Co-investments The Company has joint ventures and preferred equity investments in co-investments which are accounted for under the equity method. The co-investments own, operate, and develop apartment communities. The carrying values of the Company's co-investments as of March 31, 2017 and December 31, 2016 are as follows (in thousands, except in parenthetical): Ownership Percentage March 31, 2017 December 31, 2016 Membership interest/Partnership interest in: CPPIB 50%-55% $ 463,899 $ 422,068 Wesco I, III and IV 50 % 181,187 180,687 Palm Valley 50 % — 68,396 BEXAEW 50 % 47,321 47,963 BEX II (1) 50 % (35,534 ) 19,078 Other 50%-55% 42,384 43,713 Total operating co-investments, net 699,257 781,905 Total development co-investments, net 50%-55% 123,408 157,317 Total preferred interest co-investments (includes related party investments of $20.5 million and $35.9 million as of March 31, 2017 and December 31, 2016, respectively) 213,059 222,053 Total co-investments, net $ 1,035,724 $ 1,161,275 (1) This co-investment was classified as a liability as of March 31, 2017. The combined summarized financial information of co-investments is as follows (in thousands). March 31, 2017 December 31, 2016 Combined balance sheets: (1) Rental properties and real estate under development $ 3,433,014 $ 3,807,245 Other assets 102,385 121,505 Total assets $ 3,535,399 $ 3,928,750 Debt $ 1,461,893 $ 1,617,639 Other liabilities 75,570 74,607 Equity (1) 1,997,936 2,236,504 Total liabilities and equity $ 3,535,399 $ 3,928,750 Company's share of equity $ 1,035,724 $ 1,161,275 Three Months Ended March 31, 2017 2016 Combined statements of income: (1) Property revenues $ 75,905 $ 75,130 Property operating expenses (25,408 ) (25,821 ) Net operating income 50,497 49,309 Gain on sale of real estate — 17,495 Interest expense (11,921 ) (13,140 ) General and administrative (1,778 ) (1,240 ) Depreciation and amortization (27,904 ) (28,716 ) Net income $ 8,894 $ 23,708 Company's share of net income (2) $ 10,899 $ 15,068 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from co-investments and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $0.5 million and $0.8 million for the three months ended March 31, 2017 and 2016 , respectively. |
Notes and Other Receivables
Notes and Other Receivables | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Notes and Other Receivables | Notes and Other Receivables Notes receivable, secured by real estate, and other receivables consist of the following as of March 31, 2017 and December 31, 2016 ($ in thousands): March 31, 2017 December 31, 2016 Notes receivable, secured, bearing interest at 10.75%, due September 2020 $ 27,032 $ 17,685 Related party note receivable, secured, bearing interest at 9.5%, due October 2019 (1) 6,594 6,593 Notes and other receivables from affiliates (2) 3,739 4,695 Other receivables 13,490 11,997 Total notes and other receivables $ 50,855 $ 40,970 (1) See Note 5, Related Party Transactions, for additional details. (2) The Company had $3.7 million and $4.7 million of short-term loans outstanding and due from various joint ventures as of March 31, 2017 and December 31, 2016 , respectively. See Note 5, Related Party Transactions, for additional details. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company charges certain fees relating to its co-investments for asset management, property management, development, and redevelopment services. These fees from affiliates totaled $3.0 million and $3.3 million during the three months ended March 31, 2017 and 2016 , respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of $0.8 million and $1.3 million against general and administrative expenses for the three months ended March 31, 2017 and 2016 , respectively. The Company’s Chairman and founder, Mr. George Marcus, is the Chairman of the Marcus & Millichap Company (“MMC”), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Co-Chairman of Marcus & Millichap, Inc. (“MMI”), and Mr. Marcus owns a controlling interest in MMI, a national brokerage firm listed on the NYSE. In March 2017, the Company converted its existing $15.3 million preferred equity investment in Sage at Cupertino, a 230 apartment home community located in San Jose, CA, into a 40.5% common equity ownership interest in the property. The Company issued DownREIT units to the other members, including an MMC affiliate, based on an estimated property valuation of $90.0 million . The property is encumbered by $52.0 million of mortgage debt. As a result of this transaction, the Company consolidates the property, based on a VIE analysis performed by the Company. In 2015, the Company made preferred equity investments totaling $20.0 million in three entities affiliated with MMC that own apartment communities in California. The Company earns a 9.5% preferred return on each such investment, all of which are scheduled to mature in 2022. As described in Note 4, the Company has provided short-term loans to affiliates. As of March 31, 2017 and December 31, 2016 , $3.7 million and $4.7 million , respectively, of short-term loans remained outstanding due from joint venture affiliates and is classified within notes and other receivables in the accompanying condensed consolidated balance sheets. In November 2016, the Company provided a $6.6 million mezzanine loan to a limited liability company in which MMC holds a significant ownership interest through subsidiaries. The mezzanine loan is also classified within notes and other receivables in the accompanying condensed consolidated balance sheets and had an outstanding balance of $6.6 million and $6.6 million as of March 31, 2017 and December 31, 2016, respectively. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company does not have indebtedness as debt is incurred by the Operating Partnership. The Company guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of such debt. Debt consists of the following ($ in thousands): March 31, 2017 December 31, 2016 Weighted Average Maturity In Years Unsecured bonds private placement - fixed rate $ 314,253 $ 314,190 3.4 Term loan - variable rate 348,279 98,189 4.9 Bonds public offering - fixed rate 2,532,597 2,834,400 6.8 Unsecured debt, net (1) 3,195,129 3,246,779 Lines of credit (2) 176,233 125,000 Mortgage notes payable, net (3) 2,231,145 2,191,481 5.7 Total debt, net $ 5,602,507 $ 5,563,260 Weighted average interest rate on fixed rate unsecured and unsecured private placement bonds 3.8 % 3.6 % Weighted average interest rate on variable rate term loan 2.2 % 2.3 % Weighted average interest rate on lines of credit 1.9 % 1.8 % Weighted average interest rate on mortgage notes payable 4.3 % 4.3 % (1) Includes unamortized discount of $2.6 million and $0.1 million and unamortized debt issuance costs of $17.3 million and $18.1 million , as of March 31, 2017 and December 31, 2016 , respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.03 billion , excludes unamortized debt issuance costs of $4.0 million and $3.3 million as of March 31, 2017 and December 31, 2016, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of March 31, 2017, the Company had two lines of unsecured credit aggregating $1.03 billion . The Company’s $1.0 billion credit facility had an interest rate of LIBOR plus 0.90% , which is based on a tiered rate structure tied to the Company’s credit ratings. In January 2017, the Company’s $1.0 billion credit facility’s maturity date was extended to December 2020 with one 18 -month extension, exercisable at the Company’s option. The Company’s $25.