Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 29, 2018 | |
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 | 66,065,097 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
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 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Rental properties: | ||
Land and land improvements | $ 2,710,139 | $ 2,719,064 |
Buildings and improvements | 10,744,841 | 10,643,009 |
Total rental properties | 13,454,980 | 13,362,073 |
Less: accumulated depreciation | (3,113,386) | (2,769,297) |
Net real estate | 10,341,594 | 10,592,776 |
Real estate under development | 403,644 | 355,735 |
Co-investments | 1,267,593 | 1,155,984 |
Total real estate | 12,012,831 | 12,104,495 |
Cash and cash equivalents-unrestricted | 157,279 | 44,620 |
Cash and cash equivalents-restricted | 17,347 | 16,506 |
Marketable securities | 210,596 | 190,004 |
Notes and other receivables (includes related party receivables of $10.3 million and $41.2 million as of September 30, 2018 and December 31, 2017, respectively) | 69,166 | 100,926 |
Prepaid expenses and other assets | 50,924 | 39,155 |
Total assets | 12,518,143 | 12,495,706 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 3,798,705 | 3,501,709 |
Mortgage notes payable, net | 1,834,967 | 2,008,417 |
Lines of credit | 0 | 179,000 |
Accounts payable and accrued liabilities | 185,426 | 127,501 |
Construction payable | 63,905 | 51,770 |
Dividends/Distributions payable | 128,831 | 121,420 |
Distributions in excess of investments in co-investments | 0 | 36,726 |
Other liabilities | 33,616 | 33,132 |
Total liabilities | 6,045,450 | 6,059,675 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 36,665 | 39,206 |
Equity/Capital: | ||
Common stock; $0.0001 par value, 670,000,000 shares authorized; 66,055,166 and 66,054,399 shares issued and outstanding, respectively | 7 | 7 |
Additional paid-in capital | 7,133,587 | 7,129,571 |
Distributions in excess of accumulated earnings | (808,085) | (833,726) |
Limited Partners: | ||
Accumulated other comprehensive loss, net | (8,548) | (18,446) |
Total stockholders' equity | 6,316,961 | 6,277,406 |
Noncontrolling interest | 119,067 | 119,419 |
Total equity | 6,436,028 | 6,396,825 |
Total liabilities and equity/capital | 12,518,143 | 12,495,706 |
Essex Portfolio, L.P. [Member] | ||
Rental properties: | ||
Land and land improvements | 2,710,139 | 2,719,064 |
Buildings and improvements | 10,744,841 | 10,643,009 |
Total rental properties | 13,454,980 | 13,362,073 |
Less: accumulated depreciation | (3,113,386) | (2,769,297) |
Net real estate | 10,341,594 | 10,592,776 |
Real estate under development | 403,644 | 355,735 |
Co-investments | 1,267,593 | 1,155,984 |
Total real estate | 12,012,831 | 12,104,495 |
Cash and cash equivalents-unrestricted | 157,279 | 44,620 |
Cash and cash equivalents-restricted | 17,347 | 16,506 |
Marketable securities | 210,596 | 190,004 |
Notes and other receivables (includes related party receivables of $10.3 million and $41.2 million as of September 30, 2018 and December 31, 2017, respectively) | 69,166 | 100,926 |
Prepaid expenses and other assets | 50,924 | 39,155 |
Total assets | 12,518,143 | 12,495,706 |
LIABILITIES AND EQUITY/CAPITAL | ||
Unsecured debt, net | 3,798,705 | 3,501,709 |
Mortgage notes payable, net | 1,834,967 | 2,008,417 |
Lines of credit | 0 | 179,000 |
Accounts payable and accrued liabilities | 185,426 | 127,501 |
Construction payable | 63,905 | 51,770 |
Dividends/Distributions payable | 128,831 | 121,420 |
Distributions in excess of investments in co-investments | 0 | 36,726 |
Other liabilities | 33,616 | 33,132 |
Total liabilities | 6,045,450 | 6,059,675 |
Commitments and contingencies | ||
Redeemable noncontrolling interest | 36,665 | 39,206 |
Limited Partners: | ||
Common equity (2,272,983 and 2,268,114 units issued and outstanding, respectively) | 51,093 | 49,792 |
Accumulated other comprehensive loss, net | (4,908) | (15,229) |
Total partners' capital | 6,371,694 | 6,330,415 |
Noncontrolling interest | 64,334 | 66,410 |
Total capital | 6,436,028 | 6,396,825 |
Total liabilities and equity/capital | 12,518,143 | 12,495,706 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | ||
General Partner: | ||
Common equity (66,055,166 and 66,054,399 units issued and outstanding, respectively) | 6,325,509 | 6,295,852 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Common Equity [Member] | ||
General Partner: | ||
Common equity (66,055,166 and 66,054,399 units issued and outstanding, respectively) | 6,325,509 | 6,295,852 |
Limited Partners: | ||
Total capital | $ 6,325,509 | $ 6,295,852 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2018 | Dec. 31, 2017 |
Related party receivables | $ 10.3 | $ 41.2 |
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) | 66,055,166 | 66,054,399 |
Common stock, shares outstanding (in shares) | 66,055,166 | 66,054,399 |
Essex Portfolio, L.P. [Member] | ||
Related party receivables | $ 10.3 | $ 41.2 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | ||
Common stock, shares issued (in shares) | 66,055,166 | 66,054,399 |
Common stock, shares outstanding (in shares) | 66,055,166 | 66,054,399 |
Essex Portfolio, L.P. [Member] | Limited Partners [Member] | ||
Common stock, shares issued (in shares) | 2,272,983 | 2,268,114 |
Common stock, shares outstanding (in shares) | 2,272,983 | 2,268,114 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenues: | ||||
Total revenues | $ 350,917 | $ 344,369 | $ 1,046,895 | $ 1,018,835 |
Expenses: | ||||
Property operating, excluding real estate taxes | 59,100 | 59,033 | 174,506 | 171,028 |
Real estate taxes | 38,675 | 37,531 | 112,378 | 108,283 |
Corporate-level property management expenses | 7,761 | 7,573 | 23,313 | 22,604 |
Depreciation and amortization | 120,852 | 117,451 | 359,287 | 350,893 |
General and administrative | 10,601 | 9,788 | 36,539 | 30,726 |
Expensed acquisition and investment related costs | 31 | 324 | 156 | 1,154 |
Total expenses | 237,020 | 231,700 | 706,179 | 684,688 |
Earnings from operations | 113,897 | 112,669 | 340,716 | 334,147 |
Interest expense | (55,196) | (55,938) | (166,335) | (167,333) |
Total return swap income | 2,184 | 2,538 | 6,682 | 7,653 |
Interest and other income | 8,437 | 5,790 | 21,241 | 17,916 |
Equity income from co-investments | 16,788 | 19,727 | 64,611 | 40,934 |
Gain on sale of real estate and land | 0 | 249 | 22,244 | 26,423 |
Gain on remeasurement of co-investment | 0 | 0 | 0 | 88,641 |
Net income | 86,110 | 85,035 | 289,159 | 348,381 |
Net income attributable to noncontrolling interest | (5,135) | (5,312) | (16,826) | (18,935) |
Net income available to common stockholders | 80,975 | 79,723 | 272,333 | 329,446 |
Comprehensive income | 89,100 | 88,870 | 301,708 | 356,102 |
Comprehensive income attributable to noncontrolling interest | (5,235) | (5,438) | (17,243) | (19,190) |
Comprehensive income attributable to controlling interest | $ 83,865 | $ 83,432 | $ 284,465 | $ 336,912 |
Basic: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5.01 |
Weighted average number of shares/common units outstanding during the period (in shares) | 66,052,108 | 65,994,896 | 66,047,990 | 65,759,450 |
Diluted: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.22 | $ 1.21 | $ 4.12 | $ 5 |
Weighted average number of shares/common units outstanding during the period (in shares) | 66,103,812 | 66,078,283 | 66,093,004 | 65,836,965 |
Dividends/Distributions per common share/unit (in dollars per share) | $ 1.86 | $ 1.75 | $ 5.58 | $ 5.25 |
Rental and Other Property Revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 348,610 | $ 341,974 | $ 1,040,083 | $ 1,011,908 |
Management and Other Fees From Affiliates Income [Member] | ||||
Revenues: | ||||
Total revenues | 2,307 | 2,395 | 6,812 | 6,927 |
Essex Portfolio, L.P. [Member] | ||||
Revenues: | ||||
Total revenues | 350,917 | 344,369 | 1,046,895 | 1,018,835 |
Expenses: | ||||
Property operating, excluding real estate taxes | 59,100 | 59,033 | 174,506 | 171,028 |
Real estate taxes | 38,675 | 37,531 | 112,378 | 108,283 |
Corporate-level property management expenses | 7,761 | 7,573 | 23,313 | 22,604 |
Depreciation and amortization | 120,852 | 117,451 | 359,287 | 350,893 |
General and administrative | 10,601 | 9,788 | 36,539 | 30,726 |
Expensed acquisition and investment related costs | 31 | 324 | 156 | 1,154 |
Total expenses | 237,020 | 231,700 | 706,179 | 684,688 |
Earnings from operations | 113,897 | 112,669 | 340,716 | 334,147 |
Interest expense | (55,196) | (55,938) | (166,335) | (167,333) |
Total return swap income | 2,184 | 2,538 | 6,682 | 7,653 |
Interest and other income | 8,437 | 5,790 | 21,241 | 17,916 |
Equity income from co-investments | 16,788 | 19,727 | 64,611 | 40,934 |
Gain on sale of real estate and land | 0 | 249 | 22,244 | 26,423 |
Gain on remeasurement of co-investment | 0 | 0 | 0 | 88,641 |
Net income | 86,110 | 85,035 | 289,159 | 348,381 |
Net income attributable to noncontrolling interest | (2,346) | (2,591) | (7,445) | (7,646) |
Net income available to common stockholders | 83,764 | 82,444 | 281,714 | 340,735 |
Comprehensive income | 89,100 | 88,870 | 301,708 | 356,102 |
Comprehensive income attributable to noncontrolling interest | (2,346) | (2,591) | (7,445) | (7,646) |
Comprehensive income attributable to controlling interest | $ 86,754 | $ 86,279 | $ 294,263 | $ 348,456 |
Basic: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5.01 |
Weighted average number of shares/common units outstanding during the period (in shares) | 68,325,091 | 68,246,008 | 68,321,153 | 68,011,123 |
Diluted: | ||||
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5 |
Weighted average number of shares/common units outstanding during the period (in shares) | 68,376,795 | 68,329,395 | 68,366,167 | 68,088,638 |
Dividends/Distributions per common share/unit (in dollars per share) | $ 1.86 | $ 1.75 | $ 5.58 | $ 5.25 |
Essex Portfolio, L.P. [Member] | Rental and Other Property Revenues [Member] | ||||
Revenues: | ||||
Total revenues | $ 348,610 | $ 341,974 | $ 1,040,083 | $ 1,011,908 |
Essex Portfolio, L.P. [Member] | Management and Other Fees From Affiliates Income [Member] | ||||
Revenues: | ||||
Total revenues | $ 2,307 | $ 2,395 | $ 6,812 | $ 6,927 |
Condensed Consolidated Statem_2
Condensed Consolidated Statement of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Distributions in Excess of Accumulated Earnings [Member] | Accumulated Other Comprehensive Loss, Net [Member] | Noncontrolling Interest [Member] |
Issuance of common stock under: | ||||||
Cumulative effect upon adoption | $ (2,234) | |||||
Cumulative effect upon adoption | ASU 2016-01 [Member] | $ 0 | $ 2,234 | (2,234) | |||
Cumulative effect upon adoption | ASU 2017-05 [Member] | 123,708 | 119,651 | $ 4,057 | |||
Balance at period beginning at Dec. 31, 2017 | 6,396,825 | $ 7 | $ 7,129,571 | (833,726) | (18,446) | 119,419 |
Balances (in shares) at Dec. 31, 2017 | 66,054 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 289,159 | 272,333 | 16,826 | |||
Reversal of unrealized losses upon the sale of marketable debt securities | 6 | 6 | ||||
Change in fair value of derivatives and amortization of swap settlements | 12,630 | 12,210 | 420 | |||
Change in fair value of marketable debt securities, net | (87) | (84) | (3) | |||
Issuance of common stock under: | ||||||
Stock option and restricted stock plans, net | 2,751 | $ 0 | 2,751 | |||
Stock option and restricted stock plans, net (in shares) | 17 | |||||
Sale of common stock, net | (483) | (483) | ||||
Equity based compensation costs | 8,561 | 7,697 | 864 | |||
Retirement of common stock, net | (3,774) | $ 0 | (3,774) | |||
Retirement of common stock, net (in shares) | (17) | |||||
Changes in the redemption value of redeemable noncontrolling interest | (2,253) | (2,032) | (221) | |||
Distributions to noncontrolling interest | (22,281) | (22,281) | ||||
Redemptions of noncontrolling interest | (157) | (143) | (14) | |||
Redemptions of noncontrolling interest (in shares) | 1 | |||||
Common stock dividends | (368,577) | (368,577) | ||||
Balance at period end at Sep. 30, 2018 | $ 6,436,028 | $ 7 | $ 7,133,587 | $ (808,085) | $ (8,548) | $ 119,067 |
Balances (in shares) at Sep. 30, 2018 | 66,055 |
Condensed Consolidated Statem_3
Condensed Consolidated Statement of Capital - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Net income | $ 86,110 | $ 289,159 | |
Reversal of unrealized losses upon the sale of marketable debt securities | 6 | ||
Change in fair value of derivatives and amortization of swap settlements | 12,630 | ||
Change in fair value of marketable debt securities, net | (87) | ||
Issuance of common stock under: | |||
Sale of common stock by general partner, net | (483) | ||
Retirement of common units, net | (3,774) | ||
Changes in the redemption value of redeemable noncontrolling interest | (2,253) | ||
Distributions to noncontrolling interest | (22,281) | ||
Redemptions | (157) | ||
ASU 2016-01 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | $ 0 | ||
ASU 2017-05 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 123,708 | ||
Essex Portfolio, L.P. [Member] | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Balance at period beginning | 6,396,825 | ||
Net income | 86,110 | 289,159 | |
Reversal of unrealized losses upon the sale of marketable debt securities | 6 | ||
Change in fair value of derivatives and amortization of swap settlements | 12,630 | ||
Change in fair value of marketable debt securities, net | (87) | ||
Issuance of common stock under: | |||
General partner's stock based compensation, net | 2,751 | ||
Sale of common stock by general partner, net | (483) | ||
Equity based compensation costs | 8,561 | ||
Retirement of common units, net | (3,774) | ||
Changes in the redemption value of redeemable noncontrolling interest | (2,253) | ||
Distributions to noncontrolling interest | (9,522) | ||
Redemptions | (157) | ||
Distributions declared | (381,336) | ||
Balance at period end | 6,436,028 | 6,436,028 | |
Essex Portfolio, L.P. [Member] | ASU 2016-01 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 0 | ||
Essex Portfolio, L.P. [Member] | ASU 2017-05 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 123,708 | ||
Essex Portfolio, L.P. [Member] | Common Equity [Member] | General Partner [Member] | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Balance at period beginning | $ 6,295,852 | ||
Balance at period beginning (in units) | 66,054 | ||
Net income | $ 272,333 | ||
Issuance of common stock under: | |||
General partner's stock based compensation, net | $ 2,751 | ||
General partner's stock based compensation, net (in units) | 17 | ||
Sale of common stock by general partner, net | $ (483) | ||
Equity based compensation costs | 7,697 | ||
Retirement of common units, net | $ (3,774) | ||
Retirement of common units, net (in shares) | (17) | ||
Changes in the redemption value of redeemable noncontrolling interest | $ (2,032) | ||
Redemptions | $ (143) | ||
Redemptions (in units) | 1 | ||
Distributions declared | $ (368,577) | ||
Balance at period end | $ 6,325,509 | $ 6,325,509 | |
Balance at period end (in units) | 66,055 | 66,055 | |
Essex Portfolio, L.P. [Member] | Common Equity [Member] | General Partner [Member] | ASU 2016-01 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 2,234 | ||
Essex Portfolio, L.P. [Member] | Common Equity [Member] | General Partner [Member] | ASU 2017-05 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 119,651 | ||
