Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2014 | 8-May-14 | |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'ESSEX PROPERTY TRUST INC | ' |
Entity Central Index Key | '0000920522 | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 62,513,605 |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q1 | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 31-Mar-14 | ' |
ESSEX PORTFOLIO LP [Member] | ' | ' |
Entity Information [Line Items] | ' | ' |
Entity Registrant Name | 'ESSEX PORTFOLIO LP | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Entity Voluntary Filers | 'No | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (Unaudited) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Rental properties: | ' | ' |
Land and land improvements | $1,354,748 | $1,083,552 |
Buildings and improvements | 5,286,033 | 4,360,205 |
Total rental properties | 6,640,781 | 5,443,757 |
Less accumulated depreciation | -1,300,793 | -1,254,886 |
Net real estate | 5,339,988 | 4,188,871 |
Real estate under development | 308,266 | 50,430 |
Co-investments | 716,443 | 677,133 |
Total real estate | 6,364,697 | 4,916,434 |
Cash and cash equivalents-unrestricted | 19,918 | 18,491 |
Cash and cash equivalents-restricted | 28,753 | 35,275 |
Marketable securities | 100,348 | 90,084 |
Notes and other receivables | 36,105 | 68,255 |
Prepaid expenses and other assets | 54,024 | 33,781 |
Deferred charges, net | 29,197 | 24,519 |
Total assets | 6,633,042 | 5,186,839 |
Liabilities and Equity | ' | ' |
Mortgage notes payable | 1,408,232 | 1,404,080 |
Unsecured debt | 1,410,162 | 1,410,023 |
Lines of credit | 135,903 | 219,421 |
Accounts payable and accrued liabilities | 83,470 | 67,183 |
Construction payable | 7,671 | 8,047 |
Dividends payable | 1,461 | 50,627 |
Derivative liabilities | 2,109 | 2,682 |
Other liabilities | 22,281 | 22,189 |
Total liabilities | 3,071,289 | 3,184,252 |
Commitments and contingencies | ' | ' |
Cumulative convertible Series G preferred stock | 4,349 | 4,349 |
Equity: | ' | ' |
Cumulative redeemable Series H preferred stock at liquidation value | 73,750 | 73,750 |
Common stock, $.0001 par value, 656,020,000 shares authorized 38,392,134 and 37,421,219 shares issued and outstanding | 4 | 4 |
Additional paid-in capital | 2,505,003 | 2,345,763 |
Distributions in excess of accumulated earnings | -498,368 | -474,426 |
Accumulated other comprehensive loss, net | -56,395 | -60,472 |
Total stockholders' equity | 2,023,994 | 1,884,619 |
Noncontrolling interest | 1,533,410 | 113,619 |
Total equity | 3,557,404 | 1,998,238 |
Total liabilities and equity | 6,633,042 | 5,186,839 |
Essex Portfolio, L.P. [Member] | ' | ' |
Rental properties: | ' | ' |
Land and land improvements | 1,354,748 | 1,083,552 |
Buildings and improvements | 5,286,033 | 4,360,205 |
Total rental properties | 6,640,781 | 5,443,757 |
Less accumulated depreciation | -1,300,793 | -1,254,886 |
Net real estate | 5,339,988 | 4,188,871 |
Real estate under development | 308,266 | 50,430 |
Co-investments | 716,443 | 677,133 |
Total real estate | 6,364,697 | 4,916,434 |
Cash and cash equivalents-unrestricted | 19,918 | 18,491 |
Cash and cash equivalents-restricted | 28,753 | 35,275 |
Marketable securities | 100,348 | 90,084 |
Notes and other receivables | 36,105 | 68,255 |
Prepaid expenses and other assets | 54,024 | 33,781 |
Deferred charges, net | 29,197 | 24,519 |
Total assets | 6,633,042 | 5,186,839 |
Liabilities and Equity | ' | ' |
Mortgage notes payable | 1,408,232 | 1,404,080 |
Unsecured debt | 1,410,162 | 1,410,023 |
Lines of credit | 135,903 | 219,421 |
Accounts payable and accrued liabilities | 83,470 | 67,183 |
Construction payable | 7,671 | 8,047 |
Distributions payable | 1,461 | 50,627 |
Derivative liabilities | 2,109 | 2,682 |
Other liabilities | 22,281 | 22,189 |
Total liabilities | 3,071,289 | 3,184,252 |
Commitments and contingencies | ' | ' |
Cumulative convertible Series G preferred stock | 4,349 | 4,349 |
Equity: | ' | ' |
Limited Partners, Common equity | 1,465,127 | 45,957 |
Accumulated other comprehensive loss, net | -54,617 | -58,940 |
Total partners' capital | 3,490,900 | 1,932,108 |
Noncontrolling interest | 66,504 | 66,130 |
Total capital | 3,557,404 | 1,998,238 |
Total liabilities and equity | 6,633,042 | 5,186,839 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | ' | ' |
Equity: | ' | ' |
General Partner | 2,080,390 | 1,945,091 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Common Capital [Member] | ' | ' |
Equity: | ' | ' |
General Partner | 2,009,181 | 1,873,882 |
Total capital | 2,009,181 | 1,873,882 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Preferred Capital [Member] | ' | ' |
Equity: | ' | ' |
General Partner | 71,209 | 71,209 |
Total capital | $71,209 | $71,209 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Liabilities and Equity | ' | ' |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized (in shares) | 656,020,000 | 656,020,000 |
Common stock, shares issued (in shares) | 38,392,134 | 37,421,219 |
Common stock, shares outstanding (in shares) | 38,392,134 | 37,421,219 |
Essex Portfolio, L.P. [Member] | 4.875% Series G Cumulative Convertible Preferred Stock [Member] | ' | ' |
Liabilities and Equity | ' | ' |
Cumulative convertible preferred interest, liquidation value | $4,456 | $4,456 |
Essex Portfolio, L.P. [Member] | 7.125% Series H Cumulative Redeemable Preferred Stock [Member] | ' | ' |
Liabilities and Equity | ' | ' |
Preferred interest, liquidation value | $73,750 | $73,750 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | ' | ' |
Liabilities and Equity | ' | ' |
Common stock, shares issued (in shares) | 38,392,134 | 37,421,219 |
Common stock, shares outstanding (in shares) | 38,392,134 | 37,421,219 |
Essex Portfolio, L.P. [Member] | Limited Partners [Member] | ' | ' |
Liabilities and Equity | ' | ' |
Common stock, shares issued (in shares) | 10,736,550 | 2,149,802 |
Common stock, shares outstanding (in shares) | 10,736,550 | 2,149,802 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Revenues: | ' | ' |
Rental and other property | $159,017 | $145,057 |
Management and other fees | 2,628 | 2,948 |
Total revenues | 161,645 | 148,005 |
Expenses: | ' | ' |
Property operating, excluding real estate taxes | 36,634 | 32,253 |
Real estate taxes | 15,339 | 14,073 |
Depreciation | 50,312 | 46,787 |
General and administrative | 7,075 | 6,239 |
Merger expenses | 16,059 | 0 |
Cost of management and other fees | 1,477 | 1,701 |
Acquisition and dispositions costs | 975 | 387 |
Total expenses | 127,871 | 101,440 |
Earnings from operations | 33,774 | 46,565 |
Interest expense before amortization | -26,055 | -25,211 |
Amortization expense | -2,986 | -2,930 |
Interest and other income | 2,879 | 5,023 |
Equity income in co-investments | 10,526 | 4,211 |
Gains on sale of real estate and land | 8,268 | 1,503 |
Income from continuing operations | 26,406 | 29,161 |
Income from discontinued operations | 0 | 542 |
Net income | 26,406 | 29,703 |
Net income attributable to noncontrolling interest | -3,126 | -3,132 |
Net income attributable to controlling interest | 23,280 | 26,571 |
Dividends to preferred stockholders | -1,368 | -1,368 |
Net income available to common stockholders | 21,912 | 25,203 |
Comprehensive income | 30,729 | 30,739 |
Comprehensive income attributable to noncontrolling interest | -3,372 | -3,187 |
Comprehensive income attributable to controlling interest | 27,357 | 27,552 |
Basic: | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.67 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 |
Net income available to common stockholders/unitholders (in dollars per share) | $0.58 | $0.68 |
Weighted average number of common shares outstanding during the period (in shares) | 37,685,073 | 37,003,925 |
Diluted: | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.67 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 |
Net income available to common stockholders/unitholders (in dollars per share) | $0.58 | $0.68 |
Weighted average number of common shares outstanding during the period (in shares) | 37,931,454 | 37,092,062 |
Dividends per common share (in dollars per share) | $1.21 | $1.21 |
Essex Portfolio, L.P. [Member] | ' | ' |
Revenues: | ' | ' |
Rental and other property | 159,017 | 145,057 |
Management and other fees | 2,628 | 2,948 |
Total revenues | 161,645 | 148,005 |
Expenses: | ' | ' |
Property operating, excluding real estate taxes | 36,634 | 32,253 |
Real estate taxes | 15,339 | 14,073 |
Depreciation | 50,312 | 46,787 |
General and administrative | 7,075 | 6,239 |
Merger expenses | 16,059 | 0 |
Cost of management and other fees | 1,477 | 1,701 |
Acquisition and dispositions costs | 975 | 387 |
Total expenses | 127,871 | 101,440 |
Earnings from operations | 33,774 | 46,565 |
Interest expense before amortization | -26,055 | -25,211 |
Amortization expense | -2,986 | -2,930 |
Interest and other income | 2,879 | 5,023 |
Equity income in co-investments | 10,526 | 4,211 |
Gains on sale of real estate and land | 8,268 | 1,503 |
Income from continuing operations | 26,406 | 29,161 |
Income from discontinued operations | 0 | 542 |
Net income | 26,406 | 29,703 |
Net income attributable to noncontrolling interest | -1,709 | -1,631 |
Net income attributable to controlling interest | 24,697 | 28,072 |
Dividends to preferred stockholders | -1,368 | -1,368 |
Net income available to common stockholders | 23,329 | 26,704 |
Comprehensive income | 30,729 | 30,739 |
Comprehensive income attributable to noncontrolling interest | -1,709 | -1,631 |
Comprehensive income attributable to controlling interest | $29,020 | $29,108 |
Basic: | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.67 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 |
Net income available to common stockholders/unitholders (in dollars per share) | $0.58 | $0.68 |
Weighted average number of common shares outstanding during the period (in shares) | 39,957,252 | 39,083,371 |
Diluted: | ' | ' |
Income from continuing operations (in dollars per share) | $0.58 | $0.67 |
Income from discontinued operations (in dollars per share) | $0 | $0.01 |
Net income available to common stockholders/unitholders (in dollars per share) | $0.58 | $0.68 |
Weighted average number of common shares outstanding during the period (in shares) | 40,203,633 | 39,171,508 |
Dividends per common share (in dollars per share) | $1.21 | $1.21 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Equity (Unaudited) (USD $) | Series H Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Distributions in Excess of Accumulated Earnings [Member] | Accumulated Other Comprehensive Loss, Net [Member] | Noncontrolling Interest [Member] | Total |
In Thousands, except Share data, unless otherwise specified | |||||||
Balances at Dec. 31, 2013 | $73,750 | $4 | $2,345,763 | ($474,426) | ($60,472) | $113,619 | $1,998,238 |
Balances (in shares) at Dec. 31, 2013 | 2,950,000 | 37,421,000 | ' | ' | ' | ' | ' |
Net income | 0 | 0 | 0 | 23,280 | 0 | 3,126 | 26,406 |
Reversal of unrealized gains upon the sale of marketable securities | 0 | 0 | 0 | 0 | -402 | -25 | -427 |
Change in fair value of cash flow hedges and amortization of swap settlements | 0 | 0 | 0 | 0 | 2,565 | 155 | 2,720 |
Changes in fair value of marketable securities | 0 | 0 | 0 | 0 | 1,914 | 116 | 2,030 |
Issuance of common stock under: | ' | ' | ' | ' | ' | ' | ' |
Stock option and restricted stock plans | 0 | 0 | 1,769 | 0 | 0 | 0 | 1,769 |
Stock option and restricted stock plans shares (in shares) | 0 | 13,000 | ' | ' | ' | ' | ' |
Equity distribution agreement | 0 | 0 | 157,596 | 0 | 0 | 0 | 157,596 |
Equity distribution agreement (in shares) | 0 | 958,000 | ' | ' | ' | ' | 0 |
Equity based compensation costs | 0 | 0 | -125 | 0 | 0 | 673 | 548 |
Contributions from noncontrolling interest | 0 | 0 | 0 | 0 | 0 | 1,419,816 | 1,419,816 |
Distributions to noncontrolling interest | 0 | 0 | 0 | 0 | 0 | -3,969 | -3,969 |
Redemptions of noncontrolling interest | 0 | 0 | 0 | 0 | 0 | -101 | -101 |
Common and preferred stock dividends | 0 | 0 | 0 | -47,222 | 0 | 0 | -47,222 |