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.90% , which is based on a tiered rate structure tied to the Company’s credit ratings. The $25.0 million credit facility matures in January 2018. (3) Includes unamortized premium of $46.0 million and $50.8 million and reduced by unamortized debt issuance costs of $6.9 million and $7.4 million , as of March 31, 2017 and December 31, 2016 , respectively. The aggregate scheduled principal payments of the Company’s outstanding debt as of March 31, 2017 are as follows (excluding lines of credit) ($ in thousands): Remaining in 2017 $ 114,776 2018 301,858 2019 653,114 2020 695,070 2021 552,831 Thereafter 3,089,422 Total $ 5,407,071 |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company's segment disclosures present the measure used by the chief operating decision makers for purposes of assessing each segment's performance. Essex's chief operating decision makers are comprised of several members of its executive management team who use NOI to assess the performance of the business for the Company's reportable operating segments. NOI represents total property revenue less direct property operating expenses. The executive management team evaluates the Company's operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California, and Seattle Metro. Excluded from segment revenues and net operating income are management and other fees from affiliates and interest and other income. Non-segment revenues and net operating income included in the following schedule also consist of revenue generated from commercial properties and properties that have been sold. Other non-segment assets include real estate under development, co-investments, real estate held for sale, net, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets. The revenues and net operating income for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2017 and 2016 ($ in thousands): Three Months Ended March 31, 2017 2016 Revenues: Southern California $ 147,099 $ 135,894 Northern California 123,308 110,408 Seattle Metro 56,192 52,073 Other real estate assets 6,569 13,803 Total property revenues $ 333,168 $ 312,178 Net operating income: Southern California $ 101,405 $ 92,654 Northern California 87,663 79,013 Seattle Metro 38,933 35,689 Other real estate assets 5,654 10,332 Total net operating income 233,655 217,688 Management and other fees from affiliates 2,236 2,024 Depreciation and amortization (115,503 ) (109,707 ) General and administrative (10,601 ) (9,182 ) Acquisition and investment related costs (556 ) (828 ) Interest expense (54,583 ) (52,466 ) Total return swap income 2,584 3,123 Interest and other income 6,764 5,208 Equity income from co-investments 10,899 15,068 Gain on sale of real estate and land 26,174 20,258 Deferred tax expense on gain on sale of real estate and land — (4,279 ) Gain on remeasurement of co-investment 86,482 — Net income $ 187,551 $ 86,907 Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2017 and December 31, 2016 ($ in thousands): March 31, 2017 December 31, 2016 Assets: Southern California $ 4,885,678 $ 4,924,792 Northern California 4,293,943 3,791,549 Seattle Metro 1,555,853 1,570,340 Other real estate assets 57,210 78,079 Net reportable operating segment - real estate assets 10,792,684 10,364,760 Real estate under development 239,685 190,505 Co-investments 1,071,258 1,161,275 Real estate held for sale, net — 101,957 Cash and cash equivalents, including restricted cash 100,252 170,302 Marketable securities 138,977 139,189 Notes and other receivables 50,855 40,970 Prepaid expenses and other assets 53,716 48,450 Total assets $ 12,447,427 $ 12,217,408 |
Net Income Per Common Share and
Net Income Per Common Share and Net Income Per Common Unit | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Income Per Common Share and Net Income Per Common Unit | Net Income Per Common Share and Net Income Per Common Unit ($ in thousands, except share and unit data) Essex Property Trust, Inc. Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Income Weighted- average Common Shares Per Common Share Amount Income Weighted- average Common Shares Per Common Share Amount Basic: Net income available to common stockholders $ 178,964 65,549,484 $ 2.73 $ 77,981 65,405,654 $ 1.19 Effect of Dilutive Securities: Stock options — 96,778 — 151,985 DownREIT units 373 213,228 — — Diluted: Net income available to common stockholders $ 179,337 65,859,490 $ 2.72 $ 77,981 65,557,639 $ 1.19 The table above exclude from the calculations of diluted EPS weighted average convertible limited partnership units of 2,252,234 and 2,227,865 , which include vested Series Z Incentive Units, Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended March 31, 2017 and 2016 , respectively, because they were anti-dilutive. The related income allocated to these convertible limited partnership units aggregated $6.1 million and $2.8 million for the three months ended March 31, 2017 and 2016 , respectively. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT limited partnership units for cash and does not consider them to be common stock equivalents. Stock options of 225,895 and 77,200 for the three months ended March 31, 2017 and 2016 , respectively were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of these options plus the average unearned compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive. Essex Portfolio, L.P. Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Income Weighted- average Common Units Per Common Unit Amount Income Weighted- average Common Units Per Common Unit Amount Basic: Net income available to common unitholders $ 185,110 67,801,718 $ 2.73 $ 80,765 67,633,519 $ 1.19 Effect of Dilutive Securities: Stock options — 96,778 — 151,985 DownREIT units 373 213,228 — — Diluted: Net income available to common unitholders $ 185,483 68,111,724 $ 2.72 $ 80,765 67,785,504 $ 1.19 Stock options of 225,895 and 77,200 for the three months ended March 31, 2017 and 2016 , respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the periods ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT limited partnership units for cash and does not consider them to be common stock equivalents. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of March 31, 2017 , the Company has entered into interest rate swap contracts with an aggregate notional amount of $200 million that effectively fixed the interest rate on the $200 million unsecured term loan at 2.3% . These derivatives qualify for hedge accounting. As of March 31, 2017 , the Company has interest rate caps, which are not accounted for as hedges, totaling a notional amount of $20.7 million that effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for $20.7 million of the Company’s tax exempt variable rate debt. As of March 31, 2017 and December 31, 2016 , the aggregate carrying value of the interest rate swap contracts was an asset of $4.7 million and $4.4 million , respectively, and is included in prepaid expenses and other assets on the condensed consolidated balance sheets. The aggregate carrying value of the interest rate caps was zero on the condensed consolidated balance sheets as of both March 31, 2017 and December 31, 2016 . Hedge ineffectiveness related to cash flow hedges, which is included in interest expense on the condensed consolidated income statements, net was not significant for both the three months ended March 31, 2017 and 2016 . Additionally, the Company has entered into total return swaps that effectively convert $257.3 million of mortgage notes payable to a floating interest rate based on SIFMA plus a spread. The total return swaps provide fair market value protection on the mortgage notes payable to our counterparties during the initial period of the total return swap until the Company's option to call the mortgage notes at par can be exercised. The Company can currently call all total return swaps with $257.3 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting and had a carrying and fair value of zero at both March 31, 2017 and December 31, 2016 . These total return swaps are scheduled to mature between September 2021 and November 2022 . Realized gains of $2.6 million and $3.1 million are reported in the condensed consolidated statements of income and comprehensive income as total return swap income for the three months ended March 31, 2017 and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits could, but are not expected to, have a material adverse effect on the Company's financial condition, results of operations or cash flows. The Company is subject to various federal, state, and local environmental laws. To the extent that an environmental matter arises or is identified in the future that has other than a remote risk of having a material impact on the condensed consolidated financial statements, the Company will disclose the estimated range of possible outcomes associated with it, and, if an outcome is probable, accrue an appropriate liability for that matter. The Company will consider whether any such matter results in an impairment of value on the affected property and, if so, impairment will be recognized. |