Essex Portfolio, L.P. [Member] | Common Equity [Member] | Limited Partner [Member] | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Balance at period beginning | $ 49,792 | ||
Balance at period beginning (in units) | 2,268 | ||
Net income | $ 9,381 | ||
Issuance of common stock under: | |||
Equity based compensation costs | $ 864 | ||
Equity based compensation costs (in units) | 5 | ||
Changes in the redemption value of redeemable noncontrolling interest | $ (233) | ||
Redemptions | (3) | ||
Distributions declared | (12,759) | ||
Balance at period end | $ 51,093 | $ 51,093 | |
Balance at period end (in units) | 2,273 | 2,273 | |
Essex Portfolio, L.P. [Member] | Common Equity [Member] | Limited Partner [Member] | ASU 2016-01 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | (6) | ||
Essex Portfolio, L.P. [Member] | Common Equity [Member] | Limited Partner [Member] | ASU 2017-05 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | 4,057 | ||
Essex Portfolio, L.P. [Member] | Accumulated Other Comprehensive Loss [Member] | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Balance at period beginning | $ (15,229) | ||
Reversal of unrealized losses upon the sale of marketable debt securities | 6 | ||
Change in fair value of derivatives and amortization of swap settlements | 12,630 | ||
Change in fair value of marketable debt securities, net | (87) | ||
Issuance of common stock under: | |||
Cumulative effect upon adoption | (2,228) | ||
Balance at period end | $ (4,908) | (4,908) | |
Essex Portfolio, L.P. [Member] | Accumulated Other Comprehensive Loss [Member] | ASU 2016-01 [Member] | |||
Issuance of common stock under: | |||
Cumulative effect upon adoption | $ (2,228) | ||
Essex Portfolio, L.P. [Member] | Noncontrolling Interest [Member] | |||
Increase (Decrease) in Partners' Capital [Roll Forward] | |||
Balance at period beginning | 66,410 | ||
Net income | 7,445 | ||
Issuance of common stock under: | |||
Changes in the redemption value of redeemable noncontrolling interest | 12 | ||
Distributions to noncontrolling interest | (9,522) | ||
Redemptions | (11) | ||
Balance at period end | $ 64,334 | $ 64,334 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 289,159 | $ 348,381 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 359,287 | 350,893 |
Amortization of discount on marketable securities | (12,949) | (11,128) |
Amortization of (premium) discount and debt financing costs, net | (1,958) | (5,132) |
Gain on sale of marketable securities and other investments | (669) | (1,650) |
Unrealized gain on equity securities recognized through income | (426) | 0 |
Company's share of gain on the sales of co-investments | 0 | (10,058) |
Earnings from co-investments | (64,611) | (30,876) |
Operating distributions from co-investments | 80,232 | 47,702 |
Accrued interest from notes and other receivables | (4,016) | (2,738) |
Gain on the sale of real estate and land | (22,244) | (26,423) |
Equity-based compensation | 7,209 | 4,894 |
Gain on remeasurement of co-investment | 0 | (88,641) |
Changes in operating assets and liabilities: | ||
Prepaid expenses, receivables and other assets | (4,044) | (2,844) |
Accounts payable and accrued liabilities | 55,469 | 50,788 |
Other liabilities | 698 | 399 |
Net cash provided by operating activities | 681,137 | 623,567 |
Additions to real estate: | ||
Acquisitions of real estate and acquisition related capital expenditures | (7,807) | (200,028) |
Redevelopment | (54,656) | (50,642) |
Development acquisitions of and additions to real estate under development | (131,867) | (92,936) |
Capital expenditures on rental properties | (54,890) | (48,735) |
Investments in notes receivable | 0 | (76,961) |
Collections of notes receivable | 29,500 | 0 |
Proceeds from insurance for property losses | 1,237 | 648 |
Proceeds from dispositions of real estate | 130,730 | 132,039 |
Contributions to co-investments | (100,202) | (231,552) |
Changes in refundable deposits | (3,804) | 2,594 |
Purchases of marketable securities | (29,130) | (65,668) |
Sales and maturities of marketable securities | 22,501 | 33,377 |
Non-operating distributions from co-investments | 62,564 | 112,572 |
Net cash used in investing activities | (135,824) | (485,292) |
Cash flows from financing activities: | ||
Proceeds from unsecured debt and mortgage notes | 298,773 | 597,981 |
Payments on unsecured debt and mortgage notes | (162,317) | (460,040) |
Proceeds from lines of credit | 454,170 | 564,833 |
Repayments of lines of credit | (633,170) | (687,224) |
Retirement of common stock | (3,774) | 0 |
Additions to deferred charges | (4,093) | (4,108) |
Net proceeds from issuance of common stock | (483) | 80,377 |
Net proceeds from stock options exercised | 2,751 | 24,079 |
Payments related to tax withholding for share-based compensation | (23) | (118) |
Distributions to noncontrolling interest | (22,137) | (20,405) |
Redemption of noncontrolling interest | (157) | (4,849) |
Redemption of redeemable noncontrolling interest | (43) | (720) |
Common and preferred stock dividends paid | (361,310) | (335,110) |
Net cash used in financing activities | (431,813) | (245,304) |
Net increase (decrease) in unrestricted and restricted cash and cash equivalents | 113,500 | (107,029) |
Unrestricted and restricted cash and cash equivalents at beginning of period | 61,126 | 170,302 |
Unrestricted and restricted cash and cash equivalents at end of period | 174,626 | 63,273 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest (net of $13.3 million and $10.0 million capitalized in 2018 and 2017, respectively) | 146,039 | 148,742 |
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of DownREIT units in connection with acquisition of real estate | 0 | 22,506 |
Transfers between real estate under development to rental properties, net | 99,547 | 2,195 |
Transfer from real estate under development to co-investments | 640 | 4,122 |
Reclassifications to redeemable noncontrolling interest from additional paid in capital and noncontrolling interest | 2,253 | 903 |
Redemption of redeemable noncontrolling interest via reduction of note receivable | 4,751 | 0 |
Debt assumed in connection with acquisition | 0 | 51,882 |
Repayment of mortgage note from new financing proceeds | 52,000 | 0 |
Essex Portfolio, L.P. [Member] | ||
Cash flows from operating activities: | ||
Net income | 289,159 | 348,381 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 359,287 | 350,893 |
Amortization of discount on marketable securities | (12,949) | (11,128) |
Amortization of (premium) discount and debt financing costs, net | (1,958) | (5,132) |
Gain on sale of marketable securities and other investments | (669) | (1,650) |
Unrealized gain on equity securities recognized through income | (426) | 0 |
Company's share of gain on the sales of co-investments | 0 | (10,058) |
Earnings from co-investments | (64,611) | (30,876) |
Operating distributions from co-investments | 80,232 | 47,702 |
Accrued interest from notes and other receivables | (4,016) | (2,738) |
Gain on the sale of real estate and land | (22,244) | (26,423) |
Equity-based compensation | 7,209 | 4,894 |
Gain on remeasurement of co-investment | 0 | (88,641) |
Changes in operating assets and liabilities: | ||
Prepaid expenses, receivables and other assets | (4,044) | (2,844) |
Accounts payable and accrued liabilities | 55,469 | 50,788 |
Other liabilities | 698 | 399 |
Net cash provided by operating activities | 681,137 | 623,567 |
Additions to real estate: | ||
Acquisitions of real estate and acquisition related capital expenditures | (7,807) | (200,028) |
Redevelopment | (54,656) | (50,642) |
Development acquisitions of and additions to real estate under development | (131,867) | (92,936) |
Capital expenditures on rental properties | (54,890) | (48,735) |
Investments in notes receivable | 0 | (76,961) |
Collections of notes receivable | 29,500 | 0 |
Proceeds from insurance for property losses | 1,237 | 648 |
Proceeds from dispositions of real estate | 130,730 | 132,039 |
Contributions to co-investments | (100,202) | (231,552) |
Changes in refundable deposits | (3,804) | 2,594 |
Purchases of marketable securities | (29,130) | (65,668) |
Sales and maturities of marketable securities | 22,501 | 33,377 |
Non-operating distributions from co-investments | 62,564 | 112,572 |
Net cash used in investing activities | (135,824) | (485,292) |
Cash flows from financing activities: | ||
Proceeds from unsecured debt and mortgage notes | 298,773 | 597,981 |
Payments on unsecured debt and mortgage notes | (162,317) | (460,040) |
Proceeds from lines of credit | 454,170 | 564,833 |
Repayments of lines of credit | (633,170) | (687,224) |
Retirement of common stock | (3,774) | 0 |
Additions to deferred charges | (4,093) | (4,108) |
Net proceeds from issuance of common stock | (483) | 80,377 |
Net proceeds from stock options exercised | 2,751 | 24,079 |
Payments related to tax withholding for share-based compensation | (23) | (118) |
Distributions to noncontrolling interest | (6,615) | (5,568) |
Redemption of noncontrolling interest | (157) | (4,849) |
Redemption of redeemable noncontrolling interest | (43) | (720) |
Common and preferred stock dividends paid | (376,832) | (349,947) |
Net cash used in financing activities | (431,813) | (245,304) |
Net increase (decrease) in unrestricted and restricted cash and cash equivalents | 113,500 | (107,029) |
Unrestricted and restricted cash and cash equivalents at beginning of period | 61,126 | 170,302 |
Unrestricted and restricted cash and cash equivalents at end of period | 174,626 | 63,273 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest (net of $13.3 million and $10.0 million capitalized in 2018 and 2017, respectively) | 146,039 | 148,742 |
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of DownREIT units in connection with acquisition of real estate | 0 | 22,506 |
Transfers between real estate under development to rental properties, net | 99,547 | 2,195 |
Transfer from real estate under development to co-investments | 640 | 4,122 |
Reclassifications to redeemable noncontrolling interest from additional paid in capital and noncontrolling interest | 2,253 | 903 |
Redemption of redeemable noncontrolling interest via reduction of note receivable | 4,571 | 0 |
Debt assumed in connection with acquisition | 0 | 51,882 |
Repayment of mortgage note from new financing proceeds | $ 52,000 | $ 0 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash paid for interest, capitalized | $ 13.3 | $ 10 |
Essex Portfolio, L.P. [Member] | ||
Cash paid for interest, capitalized | $ 13.3 | $ 10 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
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 its 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, 2017 . 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, including the reclassification of corporate-level property management expenses out of property operating, excluding real estate taxes to its own line item on the Company's condensed consolidated statements of income and comprehensive income. $13.2 million has been reclassified out of other assets and into building and improvements on the Company's condensed consolidated balance sheets as of December 31, 2017. The unaudited condensed consolidated financial statements for the three and nine months ended September 30, 2018 and 2017 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.7% general partnership interest as of both September 30, 2018 and December 31, 2017 . Total Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) outstanding were 2,272,983 and 2,268,114 as of September 30, 2018 and December 31, 2017 , respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $560.8 million and $547.5 million as of September 30, 2018 and December 31, 2017 , respectively. As of September 30, 2018 , the Company owned or had ownership interests in 247 operating apartment communities, comprising 59,982 apartment homes, excluding the Company’s ownership interest in preferred equity co-investments, one operating commercial building, six active developments and three loan investments. The operating apartment 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. Accounting Pronouncements Adopted in the Current Year In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The new standard may be applied using either a full retrospective or a modified approach upon adoption. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective approach. See Note 3, Revenues, for further details. 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 is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-01 as of January 1, 2018 using the modified retrospective method by applying a cumulative effect adjustment to retained earnings and partners' capital of $2.2 million , representing accumulated net unrealized gains of certain equity securities held by the Company. Furthermore, as a result of the adoption of this standard, the Company will recognize changes in the fair value of equity investments with readily determinable fair values through net income as opposed to comprehensive income. 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 is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-15 as of January 1, 2018 using the retrospective transition method. This amendment did not have a material impact on the Company's 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-18 as of January 1, 2018 using the retrospective transition method. This amendment did not have a material impact on the Company's 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. Previously, U.S. GAAP did 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2017-01 as of January 1, 2018 prospectively. The Company expects that substantially all of its acquisitions of communities will qualify as asset acquisitions and transaction costs related to these acquisitions will be capitalized upon adoption. 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 nonfinancial 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. Management performed an evaluation of all of the Company's contracts that may be affected by the new standard. The Company adopted ASU No. 2017-05 concurrently with the adoption of ASU No. 2014-09 “Revenue from Contracts with Customers” as of January 1, 2018 using the modified-retrospective method by applying a cumulative effect adjustment to retained earnings and partners' capital of $123.7 million , representing the partial sale of its membership interest in BEX II, LLC (“BEX II”) during the fourth quarter of 2016. Recent Accounting Pronouncements 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 Company expects that its residential and commercial leases, where it is the lessor, will continue to be accounted for as operating leases under the new standard. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements,” which includes a practical expedient that allows lessors to not separate nonlease components from the associated lease component. This provides the Company with the option of not bifurcating certain common area maintenance recoveries as a non-lease component, if certain requirements are met. The Company expects to elect this practical expedient, which would result in minimum rents and expense recoveries being presented as a single revenue line item in the consolidated statement of income and comprehensive income. For leases where the Company is the lessee, which includes various corporate office and ground leases, the Company will be required to recognize a right of use asset and related lease liability on its consolidated balance sheets upon adoption. The Company expects that its corporate office leases, where it is the lessee, will continue to be accounted for as operating leases. The Company also expects to elect a package of practical expedients, under which the Company would not be required to reassess the classification of existing ground leases. The new standards will be effective for the Company beginning January 1, 2019 and early adoption is permitted, including adoption in an interim period. The Company currently anticipates adopting the new standards on the effective date. The Company expects to apply the new standard on January 1, 2019 and is continuing to evaluate the impact of these amendments 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 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 2017, the FASB issued ASU No. 2017-12 “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities,” which, among other things, requires entities to present the earnings effect of hedging instruments in the same income statement line item in which the earnings effect of the hedged item is reported. The new standard also adds new disclosure requirements. This new standard will be effective for the Company beginning January 1, 2019 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 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which eliminates certain disclosure requirements affecting all levels of measurements, and modifies and adds new disclosure requirements for Level 3 measurements. The new standard will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its disclosures. Marketable Securities The Company reports its equity securities and available for sale debt 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). Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, 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 September 30, 2018 and December 31, 2017 , equity securities and available for sale debt securities consisted primarily of investment-grade unsecured bonds, common stock and stock funds, investments in mortgage backed securities, and investment funds that invest in U.S. treasury or agency securities. As of September 30, 2018 and December 31, 2017 , 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 September 30, 2018 and December 31, 2017 , marketable securities consist of the following ($ in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Equity securities: Investment funds - debt securities $ 31,914 $ (430 ) $ 31,484 Investment funds - U.S. treasuries 8,929 (90 ) 8,839 Common stock and stock funds 39,755 3,835 43,590 Debt securities: Available for sale Investment-grade unsecured bonds 4,281 (121 ) 4,160 Held to maturity Mortgage backed securities 122,523 — 122,523 Total - Marketable securities $ 207,402 $ 3,194 $ 210,596 December 31, 2017 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Equity securities: Investment funds - debt securities $ 27,914 $ (29 ) $ 27,885 Investment funds - U.S. treasuries 10,999 (55 ) 10,944 Common stock and stock funds 34,329 2,973 37,302 Debt securities: Available for sale Investment-grade unsecured bonds 4,365 (40 ) 4,325 Held to maturity Mortgage backed securities 109,548 — 109,548 Total - Marketable securities $ 187,155 $ 2,849 $ 190,004 The Company uses the specific identification method to determine the cost basis of a debt security sold and to reclassify amounts from accumulated other comprehensive income for such securities. For the three months ended September 30, 2018 and 2017 , the proceeds from sales and maturities of marketable securities totaled $3.5 million and $4.6 million , respectively, which resulted in $0.1 million and $32,000 in realized gains, respectively, for such periods. For the nine months ended September 30, 2018 and 2017 , the proceeds from sales and maturities of marketable securities totaled $22.5 million and $33.4 million , respectively, which resulted in $0.7 million and $1.7 million in realized gains, respectively, for such periods. For the three and nine months ended September 30, 2018 , the portion of equity security unrealized gains that was recognized in income totaled $1.2 million and $0.4 million , respectively, and was included in interest and other income on the Company's condensed consolidated statements of income and comprehensive income. Variable Interest Entities In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidates the Operating Partnership, 16 limited partnerships, comprising eight communities, (the “DownREIT limited partnerships”) and eight co-investments as of September 30, 2018 . The Company consolidates these entities because it is deemed the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the eight consolidated co-investments and 16 DownREIT limited partnerships, net of intercompany eliminations, were approximately $839.1 million and $264.1 million , respectively, as of September 30, 2018 and $837.7 million and $265.5 million , respectively, as of December 31, 2017 . Noncontrolling interests in these entities were $64.6 million and $66.7 million as of September 30, 2018 and December 31, 2017 , respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of September 30, 2018 and December 31, 2017 , 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 annual report on Form 10-K for the year ended December 31, 2017 ) 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 September 30, 2018 and December 31, 2017 , 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 fixed rate debt with a carrying value of $5.0 billion and $4.9 billion , including premiums, discounts and debt financing costs, at both September 30, 2018 and December 31, 2017 , was approximately $5.0 billion . Management has estimated that the fair value of the Company’s $612.7 million and $792.9 million of variable rate debt, net of debt financing costs, at September 30, 2018 and December 31, 2017 , respectively, was approximately $615.3 million and $793.9 million 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 September 30, 2018 and December 31, 2017 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of September 30, 2018 and December 31, 2017 . At September 30, 2018 , the Company’s investments in mortgage backed securities had a carrying value of $122.5 million and the Company estimated the fair value to be approximately $130.6 million . At December 31, 2017 , the Company’s investments in mortgage backed securities had a carrying value of $109.5 million and the Company estimated the fair value to be approximately $120.7 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 the expected discounted cash flows to estimate 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 $4.7 million and $4.6 million during the three months ended September 30, 2018 and 2017 , respectively, and $14.2 million and $14.0 million for the nine months ended September 30, 2018 and 2017 , 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 and preferred equity investments, (collectively, “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 the transaction will be accounted for as a business combination if the entity meets the definition of a business pursuant to ASU No. 2017-01, or an asset acquisition if the entity is not determined to be a business. 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. As of December 31, 2017, the net investment of one of the Company’s co-investments was less than zero as a result of financing distributions in excess of the Company's investment in that co-investment. As a result of the Company's adoption of ASU No. 2017-05 on January 1, 2018, the carrying value of this co-investment was greater than zero as of September 30, 2018. 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/(losses) on available for sale securities Total Balance at December 31, 2017 $ (20,641 ) $ 2,195 $ (18,446 ) Cumulative effect upon adoption of ASU No. 2016-01 — (2,234 ) (2,234 ) Other comprehensive income before reclassification 18,075 (84 ) 17,991 Amounts reclassified from accumulated other comprehensive loss (5,865 ) 6 (5,859 ) Other comprehensive income 12,210 (2,312 ) 9,898 Balance at September 30, 2018 $ (8,431 ) $ (117 ) $ (8,548 ) 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/(losses) on available for sale securities Total Balance at December 31, 2017 $ (17,417 ) $ 2,188 $ (15,229 ) Cumulative effect upon adoption of ASU No. 2016-01 — (2,228 ) (2,228 ) Other comprehensive income before reclassification 18,697 (87 ) 18,610 Amounts reclassified from accumulated other comprehensive loss (6,067 ) 6 (6,061 ) Other comprehensive income 12,630 (2,309 ) 10,321 Balance at September 30, 2018 $ (4,787 ) $ (121 ) $ (4,908 ) Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income. Redeemable Noncontrolling Interest The carrying value of redeemable noncontrolling interest in the accompanying condensed consolidated balance sheets was $36.7 million and $39.2 million as of September 30, 2018 and December 31, 2017 , respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances. The changes to the redemption value of redeemable noncontrolling interests for the nine months ended September 30, 2018 is as follows ($ in thousands): Balance at December 31, 2017 $ 39,206 Reclassification due to change in redemption value and other 2,253 Redemptions (4,794 ) Balance at September 30, 2018 $ 36,665 Cash, Cash Equivalents and Restricted Cash Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt. The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2018 December 31, 2017 September 30, 2017 December 31, 2016 Cash and cash equivalents - unrestricted $ 157,279 $ 44,620 $ 46,507 $ 64,921 Cash and cash equivalents - restricted 17,347 16,506 16,766 105,381 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 174,626 $ 61,126 $ 63,273 $ 170,302 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 Nine Months Ended September 30, 2018 and Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Significant Transactions During the Nine Months Ended September 30, 2018 and Subsequent Events | Significant Transactions During The Nine Months Ended September 30, 2018 and Subsequent Events Significant Transactions Dispositions In June 2018, the Company sold Domain, a 379 apartment home community located in San Diego, CA, for $132.0 million , resulting in a gain of $22.2 million . Co-Investments Joint Ventures In March 2018, the BEXAEW, LLC (“BEXAEW”) joint venture operating agreement was amended, and the joint venture was extended. Under the amendment, the Company received a cash payment for promote income of $20.5 million , which is included in equity income from co-investments on the condensed consolidated statements of income and comprehensive income. Preferred Equity Investments In January 2018, the Company received cash of $2.4 million for the full redemption of a preferred equity investment in a co-investment that holds property in Seattle, WA. In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include a related party. The entity wholly owns a 400 apartment home community located in Ventura, CA. This investment will accrue interest based on a 10.25% preferred return. The investment is scheduled to mature in May 2023. As of September 30, 2018, the Company had funded $20.6 million of the commitment. The remaining committed amount will be funded if and when requested by the sponsors. See Note 6, Related Party Transactions, for additional details. In June 2018, the Company received cash of $26.5 million for the full redemption of a preferred equity investment in an entity that holds property in Seattle, WA. The Company recognized a gain of $1.6 million as a result of this early redemption, which is included in equity income from co-investments in the condensed consolidated statements of income and comprehensive income. Notes Receivable In January 2018, the Village at Toluca Lake, a property located in Burbank, CA and owned by BEX III, LLC (“BEX III”), a Company joint venture, paid off a $29.5 million bridge loan provided by the Company in November 2017. See Note 6, Related Party Transactions, for additional details related to the related party bridge loan. Senior Unsecured Debt In March 2018, the Company issued $300.0 million of 30 -year 4.50% senior unsecured notes. The interest is paid semi-annually in arrears on March 15 and September 15 of each year commencing on September 15, 2018 until the maturity date of March 15, 2048. 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. Common Stock In January 2018, the Company repurchased and retired 16,834 shares totaling $3.8 million , including commissions. As of September 30, 2018, the Company had $245.2 million of purchase authority remaining under the stock repurchase plan authorized by the Company's board of directors. Subsequent Events In October 2018, Wesco V, LLC ("Wesco V"), one of the Company's joint ventures, acquired Meridian at Midtown, a 218 apartment home community located in San Jose, CA, for a total contract price of $104.0 million . In connection with this acquisition, Wesco V assumed $69.9 million of mortgage debt, with an effective interest rate of 4.50% and a maturity date of March 2026. The Company had previously made a preferred equity investment in this apartment home community, which was fully redeemed in August 2015. In October 2018, the Company funded an $18.6 million preferred equity investment in an entity whose sponsor is a related party. The entity wholly owns a 268 apartment home community development located in Burlingame, CA. This investment will accrue interest based on an initial 12.00% preferred return. The investment is scheduled to mature in April 2024. See Note 6, Related Party Transactions, for additional details. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues On January 1, 2018, the Company adopted ASU No. 2014-09, “Revenue from Contracts with Customers” using a modified retrospective transition method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods after January 1, 2018 are presented under the new standard, while prior period amounts are not adjusted and continue to be reported in accordance with the old revenue recognition standard. Based on a full analysis of applicable contracts, the Company determined that the new standard did not have an impact to reported revenues from prior or current periods. Revenue Recognition Revenue from Leasing The Company generates revenues primarily from leasing apartment homes to tenants. Such leasing revenues are recorded when due from tenants and are recognized monthly as they are earned, which is not materially different than on a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 6 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. The Company also generates other property-related revenue through the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned. Revenue from Contracts with Customers Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized is determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed. Disaggregated Revenue The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Rental $ 324,780 $ 319,308 $ 969,461 $ 943,976 Other property leasing revenue 23,830 22,666 70,622 67,932 Management and other fees from affiliates 2,307 2,395 6,812 6,927 Total revenues $ 350,917 $ 344,369 $ 1,046,895 $ 1,018,835 The following table presents the Company’s rental and other property-related revenues disaggregated by geographic operating segment ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Southern California $ 151,847 $ 148,150 452,047 438,654 Northern California 131,538 127,673 389,750 377,531 Seattle Metro 59,231 58,285 176,740 171,564 Other real estate assets (1) 5,994 7,866 21,546 24,159 Total rental and other property leasing revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 (1) Other real estate assets consists of revenue generated from retail space, commercial properties, held for sale properties, and disposition properties. Executive management does not evaluate such operating performance geographically. The following table presents the Company’s rental and other property-related revenues disaggregated by current property category status ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Same-property (1) $ 324,271 $ 317,302 $ 965,649 $ 939,762 Acquisitions (2) 10,695 10,498 31,579 28,854 Development (3) 1,091 — 1,560 — Redevelopment 5,125 4,913 15,185 14,636 Non-residential/other, net (4) 7,428 9,261 26,110 28,656 Total rental and other property leasing revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 (1) Stabilized properties consolidated by the Company for the three and nine months ended September 30, 2018 and 2017. (2) Acquisitions includes properties acquired which did not have comparable stabilized results as of January 1, 2017. (3) Development includes properties developed which did not have stabilized results as of January 1, 2017. (4) Non-residential/other, net consists of revenue generated from retail space, commercial properties, held for sale properties, disposition properties and student housing. Deferred Revenues and Remaining Performance Obligations When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $6.9 million and $9.3 million as of September 30, 2018 and December 31, 2017 , respectively, and was included in accounts payable and accrued liabilities within the accompanying consolidated balance sheets. The amount of revenue recognized for the nine months ended September 30, 2018 that was included in the December 31, 2017 deferred revenue balance was $2.4 million , which was included in interest and other income within the condensed consolidated statements of income and comprehensive income. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the new revenue recognition accounting standard. As of September 30, 2018 , the Company had $6.9 million of remaining performance obligations. The Company expects to recognize approximately 11% of these remaining performance obligations in 2018, an additional 43% through 2020, and the remaining balance thereafter. Practical Expedients The Company does not disclose the value of unsatisfied performance obligations for contracts with an original expected length of one year or less or when variable consideration is allocated entirely to a wholly unsatisfied performance obligation. |
Co-investments
Co-investments | 9 Months Ended |
Sep. 30, 2018 | |
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract] | |
Co-investments | Co-investments The Company has joint ventures and preferred equity investments in co-investments which are accounted for under the equity method. The co-investments own, operate, and develop apartment communities. In addition to the Company's joint ventures with BEXAEW, BEX II, and BEX III, the Company has joint venture investments with the Canadian Pension Plan Investment Board (“CPPIB”), Wesco I, LLC (“Wesco I”), Wesco III, LLC (“Wesco III”), Wesco IV, LLC (“Wesco IV”), and Wesco V. The carrying values of the Company's co-investments as of September 30, 2018 and December 31, 2017 are as follows ($ in thousands, except parenthetical amounts): Weighted Average Company Ownership Percentage (1) September 30, 2018 December 31, 2017 Ownership interest in: CPPIB 54 % $ 487,002 $ 500,287 Wesco I, Wesco III, Wesco IV, and Wesco V 52 % 187,905 214,408 BEXAEW, BEX II and BEX III (2) 50 % 118,924 13,827 Other 51 % 46,229 51,810 Total operating and other co-investments, net 840,060 780,332 Total development co-investments, net 50 % 77,144 73,770 Total preferred interest co-investments (includes related party investments of $36.8 million and $15.7 million as of September 30, 2018 and December 31, 2017, respectively) 350,389 265,156 Total co-investments, net $ 1,267,593 $ 1,119,258 (1) Weighted average Company ownership percentages are as of September 30, 2018 . (2) As of December 31, 2017, the Company's investment in BEX II was classified as a liability of $36.7 million . The combined summarized entity financial information of co-investments is as follows ($ in thousands). September 30, 2018 December 31, 2017 Combined balance sheets: (1) Rental properties and real estate under development $ 4,221,973 $ 3,722,778 Other assets 146,930 110,333 Total assets $ 4,368,903 $ 3,833,111 Debt $ 2,089,414 $ 1,705,051 Other liabilities 101,514 45,515 Equity 2,177,975 2,082,545 Total liabilities and equity $ 4,368,903 $ 3,833,111 Company's share of equity $ 1,267,593 $ 1,155,984 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Combined statements of income: (1) Property revenues $ 84,820 $ 76,303 $ 247,010 $ 224,319 Property operating expenses (27,779 ) (27,753 ) (81,415 ) (79,028 ) Net operating income 57,041 48,550 165,595 145,291 Gain on sale of real estate — 10,058 — 10,058 Interest expense (15,805 ) (13,718 ) (46,179 ) (39,663 ) General and administrative (1,254 ) (2,452 ) (5,134 ) (6,147 ) Depreciation and amortization (32,833 ) (27,884 ) (95,312 ) (84,211 ) Net income $ 7,149 $ 14,554 $ 18,970 $ 25,328 Company's share of net income (2) $ 16,788 $ 19,727 $ 64,611 $ 40,934 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from joint ventures 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 $0.7 million and $0.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.4 million and $1.5 million for the nine months ended September 30, 2018 and 2017 , respectively. |
Notes and Other Receivables
Notes and Other Receivables | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Notes and Other Receivables | Notes and Other Receivables Notes and other receivables consist of the following as of September 30, 2018 and December 31, 2017 ($ in thousands): September 30, 2018 December 31, 2017 Notes receivable, bearing interest at 10.00%, due May 2021 $ 14,843 $ 13,762 Notes receivable, bearing interest at 10.75%, due September 2020 31,776 29,318 Related party note receivable, bearing interest at 9.50%, due October 2019 (1) 6,613 6,656 Related party note receivable, bearing interest at 3.50%, due March 2018 (1) — 29,500 Notes and other receivables from affiliates (2) 3,641 5,061 Other receivables 12,293 16,629 Total notes and other receivables $ 69,166 $ 100,926 (1) See Note 6, Related Party Transactions, for additional details. (2) These amounts consist of short-term loans outstanding and due from various joint ventures as of September 30, 2018 and December 31, 2017 , respectively. See Note 6, Related Party Transactions, for additional details. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
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 $3.6 million and $3.1 million during the three months ended September 30, 2018 and 2017 , respectively, and $10.0 million and $9.0 million during the nine months ended September 30, 2018 and 2017 , respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of $1.3 million and $0.7 million against general and administrative expenses for the three months ended September 30, 2018 and 2017 , respectively, and $3.2 million and $2.1 million for the nine months ended September 30, 2018 and 2017 , respectively. In November 2017, the Company provided a $29.5 million related party bridge loan to a property acquired by BEX III. The note receivable accrued interest at 3.5% and was paid off in January 2018. The bridge loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets and had no amount outstanding as of September 30, 2018. The Company’s Chairman and founder, Mr. George M. 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 New York Stock Exchange. In October 2018, the Company funded a $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268 apartment home community development located in Burlingame, CA. This investment will accrue interest based on an initial 12.00% preferred return. The investment is scheduled to mature in April 2024. In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400 apartment home community located in Ventura, CA. This investment will accrue interest based on a 10.25% preferred return. The investment is scheduled to mature in May 2023. As of September 30, 2018, the Company had funded $20.6 million of the commitment. The remaining committed amount will be funded if and when requested by the sponsors. 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 . At the time of the conversion, the property was 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. One $5.0 million investment, which was scheduled to mature in 2022, was fully redeemed in 2017. The remaining two investments are scheduled to mature in 2022. As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of September 30, 2018 and December 31, 2017 , $3.6 million and $5.1 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 classified within notes and other receivables in the accompanying condensed consolidated balance sheets and had an outstanding balance of $6.6 million and $6.7 million as of September 30, 2018 and December 31, 2017 , respectively. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company does not have indebtedness as debt is incurred by the Operating Partnership. The Company guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities. Debt consists of the following ($ in thousands): September 30, 2018 December 31, 2017 Weighted Average Maturity In Years as of September 30, 2018 Unsecured bonds private placement - fixed rate $ 274,574 $ 274,427 2.3 Term loan - variable rate 348,717 348,545 3.4 Bonds public offering - fixed rate 3,175,414 2,878,737 7.9 Unsecured debt, net (1) 3,798,705 3,501,709 Lines of credit (2) — 179,000 Mortgage notes payable, net (3) 1,834,967 2,008,417 4.5 Total debt, net $ 5,633,672 $ 5,689,126 Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering 3.9 % 3.7 % Weighted average interest rate on variable rate term loan 2.8 % 2.5 % Weighted average interest rate on lines of credit 3.0 % 2.3 % Weighted average interest rate on mortgage notes payable 4.4 % 4.2 % (1) Includes unamortized discount of $7.0 million and $5.2 million and unamortized debt issuance costs of $19.3 million and $18.1 million , as of September 30, 2018 and December 31, 2017 , respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of September 30, 2018 , excludes unamortized debt issuance costs of $4.2 million and $3.2 million as of September 30, 2018 and December 31, 2017 , respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of September 30, 2018, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.875% , which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of December 2021 with one 18 -month extension, exercisable at the Company’s option. As of September 30, 2018, the Company’s $35.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.875% , which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of January 2020. (3) Includes total unamortized premium of $21.2 million and $33.2 million , reduced by unamortized debt issuance costs of $4.4 million and $5.4 million , as of September 30, 2018 and December 31, 2017 , respectively. The aggregate scheduled principal payments of the Company’s outstanding debt as of September 30, 2018 are as follows (excluding lines of credit) ($ in thousands): Remaining in 2018 $ 68,054 2019 605,688 2020 693,723 2021 543,604 2022 691,178 Thereafter 3,040,928 Total $ 5,643,175 |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
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. The Company's chief operating decision makers are comprised of several members of its executive management team who use net operating income (“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 NOI are management and other fees from affiliates and interest and other income. Non-segment revenues and NOI included in the following schedule also consist of revenue generated from commercial properties and properties that have been sold. Other non-segment assets include items such as 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 NOI for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2018 and 2017 ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: Southern California $ 151,847 $ 148,150 $ 452,047 $ 438,654 Northern California 131,538 127,673 389,750 377,531 Seattle Metro 59,231 58,285 176,740 171,564 Other real estate assets 5,994 7,866 21,546 24,159 Total property revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 Net operating income: Southern California $ 106,853 $ 104,378 $ 321,477 $ 311,017 Northern California 97,306 93,212 289,081 277,635 Seattle Metro 41,040 41,137 123,547 121,121 Other real estate assets 5,636 6,683 19,094 22,824 Total net operating income 250,835 245,410 753,199 732,597 Management and other fees from affiliates 2,307 2,395 6,812 6,927 Corporate-level property management expenses (7,761 ) (7,573 ) (23,313 ) (22,604 ) Depreciation and amortization (120,852 ) (117,451 ) (359,287 ) (350,893 ) General and administrative (10,601 ) (9,788 ) (36,539 ) (30,726 ) Expensed acquisition and investment related costs (31 ) (324 ) (156 ) (1,154 ) Interest expense (55,196 ) (55,938 ) (166,335 ) (167,333 ) Total return swap income 2,184 2,538 6,682 7,653 Interest and other income 8,437 5,790 21,241 17,916 Equity income from co-investments 16,788 19,727 64,611 40,934 Gain on sale of real estate and land — 249 22,244 26,423 Gain on remeasurement of co-investment — — — 88,641 Net income $ 86,110 $ 85,035 $ 289,159 $ 348,381 Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2018 and December 31, 2017 ($ in thousands): September 30, 2018 December 31, 2017 Assets: Southern California $ 4,566,713 $ 4,687,277 Northern California 4,229,777 4,220,551 Seattle Metro 1,484,544 1,522,452 Other real estate assets 60,560 162,496 Net reportable operating segment - real estate assets 10,341,594 10,592,776 Real estate under development 403,644 355,735 Co-investments 1,267,593 1,155,984 Cash and cash equivalents, including restricted cash 174,626 61,126 Marketable securities 210,596 190,004 Notes and other receivables 69,166 100,926 Prepaid expenses and other assets 50,924 39,155 Total assets $ 12,518,143 $ 12,495,706 |
Net Income Per Common Share and