Balances at Mar. 31, 2014 | $73,750 | $4 | $2,505,003 | ($498,368) | ($56,395) | $1,533,410 | $3,557,404 |
Balances (in shares) at Mar. 31, 2014 | 2,950,000 | 38,392,000 | ' | ' | ' | ' | ' |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Capital (Unaudited) (USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2014 |
Net income | $26,406 |
Reversal of unrealized gains upon the sale of marketable securities | -427 |
Changes in fair value of derivatives and amortization of swap settlements | 2,720 |
Changes in fair value of marketable securities | -2,030 |
Issuance of common stock under: | ' |
Stock and unit based compensation plan (in shares) | 0 |
Sale of common stock by general partner | 157,596 |
Sale of common stock by general partner (in shares) | 0 |
Contributions from noncontrolling interest | 1,419,816 |
Distributions to noncontrolling interests | 3,969 |
Redemptions of noncontrolling interest | -101 |
Essex Portfolio, L.P. [Member] | ' |
Balances | 1,998,238 |
Net income | 26,406 |
Reversal of unrealized gains upon the sale of marketable securities | -427 |
Changes in fair value of derivatives and amortization of swap settlements | 2,720 |
Changes in fair value of marketable securities | 2,030 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 1,769 |
Sale of common stock by general partner | 157,596 |
Stock and unit based compensation costs | 548 |
Contributions from noncontrolling interest | 1,419,816 |
Distributions to noncontrolling interests | -1,335 |
Redemptions of noncontrolling interest | -101 |
Distributions declared | -49,856 |
Balances | 3,557,404 |
Essex Portfolio, L.P. [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | ' |
Balances | -58,940 |
Net income | 0 |
Reversal of unrealized gains upon the sale of marketable securities | -427 |
Changes in fair value of derivatives and amortization of swap settlements | 2,720 |
Changes in fair value of marketable securities | 2,030 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 0 |
Sale of common stock by general partner | 0 |
Stock and unit based compensation costs | 0 |
Contributions from noncontrolling interest | 0 |
Distributions to noncontrolling interests | 0 |
Redemptions of noncontrolling interest | 0 |
Distributions declared | 0 |
Balances | -54,617 |
Essex Portfolio, L.P. [Member] | Noncontrolling Interest [Member] | ' |
Balances | 66,130 |
Net income | 1,709 |
Reversal of unrealized gains upon the sale of marketable securities | 0 |
Changes in fair value of derivatives and amortization of swap settlements | 0 |
Changes in fair value of marketable securities | 0 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 0 |
Sale of common stock by general partner | 0 |
Stock and unit based compensation costs | 0 |
Contributions from noncontrolling interest | 0 |
Distributions to noncontrolling interests | -1,335 |
Redemptions of noncontrolling interest | 0 |
Distributions declared | 0 |
Balances | 66,504 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Common Equity [Member] | ' |
Balances | 1,873,882 |
Balances (in shares) | 37,421,000 |
Net income | 21,912 |
Reversal of unrealized gains upon the sale of marketable securities | 0 |
Changes in fair value of derivatives and amortization of swap settlements | 0 |
Changes in fair value of marketable securities | 0 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 1,769 |
Stock and unit based compensation plan (in shares) | 13,000 |
Sale of common stock by general partner | 157,596 |
Sale of common stock by general partner (in shares) | 958,000 |
Stock and unit based compensation costs | -125 |
Contributions from noncontrolling interest | 0 |
Distributions to noncontrolling interests | 0 |
Redemptions of noncontrolling interest | 0 |
Distributions declared | -45,853 |
Balances | 2,009,181 |
Balances (in shares) | 38,392,000 |
Essex Portfolio, L.P. [Member] | General Partner [Member] | Preferred Equity [Member] | ' |
Balances | 71,209 |
Net income | 1,368 |
Reversal of unrealized gains upon the sale of marketable securities | 0 |
Changes in fair value of derivatives and amortization of swap settlements | 0 |
Changes in fair value of marketable securities | 0 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 0 |
Sale of common stock by general partner | 0 |
Stock and unit based compensation costs | 0 |
Contributions from noncontrolling interest | 0 |
Distributions to noncontrolling interests | 0 |
Redemptions of noncontrolling interest | 0 |
Distributions declared | -1,368 |
Balances | 71,209 |
Essex Portfolio, L.P. [Member] | Limited Partners [Member] | Common Equity [Member] | ' |
Balances | 45,957 |
Balances (in shares) | 2,150,000 |
Net income | 1,417 |
Reversal of unrealized gains upon the sale of marketable securities | 0 |
Changes in fair value of derivatives and amortization of swap settlements | 0 |
Changes in fair value of marketable securities | 0 |
Issuance of common stock under: | ' |
Stock and unit based compensation plans | 0 |
Sale of common stock by general partner | 0 |
Stock and unit based compensation costs | 673 |
Stock and unit based compensation costs (in shares) | 26,000 |
Contributions from noncontrolling interest | 1,419,816 |
Contributions from noncontrolling interest (in shares) | 8,560,000 |
Distributions to noncontrolling interests | 0 |
Redemptions of noncontrolling interest | -101 |
Distributions declared | -2,635 |
Balances | $1,465,127 |
Balances (in shares) | 10,736,000 |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $26,406 | $29,703 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Gain on sale of marketable securities | -427 | -1,767 |
Company's share of gain on the sales of co-investment | -3,213 | 0 |
Gain on the sales of real estate | -8,268 | -1,503 |
(Gain) loss on early retirement of debt | 3,750 | 0 |
Co-investments | -6,695 | -391 |
Amortization expense | 2,986 | 2,930 |
Amortization of discount on notes receivables | 0 | -844 |
Amortization of discount on marketable securities | -1,938 | -1,377 |
Depreciation | 50,312 | 47,144 |
Equity-based compensation | 1,233 | 1,132 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses and other assets | 2,787 | 1,764 |
Accounts payable and accrued liabilities | 15,918 | 8,443 |
Other liabilities | 92 | 458 |
Net cash provided by operating activities | 82,943 | 85,692 |
Additions to real estate: | ' | ' |
Acquisitions of real estate | -33,825 | -175,950 |
Improvements to recent acquisitions | -1,960 | -2,601 |
Redevelopment | -6,408 | -6,573 |
Revenue generating capital expenditures | -3,873 | -304 |
Lessor required capital expenditure | -4,321 | -768 |
Non-revenue generating capital expenditures | -4,416 | -4,019 |
Acquisitions of and additions to real estate under development | -11,919 | -3,332 |
Dispositions of real estate | 14,123 | 9,051 |
Changes in restricted cash and deposits | 2,512 | 19,980 |
Purchases of marketable securities | -10,340 | -6,541 |
Sales and maturities of marketable securities | 4,016 | 20,335 |
Collections of notes and other receivables | 35,500 | 52,473 |
Contributions to co-investments | -39,679 | -45,518 |
Distributions from co-investments | 8,951 | 38,030 |
Net cash used in investing activities | -51,639 | -105,737 |
Cash flows from financing activities: | ' | ' |
Borrowings under debt agreements | 233,780 | 235,282 |
Repayment of debt | -312,585 | -279,854 |
Additions to deferred charges | -9,294 | -716 |
Equity related issuance cost | -92 | -225 |
Net proceeds from stock options exercised | 1,176 | 1,367 |
Net proceeds from issuance of common stock | 157,596 | 122,905 |
Distributions to noncontrolling interest | -3,969 | -3,995 |
Redemption of noncontrolling interest | -101 | -1,329 |
Common and preferred stock dividends paid | -96,388 | -41,152 |
Net cash provided by financing activities | -29,877 | 32,283 |
Net increase in cash and cash equivalents | 1,427 | 12,238 |
Cash and cash equivalents at beginning of year | 18,491 | 18,606 |
Cash and cash equivalents at end of period | 19,918 | 30,844 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest, net of $3.1 million, and $3.7 million capitalized in 2014 and 2013, respectively | 26,447 | 23,863 |
Supplemental disclosure of noncash investing and financing activities: | ' | ' |
Issuance of Operating Partnership units for contributed properties | 1,416,816 | 0 |
Transfer from real estate under development to rental properties | 3,070 | 67 |
Transfer from real estate under development to co-investments | 3,125 | 0 |
Change in fair value of derivative liabilities | 631 | 570 |
Change in fair value of marketable securities | 1,575 | 1,629 |
Essex Portfolio, L.P. [Member] | ' | ' |
Cash flows from operating activities: | ' | ' |
Net income | 26,406 | 29,703 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Gain on sale of marketable securities | -427 | -1,767 |
Company's share of gain on the sales of co-investment | -3,213 | 0 |
Gain on the sales of real estate | -8,268 | -1,503 |
(Gain) loss on early retirement of debt | 3,750 | 0 |
Co-investments | -6,695 | -391 |
Amortization expense | 2,986 | 2,930 |
Amortization of discount on notes receivables | 0 | -844 |
Amortization of discount on marketable securities | -1,938 | -1,377 |
Depreciation | 50,312 | 47,144 |
Equity-based compensation | 1,233 | 1,132 |
Changes in operating assets and liabilities: | ' | ' |
Prepaid expenses and other assets | 2,787 | 1,764 |
Accounts payable and accrued liabilities | 15,918 | 8,443 |
Other liabilities | 92 | 458 |
Net cash provided by operating activities | 82,943 | 85,692 |
Additions to real estate: | ' | ' |
Acquisitions of real estate | -33,825 | -175,950 |
Improvements to recent acquisitions | -1,960 | -2,601 |
Redevelopment | -6,408 | -6,573 |
Revenue generating capital expenditures | -3,873 | -304 |
Lessor required capital expenditure | -4,321 | -768 |
Non-revenue generating capital expenditures | -4,416 | -4,019 |
Acquisitions of and additions to real estate under development | -11,919 | -3,332 |
Dispositions of real estate | 14,123 | 9,051 |
Changes in restricted cash and deposits | 2,512 | 19,980 |
Purchases of marketable securities | -10,340 | -6,541 |
Sales and maturities of marketable securities | 4,016 | 20,335 |
Collections of notes and other receivables | 35,500 | 52,473 |
Contributions to co-investments | -39,679 | -45,518 |
Distributions from co-investments | 8,951 | 38,030 |
Net cash used in investing activities | -51,639 | -105,737 |
Cash flows from financing activities: | ' | ' |
Borrowings under debt agreements | 233,780 | 235,282 |
Repayment of debt | -312,585 | -279,854 |
Additions to deferred charges | -9,294 | -716 |
Equity related issuance cost | -92 | -225 |
Net proceeds from stock options exercised | 1,176 | 1,367 |
Net proceeds from issuance of common stock | 157,596 | 122,905 |
Distributions to noncontrolling interest | -1,335 | -1,323 |
Redemption of noncontrolling interest | -101 | -1,329 |
Common and preferred stock dividends paid | -99,022 | -43,824 |
Net cash provided by financing activities | -29,877 | 32,283 |
Net increase in cash and cash equivalents | 1,427 | 12,238 |
Cash and cash equivalents at beginning of year | 18,491 | 18,606 |
Cash and cash equivalents at end of period | 19,918 | 30,844 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest, net of $3.1 million, and $3.7 million capitalized in 2014 and 2013, respectively | 26,447 | 23,863 |
Supplemental disclosure of noncash investing and financing activities: | ' | ' |
Issuance of Operating Partnership units for contributed properties | 1,416,816 | 0 |
Transfer from real estate under development to rental properties | 3,070 | 67 |
Transfer from real estate under development to co-investments | 3,125 | 0 |
Change in fair value of derivative liabilities | 631 | 570 |
Change in fair value of marketable securities | $1,575 | $1,629 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (Unaudited) (Parenthetical) (USD $) | 3 Months Ended | |
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest, capitalized | $3.10 | $3.70 |
Essex Portfolio, L.P. [Member] | ' | ' |
Supplemental disclosure of cash flow information: | ' | ' |