Organization and Basis of Pre19
Organization and Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation Policy | The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (“Essex” or the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. and subsidiaries (the “Operating Partnership,” which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2016 . All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board ("FASB") issued ASU 2014-09, "Revenue from Contracts with Customers." The new standard provides a single comprehensive revenue recognition model for contracts with customers (excluding certain contracts, such as lease contracts) to improve comparability within industries. The new standard requires an entity to recognize revenue to reflect the transfer of goods or services to customers at an amount the entity expects to be paid in exchange for those goods and services and provide enhanced disclosures, all to provide more comprehensive guidance for transactions such as service revenue and contract modifications. In August 2015, the FASB deferred the effective date of the new standard by one year, and it is now effective for interim and annual periods beginning after December 15, 2017. Early adoption is permitted. The new standard may be applied using either a full retrospective or a modified approach upon adoption. The Company does not expect that this amendment will have a material effect on its consolidated results of operations or financial position. In January 2016, the FASB issued ASU No. 2016-01 "Recognition and Measurement of Financial Assets and Financial Liabilities", which requires changes to the classification and measurement of investments in certain equity securities and to the presentation of certain fair value changes for financial liabilities measured at fair value. The new standard will be effective for the Company beginning on January 1, 2018 and early adoption is permitted. The Company does not expect that this amendment will have a material effect on its consolidated results of operations or financial position. In February 2016, the FASB issued ASU No. 2016-02 "Leases", which requires an entity that is a lessee to classify leases as either finance or operating and to recognize a lease liability and a right-of-use asset for all leases that have a duration of greater than 12 months. Leases of 12 months or less will be accounted for similar to existing guidance for operating leases today. For lessors, accounting for leases under the new standard will be substantially the same as existing guidance for sales-type leases, direct financing leases, and operating leases, but eliminates current real estate specific provisions and changes the treatment of initial direct costs. The new standard will be effective for the Company beginning on January 1, 2019 and early adoption is permitted, including adoption in an interim period. The new standard must be applied using a modified retrospective approach. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In June 2016, the FASB issued ASU No. 2016-13 "Measurement of Credit Losses on Financial Instruments", which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities, and other financial instruments. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Currently, U.S. GAAP requires entities to write down credit losses only when losses are probable and loss reversals are not permitted. The new standard will be effective for the Company beginning on January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In August 2016, the FASB issued ASU No. 2016-15 "Classification of Certain Cash Receipts and Cash Payments", which requires entities to adhere to a uniform classification and presentation of certain cash receipts and cash payments in the statement of cash flows. The amendments in this update provide guidance on eight specific cash flow issues. The new standard will be effective for the Company beginning on January 1, 2018 and early adoption is permitted. The Company does not expect the impact of the other items identified in this amendment to be material on its consolidated results of operations or financial position. In November 2016, the FASB issued ASU No. 2016-18 "Statement of Cash Flows", which requires entities to include restricted cash and restricted cash equivalents in the reconciliation of beginning-of-period to the end-of-period of cash and cash equivalents in the statement of cash flows. This new standard seeks to eliminate the current diversity in practice in how changes in restricted cash and restricted cash equivalents is presented in the statement of cash flows. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company does not expect the impact of the other items identified in this amendment to be material on its consolidated results of operations or financial position. In January 2017, the FASB issued ASU No. 2017-01 "Business Combinations: Clarifying the Definition of a Business", which provides a new framework for determining whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Currently, U.S. GAAP does not specify the minimum inputs and processes required for an integrated set of assets and activities to meet the definition of a business, causing a broad interpretation of the definition of a business. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. In February 2017, the FASB issued ASU No. 2017-05 "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets", which adds guidance for partial sales of nonfinanical assets, including partial sales of real estate. Historically, U.S. GAAP contained several different accounting models to evaluate whether the transfer of certain assets qualified for sale treatment. This new standard reduces the number of potential accounting models that might apply and clarifies which model does apply in various circumstances. Partial sales of nonfinancial assets are common in the real estate industry and include transactions in which the seller retains an equity interest in the entity that owns the assets or has an equity interest in the buyer. This new standard will be effective for the Company beginning January 1, 2018 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its consolidated results of operations and financial position. |
Marketable Securities | The Company reports its available for sale securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds, Level 2 for the unsecured bonds and Level 3 for investments in mortgage backed securities, as defined by the FASB standard for fair value measurements), and any unrealized gain or loss is recorded as other comprehensive income. Realized gains and losses, interest income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statements of income and comprehensive income. As of March 31, 2017 and December 31, 2016 , marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities, and investment funds that invest in U.S. treasury or agency securities. As of March 31, 2017 and December 31, 2016 , the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost. The discount on the mortgage backed securities is being amortized to interest income based on an estimated yield and the maturity date of the securities. |
Variable Interest Entities | In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidates the Operating Partnership, 20 DownREIT limited partnerships (comprising twelve communities), and 9 co-investments. The Company consolidates these entities because it is deemed the primary beneficiary. The Company has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the 9 consolidated co-investments and 20 DownREIT limited partnerships, net of intercompany eliminations, were approximately $1.1 billion and $351.1 million , respectively, as of March 31, 2017 and $989.3 million and $288.1 million , respectively, as of December 31, 2016 . Noncontrolling interests in these entities was $75.7 million and $52.9 million as of March 31, 2017 and December 31, 2016 , respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2017 and December 31, 2016 , the Company did not have any other VIEs of which it was deemed to be the primary beneficiary and did not have any VIEs of which it was not deemed to be the primary beneficiary. |