Net Income Per Common Share and Net Income Per Common Unit | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Three Months Ended September 30, 2017 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 $ 80,975 66,052,108 $ 1.23 $ 79,723 65,994,896 $ 1.21 Effect of Dilutive Securities: Stock options — 51,704 — 83,387 Diluted: Net income available to common stockholders $ 80,975 66,103,812 $ 1.22 $ 79,723 66,078,283 $ 1.21 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 $ 272,333 66,047,990 $ 4.12 $ 329,446 65,759,450 $ 5.01 Effect of Dilutive Securities: Stock options — 45,014 — 77,515 Diluted: Net income available to common stockholders $ 272,333 66,093,004 $ 4.12 $ 329,446 65,836,965 $ 5.00 The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,272,983 and 2,251,112 , which include vested Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended September 30, 2018 and 2017 , respectively, and 2,273,163 and 2,251,673 for the nine months ended September 30, 2018 and 2017 , respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $2.8 million and $2.7 million for the three months ended September 30, 2018 and 2017 , respectively, and $9.4 million and $11.3 million for the nine months ended September 30, 2018 and 2017 , respectively. Additionally, the table excludes all DownREIT limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents. Stock options of 150,852 and zero for the three months ended September 30, 2018 and 2017 , respectively, and 160,252 and 2,352 for the nine months ended September 30, 2018 and 2017 were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such 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 September 30, 2018 Three Months Ended September 30, 2017 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 $ 83,764 68,325,091 $ 1.23 $ 82,444 68,246,008 $ 1.21 Effect of Dilutive Securities: Stock options — 51,704 — 83,387 Diluted: Net income available to common unitholders $ 83,764 68,376,795 $ 1.23 $ 82,444 68,329,395 $ 1.21 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 $ 281,714 68,321,153 $ 4.12 $ 340,735 68,011,123 $ 5.01 Effect of Dilutive Securities: Stock options — 45,014 — 77,515 Diluted: Net income available to common unitholders $ 281,714 68,366,167 $ 4.12 $ 340,735 68,088,638 $ 5.00 Stock options of 150,852 and zero for the three months ended September 30, 2018 and 2017 , respectively, and 160,252 and 2,352 for the nine months ended September 30, 2018 and 2017 , 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 limited partnership units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 9 Months Ended |
Sep. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities As of September 30, 2018 , the Company had entered into interest rate swap contracts with an aggregate notional amount of $175.0 million that effectively fixed the interest rate on the $175.0 million unsecured term loan at 2.3% . These derivatives qualify for hedge accounting. As of September 30, 2018 , the Company had interest rate caps, which are not accounted for as hedges, totaling a notional amount of $9.9 million that effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for $9.9 million of the Company’s tax exempt variable rate debt. As of September 30, 2018 and December 31, 2017 , the aggregate carrying value of the interest rate swap contracts was an asset of $8.8 million and $5.4 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 September 30, 2018 and December 31, 2017 . Hedge ineffectiveness related to cash flow hedges, which is included in interest expense on the condensed consolidated statements of income and comprehensive income, was not significant for the three and nine months ended September 30, 2018 and 2017 . Additionally, the Company has entered into total return swaps that effectively convert $256.2 million of mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index (“SIFMA”) plus a spread. The total return swaps provide fair market value protection on the mortgage notes payable to the 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 $256.2 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 September 30, 2018 and December 31, 2017 . These total return swaps are scheduled to mature between September 2021 and November 2022 . The realized gains of $2.2 million and $2.5 million for the three months ended September 30, 2018 and 2017, respectively, and $6.7 million and $7.7 million for the nine months ended September 30, 2018 and 2017 , respectively, were reported in the condensed consolidated statements of income and comprehensive income as total return swap income. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
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 have not had a material adverse effect on the Company's financial condition, results of operations or cash flows.While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company. The Company is subject to various federal, state, and local environmental laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current portfolio or on other assets that the Company may acquire in the future. 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 Pre_2
Organization and Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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 its 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, 2017 . 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, including the reclassification of corporate-level property management expenses out of property operating, excluding real estate taxes to its own line item on the Company's condensed consolidated statements of income and comprehensive income. |
Accounting Pronouncement Adopted in the Current Year and Recent Accounting Pronouncements | Accounting Pronouncements Adopted in the Current Year In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The new standard may be applied using either a full retrospective or a modified approach upon adoption. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified retrospective approach. See Note 3, Revenues, for further details. 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 is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-01 as of January 1, 2018 using the modified retrospective method by applying a cumulative effect adjustment to retained earnings and partners' capital of $2.2 million , representing accumulated net unrealized gains of certain equity securities held by the Company. Furthermore, as a result of the adoption of this standard, the Company will recognize changes in the fair value of equity investments with readily determinable fair values through net income as opposed to comprehensive income. 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 is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-15 as of January 1, 2018 using the retrospective transition method. This amendment did not have a material impact on the Company's 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2016-18 as of January 1, 2018 using the retrospective transition method. This amendment did not have a material impact on the Company's 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. Previously, U.S. GAAP did 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. The Company adopted ASU No. 2017-01 as of January 1, 2018 prospectively. The Company expects that substantially all of its acquisitions of communities will qualify as asset acquisitions and transaction costs related to these acquisitions will be capitalized upon adoption. 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 nonfinancial 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. The new standard is effective for interim and annual periods beginning after December 15, 2017. Management performed an evaluation of all of the Company's contracts that may be affected by the new standard. The Company adopted ASU No. 2017-05 concurrently with the adoption of ASU No. 2014-09 “Revenue from Contracts with Customers” as of January 1, 2018 using the modified-retrospective method by applying a cumulative effect adjustment to retained earnings and partners' capital of $123.7 million , representing the partial sale of its membership interest in BEX II, LLC (“BEX II”) during the fourth quarter of 2016. Recent Accounting Pronouncements 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 Company expects that its residential and commercial leases, where it is the lessor, will continue to be accounted for as operating leases under the new standard. In July 2018, the FASB issued ASU No. 2018-11 “Leases (Topic 842): Targeted Improvements,” which includes a practical expedient that allows lessors to not separate nonlease components from the associated lease component. This provides the Company with the option of not bifurcating certain common area maintenance recoveries as a non-lease component, if certain requirements are met. The Company expects to elect this practical expedient, which would result in minimum rents and expense recoveries being presented as a single revenue line item in the consolidated statement of income and comprehensive income. For leases where the Company is the lessee, which includes various corporate office and ground leases, the Company will be required to recognize a right of use asset and related lease liability on its consolidated balance sheets upon adoption. The Company expects that its corporate office leases, where it is the lessee, will continue to be accounted for as operating leases. The Company also expects to elect a package of practical expedients, under which the Company would not be required to reassess the classification of existing ground leases. The new standards will be effective for the Company beginning January 1, 2019 and early adoption is permitted, including adoption in an interim period. The Company currently anticipates adopting the new standards on the effective date. The Company expects to apply the new standard on January 1, 2019 and is continuing to evaluate the impact of these amendments 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 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 2017, the FASB issued ASU No. 2017-12 “Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities,” which, among other things, requires entities to present the earnings effect of hedging instruments in the same income statement line item in which the earnings effect of the hedged item is reported. The new standard also adds new disclosure requirements. This new standard will be effective for the Company beginning January 1, 2019 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 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which eliminates certain disclosure requirements affecting all levels of measurements, and modifies and adds new disclosure requirements for Level 3 measurements. The new standard will be effective for the Company beginning January 1, 2020 and early adoption is permitted. The Company is currently evaluating the impact of this amendment on its disclosures. |
Marketable Securities | Marketable Securities The Company reports its equity securities and available for sale debt 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). Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, 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 September 30, 2018 and December 31, 2017 , equity securities and available for sale debt securities consisted primarily of investment-grade unsecured bonds, common stock and stock funds, investments in mortgage backed securities, and investment funds that invest in U.S. treasury or agency securities. As of September 30, 2018 and December 31, 2017 , 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 | Variable Interest Entities In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidates the Operating Partnership, 16 limited partnerships, comprising eight communities, (the “DownREIT limited partnerships”) and eight co-investments as of September 30, 2018 . The Company consolidates these entities because it is deemed the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the eight consolidated co-investments and 16 DownREIT limited partnerships, net of intercompany eliminations, were approximately $839.1 million and $264.1 million , respectively, as of September 30, 2018 and $837.7 million and $265.5 million , respectively, as of December 31, 2017 . Noncontrolling interests in these entities were $64.6 million and $66.7 million as of September 30, 2018 and December 31, 2017 , respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of September 30, 2018 and December 31, 2017 , 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 | 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 annual report on Form 10-K for the year ended December 31, 2017 ) are being amortized over the expected service periods. |
Fair Value of Financial Instruments | 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 September 30, 2018 and December 31, 2017 , 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 fixed rate debt with a carrying value of $5.0 billion and $4.9 billion , including premiums, discounts and debt financing costs, at both September 30, 2018 and December 31, 2017 , was approximately $5.0 billion . Management has estimated that the fair value of the Company’s $612.7 million and $792.9 million of variable rate debt, net of debt financing costs, at September 30, 2018 and December 31, 2017 , respectively, was approximately $615.3 million and $793.9 million 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 September 30, 2018 and December 31, 2017 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of September 30, 2018 and December 31, 2017 . At September 30, 2018 , the Company’s investments in mortgage backed securities had a carrying value of $122.5 million and the Company estimated the fair value to be approximately $130.6 million . At December 31, 2017 , the Company’s investments in mortgage backed securities had a carrying value of $109.5 million and the Company estimated the fair value to be approximately $120.7 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 the expected discounted cash flows to estimate fair value. |
Capitalization of Costs | Capitalization of Costs The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of employee compensation and totaled $4.7 million and $4.6 million during the three months ended September 30, 2018 and 2017 , respectively, and $14.2 million and $14.0 million for the nine months ended September 30, 2018 and 2017 , 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 | Co-investments The Company owns investments in joint ventures and preferred equity investments, (collectively, “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 the transaction will be accounted for as a business combination if the entity meets the definition of a business pursuant to ASU No. 2017-01, or an asset acquisition if the entity is not determined to be a business. 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. As of December 31, 2017, the net investment of one of the Company’s co-investments was less than zero as a result of financing distributions in excess of the Company's investment in that co-investment. As a result of the Company's adoption of ASU No. 2017-05 on January 1, 2018, the carrying value of this co-investment was greater than zero as of September 30, 2018. |
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 statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt. |
Accounting Estimates | 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 Pre_3
Organization and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Components of marketable securities | As of September 30, 2018 and December 31, 2017 , marketable securities consist of the following ($ in thousands): September 30, 2018 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Equity securities: Investment funds - debt securities $ 31,914 $ (430 ) $ 31,484 Investment funds - U.S. treasuries 8,929 (90 ) 8,839 Common stock and stock funds 39,755 3,835 43,590 Debt securities: Available for sale Investment-grade unsecured bonds 4,281 (121 ) 4,160 Held to maturity Mortgage backed securities 122,523 — 122,523 Total - Marketable securities $ 207,402 $ 3,194 $ 210,596 December 31, 2017 Amortized Cost Gross Unrealized Gain (Loss) Carrying Value Equity securities: Investment funds - debt securities $ 27,914 $ (29 ) $ 27,885 Investment funds - U.S. treasuries 10,999 (55 ) 10,944 Common stock and stock funds 34,329 2,973 37,302 Debt securities: Available for sale Investment-grade unsecured bonds 4,365 (40 ) 4,325 Held to maturity Mortgage backed securities 109,548 — 109,548 Total - Marketable securities $ 187,155 $ 2,849 $ 190,004 |