Cash paid for interest, capitalized | $3.10 | $3.70 |
Organization_and_Basis_of_Pres
Organization and Basis of Presentation | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization and Basis of Presentation [Abstract] | ' | ||||||||||||
Organization and Basis of Presentation | ' | ||||||||||||
(1) Organization and Basis of Presentation | |||||||||||||
The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (“Essex” or the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. and subsidiaries (the “Operating Partnership,” which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles (“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, 2013. | |||||||||||||
All significant intercompany balances and transactions have been eliminated in the condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation. Such reclassification had no effect on previously reported financial statements. | |||||||||||||
On April 1, 2014, Essex completed the merger with BRE Properties, Inc. (“BRE”). In connection with the closing of the merger, (1) BRE merged into a wholly owned subsidiary of Essex, and (2) each outstanding share of BRE common stock was converted into (i) 0.2971 shares (the “Stock Consideration”) of Essex common stock, and (ii) $7.18 in cash, (the “Cash Consideration”), plus cash in lieu of fractional shares for total consideration of approximately $4.3 billion. The Cash Consideration was adjusted as a result of the authorization and declaration of a special distribution to the stockholders of BRE of $5.15 per share of BRE common stock payable to BRE stockholders of record as of the close of business on March 31, 2014 (the “Special Dividend”). The Special Dividend is payable as a result of the closing of the sale of certain interests in assets of BRE to certain parties designated by Essex, which closed on March 31, 2014. Pursuant to the terms of the merger agreement, the amounts payable as a Special Dividend reduced the Cash Consideration of $12.33 payable by Essex in the merger to $7.18 per share of BRE common stock. | |||||||||||||
Essex issued approximately 23.1 million shares of Essex common stock as Stock Consideration in the merger. For purchase accounting, the value of the common stock issued by Essex upon the consummation of the merger was determined based on the closing price of BRE’s common stock on the closing date of the merger. As a result of Essex being admitted to the S&P 500 on the same date as the closing of the merger, Essex’s common stock price experienced significantly higher than usual trading volume and the closing price of $174 per share was significantly higher than its volume-weighted average trading price for the days before and after April 1, 2014. BRE’s common stock did not experience the same proportionate increase in common stock price leading up to April 1, 2014. As a result, given that a substantial component of the purchase price is an exchange of equity instruments, Essex used the closing price of BRE’s common stock on April 1, 2014 of $61 per share, less the Cash Consideration, as the fair value of the stock consideration. The net assets and results of operations of BRE will be included in our condensed consolidated financial statements beginning April 1, 2014, our second quarter of 2014. | |||||||||||||
On March 31, 2014, BRE contributed 14 properties valued at approximately $1.4 billion to Essex for approximately 8.6 million Operating Partnership units (“OP units”). The OP units were subsequently retired by the Company on April 1, 2014. The purpose of this transaction was tax efficiency. | |||||||||||||
The unaudited condensed consolidated financial statements for the three months ended March 31, 2014 and 2013 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner in the Operating Partnership, and excluding the 8.6 million OP units issued on March 31, 2014 and retired on April 1, 2014, held a 94.5% general partnership interest as of March 31, 2014. Total Operating Partnership units outstanding, excluding the March 31, 2014 transaction, were 2,176,222 and 2,149,802 as of March 31, 2014 and December 31, 2013, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $370.1 million and $308.5 million, as of March 31, 2014 and December 31, 2013, respectively. | |||||||||||||
As of March 31, 2014, and prior to the merger with BRE, the Company owned or had ownership interests in 176 apartment communities, aggregating 37,569 units, excluding the Company’s ownership in preferred interest co-investments, (collectively, the “Communities”, and individually, a “Community”), four commercial buildings and thirteen active development projects (collectively, the “Portfolio”). The Communities are located in Southern California (Los Angeles, Orange, Riverside, San Diego, Santa Barbara, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan area. | |||||||||||||
Marketable Securities | |||||||||||||
The Company reports its available for sale securities at fair value, based on quoted market prices (Level 2 for the unsecured bonds and Level 1 for the common stock and investment funds, as defined by the Financial Accounting Standards Board (“FASB”) standard for fair value measurements, and any unrealized gain or loss is recorded as other comprehensive income (loss). Realized gains and losses, interest and dividend income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statement of operations and comprehensive income. | |||||||||||||
As of March 31, 2014 and December 31, 2013, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities. As of March 31, 2014 and December 31, 2013, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost. As of March 31, 2014 and December 31, 2013 marketable securities consist of the following ($ in thousands): | |||||||||||||
31-Mar-14 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 11,772 | $ | 96 | $ | 11,868 | |||||||
Investment funds - US treasuries | 5,017 | 5 | 5,022 | ||||||||||
Common stock | 22,103 | 710 | 22,813 | ||||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 60,645 | - | 60,645 | ||||||||||
Total | $ | 99,537 | $ | 811 | $ | 100,348 | |||||||
31-Dec-13 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 15,446 | $ | 509 | $ | 15,955 | |||||||
Investment funds - US treasuries | 3,675 | 3 | 3,678 | ||||||||||
Common stock | 13,104 | (1,304 | ) | 11,800 | |||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 58,651 | - | 58,651 | ||||||||||
Total | $ | 90,876 | $ | (792 | ) | $ | 90,084 | ||||||
The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold. For the three months ended March 31, 2014, and 2013, the proceeds from sales of available for sale securities totaled $4.0 million and $20.3 million, respectively, which resulted in gains of $0.4 million and $1.8 million, respectively. | |||||||||||||
Variable Interest Entities | |||||||||||||
The Company consolidates 19 DownREIT limited partnerships (comprising twelve communities) since the Company is the primary beneficiary of these variable interest entities (“VIEs”). Total DownREIT units outstanding were 1,007,879 for both as of March 31, 2014 and December 31, 2013, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $171.4 million and $144.6 million, as of March 31, 2014 and December 31, 2013, respectively. The consolidated total assets and liabilities related to these VIEs, net of intercompany eliminations, were approximately $233.4 million and $218.9 million, respectively, as of March 31, 2014 and $194.9 million and $178.3 million, respectively, as of December 31, 2013. Interest holders in VIEs consolidated by the Company are allocated income equal to the cash payments made to those interest holders. The remaining results of operations are allocated to the Company. As of March 31, 2014 and December 31, 2013, the Company did not have any other VIEs of which it was deemed to be the primary beneficiary. | |||||||||||||
Equity Based Compensation | |||||||||||||
The Company accounts for equity based compensation using the fair value method of accounting. The estimated fair value of stock options granted by the Company is being amortized over the vesting period of the stock options. The estimated grant date fair values of the long term incentive plan units (discussed in Note 13, “Equity Based Compensation Plans,” in the Company’s Form 10-K for the year ended December 31, 2013) are being amortized over the expected service periods. | |||||||||||||
Stock-based compensation expense for options and restricted stock totaled $0.6 million for the three months ended March 31, 2014 and 2013. The intrinsic value of the stock options exercised during the three months ended March 31, 2014 and 2013 totaled $0.6 million and $0.9 million, respectively. As of March 31, 2014, the intrinsic value of the stock options outstanding and fully vested totaled $21.1 million. As of March 31, 2014, total unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans totaled $6.1 million. The cost is expected to be recognized over a weighted-average period of 1 to 5 years for the stock option plans and is expected to be recognized straight-line over a period of 1 to 7 years for the restricted stock awards. | |||||||||||||
The Company has adopted an incentive program involving the issuance of Series Z-1 Incentive Units of limited partnership interest in the Operating Partnership. The Operating Partnership also issued 50,500 units under the 2014 Long-Term Incentive Plan Award agreements in December 2013. Pursuant to the 2014 Long-Term Incentive Plan Awards, each recipient was initially granted a number of 2014 Long-Term Incentive Plan Units (the “2014 LTIP Units”), 90% of which are subject to performance-based vesting, and 10% of which are subject to service-based vesting based on continued employment. One-third of the performance-based vesting of the 2014 LTIP Units initially granted will be eligible to be earned by recipients based on Essex’s absolute total stockholder return and two-thirds will be eligible to be earned based on Essex’s relative total stockholder return, in each case, during a one-year performance period beginning on the initial grant date of the awards. | |||||||||||||
Stock-based compensation expense for Z-1 Units and 2014 LTIP Units totaled $0.6 million and $0.5 million for the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, the intrinsic value of the Z-1 Units and 2014 LTIP Units subject to future vesting totaled $22.4 million. As of March 31, 2014, total unrecognized compensation cost related to Z-1 Units and 2014 LTIP Units subject to future vesting totaled $7.6 million. The unamortized cost is expected to be recognized over 6 years subject to the achievement of the stated performance criteria. | |||||||||||||
Fair Value of Financial Instruments | |||||||||||||
Management believes that the carrying amounts of outstanding lines of credit, notes and other receivables approximate fair value as of March 31, 2014 and December 31, 2013, 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 $2.29 billion of fixed rate debt, including unsecured bonds, at March 31, 2014 is approximately $2.42 billion and the fair value of the Company’s $527.6 million of variable rate debt, excluding borrowings under the lines of credit, at March 31, 2014 is $500.0 million based on the terms of existing mortgage notes payable, unsecured bonds and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2014 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of March 31, 2014. | |||||||||||||
At March 31, 2014, the Company’s investments in mortgage backed securities had a carrying value of $60.6 million and the Company estimated the fair value to be approximately $89.4 million. At December 31, 2013, the Company’s investments in mortgage backed securities had a carrying value of $58.7 million and the Company estimated the fair value to be approximately $86.2 million. The Company determines the fair value of the mortgage backed securities based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing these securities. Assumptions such as estimated default rates and discount rates are used to determine expected, discounted cash flows to estimate the fair value. | |||||||||||||