Equity-based Compensation | The cost of share and unit based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 12, “Equity Based Compensation Plans,” in the Company’s Form 10-K for the year ended December 31, 2016 ) are being amortized over the expected service periods. |
Fair Value of Financial Instruments | Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of March 31, 2017 and December 31, 2016 , because interest rates, yields, and other terms for these instruments are consistent with yields and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s $4.8 billion of fixed rate debt, including unsecured debt, at March 31, 2017 is approximately $4.9 billion and the Company’s variable rate debt at March 31, 2017 and December 31, 2016 approximates its fair value based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of March 31, 2017 and December 31, 2016 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of March 31, 2017 and December 31, 2016. At March 31, 2017 , the Company’s investments in mortgage backed securities had a carrying value of $98.0 million and the Company estimated the fair value to be approximately $111.6 million . At December 31, 2016 , the Company’s investments in mortgage backed securities had a carrying value of $94.4 million and the Company estimated the fair value to be approximately $108.8 million . The Company determines the fair value of the mortgage backed securities based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing these securities. Assumptions such as estimated default rates and discount rates are used to determine expected, discounted cash flows to estimate the fair value. |
Capitalization of Costs | The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of employee compensation and totaled $5.2 million and $4.5 million during the three months ended March 31, 2017 and 2016 , respectively. The Company capitalizes leasing commissions associated with the lease-up of development communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented. |
Co-investments | The Company owns investments in joint ventures (“co-investments”) in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects. Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the condensed consolidated statement of income and comprehensive income equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments. The Company reports investments in co-investments where accumulated distributions have exceeded the Company’s investment as distributions in excess of investments in co-investments in the accompanying condensed consolidated balance sheets. The net investment of one of the Company’s co-investments is less than zero as a result of financing distributions in excess of the Company's investment in that co-investment. |
Changes in Accumulated Other Comprehensive Loss | Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statement of income and comprehensive income. Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of income and comprehensive income. |
Accounting Estimates | The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing, and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a Real Estate Investment Trust (“REIT”). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions. |
Organization and Basis of Pre20
Organization and Basis of Presentation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of marketable securities | As of March 31, 2017 and December 31, 2016 , marketable securities consist of the following ($ in thousands): March 31, 2017 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Available for sale: Investment-grade unsecured bonds $ 13,540 $ 99 $ 13,639 Investment funds - U.S. treasuries 10,273 (24 ) 10,249 Common stock and stock funds 17,147 (27 ) 17,120 Held to maturity: Mortgage backed securities 97,969 — 97,969 Total - Marketable securities $ 138,929 $ 48 $ 138,977 December 31, 2016 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Available for sale: Investment-grade unsecured bonds $ 19,604 $ (73 ) $ 19,531 Investment funds - U.S. treasuries 10,022 (22 ) 10,000 Common stock and stock funds 13,696 1,569 15,265 Held to maturity: Mortgage backed securities 94,393 — 94,393 Total - Marketable securities $ 137,715 $ 1,474 $ 139,189 |
Changes in accumulated other comprehensive income (loss) | Changes in Accumulated Other Comprehensive Loss, Net by Component Essex Property Trust, Inc. ($ in thousands) Change in fair value and amortization of swap settlements Unrealized gains on available for sale securities Total Balance at December 31, 2016 $ (32,963 ) $ 865 $ (32,098 ) Other comprehensive income before reclassification 5,496 173 5,669 Amounts reclassified from accumulated other comprehensive loss (1,978 ) (1,552 ) (3,530 ) Other comprehensive income (loss) 3,518 (1,379 ) 2,139 Balance at March 31, 2017 $ (29,445 ) $ (514 ) $ (29,959 ) Changes in Accumulated Other Comprehensive Loss, by Component Essex Portfolio, L.P. ($ in thousands): Change in fair value and amortization of swap settlements Unrealized gains on available for sale securities Total Balance at December 31, 2016 $ (30,161 ) $ 813 $ (29,348 ) Other comprehensive income before reclassification 5,685 179 5,864 Amounts reclassified from accumulated other comprehensive loss (2,046 ) (1,605 ) (3,651 ) Other comprehensive income (loss) 3,639 (1,426 ) 2,213 Balance at March 31, 2017 $ (26,522 ) $ (613 ) $ (27,135 ) |
Schedule of changes to the redemption value of noncontrolling interests | The changes to the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2017 is as follows ($ in thousands): 2017 Balance at January 1, $ 44,684 Reclassification due to change in redemption value and other 731 Redemptions — Additions — Balance at March 31, $ 45,415 |
Co-investments (Tables)
Co-investments (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Summary of co-investments | The carrying values of the Company's co-investments as of March 31, 2017 and December 31, 2016 are as follows (in thousands, except in parenthetical): Ownership Percentage March 31, 2017 December 31, 2016 Membership interest/Partnership interest in: CPPIB 50%-55% $ 463,899 $ 422,068 Wesco I, III and IV 50 % 181,187 180,687 Palm Valley 50 % — 68,396 BEXAEW 50 % 47,321 47,963 BEX II (1) 50 % (35,534 ) 19,078 Other 50%-55% 42,384 43,713 Total operating co-investments, net 699,257 781,905 Total development co-investments, net 50%-55% 123,408 157,317 Total preferred interest co-investments (includes related party investments of $20.5 million and $35.9 million as of March 31, 2017 and December 31, 2016, respectively) 213,059 222,053 Total co-investments, net $ 1,035,724 $ 1,161,275 (1) This co-investment was classified as a liability as of March 31, 2017. |
Summarized financial information for co-investments accounted for under the equity method | The combined summarized financial information of co-investments is as follows (in thousands). March 31, 2017 December 31, 2016 Combined balance sheets: (1) Rental properties and real estate under development $ 3,433,014 $ 3,807,245 Other assets 102,385 121,505 Total assets $ 3,535,399 $ 3,928,750 Debt $ 1,461,893 $ 1,617,639 Other liabilities 75,570 74,607 Equity (1) 1,997,936 2,236,504 Total liabilities and equity $ 3,535,399 $ 3,928,750 Company's share of equity $ 1,035,724 $ 1,161,275 Three Months Ended March 31, 2017 2016 Combined statements of income: (1) Property revenues $ 75,905 $ 75,130 Property operating expenses (25,408 ) (25,821 ) Net operating income 50,497 49,309 Gain on sale of real estate — 17,495 Interest expense (11,921 ) (13,140 ) General and administrative (1,778 ) (1,240 ) Depreciation and amortization (27,904 ) (28,716 ) Net income $ 8,894 $ 23,708 Company's share of net income (2) $ 10,899 $ 15,068 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from co-investments and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $0.5 million and $0.8 million for the three months ended March 31, 2017 and 2016 , respectively. |