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/(losses) on available for sale securities Total Balance at December 31, 2017 $ (20,641 ) $ 2,195 $ (18,446 ) Cumulative effect upon adoption of ASU No. 2016-01 — (2,234 ) (2,234 ) Other comprehensive income before reclassification 18,075 (84 ) 17,991 Amounts reclassified from accumulated other comprehensive loss (5,865 ) 6 (5,859 ) Other comprehensive income 12,210 (2,312 ) 9,898 Balance at September 30, 2018 $ (8,431 ) $ (117 ) $ (8,548 ) 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/(losses) on available for sale securities Total Balance at December 31, 2017 $ (17,417 ) $ 2,188 $ (15,229 ) Cumulative effect upon adoption of ASU No. 2016-01 — (2,228 ) (2,228 ) Other comprehensive income before reclassification 18,697 (87 ) 18,610 Amounts reclassified from accumulated other comprehensive loss (6,067 ) 6 (6,061 ) Other comprehensive income 12,630 (2,309 ) 10,321 Balance at September 30, 2018 $ (4,787 ) $ (121 ) $ (4,908 ) |
Schedule of changes to the redemption value of noncontrolling interests | The changes to the redemption value of redeemable noncontrolling interests for the nine months ended September 30, 2018 is as follows ($ in thousands): Balance at December 31, 2017 $ 39,206 Reclassification due to change in redemption value and other 2,253 Redemptions (4,794 ) Balance at September 30, 2018 $ 36,665 |
Schedule of cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2018 December 31, 2017 September 30, 2017 December 31, 2016 Cash and cash equivalents - unrestricted $ 157,279 $ 44,620 $ 46,507 $ 64,921 Cash and cash equivalents - restricted 17,347 16,506 16,766 105,381 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 174,626 $ 61,126 $ 63,273 $ 170,302 |
Schedule of restricted cash and cash equivalents | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands): September 30, 2018 December 31, 2017 September 30, 2017 December 31, 2016 Cash and cash equivalents - unrestricted $ 157,279 $ 44,620 $ 46,507 $ 64,921 Cash and cash equivalents - restricted 17,347 16,506 16,766 105,381 Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows $ 174,626 $ 61,126 $ 63,273 $ 170,302 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Rental $ 324,780 $ 319,308 $ 969,461 $ 943,976 Other property leasing revenue 23,830 22,666 70,622 67,932 Management and other fees from affiliates 2,307 2,395 6,812 6,927 Total revenues $ 350,917 $ 344,369 $ 1,046,895 $ 1,018,835 The following table presents the Company’s rental and other property-related revenues disaggregated by geographic operating segment ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Southern California $ 151,847 $ 148,150 452,047 438,654 Northern California 131,538 127,673 389,750 377,531 Seattle Metro 59,231 58,285 176,740 171,564 Other real estate assets (1) 5,994 7,866 21,546 24,159 Total rental and other property leasing revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 (1) Other real estate assets consists of revenue generated from retail space, commercial properties, held for sale properties, and disposition properties. Executive management does not evaluate such operating performance geographically. The following table presents the Company’s rental and other property-related revenues disaggregated by current property category status ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Same-property (1) $ 324,271 $ 317,302 $ 965,649 $ 939,762 Acquisitions (2) 10,695 10,498 31,579 28,854 Development (3) 1,091 — 1,560 — Redevelopment 5,125 4,913 15,185 14,636 Non-residential/other, net (4) 7,428 9,261 26,110 28,656 Total rental and other property leasing revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 (1) Stabilized properties consolidated by the Company for the three and nine months ended September 30, 2018 and 2017. (2) Acquisitions includes properties acquired which did not have comparable stabilized results as of January 1, 2017. (3) Development includes properties developed which did not have stabilized results as of January 1, 2017. (4) Non-residential/other, net consists of revenue generated from retail space, commercial properties, held for sale properties, disposition properties and student housing. |
Co-investments (Tables)
Co-investments (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 and December 31, 2017 are as follows ($ in thousands, except parenthetical amounts): Weighted Average Company Ownership Percentage (1) September 30, 2018 December 31, 2017 Ownership interest in: CPPIB 54 % $ 487,002 $ 500,287 Wesco I, Wesco III, Wesco IV, and Wesco V 52 % 187,905 214,408 BEXAEW, BEX II and BEX III (2) 50 % 118,924 13,827 Other 51 % 46,229 51,810 Total operating and other co-investments, net 840,060 780,332 Total development co-investments, net 50 % 77,144 73,770 Total preferred interest co-investments (includes related party investments of $36.8 million and $15.7 million as of September 30, 2018 and December 31, 2017, respectively) 350,389 265,156 Total co-investments, net $ 1,267,593 $ 1,119,258 (1) Weighted average Company ownership percentages are as of September 30, 2018 . (2) As of December 31, 2017, the Company's investment in BEX II was classified as a liability of $36.7 million . |
Summarized financial information for co-investments accounted for under the equity method | The combined summarized entity financial information of co-investments is as follows ($ in thousands). September 30, 2018 December 31, 2017 Combined balance sheets: (1) Rental properties and real estate under development $ 4,221,973 $ 3,722,778 Other assets 146,930 110,333 Total assets $ 4,368,903 $ 3,833,111 Debt $ 2,089,414 $ 1,705,051 Other liabilities 101,514 45,515 Equity 2,177,975 2,082,545 Total liabilities and equity $ 4,368,903 $ 3,833,111 Company's share of equity $ 1,267,593 $ 1,155,984 Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Combined statements of income: (1) Property revenues $ 84,820 $ 76,303 $ 247,010 $ 224,319 Property operating expenses (27,779 ) (27,753 ) (81,415 ) (79,028 ) Net operating income 57,041 48,550 165,595 145,291 Gain on sale of real estate — 10,058 — 10,058 Interest expense (15,805 ) (13,718 ) (46,179 ) (39,663 ) General and administrative (1,254 ) (2,452 ) (5,134 ) (6,147 ) Depreciation and amortization (32,833 ) (27,884 ) (95,312 ) (84,211 ) Net income $ 7,149 $ 14,554 $ 18,970 $ 25,328 Company's share of net income (2) $ 16,788 $ 19,727 $ 64,611 $ 40,934 (1) Includes preferred equity investments held by the Company. (2) Includes the Company's share of equity income from joint ventures 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 $0.7 million and $0.5 million for the three months ended September 30, 2018 and 2017 , respectively, and $1.4 million and $1.5 million for the nine months ended September 30, 2018 and 2017 , respectively. |
Notes and Other Receivables (Ta
Notes and Other Receivables (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Notes and other receivables | Notes and other receivables consist of the following as of September 30, 2018 and December 31, 2017 ($ in thousands): September 30, 2018 December 31, 2017 Notes receivable, bearing interest at 10.00%, due May 2021 $ 14,843 $ 13,762 Notes receivable, bearing interest at 10.75%, due September 2020 31,776 29,318 Related party note receivable, bearing interest at 9.50%, due October 2019 (1) 6,613 6,656 Related party note receivable, bearing interest at 3.50%, due March 2018 (1) — 29,500 Notes and other receivables from affiliates (2) 3,641 5,061 Other receivables 12,293 16,629 Total notes and other receivables $ 69,166 $ 100,926 (1) See Note 6, Related Party Transactions, for additional details. (2) These amounts consist of short-term loans outstanding and due from various joint ventures as of September 30, 2018 and December 31, 2017 , respectively. See Note 6, Related Party Transactions, for additional details. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt and lines of credit | Debt consists of the following ($ in thousands): September 30, 2018 December 31, 2017 Weighted Average Maturity In Years as of September 30, 2018 Unsecured bonds private placement - fixed rate $ 274,574 $ 274,427 2.3 Term loan - variable rate 348,717 348,545 3.4 Bonds public offering - fixed rate 3,175,414 2,878,737 7.9 Unsecured debt, net (1) 3,798,705 3,501,709 Lines of credit (2) — 179,000 Mortgage notes payable, net (3) 1,834,967 2,008,417 4.5 Total debt, net $ 5,633,672 $ 5,689,126 Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering 3.9 % 3.7 % Weighted average interest rate on variable rate term loan 2.8 % 2.5 % Weighted average interest rate on lines of credit 3.0 % 2.3 % Weighted average interest rate on mortgage notes payable 4.4 % 4.2 % (1) Includes unamortized discount of $7.0 million and $5.2 million and unamortized debt issuance costs of $19.3 million and $18.1 million , as of September 30, 2018 and December 31, 2017 , respectively. (2) Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of September 30, 2018 , excludes unamortized debt issuance costs of $4.2 million and $3.2 million as of September 30, 2018 and December 31, 2017 , respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of September 30, 2018, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.875% , which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of December 2021 with one 18 -month extension, exercisable at the Company’s option. As of September 30, 2018, the Company’s $35.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.875% , which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of January 2020. (3) Includes total unamortized premium of $21.2 million and $33.2 million , reduced by unamortized debt issuance costs of $4.4 million and $5.4 million , as of September 30, 2018 and December 31, 2017 , respectively. |
Summary of aggregate scheduled principal payments | The aggregate scheduled principal payments of the Company’s outstanding debt as of September 30, 2018 are as follows (excluding lines of credit) ($ in thousands): Remaining in 2018 $ 68,054 2019 605,688 2020 693,723 2021 543,604 2022 691,178 Thereafter 3,040,928 Total $ 5,643,175 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Reconciliation of revenues and operating profit (loss) from segments to consolidated | The revenues and NOI for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2018 and 2017 ($ in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Revenues: Southern California $ 151,847 $ 148,150 $ 452,047 $ 438,654 Northern California 131,538 127,673 389,750 377,531 Seattle Metro 59,231 58,285 176,740 171,564 Other real estate assets 5,994 7,866 21,546 24,159 Total property revenues $ 348,610 $ 341,974 $ 1,040,083 $ 1,011,908 Net operating income: Southern California $ 106,853 $ 104,378 $ 321,477 $ 311,017 Northern California 97,306 93,212 289,081 277,635 Seattle Metro 41,040 41,137 123,547 121,121 Other real estate assets 5,636 6,683 19,094 22,824 Total net operating income 250,835 245,410 753,199 732,597 Management and other fees from affiliates 2,307 2,395 6,812 6,927 Corporate-level property management expenses (7,761 ) (7,573 ) (23,313 ) (22,604 ) Depreciation and amortization (120,852 ) (117,451 ) (359,287 ) (350,893 ) General and administrative (10,601 ) (9,788 ) (36,539 ) (30,726 ) Expensed acquisition and investment related costs (31 ) (324 ) (156 ) (1,154 ) Interest expense (55,196 ) (55,938 ) (166,335 ) (167,333 ) Total return swap income 2,184 2,538 6,682 7,653 Interest and other income 8,437 5,790 21,241 17,916 Equity income from co-investments 16,788 19,727 64,611 40,934 Gain on sale of real estate and land — 249 22,244 26,423 Gain on remeasurement of co-investment — — — 88,641 Net income $ 86,110 $ 85,035 $ 289,159 $ 348,381 |
Reconciliation of assets from segment to consolidated | Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2018 and December 31, 2017 ($ in thousands): September 30, 2018 December 31, 2017 Assets: Southern California $ 4,566,713 $ 4,687,277 Northern California 4,229,777 4,220,551 Seattle Metro 1,484,544 1,522,452 Other real estate assets 60,560 162,496 Net reportable operating segment - real estate assets 10,341,594 10,592,776 Real estate under development 403,644 355,735 Co-investments 1,267,593 1,155,984 Cash and cash equivalents, including restricted cash 174,626 61,126 Marketable securities 210,596 190,004 Notes and other receivables 69,166 100,926 Prepaid expenses and other assets 50,924 39,155 Total assets $ 12,518,143 $ 12,495,706 |
Net Income Per Common Share a_2
Net Income Per Common Share and Net Income Per Common Unit (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 Three Months Ended September 30, 2017 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 $ 80,975 66,052,108 $ 1.23 $ 79,723 65,994,896 $ 1.21 Effect of Dilutive Securities: Stock options — 51,704 — 83,387 Diluted: Net income available to common stockholders $ 80,975 66,103,812 $ 1.22 $ 79,723 66,078,283 $ 1.21 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 $ 272,333 66,047,990 $ 4.12 $ 329,446 65,759,450 $ 5.01 Effect of Dilutive Securities: Stock options — 45,014 — 77,515 Diluted: Net income available to common stockholders $ 272,333 66,093,004 $ 4.12 $ 329,446 65,836,965 $ 5.00 |
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 September 30, 2018 Three Months Ended September 30, 2017 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 $ 83,764 68,325,091 $ 1.23 $ 82,444 68,246,008 $ 1.21 Effect of Dilutive Securities: Stock options — 51,704 — 83,387 Diluted: Net income available to common unitholders $ 83,764 68,376,795 $ 1.23 $ 82,444 68,329,395 $ 1.21 Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 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 $ 281,714 68,321,153 $ 4.12 $ 340,735 68,011,123 $ 5.01 Effect of Dilutive Securities: Stock options — 45,014 — 77,515 Diluted: Net income available to common unitholders $ 281,714 68,366,167 $ 4.12 $ 340,735 68,088,638 $ 5.00 |
Organization and Basis of Pre_4
Organization and Basis of Presentation - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($)communitypartnershipbuildinginvestmentapartmentprojectshares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)communitypartnershipbuildinginvestmentapartmentprojectshares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)investmentshares | Jan. 01, 2018USD ($) | Dec. 31, 2016USD ($) | |
Real Estate Properties [Line Items] | |||||||
Buildings and improvements | $ 10,744,841 | $ 10,744,841 | $ 10,643,009 | ||||
Prepaid expenses and other assets | $ 50,924 | $ 50,924 | $ 39,155 | ||||
Ownership interest in partnership | 96.70% | 96.70% | |||||
Apartment communities owned (in communities) | community | 247 | 247 | |||||
Apartment units owned (in units) | apartment | 59,982 | 59,982 | |||||
Ownership interest, number of commercial buildings (in commercial buildings) | building | 1 | 1 | |||||
Ownership interest, number of active development projects (in projects) | project | 6 | 6 | |||||
Ownership interest, number of loan investments (in investments) | investment | 3 | 3 | |||||
Sales and maturities of marketable securities | $ 3,500 | $ 4,600 | $ 22,500 | $ 33,400 | |||
Marketable securities, realized gain (loss) | $ 100 | 32 | $ 700 | 1,700 | |||
Downreit limited partnerships consolidated by company (in partnerships) | partnership | 16 | 16 | |||||