Capitalization of Costs | |||||||||||||
The Company’s capitalized internal costs related to development and redevelopment projects totaled $1.7 million and $1.6 million during the three months ended March 31, 2014 and 2013, respectively, most of which relates to development projects. These totals include capitalized salaries of $0.9 million and $0.6 million for the three months ended March 31, 2014 and 2013, respectively. The Company capitalizes leasing commissions associated with the lease-up of a development community and amortizes the costs over the life of the leases. The amounts capitalized are immaterial for all periods presented. | |||||||||||||
Co-investments | |||||||||||||
The Company owns investments in joint ventures (“co-investments”) in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with the accounting standards. Therefore, the Company accounts for these 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. For preferred equity investments, the Company recognizes its preferred interest in equity income in co-investments. | |||||||||||||
Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of operations equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and may provide promote distributions 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 (loss) from co-investments. | |||||||||||||
Changes in Accumulated Other Comprehensive Loss, Net by Component | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (59,724 | ) | $ | (748 | ) | $ | (60,472 | ) | ||||
Other comprehensive income (loss) before reclassification | 472 | 1,914 | 2,386 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (402 | ) | 1,691 | |||||||||
Net other comprehensive income (loss) | 2,565 | 1,512 | 4,077 | ||||||||||
Balance at March 31, 2014 | $ | (57,159 | ) | $ | 764 | $ | (56,395 | ) | |||||
Essex Portfolio, L.P. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (58,148 | ) | $ | (792 | ) | $ | (58,940 | ) | ||||
Other comprehensive income (loss) before reclassification | 627 | 2,030 | 2,657 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (427 | ) | 1,666 | |||||||||
Net other comprehensive income (loss) | 2,720 | 1,603 | 4,323 | ||||||||||
Balance at March 31, 2014 | $ | (55,428 | ) | $ | 811 | $ | (54,617 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense before amortization on the condensed consolidated statement of operations and comprehensive income. Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of operations and comprehensive income. | |||||||||||||
Accounting Estimates | |||||||||||||
The preparation of condensed consolidated financial statements, in accordance with U.S. generally accepted accounting principles, 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. | |||||||||||||
Discontinued Operations | |||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU, No. 2014-018, Presentation of Financial Statements, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-018 changes the requirements for reporting discontinued operation under Subtopic 205-20, Presentation of Financial Statements—Discontinued Operations. The amendment updates the definition of discontinued operation and defines discontinued operations to be those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This ASU is effective for disposals of components of an entity that occur within annual periods beginning on or after December 15, 2014 with early adoption permitted , but only for disposal that have not been reported in financial statements previously issued. | |||||||||||||
The Company adopted ASU 2014-018 in its first quarter of 2014. In January 2014, Essex sold Vista Capri North, a 106 unit community located in San Diego, CA for $14.4 million. The total gain on sale was $7.9 million. The Company determined that the disposal was not a discontinued operation in accordance with ASU 2014-018. The gain is recorded in gains on sale of real estate and land in the condensed consolidated statements of operations and comprehensive income. | |||||||||||||
BRE Merger | |||||||||||||
As previously discussed in Note 1, the merger with BRE closed on April 1, 2014 and 14 of the BRE properties were acquired on March 31, 2013. The preliminary fair value of the assets acquired on March 31, 2014 in exchange for $1.4 billion of OP units was substantially all attributable to rental properties which included land, buildings and improvements, and real estate under development and approximately $19 million attributable to acquired in-place lease value which is classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. With regards to the BRE merger that closed on April 1, 2014, a summary of the preliminary fair value of the assets and liabilities acquired on April 1, 2014 in exchange for the total consideration of approximately $4.3 billion were as follows (includes the 14 properties acquired on March 31, 2014 as the OP units issued were retired on April 1, 2014) (in millions): | |||||||||||||
Rental properties, excluding co-investments | $ | 5,808 | |||||||||||
Co-investments | 206 | ||||||||||||
In-place lease value | 97 | ||||||||||||
Other assets | 96 | ||||||||||||
Secured and unsecured debt | (1,736 | ) | |||||||||||
Other liabilities | (129 | ) | |||||||||||
$ | 4,342 | ||||||||||||
The initial purchase accounting is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase accounting, if any, are made within the measurement period, which typically does not exceed one year. | |||||||||||||
The unaudited pro forma financial information set forth below is based on Essex’s historical condensed consolidated statement of operations and comprehensive income for the quarters ended March 31, 2014 and March 31, 2013, adjusted to give effect to the merger with BRE including the 14 BRE properties contributed on March 31, 2014, as if they occurred on January 1, 2013. The pro forma adjustments primarily relate to merger expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to assumed debt. | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per share data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common shareholders (1) (2) | $ | 130,506 | $ | (16,956 | ) | ||||||||
Earnings per share, diluted (1) | $ | 2.08 | $ | (0.28 | ) | ||||||||
Essex Portfolio, L.P. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per unit data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common unitholders (1) (2) | $ | 131,923 | $ | (15,455 | ) | ||||||||
Earnings per unit, diluted (1) | $ | 2.08 | $ | (0.25 | ) | ||||||||
-1 | 2014 supplemental pro forma net income available to common stockholders were adjusted to exclude $16,059 of merger related costs incurred by Essex during the three-months ended March 31, 2014. 2013 supplemental pro forma net income available to common stockholders were adjusted to include these charges plus an additional approximately $29,000 of merger expenses estimated to be incurred by Essex . 2014 and 2013 supplemental proforma earnings per share, diluted, were adjusted accordingly. | ||||||||||||
-2 | 2014 supplemental pro forma net income available to common stockholders includes approximately $105 million from discontinued operations related to the sale of three BRE properties that are non-recurring transactions. |
Significant_Transactions_Durin
Significant Transactions During the First Quarter of 2014 and Subsequent Events | 3 Months Ended |
Mar. 31, 2014 | |
Significant Transactions During the First Quarter of 2014 and Subsequent Events [Abstract] | ' |
Significant Transactions During the First Quarter of 2014 and Subsequent Events | ' |
(2) Significant Transactions During the First Quarter of 2014 and Subsequent Events | |
Acquisitions | |
In March 2014, the Company purchased Avery, a 121-unit apartment community located in Valley Village, California, for a total purchase price of $35.0 million. In May 2014, the Company acquired Piedmont Apartments for $76.8 million. The 396 unit community was built in 1969 and subsequently renovated in 1997 and 2005. The Company assumed a $44.8 million mortgage loan secured by the property at a fixed rate of 5.6% for a remaining term of 3 years. The property is located in the East Bellevue submarket of Seattle. | |
Dispositions | |
In March 2014, Essex Apartment Value Fund II, L.P. (“Fund II”) sold one of the two remaining communities owned by Fund II for $23.8 million which resulted in a gain of $11.4 million. The Company has a 28.2% ownership stake in Fund II and received a promote income allocation of $3.8 million which is included within equity income from co-investments in the accompanying condensed consolidated statement of income for the three months ended March 31, 2014. The remaining Fund II property is expected to be sold in 2014. | |
Common Stock | |
During the first quarter of 2014, the Company issued 958,055 shares of common stock, through our equity distribution program, at an average share price of $166.24 for proceeds of $157.6 million, net of fees and commissions. During the second quarter of 2014 through May 8, 2014, Essex has issued 197,600 shares of common stock at an average price of $171.62 for proceeds of $33.7 million, net of fees and commissions. | |
Unsecured Bond Offering | |
In April 2014, the Company issued $400 million aggregate principal amount of its 3.875% Senior Notes due 2024 (the 2024 Notes). The net proceeds from the issuance of the 2024 Notes were approximately $394 million, after deducting the underwriters’ discounts and estimated offering expenses. | |
Coinvestments
Co-investments | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Co-investments [Abstract] | ' | ||||||||
Co-investments | ' | ||||||||
(3) Co-investments | |||||||||
The Company has co-investments, which are accounted for under the equity method. The co-investments own, operate and develop apartment communities. The following table details the Company's co-investments (dollars in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Membership interest in Wesco I | $ | 136,495 | $ | 142,025 | |||||
Membership interest in Wesco III | 38,928 | 39,073 | |||||||
Partnership interest in Fund II | 7,235 | 4,166 | |||||||
Membership interest in a limited liability company that owns Expo | 11,877 | 12,041 | |||||||
Total operating co-investments | 194,535 | 197,305 | |||||||
Membership interests in limited liability companies with CPPIB that own and are developing Epic, Connolly Station, Mosso I & II, Park 20, and The Village | 336,417 | 301,538 | |||||||
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan | 19,151 | 18,545 | |||||||
Membership interest in a limited liability company that owns and is developing One South Market | 22,632 | 17,115 | |||||||
Total development co-investments | 378,200 | 337,198 | |||||||
Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1% | 95,115 | 94,711 | |||||||
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of 9.5% | 15,955 | 15,775 | |||||||
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 9% | 13,824 | 13,824 | |||||||
Preferred interest in related party limited liability company that owns an apartment development in Redwood City with a preferred return of 12% | 9,681 | 9,455 | |||||||
Preferred interest in a limited liability company that owns an apartment development in San Jose with a preferred return of 12% | 9,133 | 8,865 | |||||||
Total preferred interest investments | 143,708 | 142,630 | |||||||
Total co-investments | $ | 716,443 | $ | 677,133 | |||||
The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands). | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Balance sheets: | |||||||||
Rental properties and real estate under development | $ | 1,993,763 | $ | 1,953,328 | |||||
Other assets | 131,716 | 61,578 | |||||||
Total assets | $ | 2,125,479 | $ | 2,014,906 | |||||
Debt | $ | 756,117 | $ | 667,641 | |||||
Other liabilities | 82,519 | 125,479 | |||||||
Equity | 1,286,843 | 1,221,786 | |||||||
Total liabilities and equity | $ | 2,125,479 | $ | 2,014,906 | |||||
Company's share of equity | $ | 716,443 | $ | 677,133 | |||||