Notes and Other Receivables (Ta
Notes and Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Receivables [Abstract] | |
Notes and other receivables | Notes receivable, secured by real estate, and other receivables consist of the following as of March 31, 2017 and December 31, 2016 ($ in thousands): March 31, 2017 December 31, 2016 Notes receivable, secured, bearing interest at 10.75%, due September 2020 $ 27,032 $ 17,685 Related party note receivable, secured, bearing interest at 9.5%, due October 2019 (1) 6,594 6,593 Notes and other receivables from affiliates (2) 3,739 4,695 Other receivables 13,490 11,997 Total notes and other receivables $ 50,855 $ 40,970 (1) See Note 5, Related Party Transactions, for additional details. (2) The Company had $3.7 million and $4.7 million of short-term loans outstanding and due from various joint ventures as of March 31, 2017 and December 31, 2016 , respectively. See Note 5, Related Party Transactions, for additional details. |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt and lines of credit | Debt consists of the following ($ in thousands): March 31, 2017 December 31, 2016 Weighted Average Maturity In Years Unsecured bonds private placement - fixed rate $ 314,253 $ 314,190 3.4 Term loan - variable rate 348,279 98,189 4.9 Bonds public offering - fixed rate 2,532,597 2,834,400 6.8 Unsecured debt, net (1) 3,195,129 3,246,779 Lines of credit (2) 176,233 125,000 Mortgage notes payable, net (3) 2,231,145 2,191,481 5.7 Total debt, net $ 5,602,507 $ 5,563,260 Weighted average interest rate on fixed rate unsecured and unsecured private placement bonds 3.8 % 3.6 % Weighted average interest rate on variable rate term loan 2.2 % 2.3 % Weighted average interest rate on lines of credit 1.9 % 1.8 % Weighted average interest rate on mortgage notes payable 4.3 % 4.3 % (1) Includes unamortized discount of $2.6 million and $0.1 million and unamortized debt issuance costs of $17.3 million and $18.1 million , as of March 31, 2017 and December 31, 2016 , respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.03 billion , excludes unamortized debt issuance costs of $4.0 million and $3.3 million as of March 31, 2017 and December 31, 2016, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of March 31, 2017, the Company had two lines of unsecured credit aggregating $1.03 billion . The Company’s $1.0 billion credit facility had an interest rate of LIBOR plus 0.90% , which is based on a tiered rate structure tied to the Company’s credit ratings. In January 2017, the Company’s $1.0 billion credit facility’s maturity date was extended to December 2020 with one 18 -month extension, exercisable at the Company’s option. The Company’s $25.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.90% , which is based on a tiered rate structure tied to the Company’s credit ratings. The $25.0 million credit facility matures in January 2018. (3) Includes unamortized premium of $46.0 million and $50.8 million and reduced by unamortized debt issuance costs of $6.9 million and $7.4 million , as of March 31, 2017 and December 31, 2016 , respectively. |
Summary of aggregate scheduled principal payments | The aggregate scheduled principal payments of the Company’s outstanding debt as of March 31, 2017 are as follows (excluding lines of credit) ($ in thousands): Remaining in 2017 $ 114,776 2018 301,858 2019 653,114 2020 695,070 2021 552,831 Thereafter 3,089,422 Total $ 5,407,071 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Reconciliation of revenues and operating profit (loss) from segments to consolidated | The revenues and net operating income for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2017 and 2016 ($ in thousands): Three Months Ended March 31, 2017 2016 Revenues: Southern California $ 147,099 $ 135,894 Northern California 123,308 110,408 Seattle Metro 56,192 52,073 Other real estate assets 6,569 13,803 Total property revenues $ 333,168 $ 312,178 Net operating income: Southern California $ 101,405 $ 92,654 Northern California 87,663 79,013 Seattle Metro 38,933 35,689 Other real estate assets 5,654 10,332 Total net operating income 233,655 217,688 Management and other fees from affiliates 2,236 2,024 Depreciation and amortization (115,503 ) (109,707 ) General and administrative (10,601 ) (9,182 ) Acquisition and investment related costs (556 ) (828 ) Interest expense (54,583 ) (52,466 ) Total return swap income 2,584 3,123 Interest and other income 6,764 5,208 Equity income from co-investments 10,899 15,068 Gain on sale of real estate and land 26,174 20,258 Deferred tax expense on gain on sale of real estate and land — (4,279 ) Gain on remeasurement of co-investment 86,482 — Net income $ 187,551 $ 86,907 |
Reconciliation of assets from segment to consolidated | Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2017 and December 31, 2016 ($ in thousands): March 31, 2017 December 31, 2016 Assets: Southern California $ 4,885,678 $ 4,924,792 Northern California 4,293,943 3,791,549 Seattle Metro 1,555,853 1,570,340 Other real estate assets 57,210 78,079 Net reportable operating segment - real estate assets 10,792,684 10,364,760 Real estate under development 239,685 190,505 Co-investments 1,071,258 1,161,275 Real estate held for sale, net — 101,957 Cash and cash equivalents, including restricted cash 100,252 170,302 Marketable securities 138,977 139,189 Notes and other receivables 50,855 40,970 Prepaid expenses and other assets 53,716 48,450 Total assets $ 12,447,427 $ 12,217,408 |
Net Income Per Common Share a25
Net Income Per Common Share and Net Income Per Common Unit (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Net Income Per Share and Net Income Per Unit [Line Items] | |
Schedule of net income per common share | Essex Property Trust, Inc. Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Income Weighted- average Common Shares Per Common Share Amount Income Weighted- average Common Shares Per Common Share Amount Basic: Net income available to common stockholders $ 178,964 65,549,484 $ 2.73 $ 77,981 65,405,654 $ 1.19 Effect of Dilutive Securities: Stock options — 96,778 — 151,985 DownREIT units 373 213,228 — — Diluted: Net income available to common stockholders $ 179,337 65,859,490 $ 2.72 $ 77,981 65,557,639 $ 1.19 |
Essex Portfolio, L.P. [Member] | |
Net Income Per Share and Net Income Per Unit [Line Items] | |
Schedule of net income per common share | Essex Portfolio, L.P. Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Income Weighted- average Common Units Per Common Unit Amount Income Weighted- average Common Units Per Common Unit Amount Basic: Net income available to common unitholders $ 185,110 67,801,718 $ 2.73 $ 80,765 67,633,519 $ 1.19 Effect of Dilutive Securities: Stock options — 96,778 — 151,985 DownREIT units 373 213,228 — — Diluted: Net income available to common unitholders $ 185,483 68,111,724 $ 2.72 $ 80,765 67,785,504 $ 1.19 |
Organization and Basis of Pre26
Organization and Basis of Presentation - Summary of Financial Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale securities, carrying value | $ 138,977 | $ 139,189 |
Marketable securities and other investments, amortized cost | 138,929 | 137,715 |
Marketable securities and other investments, gross unrealized gain (loss) | 48 | 1,474 |
Marketable securities | 138,977 | 139,189 |
Investment-Grade Unsecured Bonds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, amortized cost | 13,540 | 19,604 |
Available-for-sale securities, gross unrealized gain (loss) | 99 | (73) |
Available-for-sale securities, carrying value | 13,639 | 19,531 |
Investment Funds-U.S. Treasuries [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, amortized cost | 10,273 | 10,022 |
Available-for-sale securities, gross unrealized gain (loss) | (24) | (22) |
Available-for-sale securities, carrying value | 10,249 | 10,000 |
Common Stock and Stock Funds [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Available-for-sale Securities, amortized cost | 17,147 | 13,696 |
Available-for-sale securities, gross unrealized gain (loss) | (27) | 1,569 |
Available-for-sale securities, carrying value | 17,120 | 15,265 |