Communities within Downreit partnerships (in communities) | community | 8 | 8 | |||||
Number of previously consolidated co-investments considered VIE (in investments) | investment | 8 | 8 | |||||
Assets related to variable interest entities net of intercompany eliminations | $ 839,100 | $ 839,100 | $ 837,700 | ||||
Liabilities related to variable interest entities net of intercompany eliminations | 264,100 | 264,100 | 265,500 | ||||
Noncontrolling interest in variable interest entity | 64,600 | 64,600 | 66,700 | ||||
Fixed rate debt carrying amount | 5,000,000 | 5,000,000 | 4,900,000 | ||||
Fixed rate debt fair value | 5,000,000 | 5,000,000 | 5,000,000 | ||||
Variable rate debt, carrying amount | 612,700 | 612,700 | 792,900 | ||||
Variable rate debt fair value | 615,300 | 615,300 | 793,900 | ||||
Investments in mortgage back securities, fair value | 130,600 | 130,600 | $ 120,700 | ||||
Capitalized internal costs related to development and redevelopment projects | 4,700 | $ 4,600 | 14,200 | $ 14,000 | |||
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] | |||||||
Investments in mortgage backed securities, carrying value | 122,523 | 122,523 | $ 109,548 | ||||
Interest And Other Income [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Gain (loss) on sale of equity securities | 1,200 | 400 | |||||
ASU 2016-01 [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Cumulative effect upon adoption | 0 | ||||||
ASU 2017-05 [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Cumulative effect upon adoption | 123,708 | $ 123,700 | |||||
Essex Portfolio, L.P. [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Buildings and improvements | 10,744,841 | 10,744,841 | 10,643,009 | ||||
Prepaid expenses and other assets | $ 50,924 | $ 50,924 | $ 39,155 | ||||
Operating Partnership units outstanding (in units) | shares | 2,272,983 | 2,272,983 | 2,268,114 | ||||
Redemption value of operating partnership units outstanding | $ 560,800 | $ 560,800 | $ 547,500 | ||||
Essex Portfolio, L.P. [Member] | ASU 2016-01 [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Cumulative effect upon adoption | 0 | ||||||
Essex Portfolio, L.P. [Member] | ASU 2017-05 [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Cumulative effect upon adoption | 123,708 | ||||||
Adjustment [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Buildings and improvements | 13,200 | ||||||
Prepaid expenses and other assets | $ (10,000) | $ (10,000) | $ (9,300) | ||||
Adjustment [Member] | ASU 2016-01 [Member] | |||||||
Real Estate Properties [Line Items] | |||||||
Cumulative effect upon adoption | $ 2,200 |
Organization and Basis of Pre_5
Organization and Basis of Presentation - Summary of Financial Securities (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Held to maturity | ||
Equity and Debt Securities, Amortized Cost | $ 207,402 | $ 187,155 |
Equity and Debt Securities, Gross Unrealized Gain (Loss) | 3,194 | 2,849 |
Equity and Debt Securities, Marketable Securities | 210,596 | 190,004 |
Investment funds - debt securities [Member] | ||
Equity securities: | ||
Amortized Cost | 31,914 | 27,914 |
Gross Unrealized Gain (Loss) | (430) | (29) |
Carrying Value | 31,484 | 27,885 |
Investment funds - U.S. treasuries [Member] | ||
Equity securities: | ||
Amortized Cost | 8,929 | 10,999 |
Gross Unrealized Gain (Loss) | (90) | (55) |
Carrying Value | 8,839 | 10,944 |
Common stock and stock funds [Member] | ||
Equity securities: | ||
Amortized Cost | 39,755 | 34,329 |
Gross Unrealized Gain (Loss) | 3,835 | 2,973 |
Carrying Value | 43,590 | 37,302 |
Investment-grade unsecured bonds [Member] | ||
Available for sale | ||
Amortized Cost | 4,281 | 4,365 |
Gross Unrealized Gain (Loss) | (121) | (40) |
Carrying Value | 4,160 | 4,325 |
Mortgage backed securities [Member] | ||
Held to maturity | ||
Amortized Cost | 122,523 | 109,548 |
Gross Unrealized Gain (Loss) | 0 | 0 |
Carrying Value | $ 122,523 | $ 109,548 |
Organization and Basis of Pre_6
Organization and Basis of Presentation - Accumulated Other Comprehensive Loss Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | $ 6,396,825 | |
Balance at period end | 6,436,028 | |
Accumulated Other Comprehensive Loss, Net [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | (18,446) | |
Cumulative effect upon adoption | $ (2,234) | |
Other comprehensive income before reclassification | 17,991 | |
Amounts reclassified from accumulated other comprehensive loss | (5,859) | |
Other comprehensive income | 9,898 | |
Balance at period end | (8,548) | |
Change in Fair Value and Amortization of Swap Settlements [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | (20,641) | |
Cumulative effect upon adoption | 0 | |
Other comprehensive income before reclassification | 18,075 | |
Amounts reclassified from accumulated other comprehensive loss | (5,865) | |
Other comprehensive income | 12,210 | |
Balance at period end | (8,431) | |
Unrealized Gains/(Loss) on Available for Sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | 2,195 | |
Cumulative effect upon adoption | $ (2,234) | |
Other comprehensive income before reclassification | (84) | |
Amounts reclassified from accumulated other comprehensive loss | 6 | |
Other comprehensive income | (2,312) | |
Balance at period end | $ (117) |
Organization and Basis of Pre_7
Organization and Basis of Presentation - Accumulated Other Comprehensive Loss - Partnership (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | $ 6,396,825 | |
Balance at period end | 6,436,028 | |
Essex Portfolio, L.P. [Member] | Accumulated Other Comprehensive Loss, Net [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | (15,229) | |
Cumulative effect upon adoption | $ (2,228) | |
Other comprehensive income before reclassification | 18,610 | |
Amounts reclassified from accumulated other comprehensive loss | (6,061) | |
Other comprehensive income | 10,321 | |
Balance at period end | (4,908) | |
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 | (17,417) | |
Cumulative effect upon adoption | 0 | |
Other comprehensive income before reclassification | 18,697 | |
Amounts reclassified from accumulated other comprehensive loss | (6,067) | |
Other comprehensive income | 12,630 | |
Balance at period end | (4,787) | |
Essex Portfolio, L.P. [Member] | Unrealized Gains/(Loss) on Available for Sale Securities [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at period beginning | 2,188 | |
Cumulative effect upon adoption | $ (2,228) | |
Other comprehensive income before reclassification | (87) | |
Amounts reclassified from accumulated other comprehensive loss | 6 | |
Other comprehensive income | (2,309) | |
Balance at period end | $ (121) |
Organization and Basis of Pre_8
Organization and Basis of Presentation - Redeemable Noncontrolling Interest (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward] | |
December 31, 2017 | $ 39,206 |
Reclassification due to change in redemption value and other | 2,253 |
Redemptions | (4,794) |
September 30, 2018 | $ 36,665 |
Organization and Basis of Pre_9
Organization and Basis of Presentation - Cash, Cash Equivalents and Restricted Cash And Cash Equivalents (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents-unrestricted | $ 157,279 | $ 44,620 | $ 46,507 | $ 64,921 |
Cash and cash equivalents-restricted | 17,347 | 16,506 | 16,766 | 105,381 |
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows | $ 174,626 | $ 61,126 | $ 63,273 | $ 170,302 |
Significant Transactions Duri_2
Significant Transactions During the Nine Months Ended September 30, 2018 and Subsequent Events (Details) | 1 Months Ended | 5 Months Ended | 9 Months Ended | |||||
Oct. 31, 2018USD ($)unitapartment | Jun. 30, 2018USD ($)unit | May 31, 2018USD ($)apartment | Mar. 31, 2018USD ($) | Jan. 31, 2018USD ($)shares | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | |
Other Commitments [Line Items] | ||||||||
Promote income | $ 20,500,000 | |||||||
Proceeds from full redemption of a preferred equity investment in a joint venture | $ 26,500,000 | $ 2,400,000 | ||||||
Gain on early redemption of preferred equity investment | $ 1,600,000 | |||||||
Stock repurchased and retired during the period (in shares) | shares | 16,834 | |||||||
Stock repurchased and retired during the period | $ 3,800,000 | |||||||
Purchase authority remaining under stock repurchase plan | $ 245,200,000 | $ 245,200,000 | ||||||
Acquisitions of real estate | 7,807,000 | $ 200,028,000 | ||||||
Preferred equity investments | $ 100,202,000 | $ 231,552,000 | ||||||
Senior Notes [Member] | Senior Unsecured Notes At 4.500% [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Debt, face amount | $ 300,000,000 | |||||||
Debt, term (in years) | 30 years | |||||||
Debt, stated interest rate | 4.50% | |||||||
Domain [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Number of units sold | unit | 379 | |||||||
Proceeds from sale of real estate | $ 132,000,000 | |||||||
Gain (loss) on sale of properties | $ 22,200,000 | |||||||
Apartment Home Community In Ventura, California [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Commitment to fund preferred equity investment | $ 26,500,000 | |||||||
Number of units acquired | apartment | 400 | |||||||
Preferred returns rate | 10.25% | |||||||
Commitment funded amount | $ 20,600,000 | |||||||
BEX III [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Repayments of related party debt | $ 29,500,000 | |||||||
Meridian at Midtown [Member] | Wesco V [Member] | Subsequent Event [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Number of units acquired | unit | 218 | |||||||
Acquisitions of real estate | $ 104,000,000 | |||||||
Mortgage debt assumed in connection with the acquisition | $ 69,900,000 | |||||||
Effective interest rate of mortgage debt incurred as consideration | 4.50% | |||||||
Home Community Development in Burlingame, California [Member] | Subsequent Event [Member] | Affiliated Entity [Member] | ||||||||
Other Commitments [Line Items] | ||||||||
Number of units acquired | apartment | 268 | |||||||
Preferred returns rate | 12.00% | |||||||
Preferred equity investments | $ 18,600,000 |
Revenues (Details)
Revenues (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Total revenues | $ 350,917 | $ 344,369 | $ 1,046,895 | $ 1,018,835 | |
Deferred revenue | 6,900 | 6,900 | $ 9,300 | ||
Deferred revenue, revenue recognized | 2,400 | ||||
Deferred revenue balance from contracts with remaining performance obligations | 6,900 | 6,900 | |||
Rental [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 324,780 | 319,308 | 969,461 | 943,976 | |
Other Property Leasing Revenue [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 23,830 | 22,666 | 70,622 | 67,932 | |
Management and Other Fees From Affiliates Income [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 2,307 | 2,395 | 6,812 | 6,927 | |
Rental and Other Property Revenues [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 348,610 | 341,974 | 1,040,083 | 1,011,908 | |
Rental and Other Property Revenues [Member] | Same Property [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 324,271 | 317,302 | 965,649 | 939,762 | |
Rental and Other Property Revenues [Member] | Acquisitions [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 10,695 | 10,498 | 31,579 | 28,854 | |
Rental and Other Property Revenues [Member] | Development [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 1,091 | 0 | 1,560 | 0 | |
Rental and Other Property Revenues [Member] | Redevelopment [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 5,125 | 4,913 | 15,185 | 14,636 | |
Rental and Other Property Revenues [Member] | Non-Residential/Other, Net [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 7,428 | 9,261 | 26,110 | 28,656 | |
Rental and Other Property Revenues [Member] | Operating Segments [Member] | Southern California [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 151,847 | 148,150 | 452,047 | 438,654 | |
Rental and Other Property Revenues [Member] | Operating Segments [Member] | Northern California [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 131,538 | 127,673 | 389,750 | 377,531 | |
Rental and Other Property Revenues [Member] | Operating Segments [Member] | Seattle Metro [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | 59,231 | 58,285 | 176,740 | 171,564 | |
Rental and Other Property Revenues [Member] | Other real estate assets [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Total revenues | $ 5,994 | $ 7,866 | $ 21,546 | $ 24,159 | |
Minimum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Lease term | 6 months | 6 months | |||
Maximum [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Lease term | 12 months | 12 months |
Revenues - Deferred Revenues an
Revenues - Deferred Revenues and Remaining Performance Obligations (Details) | Sep. 30, 2018 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligations due per period | 11.00% |
Expected timing of performance obligation satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Percentage of remaining performance obligations due per period | 43.00% |
Expected timing of performance obligation satisfaction, period | 2 years |
Co-investments - Summary of Inv
Co-investments - Summary of Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 1,267,593 | $ 1,119,258 |
Total operating and other co-investments, net [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 840,060 | 780,332 |
Membership Interest In CPPIB [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments | 54.00% | |
Co-investments | $ 487,002 | 500,287 |
Membership interest in Wesco I, III, IV, and V [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments | 52.00% | |
Co-investments | $ 187,905 | 214,408 |
Membership interest in BEXAEW, BEX II And BEX III [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments | 50.00% | |
Co-investments | $ 118,924 | 13,827 |
Membership In Other [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments | 51.00% | |
Co-investments | $ 46,229 | 51,810 |
Total development co-investments, net [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Limited partnership interest in partnership investments | 50.00% | |
Co-investments | $ 77,144 | 73,770 |
Total preferred interest co-investments [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | 350,389 | 265,156 |
Total preferred interest co-investments [Member] | Investments in Majority-owned Subsidiaries [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ 36,800 | 15,700 |
BEX II [Member] | ||
Schedule of Equity Method Investments [Line Items] | ||
Co-investments | $ (36,700) |
Co-investments - Combined Finan
Co-investments - Combined Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Equity Method Investment, Summarized Financial Information, Assets [Abstract] | |||||
Rental properties and real estate under development | $ 403,644 | $ 403,644 | $ 355,735 | ||
Other liabilities | 33,616 | 33,616 | 33,132 | ||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||||
Interest expense | (55,196) | $ (55,938) | (166,335) | $ (167,333) | |
General and administrative | (10,601) | (9,788) | (36,539) | (30,726) | |
Total co investment [Member] | |||||
Equity Method Investment, Summarized Financial Information, Assets [Abstract] | |||||
Rental properties and real estate under development | 4,221,973 | 4,221,973 | 3,722,778 | ||
Other assets | 146,930 | 146,930 | 110,333 | ||
Total assets | 4,368,903 | 4,368,903 | 3,833,111 | ||
Debt | 2,089,414 | 2,089,414 | 1,705,051 | ||
Other liabilities | 101,514 | 101,514 | 45,515 | ||