` | Three Months Ended | ||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Statements of operations: | |||||||||
Property revenues | $ | 27,960 | $ | 27,859 | |||||
Property operating expenses | (11,560 | ) | (9,828 | ) | |||||
Net property operating income | 16,400 | 18,031 | |||||||
Gain on sale of real estate | 11,369 | - | |||||||
Interest expense | (6,023 | ) | (6,778 | ) | |||||
General and administrative | (1,388 | ) | (1,514 | ) | |||||
Equity income from co-investments | 4,759 | 4,622 | |||||||
Depreciation and amortization | (10,693 | ) | (11,019 | ) | |||||
Net income | $ | 14,424 | $ | 3,342 | |||||
Company's share of net income | $ | 10,526 | $ | 4,211 |
Notes_and_Other_Receivables
Notes and Other Receivables | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes and Other Receivables [Abstract] | ' | ||||||||
Notes and Other Receivables | ' | ||||||||
(4) Notes and Other Receivables | |||||||||
Notes receivable secured by real estate and other receivables consist of the following as of March 31, 2014 and December 31, 2013 (dollars in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Notes receivable, secured, bearing interest at 4.0%, due December 2014 (1) | $ | 3,212 | $ | 3,212 | |||||
Notes and other receivables from affiliates (2) | 25,854 | 60,968 | |||||||
Other receivables | 7,039 | 4,075 | |||||||
$ | 36,105 | $ | 68,255 | ||||||
-1 | The borrower funds an impound account for capital replacement. | ||||||||
-2 | The Company provided two bridge loans, for Gas Company Lofts and Regency at Mt. View, totaling $56.8 million to Wesco III at a rate of LIBOR + 2.50%. Wesco III repaid these two loans on Gas Company Lofts and Regency at Mt. View in January 2014 and April 2014, respectively. |
Related_Party_Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2014 | |
Related Party Transactions [Abstract] | ' |
Related Party Transactions | ' |
(5) Related Party Transactions | |
Fees earned from affiliates include management, development and redevelopment fees from co-investments of $2.6 million and $2.8 million during the three months ended March 31, 2014 and 2013, respectively. All of these fees are net of intercompany amounts eliminated by the Company. | |
The Company’s Chairman and founder, Mr. George Marcus, is the Chairman of the Marcus & Millichap Company (“MMC”), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Co-Chairman of Marcus & Millichap, Inc. (“MMI”), and Mr. Marcus owns a controlling interest in MMI. MMI is a national brokerage firm listed on the NYSE that underwent its initial public offering in 2013. During the third quarter of 2013, the Company restructured the terms of a preferred equity investment on a property located in Anaheim, California, reducing the rate from 13% to 9%, while extending the maximum term by one year. The Company recorded $0.4 million of income related to the restructured investment. The entity that owns the property is an affiliate of MMC. Independent members of the Company’s Board of Directors that serve on the Nominating and Corporate Governance and Audit Committees approved the restructuring of the investment in this entity. | |
In January 2013, the Company invested $8.6 million as a preferred equity interest investment in an entity affiliated with MMC that owns an apartment development in Redwood City, California. Independent members of the Company’s Board of Directors that serve on the Nominating and Corporate Governance and Audit Committees approved the investment in this entity. | |
As described in Note 4, the Company has provided short-term bridge loans to affiliates. As of December 31, 2013, two loans remained outstanding totaling $56.8 million; Wesco III repaid these two loans on Gas Company Lofts and Regency at Mt. View in January 2014 and April 2014, respectively. |
Unsecured_Debt_and_Lines_of_Cr
Unsecured Debt and Lines of Credit | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Unsecured Debt and Lines of Credit [Abstract] | ' | ||||||||||||
Unsecured Debt and Lines of Credit | ' | ||||||||||||
(6) Unsecured Debt and Lines of Credit | |||||||||||||
Essex does not have any indebtedness as all debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of such facilities. | |||||||||||||
Unsecured debt and lines of credit consist of the following as of March 31, 2014 and December 31, 2013 ($ in thousands): | |||||||||||||
Weighted Average | |||||||||||||
March 31, | December 31, | Maturity | |||||||||||
2014 | 2013 | In Years | |||||||||||
Bonds private placement - fixed rate | $ | 465,000 | $ | 465,000 | 5 | ||||||||
Term loan - variable rate | 350,000 | 350,000 | 2.9 | ||||||||||
Bonds public offering - fixed rate | 595,162 | 595,023 | 8.7 | ||||||||||
Unsecured debt | 1,410,162 | 1,410,023 | |||||||||||
Lines of credit | 135,903 | 219,421 | 5 | ||||||||||
Total unsecured debt and lines of credit | $ | 1,546,065 | $ | 1,629,444 | |||||||||
Weighted average interest rate on fixed rate unsecured bonds | 4 | % | 4 | % | |||||||||
Weighted average interest rate on variable rate term loan | 2.4 | % | 2.5 | % | |||||||||
Weighted average interest rate on line of credit | 1.6 | % | 2.2 | % |
Segment_Information
Segment Information | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Segment Information [Abstract] | ' | ||||||||
Segment Information | ' | ||||||||
(7) Segment Information | |||||||||
The Company defines its reportable operating segments as the three geographical regions in which its apartment communities are located: Southern California, Northern California and Seattle Metro. Excluded from segment revenues are properties classified in discontinued operations, management and other fees from affiliates, and interest and other income. Non-segment revenues and net operating income included in the following schedule also consist of revenue generated from commercial properties. Other non-segment assets include real estate under development, co-investments, cash and cash equivalents, marketable securities, notes and other receivables, prepaid expenses and other assets and deferred charges. | |||||||||
The revenues, net operating income, and assets for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2014 and 2013 (dollars in thousands): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Revenues: | |||||||||
Southern California | $ | 69,687 | $ | 64,740 | |||||
Northern California | 56,944 | 50,770 | |||||||
Seattle Metro | 28,641 | 25,751 | |||||||
Other real estate assets | 3,745 | 3,796 | |||||||
Total property revenues | $ | 159,017 | $ | 145,057 | |||||
Net operating income: | |||||||||
Southern California | $ | 47,066 | $ | 43,708 | |||||
Northern California | 40,353 | 35,283 | |||||||
Seattle Metro | 19,045 | 16,995 | |||||||
Other real estate assets | 580 | 2,745 | |||||||
Total net operating income | 107,044 | 98,731 | |||||||
Management and other fees | 2,628 | 2,948 | |||||||
Depreciation | (50,312 | ) | (46,787 | ) | |||||
General and administrative | (7,075 | ) | (6,239 | ) | |||||
Merger expenses | (16,059 | ) | - | ||||||
Cost of management and other fees | (1,477 | ) | (1,701 | ) | |||||
Acquisition and dispositon costs | (975 | ) | (387 | ) | |||||
Interest expense before amortization | (26,055 | ) | (25,211 | ) | |||||
Amortization expense | (2,986 | ) | (2,930 | ) | |||||
Interest and other income | 2,879 | 5,023 | |||||||
Equity income from co-investments | 10,526 | 4,211 | |||||||
Gains on sale of real estate and land | 8,268 | 1,503 | |||||||
Income from continuing operations | $ | 26,406 | $ | 29,161 | |||||
Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2014 and December 31, 2013 (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Southern California | $ | 2,551,297 | $ | 1,746,434 | |||||
Northern California | 1,967,133 | 1,614,159 | |||||||
Seattle Metro | 734,972 | 741,533 | |||||||
Other real estate assets | 86,586 | 86,745 | |||||||
Net reportable operating segment - real estate assets | 5,339,988 | 4,188,871 | |||||||
Real estate under development | 308,266 | 50,430 | |||||||
Co-investments | 716,443 | 677,133 | |||||||
Cash and cash equivalents, including restricted cash | 48,671 | 53,766 | |||||||
Marketable securities | 100,348 | 90,084 | |||||||
Notes and other receivables | 36,105 | 68,255 | |||||||
Other non-segment assets | 83,221 | 58,300 | |||||||
Total assets | $ | 6,633,042 | $ | 5,186,839 |
Net_Income_Per_Common_Share_an
Net Income Per Common Share and Net Income Per Common Unit | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Net Income Per Common Share and Net Income Per Common Unit [Abstract] | ' | ||||||||||||||||||||||||
Net Income Per Common Share and Net Income Per Common Unit | ' | ||||||||||||||||||||||||
(8) Net Income Per Common Share and Net Income Per Common Unit | |||||||||||||||||||||||||
(Amounts in thousands, except per share and unit data) | |||||||||||||||||||||||||
Essex Property Trust, Inc. | |||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Weighted- | Per | Weighted- | Per | ||||||||||||||||||||||
average | Common | average | Common | ||||||||||||||||||||||
Common | Share | Common | Share | ||||||||||||||||||||||
Income | Shares | Amount | Income | Shares | Amount | ||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income from continuing operations available to common stockholders | $ | 21,912 | 37,685 | $ | 0.58 | $ | 24,690 | 37,004 | $ | 0.67 | |||||||||||||||
Income from discontinued operations available to common stockholders | - | 37,685 | - | 513 | 37,004 | 0.01 | |||||||||||||||||||
$ | 21,912 | $ | 0.58 | $ | 25,203 | $ | 0.68 | ||||||||||||||||||
Effect of Dilutive Securities (1) | - | 246 | - | 88 | |||||||||||||||||||||
Diluted: | |||||||||||||||||||||||||
Income from continuing operations available to common stockholders | $ | 21,912 | 37,931 | $ | 0.58 | $ | 24,690 | 37,092 | $ | 0.67 | |||||||||||||||
Income from discontinued operations available to common stockholders | - | 37,931 | - | 513 | 37,092 | 0.01 | |||||||||||||||||||
$ | 21,912 | $ | 0.58 | $ | 25,203 | $ | 0.68 | ||||||||||||||||||
-1 | Weighted average convertible limited partnership units of 2,272,179 and 2,079,447 which include vested Series Z-1 incentive units, for the three months ended March 31, 2014, and 2013, respectively, were not included in the determination of diluted EPS because they were anti-dilutive. Income allocated to convertible limited partnership units, which includes vested Series Z-1 units, aggregating $1.4 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively, have been excluded from income available to common stockholders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive. The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. | ||||||||||||||||||||||||
Stock options of 164,442 and 260,513 for the three months ended March 31, 2014 and 2013, respectively, were not included in the diluted earnings per share calculation because the effects on earnings per share were anti-dilutive. | |||||||||||||||||||||||||
Essex Portfolio, L.P. | |||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Weighted- | Per | Weighted- | Per | ||||||||||||||||||||||
average | Common | average | Common | ||||||||||||||||||||||
Common | Unit | Common | Unit | ||||||||||||||||||||||
Income | Units | Amount | Income | Units | Amount | ||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income from continuing operations available to common unitholders | $ | 23,329 | 39,957 | $ | 0.58 | $ | 26,162 | 39,083 | $ | 0.67 | |||||||||||||||
Income from discontinued operations | - | 39,957 | - | 542 | 39,083 | 0.01 | |||||||||||||||||||
Income available to common unitholders | $ | 23,329 | $ | 0.58 | $ | 26,704 | $ | 0.68 | |||||||||||||||||
Effect of Dilutive Securities (1) | - | 246 | - | 88 | |||||||||||||||||||||
Diluted: | |||||||||||||||||||||||||
Income from continuing operations available to common unitholders (1) | $ | 23,329 | 40,203 | $ | 0.58 | $ | 26,162 | 39,171 | $ | 0.67 | |||||||||||||||
Income from discontinued operations | - | 40,203 | - | 542 | 39,171 | 0.01 | |||||||||||||||||||