Mortgage Backed Securities [Member] | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Held-to-maturity Securities, amortized cost | 97,969 | 94,393 |
Held-to-maturity securities, gross unrealized gain (loss) | 0 | 0 |
Held-to-maturity securities, carrying value | $ 97,969 | $ 94,393 |
Organization and Basis of Pre27
Organization and Basis of Presentation - Accumulated Other Comprehensive Loss Summary (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | $ 6,292,237 |
Balance at period end | 6,389,003 |
AOCI Attributable to Parent [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (32,098) |
Other comprehensive income before reclassification | 5,669 |
Amounts reclassified from accumulated other comprehensive loss | (3,530) |
Other comprehensive income (loss) | 2,139 |
Balance at period end | (29,959) |
Change in Fair Value and Amortization of Swap Settlements [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (32,963) |
Other comprehensive income before reclassification | 5,496 |
Amounts reclassified from accumulated other comprehensive loss | (1,978) |
Other comprehensive income (loss) | 3,518 |
Balance at period end | (29,445) |
Unrealized Gains on Available for Sale Securities [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | 865 |
Other comprehensive income before reclassification | 173 |
Amounts reclassified from accumulated other comprehensive loss | (1,552) |
Other comprehensive income (loss) | (1,379) |
Balance at period end | $ (514) |
Organization and Basis of Pre28
Organization and Basis of Presentation - Accumulated Other Comprehensive Loss - Partnership (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | $ 6,292,237 |
Balance at period end | 6,389,003 |
Essex Portfolio, L.P. [Member] | AOCI Attributable to Parent [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (29,348) |
Other comprehensive income before reclassification | 5,864 |
Amounts reclassified from accumulated other comprehensive loss | (3,651) |
Other comprehensive income (loss) | 2,213 |
Balance at period end | (27,135) |
Essex Portfolio, L.P. [Member] | Change in Fair Value and Amortization of Swap Settlements [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | (30,161) |
Other comprehensive income before reclassification | 5,685 |
Amounts reclassified from accumulated other comprehensive loss | (2,046) |
Other comprehensive income (loss) | 3,639 |
Balance at period end | (26,522) |
Essex Portfolio, L.P. [Member] | Unrealized Gains on Available for Sale Securities [Member] | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | |
Balance at period beginning | 813 |
Other comprehensive income before reclassification | 179 |
Amounts reclassified from accumulated other comprehensive loss | (1,605) |
Other comprehensive income (loss) | (1,426) |
Balance at period end | $ (613) |
Organization and Basis of Pre29
Organization and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)communitybuildinginvestmentpartnershipapartmentprojectshares | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)shares | |
Real Estate Properties [Line Items] | |||
Ownership interest in partnership (as a percent) | 96.70% | ||
Apartment communities owned (in communities) | community | 246 | ||
Apartment units owned (in units) | apartment | 59,860 | ||
Ownership interest, number of commercial buildings (in commercial buildings) | building | 1 | ||
Ownership interest, number of active development projects (in projects) | project | 5 | ||
Sales and maturities of marketable securities | $ 24,900 | $ 5,000 | |
Available-for-sale securities, gross realized gain (loss) | $ 1,600 | 700 | |
Downreit limited partnerships consolidated by company (in partnerships) | partnership | 20 | ||
Communities within Downreit partnerships (in communities) | community | 12 | ||
Number of previously consolidated co-investments considered VIE (in investments) | investment | 9 | ||
Assets related to variable interest entities net of intercompany eliminations | $ 1,100,000 | $ 989,300 | |
Liabilities related to variable interest entities net of intercompany eliminations | 351,100 | 288,100 | |
Noncontrolling interest in variable interest entity | 75,700 | 52,900 | |
Fixed rate debt carrying amount | 4,800,000 | ||
Fixed rate debt fair value | 4,900,000 | ||
Investments in mortgage back securities, fair value | 111,600 | 108,800 | |
Capitalized internal costs related to development and redevelopment projects | $ 5,200 | $ 4,500 | |
Number of co-investments with financing distributions in excess of the company's investment (in investments) | investment | 1 | ||
Mortgage Backed Securities [Member] | |||
Real Estate Properties [Line Items] | |||
Held-to-maturity securities, carrying value | $ 97,969 | $ 94,393 | |
Essex Portfolio, L.P. [Member] | |||
Real Estate Properties [Line Items] | |||
Operating Partnership units outstanding (in units) | shares | 2,251,920 | 2,237,290 | |
Redemption value of operating partnership units outstanding | $ 521,400 | $ 520,200 |
Organization and Basis of Pre30
Organization and Basis of Presentation - Redeemable Noncontrolling Interest (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
Balance at January 1, | $ 44,684 |
Reclassification due to change in redemption value and other | 731 |
Redemptions | 0 |
Additions | 0 |
Balance at March 31, | $ 45,415 |
Significant Transactions Duri31
Significant Transactions During the First Quarter of 2017 and Subsequent Event (Details) | 1 Months Ended | 3 Months Ended | ||||
Apr. 30, 2017USD ($) | Mar. 31, 2017USD ($)unitproject | Jan. 31, 2017USD ($)communityunit | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Other Commitments [Line Items] | ||||||
Payments to acquire preferred equity investments | $ 120,816,000 | $ 50,591,000 | ||||
Gain on remeasurement of co-investment | 86,482,000 | $ 0 | ||||
Co-investments | $ 1,071,258,000 | 1,071,258,000 | $ 1,161,275,000 | |||
Land and land improvements | 2,719,064,000 | 2,719,064,000 | 2,559,743,000 | |||
Buildings and improvements | 10,492,413,000 | 10,492,413,000 | 10,116,563,000 | |||
Prepaid expenses and other assets | 53,716,000 | 53,716,000 | 48,450,000 | |||
Senior Notes [Member] | Senior Unsecured Notes at 5.500% [Member] | ||||||
Other Commitments [Line Items] | ||||||
Senior unsecured notes paid off | $ 300,000,000 | $ 300,000,000 | ||||
Stated interest rate (as a percent) | 5.50% | 5.50% | ||||
Subsequent Event [Member] | Senior Notes [Member] | Senior Unsecured Notes At 3.625% [Member] | ||||||
Other Commitments [Line Items] | ||||||
Stated interest rate (as a percent) | 3.625% | |||||
Debt instrument, face amount | $ 350,000,000 | |||||
Debt instrument, term (in years) | 10 years | |||||
Membership Interest In Palm Valley And Sage At Cupertino [Member] | ||||||
Other Commitments [Line Items] | ||||||
Land and land improvements | $ 169,500,000 | $ 169,500,000 | ||||
Buildings and improvements | 365,700,000 | 365,700,000 | ||||
Prepaid expenses and other assets | $ 3,200,000 | 3,200,000 | ||||
Membership Interest In Palm Valley [Member] | ||||||
Other Commitments [Line Items] | ||||||
Equity method investment, ownership percentage acquired (as a percent) | 50.00% | |||||
Payments to acquire preferred equity investments | $ 183,000,000 | |||||
Mortgage encumbrance | $ 220,000,000 | |||||
Number of units acquired (in units) | unit | 1,098 | |||||
Number of communities acquired (in communities) | community | 4 | |||||
Gain on remeasurement of co-investment | $ 86,500,000 | |||||
Membership Interest In Sage At Cupertino [Member] | ||||||
Other Commitments [Line Items] | ||||||
Equity method investment, ownership percentage acquired (as a percent) | 40.50% | |||||
Mortgage encumbrance | $ 52,000,000 | 52,000,000 | ||||
Number of units acquired (in units) | unit | 230 | |||||
Co-investments | $ 15,300,000 | 15,300,000 | ||||
Contract price | 90,000,000 | |||||
Jefferson at Hollywood [Member] | ||||||
Other Commitments [Line Items] | ||||||
Number of units sold (in units) | unit | 270 | |||||
Proceeds from sale of real estate | $ 132,500,000 | |||||
Gain (loss) on sale of properties | $ 26,200,000 | |||||
Limited Liability Company with Development Projects in Fullerton and Irvine, CA [Member] | Equity Method Investments [Member] | ||||||
Other Commitments [Line Items] | ||||||