Equity | 2,177,975 | 2,177,975 | 2,082,545 | ||
Total liabilities and equity | 4,368,903 | 4,368,903 | 3,833,111 | ||
Company's share of equity | 1,267,593 | 1,267,593 | $ 1,155,984 | ||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||||
Property revenues | 84,820 | 76,303 | 247,010 | 224,319 | |
Property operating expenses | (27,779) | (27,753) | (81,415) | (79,028) | |
Net operating income | 57,041 | 48,550 | 165,595 | 145,291 | |
Gain on sale of real estate | 0 | 10,058 | 0 | 10,058 | |
Interest expense | (15,805) | (13,718) | (46,179) | (39,663) | |
General and administrative | (1,254) | (2,452) | (5,134) | (6,147) | |
Depreciation and amortization | (32,833) | (27,884) | (95,312) | (84,211) | |
Net income | 7,149 | 14,554 | 18,970 | 25,328 | |
Company's share of net income | 16,788 | 19,727 | 64,611 | 40,934 | |
Total co investment [Member] | Affiliated Entity [Member] | |||||
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract] | |||||
Company's share of net income | $ 700 | $ 500 | $ 1,400 | $ 1,500 |
Notes and Other Receivables (De
Notes and Other Receivables (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 69,166 | $ 100,926 |
Secured Note Receivable, 10.00% Interest Rate, Due May 2021 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 14,843 | 13,762 |
Stated interest rate | 10.00% | |
Secured Note Receivable, 10.75% Interest Rate, Due September 2020 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 31,776 | 29,318 |
Stated interest rate | 10.75% | |
Secured Note Receivable, 9.50% Interest Rate, Due October 2019 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 6,613 | 6,656 |
Stated interest rate | 9.50% | |
Secured Note Receivable, 3.50% Interest Rate, Due March 2018 [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 0 | 29,500 |
Stated interest rate | 3.50% | |
Notes and Other Receivables from Affiliates [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 3,641 | 5,061 |
Other Receivables [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Notes receivable | $ 12,293 | $ 16,629 |
Related Party Transactions (Det
Related Party Transactions (Details) | 1 Months Ended | 3 Months Ended | 5 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Oct. 31, 2018USD ($)apartment | May 31, 2018USD ($)apartment | Nov. 30, 2017USD ($) | Mar. 31, 2017USD ($)unit | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2018USD ($)investment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Dec. 31, 2015USD ($)investment | Nov. 30, 2016USD ($) | |
Related Party Transaction [Line Items] | ||||||||||||
Management and other fees from affiliates | $ 3,600,000 | $ 3,100,000 | $ 10,000,000 | $ 9,000,000 | ||||||||
Development and redevelopment fees | 1,300,000 | $ 700,000 | 3,200,000 | 2,100,000 | ||||||||
Payments to acquire preferred equity investments | 100,202,000 | $ 231,552,000 | ||||||||||
Co-investments | 1,267,593,000 | $ 1,267,593,000 | $ 1,267,593,000 | $ 1,155,984,000 | ||||||||
Equity investment, redeemed amount | 5,000,000 | |||||||||||
Number of equity method investments scheduled to mature | investment | 2 | |||||||||||
Short-term loans outstanding and due from various joint ventures | 3,600,000 | 3,600,000 | $ 3,600,000 | 5,100,000 | ||||||||
Apartment Home Community In Ventura, California [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of units acquired | apartment | 400 | |||||||||||
Preferred returns rate | 10.25% | |||||||||||
Commitment to fund preferred equity investment | $ 26,500,000 | |||||||||||
Commitment funded amount | 20,600,000 | |||||||||||
Membership Interest In Sage At Cupertino [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Number of units acquired | unit | 230 | |||||||||||
Co-investments | $ 15,300,000 | |||||||||||
Equity method investment, ownership percentage acquired | 40.50% | |||||||||||
Contract price | $ 90,000,000 | |||||||||||
Mortgage encumbrance | $ 52,000,000 | |||||||||||
Affiliated Entity [Member] | Subsequent Event [Member] | Home Community Development in Burlingame, California [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire preferred equity investments | $ 18,600,000 | |||||||||||
Number of units acquired | apartment | 268 | |||||||||||
Preferred returns rate | 12.00% | |||||||||||
Affiliated Entity [Member] | BEX III [Member] | Secured Note Receivable, 3.5% Interest Rate, Due March 9, 2018 [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | $ 29,500,000 | 0 | 0 | 0 | ||||||||
Note receivable, related party, interest rate | 3.50% | |||||||||||
Limited Liability Company [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Payments to acquire preferred equity investments | $ 20,000,000 | |||||||||||
Number of preferred equity method investments acquired during period (in investments) | investment | 3 | |||||||||||
Preferred stock, stated interest percentage | 9.50% | |||||||||||
Limited Liability Company [Member] | Marcus and Millichamp Company TMMC Affiliate [Member] | Secured Note Receivable, 9.50% Interest Rate, Due October 2019 [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Notes receivable | $ 6,600,000 | $ 6,600,000 | $ 6,600,000 | $ 6,700,000 | $ 6,600,000 |
Debt - Debt Summary (Details)
Debt - Debt Summary (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 3,798,705 | $ 3,501,709 |
Lines of credit | 0 | 179,000 |
Mortgage notes payable, net | 1,834,967 | 2,008,417 |
Total debt | 5,633,672 | 5,689,126 |
Unsecured bonds private placement - fixed rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 274,574 | 274,427 |
Debt, weighted average maturity (years) | 2 years 4 months 1 day | |
Term loan - variable rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 348,717 | $ 348,545 |
Debt, weighted average maturity (years) | 3 years 5 months 1 day | |
Weighted average interest rate | 2.80% | 2.50% |
Bonds public offering - fixed rate [Member] | ||
Debt Instrument [Line Items] | ||
Unsecured debt, net | $ 3,175,414 | $ 2,878,737 |
Debt, weighted average maturity (years) | 7 years 11 months 1 day | |
Weighted average interest rate | 3.90% | 3.70% |
Unsecured Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Lines of credit | $ 0 | $ 179,000 |
Weighted average interest rate | 3.00% | 2.30% |
Mortgage notes payable, net [Member] | ||
Debt Instrument [Line Items] | ||
Debt, weighted average maturity (years) | 4 years 6 months 1 day | |
Mortgage notes payable, net | $ 1,834,967 | $ 2,008,417 |
Weighted average interest rate | 4.40% | 4.20% |
Debt - Narrative (Details)
Debt - Narrative (Details) | 9 Months Ended | |
Sep. 30, 2018USD ($)instrumentextension | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Number of lines of unsecured credit (in instruments) | instrument | 2 | |
Unsecured Debt [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ 7,000,000 | $ 5,200,000 |
Unamortized debt issuance expense | 19,300,000 | 18,100,000 |
Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | 1,240,000,000 | |
Line of Credit [Member] | Unsecured Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized debt issuance expense | 4,200,000 | 3,200,000 |
Unsecured Line of Credit [Member] | Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | $ 1,200,000,000 | |
Number of extension options (in extensions) | extension | 1 | |
Extension period (in months) | 18 months | |
Unsecured Line of Credit [Member] | Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.875% | |
Unsecured Line of Credit [Member] | Line of Credit Working Capital [Member] | ||
Debt Instrument [Line Items] | ||
Aggregate borrowing capacity | $ 35,000,000 | |
Unsecured Line of Credit [Member] | Line of Credit Working Capital [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate | 0.875% | |
Mortgage notes payable, net [Member] | ||
Debt Instrument [Line Items] | ||
Unamortized discount (premium), net | $ (21,200,000) | (33,200,000) |
Unamortized debt issuance expense | $ 4,400,000 | $ 5,400,000 |
Debt - Future Principal Payment
Debt - Future Principal Payments (Details) $ in Thousands | Sep. 30, 2018USD ($) |
Debt Disclosure [Abstract] | |
Remaining in 2018 | $ 68,054 |
2,019 | 605,688 |
2,020 | 693,723 |
2,021 | 543,604 |
2,022 | 691,178 |
Thereafter | 3,040,928 |
Long-term debt | $ 5,643,175 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
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] | |||||
Total revenues | $ 350,917 | $ 344,369 | $ 1,046,895 | $ 1,018,835 | |
Net operating income | 250,835 | 245,410 | 753,199 | 732,597 | |
Corporate-level property management expenses | (7,761) | (7,573) | (23,313) | (22,604) | |
Depreciation and amortization | (120,852) | (117,451) | (359,287) | (350,893) | |
General and administrative | (10,601) | (9,788) | (36,539) | (30,726) | |
Expensed acquisition and investment related costs | (31) | (324) | (156) | (1,154) | |
Interest expense | (55,196) | (55,938) | (166,335) | (167,333) | |
Total return swap income | 2,184 | 2,538 | 6,682 | 7,653 | |
Interest and other income | 8,437 | 5,790 | 21,241 | 17,916 | |
Equity income from co-investments | 16,788 | 19,727 | 64,611 | 40,934 | |
Gain on sale of real estate and land | 0 | 249 | 22,244 | 26,423 | |
Gain on remeasurement of co-investment | 0 | 0 | 0 | 88,641 | |
Net income | 86,110 | 85,035 | 289,159 | 348,381 | |
Net reportable operating segment - real estate assets | 10,341,594 | 10,341,594 | $ 10,592,776 | ||
Real estate under development | 403,644 | 403,644 | 355,735 | ||
Co-investments | 1,267,593 | 1,267,593 | 1,155,984 | ||
Cash and cash equivalents, including restricted cash | 174,626 | 174,626 | 61,126 | ||
Marketable securities | 210,596 | 210,596 | 190,004 | ||
Notes and other receivables | 69,166 | 69,166 | 100,926 | ||
Prepaid expenses and other assets | 50,924 | 50,924 | 39,155 | ||
Total assets | 12,518,143 | 12,518,143 | 12,495,706 | ||
Rental and Other Property Revenues [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 348,610 | 341,974 | 1,040,083 | 1,011,908 | |
Management and Other Fees From Affiliates Income [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 2,307 | 2,395 | 6,812 | 6,927 | |
Operating Segments [Member] | Southern California [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net operating income | 106,853 | 104,378 | 321,477 | 311,017 | |
Net reportable operating segment - real estate assets | 4,566,713 | 4,566,713 | 4,687,277 | ||
Operating Segments [Member] | Southern California [Member] | Rental and Other Property Revenues [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 151,847 | 148,150 | 452,047 | 438,654 | |
Operating Segments [Member] | Northern California [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net operating income | 97,306 | 93,212 | 289,081 | 277,635 | |
Net reportable operating segment - real estate assets | 4,229,777 | 4,229,777 | 4,220,551 | ||
Operating Segments [Member] | Northern California [Member] | Rental and Other Property Revenues [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 131,538 | 127,673 | 389,750 | 377,531 | |
Operating Segments [Member] | Seattle Metro [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net operating income | 41,040 | 41,137 | 123,547 | 121,121 | |
Net reportable operating segment - real estate assets | 1,484,544 | 1,484,544 | 1,522,452 | ||
Operating Segments [Member] | Seattle Metro [Member] | Rental and Other Property Revenues [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | 59,231 | 58,285 | 176,740 | 171,564 | |
Other real estate assets [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Net operating income | 5,636 | 6,683 | 19,094 | 22,824 | |
Net reportable operating segment - real estate assets | 60,560 | 60,560 | $ 162,496 | ||
Other real estate assets [Member] | Rental and Other Property Revenues [Member] | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Total revenues | $ 5,994 | $ 7,866 | $ 21,546 | $ 24,159 |
Net Income Per Common Share a_3
Net Income Per Common Share and Net Income Per Common Unit (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Basic: | ||||
Net income available to common stockholders/unitholders | $ 80,975 | $ 79,723 | $ 272,333 | $ 329,446 |
Weighted average number of shares/common units outstanding during the period (in shares) | 66,052,108 | 65,994,896 | 66,047,990 | 65,759,450 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5.01 |
Diluted: | ||||
Net income available to common stockholders/unitholders | $ 80,975 | $ 79,723 | $ 272,333 | $ 329,446 |
Net income available to common stockholders/unitholders, weighted average common shares (in shares) | 66,103,812 | 66,078,283 | 66,093,004 | 65,836,965 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.22 | $ 1.21 | $ 4.12 | $ 5 |
Essex Portfolio, L.P. [Member] | ||||
Basic: | ||||
Net income available to common stockholders/unitholders | $ 83,764 | $ 82,444 | $ 281,714 | $ 340,735 |
Weighted average number of shares/common units outstanding during the period (in shares) | 68,325,091 | 68,246,008 | 68,321,153 | 68,011,123 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5.01 |
Diluted: | ||||
Net income available to common stockholders/unitholders | $ 83,764 | $ 82,444 | $ 281,714 | $ 340,735 |
Net income available to common stockholders/unitholders, weighted average common shares (in shares) | 68,376,795 | 68,329,395 | 68,366,167 | 68,088,638 |
Net income available to common stockholders/unitholders (in dollars per share) | $ 1.23 | $ 1.21 | $ 4.12 | $ 5 |
Employee Stock Option [Member] | ||||
Basic: | ||||
Income effect of Dilutive Securities | $ 0 | $ 0 | $ 0 | $ 0 |
Effect of dilutive securities (in shares) | 51,704 | 83,387 | 45,014 | 77,515 |
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 150,852 | 0 | 160,252 | 2,352 |
Employee Stock Option [Member] | Essex Portfolio, L.P. [Member] | ||||
Basic: | ||||
Income effect of Dilutive Securities | $ 0 | $ 0 | $ 0 | $ 0 |
Effect of dilutive securities (in shares) | 51,704 | 83,387 | 45,014 | 77,515 |
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 150,852 | 0 | 160,252 | 2,352 |
Convertible Limited Partnership Units [Member] | ||||
Diluted: | ||||
Antidilutive securities excluded from computation of earnings per share, amount (in shares) | 2,272,983 | 2,251,112 | 2,273,163 | 2,251,673 |
Antidilutive securities excluded from computation of earnings per share, value | $ 2,800 | $ 2,700 | $ 9,400 | $ 11,300 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Derivative [Line Items] | |||||
Total return swap income | $ 2,184,000 | $ 2,538,000 | $ 6,682,000 | $ 7,653,000 | |
Multifamily Housing Mortgage Revenue Bonds [Member] | |||||
Derivative [Line Items] | |||||
Bond subject to interest rate caps | 256,200,000 | 256,200,000 | |||
Designated as Hedging Instrument [Member] | Interest Rate Swap [Member] | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | $ 175,000,000 | $ 175,000,000 | |||
Interest rate | 2.30% | 2.30% | |||
Aggregate carrying value of the interest rate swap contracts, asset | $ 8,800,000 | $ 8,800,000 | $ 5,400,000 | ||
Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||||
Derivative [Line Items] | |||||
Aggregate carrying value of the interest rate swap contracts, liability | 0 | 0 | 0 | ||
Not Designated as Hedging Instrument [Member] | Interest Rate Cap [Member] | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 9,900,000 | 9,900,000 | |||
Not Designated as Hedging Instrument [Member] | Total Return Swap, Callable [Member] | |||||
Derivative [Line Items] | |||||
Derivative, notional amount | 256,200,000 | 256,200,000 | |||
Derivative, fair value, net | $ 0 | $ 0 | $ 0 |