Income available to common unitholders | $ | 23,329 | $ | 0.58 | $ | 26,704 | $ | 0.68 | |||||||||||||||||
-1 | The Operating Partnership has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. | ||||||||||||||||||||||||
Stock options of 164,442 and 260,513; for the three months ended March 31, 2014 and 2013, respectively, were not included in the diluted earnings per unit calculation because the exercise price of these options were greater than the average market price of the common shares for the years ended and, therefore, were anti-dilutive. |
Derivative_Instruments_and_Hed
Derivative Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2014 | |
Derivative Instruments and Hedging Activities [Abstract] | ' |
Derivative Instruments and Hedging Activities | ' |
(9) Derivative Instruments and Hedging Activities | |
The Company has entered into interest rate swap contracts with an aggregate notional amount of $300 million that effectively fixed the interest rate on $300 million of the $350 million unsecured term loan at 2.4%. These derivatives qualify for hedge accounting. | |
As of March 31, 2014, the Company also had nine interest rate cap contracts totaling a notional amount of $156.9 million that qualify for hedge accounting as they effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying variable interest rate for substantially all of the Company’s tax exempt variable rate debt. | |
As of March 31, 2014 and December 31, 2013, the aggregate carrying value of the interest rate swap contracts was a liability of $2.1 million and $2.7 million, respectively. |
Commitments_and_Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2014 | |
Commitments and Contingencies [Abstract] | ' |
Commitments and Contingencies | ' |
(10) Commitments and Contingencies | |
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 financial statements, the Company will disclose the estimated range of possible outcomes, and, if an outcome is probable, accrue an appropriate liability for remediation and other potential liability. The Company will consider whether such occurrence results in an impairment of value on the affected property and, if so, impairment will be recognized. | |
The Company provided a payment guarantee to the counterparties in relation to the total return swaps entered into by the joint venture responsible for the development of The Huxley (formerly Fountain at La Brea) and The Dylan (formerly Santa Monica at La Brea) communities. Further the Company has guaranteed completion of development and made certain debt service guarantees for The Huxley and The Dylan. The outstanding balance for the loans is included in the debt line item in the summarized balance sheet of the co-investments included in Note 3. The payment guarantee is for the payment of the amounts due to the counterparty related to the total return swaps which are scheduled to mature in September and December 2016. The maximum exposure of the guarantee as of March 31, 2014 was $109.1 million based on the aggregate outstanding debt amount. |
Organization_and_Basis_of_Pres1
Organization and Basis of Presentation (Policies) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization and Basis of Presentation [Abstract] | ' | ||||||||||||
Marketable Securities | ' | ||||||||||||
Marketable Securities | |||||||||||||
The Company reports its available for sale securities at fair value, based on quoted market prices (Level 2 for the unsecured bonds and Level 1 for the common stock and investment funds, as defined by the Financial Accounting Standards Board (“FASB”) standard for fair value measurements, and any unrealized gain or loss is recorded as other comprehensive income (loss). Realized gains and losses, interest and dividend income, and amortization of purchase discounts are included in interest and other income on the condensed consolidated statement of operations and comprehensive income. | |||||||||||||
As of March 31, 2014 and December 31, 2013, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities. As of March 31, 2014 and December 31, 2013, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost. As of March 31, 2014 and December 31, 2013 marketable securities consist of the following ($ in thousands): | |||||||||||||
31-Mar-14 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 11,772 | $ | 96 | $ | 11,868 | |||||||
Investment funds - US treasuries | 5,017 | 5 | 5,022 | ||||||||||
Common stock | 22,103 | 710 | 22,813 | ||||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 60,645 | - | 60,645 | ||||||||||
Total | $ | 99,537 | $ | 811 | $ | 100,348 | |||||||
31-Dec-13 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 15,446 | $ | 509 | $ | 15,955 | |||||||
Investment funds - US treasuries | 3,675 | 3 | 3,678 | ||||||||||
Common stock | 13,104 | (1,304 | ) | 11,800 | |||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 58,651 | - | 58,651 | ||||||||||
Total | $ | 90,876 | $ | (792 | ) | $ | 90,084 | ||||||
The Company uses the specific identification method to determine the cost basis of a security sold and to reclassify amounts from accumulated other comprehensive income for securities sold. For the three months ended March 31, 2014, and 2013, the proceeds from sales of available for sale securities totaled $4.0 million and $20.3 million, respectively, which resulted in gains of $0.4 million and $1.8 million, respectively. | |||||||||||||
Variable Interest Entities | ' | ||||||||||||
Variable Interest Entities | |||||||||||||
The Company consolidates 19 DownREIT limited partnerships (comprising twelve communities) since the Company is the primary beneficiary of these variable interest entities (“VIEs”). Total DownREIT units outstanding were 1,007,879 for both as of March 31, 2014 and December 31, 2013, and the redemption value of the units, based on the closing price of the Company’s common stock totaled $171.4 million and $144.6 million, as of March 31, 2014 and December 31, 2013, respectively. The consolidated total assets and liabilities related to these VIEs, net of intercompany eliminations, were approximately $233.4 million and $218.9 million, respectively, as of March 31, 2014 and $194.9 million and $178.3 million, respectively, as of December 31, 2013. Interest holders in VIEs consolidated by the Company are allocated income equal to the cash payments made to those interest holders. The remaining results of operations are allocated to the Company. As of March 31, 2014 and December 31, 2013, the Company did not have any other VIEs of which it was deemed to be the primary beneficiary. | |||||||||||||
Equity Based Compensation | ' | ||||||||||||
Equity Based Compensation | |||||||||||||
The Company accounts for equity based compensation using the fair value method of accounting. The estimated fair value of stock options granted by the Company is being amortized over the vesting period of the stock options. The estimated grant date fair values of the long term incentive plan units (discussed in Note 13, “Equity Based Compensation Plans,” in the Company’s Form 10-K for the year ended December 31, 2013) are being amortized over the expected service periods. | |||||||||||||
Stock-based compensation expense for options and restricted stock totaled $0.6 million for the three months ended March 31, 2014 and 2013. The intrinsic value of the stock options exercised during the three months ended March 31, 2014 and 2013 totaled $0.6 million and $0.9 million, respectively. As of March 31, 2014, the intrinsic value of the stock options outstanding and fully vested totaled $21.1 million. As of March 31, 2014, total unrecognized compensation cost related to unvested share-based compensation granted under the stock option and restricted stock plans totaled $6.1 million. The cost is expected to be recognized over a weighted-average period of 1 to 5 years for the stock option plans and is expected to be recognized straight-line over a period of 1 to 7 years for the restricted stock awards. | |||||||||||||
The Company has adopted an incentive program involving the issuance of Series Z-1 Incentive Units of limited partnership interest in the Operating Partnership. The Operating Partnership also issued 50,500 units under the 2014 Long-Term Incentive Plan Award agreements in December 2013. Pursuant to the 2014 Long-Term Incentive Plan Awards, each recipient was initially granted a number of 2014 Long-Term Incentive Plan Units (the “2014 LTIP Units”), 90% of which are subject to performance-based vesting, and 10% of which are subject to service-based vesting based on continued employment. One-third of the performance-based vesting of the 2014 LTIP Units initially granted will be eligible to be earned by recipients based on Essex’s absolute total stockholder return and two-thirds will be eligible to be earned based on Essex’s relative total stockholder return, in each case, during a one-year performance period beginning on the initial grant date of the awards. | |||||||||||||
Stock-based compensation expense for Z-1 Units and 2014 LTIP Units totaled $0.6 million and $0.5 million for the three months ended March 31, 2014 and 2013, respectively. As of March 31, 2014, the intrinsic value of the Z-1 Units and 2014 LTIP Units subject to future vesting totaled $22.4 million. As of March 31, 2014, total unrecognized compensation cost related to Z-1 Units and 2014 LTIP Units subject to future vesting totaled $7.6 million. The unamortized cost is expected to be recognized over 6 years subject to the achievement of the stated performance criteria. | |||||||||||||
Fair Value of Financial Instruments | ' | ||||||||||||
Fair Value of Financial Instruments | |||||||||||||
Management believes that the carrying amounts of outstanding lines of credit, notes and other receivables approximate fair value as of March 31, 2014 and December 31, 2013, 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 $2.29 billion of fixed rate debt, including unsecured bonds, at March 31, 2014 is approximately $2.42 billion and the fair value of the Company’s $527.6 million of variable rate debt, excluding borrowings under the lines of credit, at March 31, 2014 is $500.0 million based on the terms of existing mortgage notes payable, unsecured bonds and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2014 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, and derivatives are carried at fair value as of March 31, 2014. | |||||||||||||
At March 31, 2014, the Company’s investments in mortgage backed securities had a carrying value of $60.6 million and the Company estimated the fair value to be approximately $89.4 million. At December 31, 2013, the Company’s investments in mortgage backed securities had a carrying value of $58.7 million and the Company estimated the fair value to be approximately $86.2 million. The Company determines the fair value of the mortgage backed securities based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing these securities. Assumptions such as estimated default rates and discount rates are used to determine expected, discounted cash flows to estimate the fair value. | |||||||||||||
Capitalization of Costs | ' | ||||||||||||
Capitalization of Costs | |||||||||||||
The Company’s capitalized internal costs related to development and redevelopment projects totaled $1.7 million and $1.6 million during the three months ended March 31, 2014 and 2013, respectively, most of which relates to development projects. These totals include capitalized salaries of $0.9 million and $0.6 million for the three months ended March 31, 2014 and 2013, respectively. The Company capitalizes leasing commissions associated with the lease-up of a development community and amortizes the costs over the life of the leases. The amounts capitalized are immaterial for all periods presented. | |||||||||||||
Co-investments | ' | ||||||||||||
Co-investments | |||||||||||||
The Company owns investments in joint ventures (“co-investments”) in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with the accounting standards. Therefore, the Company accounts for these 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. For preferred equity investments, the Company recognizes its preferred interest in equity income in co-investments. | |||||||||||||
Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of operations equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and may provide promote distributions 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 (loss) from co-investments. | |||||||||||||
Changes in Accumulated Other Comprehensive Loss, Net by Component | ' | ||||||||||||
Changes in Accumulated Other Comprehensive Loss, Net by Component | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (59,724 | ) | $ | (748 | ) | $ | (60,472 | ) | ||||
Other comprehensive income (loss) before reclassification | 472 | 1,914 | 2,386 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (402 | ) | 1,691 | |||||||||
Net other comprehensive income (loss) | 2,565 | 1,512 | 4,077 | ||||||||||
Balance at March 31, 2014 | $ | (57,159 | ) | $ | 764 | $ | (56,395 | ) | |||||
Essex Portfolio, L.P. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (58,148 | ) | $ | (792 | ) | $ | (58,940 | ) | ||||
Other comprehensive income (loss) before reclassification | 627 | 2,030 | 2,657 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (427 | ) | 1,666 | |||||||||
Net other comprehensive income (loss) | 2,720 | 1,603 | 4,323 | ||||||||||
Balance at March 31, 2014 | $ | (55,428 | ) | $ | 811 | $ | (54,617 | ) | |||||
Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense before amortization on the condensed consolidated statement of operations and comprehensive income. Realized gains and losses on available for sale securities are included in interest and other income on the condensed consolidated statement of operations and comprehensive income. | |||||||||||||
Accounting Estimates | ' | ||||||||||||
Accounting Estimates | |||||||||||||
The preparation of condensed consolidated financial statements, in accordance with U.S. generally accepted accounting principles, 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. | |||||||||||||
Discontinued Operations | ' | ||||||||||||
Discontinued Operations | |||||||||||||
In April 2014, the Financial Accounting Standards Board (“FASB”) issued ASU, No. 2014-018, Presentation of Financial Statements, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. ASU 2014-018 changes the requirements for reporting discontinued operation under Subtopic 205-20, Presentation of Financial Statements—Discontinued Operations. The amendment updates the definition of discontinued operation and defines discontinued operations to be those disposals of components of an entity that represent a strategic shift that has (or will have) a major effect on an entity’s operations and financial results. This ASU is effective for disposals of components of an entity that occur within annual periods beginning on or after December 15, 2014 with early adoption permitted , but only for disposal that have not been reported in financial statements previously issued. | |||||||||||||
The Company adopted ASU 2014-018 in its first quarter of 2014. In January 2014, Essex sold Vista Capri North, a 106 unit community located in San Diego, CA for $14.4 million. The total gain on sale was $7.9 million. The Company determined that the disposal was not a discontinued operation in accordance with ASU 2014-018. The gain is recorded in gains on sale of real estate and land in the condensed consolidated statements of operations and comprehensive income. | |||||||||||||
BRE Merger | ' | ||||||||||||
BRE Merger | |||||||||||||
As previously discussed in Note 1, the merger with BRE closed on April 1, 2014 and 14 of the BRE properties were acquired on March 31, 2013. The preliminary fair value of the assets acquired on March 31, 2014 in exchange for $1.4 billion of OP units was substantially all attributable to rental properties which included land, buildings and improvements, and real estate under development and approximately $19 million attributable to acquired in-place lease value which is classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. With regards to the BRE merger that closed on April 1, 2014, a summary of the preliminary fair value of the assets and liabilities acquired on April 1, 2014 in exchange for the total consideration of approximately $4.3 billion were as follows (includes the 14 properties acquired on March 31, 2014 as the OP units issued were retired on April 1, 2014) (in millions): | |||||||||||||
Rental properties, excluding co-investments | $ | 5,808 | |||||||||||
Co-investments | 206 | ||||||||||||
In-place lease value | 97 | ||||||||||||
Other assets | 96 | ||||||||||||
Secured and unsecured debt | (1,736 | ) | |||||||||||
Other liabilities | (129 | ) | |||||||||||
$ | 4,342 | ||||||||||||
The initial purchase accounting is based on management’s preliminary assessment, which may differ when final information becomes available. Subsequent adjustments made to the initial purchase accounting, if any, are made within the measurement period, which typically does not exceed one year. | |||||||||||||
The unaudited pro forma financial information set forth below is based on Essex’s historical condensed consolidated statement of operations and comprehensive income for the quarters ended March 31, 2014 and March 31, 2013, adjusted to give effect to the merger with BRE including the 14 BRE properties contributed on March 31, 2014, as if they occurred on January 1, 2013. The pro forma adjustments primarily relate to merger expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to assumed debt. | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per share data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common shareholders (1) (2) | $ | 130,506 | $ | (16,956 | ) | ||||||||
Earnings per share, diluted (1) | $ | 2.08 | $ | (0.28 | ) | ||||||||
Essex Portfolio, L.P. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per unit data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common unitholders (1) (2) | $ | 131,923 | $ | (15,455 | ) | ||||||||
Earnings per unit, diluted (1) | $ | 2.08 | $ | (0.25 | ) | ||||||||
-1 | 2014 supplemental pro forma net income available to common stockholders were adjusted to exclude $16,059 of merger related costs incurred by Essex during the three-months ended March 31, 2014. 2013 supplemental pro forma net income available to common stockholders were adjusted to include these charges plus an additional approximately $29,000 of merger expenses estimated to be incurred by Essex . 2014 and 2013 supplemental proforma earnings per share, diluted, were adjusted accordingly. | ||||||||||||
-2 | 2014 supplemental pro forma net income available to common stockholders includes approximately $105 million from discontinued operations related to the sale of three BRE properties that are non-recurring transactions. |
Organization_and_Basis_of_Pres2
Organization and Basis of Presentation (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Organization and Basis of Presentation [Abstract] | ' | ||||||||||||
Components of Marketable Securities | ' | ||||||||||||
As of March 31, 2014 and December 31, 2013, marketable securities consisted primarily of investment-grade unsecured bonds, common stock, investments in mortgage backed securities and investment funds that invest in U.S. treasury or agency securities. As of March 31, 2014 and December 31, 2013, the Company classified its investments in mortgage backed securities, which mature in November 2019 and September 2020, as held to maturity, and accordingly, these securities are stated at their amortized cost. As of March 31, 2014 and December 31, 2013 marketable securities consist of the following ($ in thousands): | |||||||||||||
31-Mar-14 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 11,772 | $ | 96 | $ | 11,868 | |||||||
Investment funds - US treasuries | 5,017 | 5 | 5,022 | ||||||||||
Common stock | 22,103 | 710 | 22,813 | ||||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 60,645 | - | 60,645 | ||||||||||
Total | $ | 99,537 | $ | 811 | $ | 100,348 | |||||||
31-Dec-13 | |||||||||||||
Cost/ | Gross | ||||||||||||
Amortized | Unrealized | ||||||||||||
Cost | Gain (Loss) | Carrying Value | |||||||||||
Available for sale: | |||||||||||||
Investment-grade unsecured bonds | $ | 15,446 | $ | 509 | $ | 15,955 | |||||||
Investment funds - US treasuries | 3,675 | 3 | 3,678 | ||||||||||
Common stock | 13,104 | (1,304 | ) | 11,800 | |||||||||
Held to maturity: | |||||||||||||
Mortgage backed securities | 58,651 | - | 58,651 | ||||||||||
Total | $ | 90,876 | $ | (792 | ) | $ | 90,084 | ||||||
Changes in Accumulated Other Comprehensive Loss, Net by Component | ' | ||||||||||||
Changes in Accumulated Other Comprehensive Loss, Net by Component | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (59,724 | ) | $ | (748 | ) | $ | (60,472 | ) | ||||
Other comprehensive income (loss) before reclassification | 472 | 1,914 | 2,386 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (402 | ) | 1,691 | |||||||||
Net other comprehensive income (loss) | 2,565 | 1,512 | 4,077 | ||||||||||
Balance at March 31, 2014 | $ | (57,159 | ) | $ | 764 | $ | (56,395 | ) | |||||
Essex Portfolio, L.P. | |||||||||||||
Unrealized | |||||||||||||
Change in fair | gains/(losses) on | ||||||||||||
value and amortization | available for sale | ||||||||||||
of derivatives | securities | Total | |||||||||||
Balance at December 31, 2013 | $ | (58,148 | ) | $ | (792 | ) | $ | (58,940 | ) | ||||
Other comprehensive income (loss) before reclassification | 627 | 2,030 | 2,657 | ||||||||||
Amounts reclassified from accumulated other comprehensive loss | 2,093 | (427 | ) | 1,666 | |||||||||
Net other comprehensive income (loss) | 2,720 | 1,603 | 4,323 | ||||||||||
Balance at March 31, 2014 | $ | (55,428 | ) | $ | 811 | $ | (54,617 | ) | |||||
Preliminary Fair Values of Assets and Liabilities Acquired | ' | ||||||||||||
As previously discussed in Note 1, the merger with BRE closed on April 1, 2014 and 14 of the BRE properties were acquired on March 31, 2013. The preliminary fair value of the assets acquired on March 31, 2014 in exchange for $1.4 billion of OP units was substantially all attributable to rental properties which included land, buildings and improvements, and real estate under development and approximately $19 million attributable to acquired in-place lease value which is classified within prepaid expenses and other assets in the accompanying condensed consolidated balance sheets. With regards to the BRE merger that closed on April 1, 2014, a summary of the preliminary fair value of the assets and liabilities acquired on April 1, 2014 in exchange for the total consideration of approximately $4.3 billion were as follows (includes the 14 properties acquired on March 31, 2014 as the OP units issued were retired on April 1, 2014) (in millions): | |||||||||||||
Rental properties, excluding co-investments | $ | 5,808 | |||||||||||
Co-investments | 206 | ||||||||||||
In-place lease value | 97 | ||||||||||||
Other assets | 96 | ||||||||||||
Secured and unsecured debt | (1,736 | ) | |||||||||||
Other liabilities | (129 | ) | |||||||||||
$ | 4,342 | ||||||||||||
Pro Forma Information | ' | ||||||||||||
The unaudited pro forma financial information set forth below is based on Essex’s historical condensed consolidated statement of operations and comprehensive income for the quarters ended March 31, 2014 and March 31, 2013, adjusted to give effect to the merger with BRE including the 14 BRE properties contributed on March 31, 2014, as if they occurred on January 1, 2013. The pro forma adjustments primarily relate to merger expenses, depreciation expense on acquired buildings and improvements, amortization of acquired intangibles, and estimated interest expense related to assumed debt. | |||||||||||||
Essex Property Trust, Inc. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per share data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common shareholders (1) (2) | $ | 130,506 | $ | (16,956 | ) | ||||||||