Payments to acquire preferred equity investments | 2,000,000 | |||||
Co-investments | $ 21,500,000 | $ 21,500,000 | ||||
Number of development projects (in projects) | project | 2 | |||||
Preferred equity investment, dividend rate, first 30 months (as a percent) | 11.00% | |||||
Preferred equity investment, dividend rate, after 30 months (as a percent) | 9.50% | |||||
Limited Liability Company with Development Projects in Fullerton and Irvine, CA [Member] | Equity Method Investments [Member] | Fullerton, CA [Member] | ||||||
Other Commitments [Line Items] | ||||||
Number of units acquired (in units) | unit | 142 | |||||
Limited Liability Company with Development Projects in Fullerton and Irvine, CA [Member] | Equity Method Investments [Member] | Irvine, CA [Member] | ||||||
Other Commitments [Line Items] | ||||||
Number of units acquired (in units) | unit | 170 |
Co-investments - Summary of Inv
Co-investments - Summary of Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 1,035,724 | $ 1,161,275 |
Total operating co investments [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | 699,257 | 781,905 |
Membership Interest In CPPIB [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 463,899 | 422,068 |
Membership Interest In CPPIB [Member] | Minimum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Membership Interest In CPPIB [Member] | Maximum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 55.00% | |
Membership interest in Wesco I, III, and IV [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 181,187 | 180,687 |
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Membership Interest In Palm Valley [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 0 | 68,396 |
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Membership interest in BEXAEW [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 47,321 | 47,963 |
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
BEX II [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ (35,534) | 19,078 |
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Membership In Other [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 42,384 | 43,713 |
Membership In Other [Member] | Minimum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Membership In Other [Member] | Maximum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 55.00% | |
Total development co investments [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 123,408 | 157,317 |
Total development co investments [Member] | Minimum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 50.00% | |
Total development co investments [Member] | Maximum [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments (as a percent) | 55.00% | |
Total preferred interest investments [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 213,059 | 222,053 |
Total preferred interest investments [Member] | Investments in Majority-owned Subsidiaries [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 20,500 | $ 35,900 |
Co-investments - Combined Finan
Co-investments - Combined Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Equity Method Investment, Summarized Financial Information, Assets [Abstract] | |||
Rental properties and real estate under development | $ 239,685 | $ 190,505 | |
Equity Method Investment, Summarized Financial Information, Liabilities and Equity [Abstract] | |||
Other liabilities | 34,027 | 32,922 | |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Interest expense | (54,583) | $ (52,466) | |
General and administrative | (10,601) | (9,182) | |
Total co investment [Member] | |||
Equity Method Investment, Summarized Financial Information, Assets [Abstract] | |||
Rental properties and real estate under development | 3,433,014 | 3,807,245 | |
Other assets | 102,385 | 121,505 | |
Total assets | 3,535,399 | 3,928,750 | |
Equity Method Investment, Summarized Financial Information, Liabilities and Equity [Abstract] | |||
Debt | 1,461,893 | 1,617,639 | |
Other liabilities | 75,570 | 74,607 | |
Equity | 1,997,936 | 2,236,504 | |
Total liabilities and equity | 3,535,399 | 3,928,750 | |
Company's share of equity | 1,035,724 | $ 1,161,275 | |
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Property revenues | 75,905 | 75,130 | |
Property operating expenses | (25,408) | (25,821) | |
Net operating income | 50,497 | 49,309 | |
Gain on sale of real estate | 0 | 17,495 | |
Interest expense | (11,921) | (13,140) | |
General and administrative | (1,778) | (1,240) | |
Depreciation and amortization | (27,904) | (28,716) | |
Net income | 8,894 | 23,708 | |
Company's share of net income | 10,899 | 15,068 | |
Total co investment [Member] | Affiliated Entity [Member] | |||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||
Company's share of net income | $ 500 | $ 800 |
Notes and Other Receivables (De
Notes and Other Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 50,855 | $ 40,970 |
Secured Note Receivable, 10.75% Interest Rate, Due September 2020 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 27,032 | 17,685 |
Stated interest rate (in hundredths) | 10.75% | |
Secured Note Receivable, 9.5% Interest Rate, Due October 2019 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 6,594 | 6,593 |
Stated interest rate (in hundredths) | 9.50% | |
Notes and Other Receivables from Affiliates [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 3,739 | 4,695 |
Other Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 13,490 | $ 11,997 |
Related Party Transactions (Det
Related Party Transactions (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2017USD ($)unit | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($)investment | Dec. 31, 2016USD ($) | Nov. 30, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||||
Management and other fees from affiliates | $ 3,000 | $ 3,300 | ||||
Development and redevelopment fees | 800 | 1,300 | ||||
Co-investments | $ 1,071,258 | 1,071,258 | $ 1,161,275 | |||
Payments to acquire preferred equity investments | 120,816 | $ 50,591 | ||||
Short-term loans outstanding and due from various joint ventures | 3,700 | 3,700 | 4,700 | |||
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 50,855 | 50,855 | 40,970 | |||
Limited Liability Company [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Payments to acquire preferred equity investments | $ 20,000 | |||||
Number of preferred equity method investments acquired during period (in investments) | investment | 3 | |||||
Preferred stock, stated interest percentage (as a percent) | 9.50% | |||||
Secured Note Receivable, 9.5% Interest Rate, Due October 2019 [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 6,594 | 6,594 | 6,593 | |||
Secured Note Receivable, 9.5% Interest Rate, Due October 2019 [Member] | Marcus and Millichamp Company TMMC Affiliate [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 6,600 | 6,600 | $ 6,600 | $ 6,600 | ||
Membership Interest In Sage At Cupertino [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Co-investments | $ 15,300 | 15,300 | ||||
Number of units acquired (in units) | unit | 230 | |||||
Equity method investment, ownership percentage acquired (as a percent) | 40.50% | |||||
Contract price | $ 90,000 | |||||
Mortgage encumbrance | $ 52,000 | $ 52,000 |
Debt - Debt Summary (Details)
Debt - Debt Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 3,195,129 | $ 3,246,779 |
Lines of credit | 176,233 | 125,000 |
Mortgage notes payable, net | 2,231,145 | 2,191,481 |
Total debt | 5,602,507 | 5,563,260 |
Unsecured bonds private placement - fixed rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 314,253 | 314,190 |
Debt, weighted average maturity (years) | 3 years 4 months 15 days | |
Term loan - variable rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 348,279 | $ 98,189 |
Debt, weighted average maturity (years) | 4 years 10 months 15 days | |
Weighted average interest rate | 2.20% | 2.30% |
Bonds public offering - fixed rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 2,532,597 | $ 2,834,400 |
Debt, weighted average maturity (years) | 6 years 9 months | |
Weighted average interest rate | 3.80% | 3.60% |
Lines of credit, net [Member] | ||
Debt Instrument [Line Items] | ||
Lines of credit | $ 176,233 | $ 125,000 |
Weighted average interest rate | 1.90% | 1.80% |
Mortgage notes payable, net [Member] | ||
Debt Instrument [Line Items] | ||
Debt, weighted average maturity (years) | 5 years 8 months 15 days | |
Mortgage notes payable, net | $ 2,231,145 | $ 2,191,481 |
Weighted average interest rate | 4.30% | 4.30% |
Debt - Future Principal Payment
Debt - Future Principal Payments (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
Remaining in 2017 | $ 114,776 |
2,018 | 301,858 |
2,019 | 653,114 |
2,020 | 695,070 |
2,021 | 552,831 |
Thereafter | 3,089,422 |
Long-term debt | $ 5,407,071 |
Debt - Narrative (Details)
Debt - Narrative (Details) | 3 Months Ended | |
Mar. 31, 2017USD ($)instrumentextension | Dec. 31, 2016USD ($) | |
Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ 2,600,000 | $ 100,000 |
Unamortized debt issuance expense | 17,300,000 | 18,100,000 |
Lines of credit, net [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance expense | $ 4,000,000 | 3,300,000 |
Number of lines of unsecured credit (in instruments) | instrument | 2 | |
Aggregate borrowing capacity | $ 1,030,000,000 | |
Lines of credit, net [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | $ 1,000,000,000 | |
Number of extension options (in extensions) | extension | 1 | |
Extension period (in months) | 18 months | |
Lines of credit, net [Member] | Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 0.90% | |
Lines of credit, net [Member] | Line of Credit Working Capital [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | $ 25,000,000 | |
Lines of credit, net [Member] | Line of Credit Working Capital [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate (as a percent) | 0.90% | |
Mortgage notes payable, net [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ 46,000,000 | 50,800,000 |
Unamortized debt issuance expense | $ 6,900,000 | $ 7,400,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2017USD ($)segment | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable operating segments defined by geographical regions (in segments) | segment | 3 | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property revenues | $ 333,168 | $ 312,178 | |
Net operating income | 233,655 | 217,688 | |
Management and other fees from affiliates | 2,236 | 2,024 | |
Depreciation and amortization | (115,503) | (109,707) | |
General and administrative | (10,601) | (9,182) | |
Acquisition and investment related costs | (556) | (828) | |
Interest expense | (54,583) | (52,466) | |
Total return swap income | 2,584 | 3,123 | |
Interest and other income | 6,764 | 5,208 | |
Equity income from co-investments | 10,899 | 15,068 | |
Gain on sale of real estate and land | 26,174 | 20,258 | |
Deferred tax expense on gain on sale of real estate and land | 0 | (4,279) | |
Gain on remeasurement of co-investment | 86,482 | 0 | |
Net income | 187,551 | 86,907 | |
Net reportable operating segment - real estate assets | 10,792,684 | $ 10,364,760 | |
Real estate under development | 239,685 | 190,505 | |
Co-investments | 1,071,258 | 1,161,275 | |
Real estate held for sale, net | 0 | 101,957 | |
Cash and cash equivalents, including restricted cash | 100,252 | 170,302 | |
Marketable securities | 138,977 | 139,189 | |
Notes and other receivables (includes related party receivables of $10.3 million and $11.3 million as of March 31, 2017 and December 31, 2016, respectively) | 50,855 | 40,970 | |
Prepaid expenses and other assets | 53,716 | 48,450 | |
Total assets | 12,447,427 | 12,217,408 | |
Reportable Geographical Components [Member] | Southern California [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property revenues | 147,099 | 135,894 | |
Net operating income | 101,405 | 92,654 | |
Net reportable operating segment - real estate assets | 4,885,678 | 4,924,792 | |
Reportable Geographical Components [Member] | Northern California [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property revenues | 123,308 | 110,408 | |
Net operating income | 87,663 | 79,013 | |
Net reportable operating segment - real estate assets | 4,293,943 | 3,791,549 | |
Reportable Geographical Components [Member] | Seattle Metro [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property revenues | 56,192 | 52,073 | |
Net operating income | 38,933 | 35,689 | |
Net reportable operating segment - real estate assets | 1,555,853 | 1,570,340 | |
Segment Reconciling Items [Member] | Other Real Estate Assets [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Property revenues | 6,569 | 13,803 | |
Net operating income | 5,654 | $ 10,332 | |
Net reportable operating segment - real estate assets | $ 57,210 | $ 78,079 |
Net Income Per Common Share a40
Net Income Per Common Share and Net Income Per Common Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Basic: | ||
Net income available to common stockholders | $ 178,964 | $ 77,981 |
Weighted average number of shares outstanding during the period (in shares) | 65,549,484 | 65,405,654 |
Net income available to common stockholders (in dollars per share) | $ 2.73 | $ 1.19 |
Diluted: | ||
Income from continuing operations available to common stockholders | $ 179,337 | $ 77,981 |
Adjusted income from continuing operations available to common stockholders (in shares) | 65,859,490 | 65,557,639 |
Net income available to common stockholders (in dollars per share) | $ 2.72 | $ 1.19 |
Essex Portfolio, L.P. [Member] | ||
Basic: | ||
Net income available to common stockholders | $ 185,110 | $ 80,765 |
Weighted average number of shares outstanding during the period (in shares) | 67,801,718 | 67,633,519 |
Net income available to common stockholders (in dollars per share) | $ 2.73 | $ 1.19 |
Diluted: | ||
Income from continuing operations available to common stockholders | $ 185,483 | $ 80,765 |
Adjusted income from continuing operations available to common stockholders (in shares) | 68,111,724 | 67,785,504 |
Net income available to common stockholders (in dollars per share) | $ 2.72 | $ 1.19 |
Convertible Limited Partnership Units [Member] | ||
Diluted: | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 2,252,234 | 2,227,865 |
Antidilutive securities excluded from computation of earnings per share, value | $ 6,100 | $ 2,800 |
Employee Stock Option [Member] | ||
Basic: | ||
Income effect of Dilutive Securities | $ 0 | $ 0 |
Effect of dilutive securities (in shares) | 96,778 | 151,985 |
Diluted: | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 225,895 | 77,200 |
Employee Stock Option [Member] | Essex Portfolio, L.P. [Member] | ||
Basic: | ||
Income effect of Dilutive Securities | $ 0 | $ 0 |
Effect of dilutive securities (in shares) | 96,778 | 151,985 |
Diluted: | ||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 225,895 | 77,200 |
DownREIT Units [Member] | ||
Basic: | ||
Income effect of Dilutive Securities | $ 373 | $ 0 |
Effect of dilutive securities (in shares) | 213,228 | 0 |
DownREIT Units [Member] | Essex Portfolio, L.P. [Member] | ||
Basic: | ||
Income effect of Dilutive Securities | $ 373 | $ 0 |
Effect of dilutive securities (in shares) | 213,228 | 0 |
Derivative Instruments and He41
Derivative Instruments and Hedging Activities (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Derivative [Line Items] | |||
Cash flow hedge ineffectiveness | $ 0 | $ 0 | |
Total return swap income | 2,584,000 | $ 3,123,000 | |
Multifamily Housing Mortgage Revenue Bonds [Member] | |||
Derivative [Line Items] | |||
Bond subject to interest rate caps | 257,300,000 | ||
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 200,000,000 | ||
Interest rate (in hundredths) | 2.30% | ||
Aggregate carrying value of the interest rate swap contracts, asset | $ 4,700,000 | $ 4,400,000 | |
Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||
Derivative [Line Items] | |||
Aggregate carrying value of the interest rate swap contracts, liability | 0 | 0 | |
Not Designated as Hedging Instrument [Member] | Total Return Swap [Member] | |||
Derivative [Line Items] | |||
Derivative, notional amount | 20,700,000 | ||
Derivative, fair value, net | 0 | $ 0 | |
Not Designated as Hedging Instrument [Member] | Total Return Swap, Callable [Member] | |||
Derivative [Line Items] | |||
Derivative, notional amount | $ 257,300,000 |