Earnings per share, diluted (1) | $ | 2.08 | $ | (0.28 | ) | ||||||||
Essex Portfolio, L.P. | |||||||||||||
Pro forma (unaudited) | |||||||||||||
three months ended March 31 | |||||||||||||
(in thousands, except per unit data) | |||||||||||||
2014 | 2013 | ||||||||||||
Total revenue | $ | 247,801 | $ | 228,721 | |||||||||
Net income available to common unitholders (1) (2) | $ | 131,923 | $ | (15,455 | ) | ||||||||
Earnings per unit, diluted (1) | $ | 2.08 | $ | (0.25 | ) | ||||||||
-1 | 2014 supplemental pro forma net income available to common stockholders were adjusted to exclude $16,059 of merger related costs incurred by Essex during the three-months ended March 31, 2014. 2013 supplemental pro forma net income available to common stockholders were adjusted to include these charges plus an additional approximately $29,000 of merger expenses estimated to be incurred by Essex . 2014 and 2013 supplemental proforma earnings per share, diluted, were adjusted accordingly. | ||||||||||||
-2 | 2014 supplemental pro forma net income available to common stockholders includes approximately $105 million from discontinued operations related to the sale of three BRE properties that are non-recurring transactions. |
Coinvestments_Tables
Co-investments (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Co-investments [Abstract] | ' | ||||||||
Summary of Co Investment | ' | ||||||||
The Company has co-investments, which are accounted for under the equity method. The co-investments own, operate and develop apartment communities. The following table details the Company's co-investments (dollars in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Membership interest in Wesco I | $ | 136,495 | $ | 142,025 | |||||
Membership interest in Wesco III | 38,928 | 39,073 | |||||||
Partnership interest in Fund II | 7,235 | 4,166 | |||||||
Membership interest in a limited liability company that owns Expo | 11,877 | 12,041 | |||||||
Total operating co-investments | 194,535 | 197,305 | |||||||
Membership interests in limited liability companies with CPPIB that own and are developing Epic, Connolly Station, Mosso I & II, Park 20, and The Village | 336,417 | 301,538 | |||||||
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan | 19,151 | 18,545 | |||||||
Membership interest in a limited liability company that owns and is developing One South Market | 22,632 | 17,115 | |||||||
Total development co-investments | 378,200 | 337,198 | |||||||
Membership interest in Wesco II that owns a preferred equity interest in Parkmerced with a preferred return of 10.1% | 95,115 | 94,711 | |||||||
Preferred interest in related party limited liability company that owns Sage at Cupertino with a preferred return of 9.5% | 15,955 | 15,775 | |||||||
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 9% | 13,824 | 13,824 | |||||||
Preferred interest in related party limited liability company that owns an apartment development in Redwood City with a preferred return of 12% | 9,681 | 9,455 | |||||||
Preferred interest in a limited liability company that owns an apartment development in San Jose with a preferred return of 12% | 9,133 | 8,865 | |||||||
Total preferred interest investments | 143,708 | 142,630 | |||||||
Total co-investments | $ | 716,443 | $ | 677,133 | |||||
Summarized Financial Statement for Co Investment Accounted for Under the Equity Method | ' | ||||||||
The combined summarized balance sheet and statements of operations for co-investments are as follows (dollars in thousands). | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Balance sheets: | |||||||||
Rental properties and real estate under development | $ | 1,993,763 | $ | 1,953,328 | |||||
Other assets | 131,716 | 61,578 | |||||||
Total assets | $ | 2,125,479 | $ | 2,014,906 | |||||
Debt | $ | 756,117 | $ | 667,641 | |||||
Other liabilities | 82,519 | 125,479 | |||||||
Equity | 1,286,843 | 1,221,786 | |||||||
Total liabilities and equity | $ | 2,125,479 | $ | 2,014,906 | |||||
Company's share of equity | $ | 716,443 | $ | 677,133 | |||||
` | Three Months Ended | ||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Statements of operations: | |||||||||
Property revenues | $ | 27,960 | $ | 27,859 | |||||
Property operating expenses | (11,560 | ) | (9,828 | ) | |||||
Net property operating income | 16,400 | 18,031 | |||||||
Gain on sale of real estate | 11,369 | - | |||||||
Interest expense | (6,023 | ) | (6,778 | ) | |||||
General and administrative | (1,388 | ) | (1,514 | ) | |||||
Equity income from co-investments | 4,759 | 4,622 | |||||||
Depreciation and amortization | (10,693 | ) | (11,019 | ) | |||||
Net income | $ | 14,424 | $ | 3,342 | |||||
Company's share of net income | $ | 10,526 | $ | 4,211 |
Notes_and_Other_Receivables_Ta
Notes and Other Receivables (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Notes and Other Receivables [Abstract] | ' | ||||||||
Notes and Other Receivables | ' | ||||||||
Notes receivable secured by real estate and other receivables consist of the following as of March 31, 2014 and December 31, 2013 (dollars in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Notes receivable, secured, bearing interest at 4.0%, due December 2014 (1) | $ | 3,212 | $ | 3,212 | |||||
Notes and other receivables from affiliates (2) | 25,854 | 60,968 | |||||||
Other receivables | 7,039 | 4,075 | |||||||
$ | 36,105 | $ | 68,255 | ||||||
-1 | The borrower funds an impound account for capital replacement. | ||||||||
-2 | The Company provided two bridge loans, for Gas Company Lofts and Regency at Mt. View, totaling $56.8 million to Wesco III at a rate of LIBOR + 2.50%. Wesco III repaid these two loans on Gas Company Lofts and Regency at Mt. View in January 2014 and April 2014, respectively. |
Unsecured_Debt_and_Lines_of_Cr1
Unsecured Debt and Lines of Credit (Tables) | 3 Months Ended | ||||||||||||
Mar. 31, 2014 | |||||||||||||
Unsecured Debt and Lines of Credit [Abstract] | ' | ||||||||||||
Schedule of unsecured debt and lines of credit | ' | ||||||||||||
Unsecured debt and lines of credit consist of the following as of March 31, 2014 and December 31, 2013 ($ in thousands): | |||||||||||||
Weighted Average | |||||||||||||
March 31, | December 31, | Maturity | |||||||||||
2014 | 2013 | In Years | |||||||||||
Bonds private placement - fixed rate | $ | 465,000 | $ | 465,000 | 5 | ||||||||
Term loan - variable rate | 350,000 | 350,000 | 2.9 | ||||||||||
Bonds public offering - fixed rate | 595,162 | 595,023 | 8.7 | ||||||||||
Unsecured debt | 1,410,162 | 1,410,023 | |||||||||||
Lines of credit | 135,903 | 219,421 | 5 | ||||||||||
Total unsecured debt and lines of credit | $ | 1,546,065 | $ | 1,629,444 | |||||||||
Weighted average interest rate on fixed rate unsecured bonds | 4 | % | 4 | % | |||||||||
Weighted average interest rate on variable rate term loan | 2.4 | % | 2.5 | % | |||||||||
Weighted average interest rate on line of credit | 1.6 | % | 2.2 | % |
Segment_Information_Tables
Segment Information (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2014 | |||||||||
Segment Information [Abstract] | ' | ||||||||
Reconciliation of Revenues and Operating Profit Loss from Segments to Consolidated | ' | ||||||||
The revenues, net operating income, and assets for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2014 and 2013 (dollars in thousands): | |||||||||
Three Months Ended | |||||||||
March 31, | |||||||||
2014 | 2013 | ||||||||
Revenues: | |||||||||
Southern California | $ | 69,687 | $ | 64,740 | |||||
Northern California | 56,944 | 50,770 | |||||||
Seattle Metro | 28,641 | 25,751 | |||||||
Other real estate assets | 3,745 | 3,796 | |||||||
Total property revenues | $ | 159,017 | $ | 145,057 | |||||
Net operating income: | |||||||||
Southern California | $ | 47,066 | $ | 43,708 | |||||
Northern California | 40,353 | 35,283 | |||||||
Seattle Metro | 19,045 | 16,995 | |||||||
Other real estate assets | 580 | 2,745 | |||||||
Total net operating income | 107,044 | 98,731 | |||||||
Management and other fees | 2,628 | 2,948 | |||||||
Depreciation | (50,312 | ) | (46,787 | ) | |||||
General and administrative | (7,075 | ) | (6,239 | ) | |||||
Merger expenses | (16,059 | ) | - | ||||||
Cost of management and other fees | (1,477 | ) | (1,701 | ) | |||||
Acquisition and dispositon costs | (975 | ) | (387 | ) | |||||
Interest expense before amortization | (26,055 | ) | (25,211 | ) | |||||
Amortization expense | (2,986 | ) | (2,930 | ) | |||||
Interest and other income | 2,879 | 5,023 | |||||||
Equity income from co-investments | 10,526 | 4,211 | |||||||
Gains on sale of real estate and land | 8,268 | 1,503 | |||||||
Income from continuing operations | $ | 26,406 | $ | 29,161 | |||||
Reconciliation of Assets from Segment to Consolidated | ' | ||||||||
Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2014 and December 31, 2013 (in thousands): | |||||||||
March 31, | December 31, | ||||||||
2014 | 2013 | ||||||||
Assets: | |||||||||
Southern California | $ | 2,551,297 | $ | 1,746,434 | |||||
Northern California | 1,967,133 | 1,614,159 | |||||||
Seattle Metro | 734,972 | 741,533 | |||||||
Other real estate assets | 86,586 | 86,745 | |||||||
Net reportable operating segment - real estate assets | 5,339,988 | 4,188,871 | |||||||
Real estate under development | 308,266 | 50,430 | |||||||
Co-investments | 716,443 | 677,133 | |||||||
Cash and cash equivalents, including restricted cash | 48,671 | 53,766 | |||||||
Marketable securities | 100,348 | 90,084 | |||||||
Notes and other receivables | 36,105 | 68,255 | |||||||
Other non-segment assets | 83,221 | 58,300 | |||||||
Total assets | $ | 6,633,042 | $ | 5,186,839 |
Net_Income_Per_Common_Share_an1
Net Income Per Common Share and Net Income Per Common Unit (Tables) | 3 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2014 | |||||||||||||||||||||||||
Net Income Per Share and Net Income Per Unit [Line Items] | ' | ||||||||||||||||||||||||
Net Income Per Common Share | ' | ||||||||||||||||||||||||
Essex Property Trust, Inc. | |||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Weighted- | Per | Weighted- | Per | ||||||||||||||||||||||
average | Common | average | Common | ||||||||||||||||||||||
Common | Share | Common | Share | ||||||||||||||||||||||
Income | Shares | Amount | Income | Shares | Amount | ||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income from continuing operations available to common stockholders | $ | 21,912 | 37,685 | $ | 0.58 | $ | 24,690 | 37,004 | $ | 0.67 | |||||||||||||||
Income from discontinued operations available to common stockholders | - | 37,685 | - | 513 | 37,004 | 0.01 | |||||||||||||||||||
$ | 21,912 | $ | 0.58 | $ | 25,203 | $ | 0.68 | ||||||||||||||||||
Effect of Dilutive Securities (1) | - | 246 | - | 88 | |||||||||||||||||||||
Diluted: | |||||||||||||||||||||||||
Income from continuing operations available to common stockholders | $ | 21,912 | 37,931 | $ | 0.58 | $ | 24,690 | 37,092 | $ | 0.67 | |||||||||||||||
Income from discontinued operations available to common stockholders | - | 37,931 | - | 513 | 37,092 | 0.01 | |||||||||||||||||||
$ | 21,912 | $ | 0.58 | $ | 25,203 | $ | 0.68 | ||||||||||||||||||
-1 | Weighted average convertible limited partnership units of 2,272,179 and 2,079,447 which include vested Series Z-1 incentive units, for the three months ended March 31, 2014, and 2013, respectively, were not included in the determination of diluted EPS because they were anti-dilutive. Income allocated to convertible limited partnership units, which includes vested Series Z-1 units, aggregating $1.4 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively, have been excluded from income available to common stockholders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive. The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. | ||||||||||||||||||||||||
Essex Portfolio, L.P. [Member] | ' | ||||||||||||||||||||||||
Net Income Per Share and Net Income Per Unit [Line Items] | ' | ||||||||||||||||||||||||
Net Income Per Common Share | ' | ||||||||||||||||||||||||
Essex Portfolio, L.P. | |||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||
31-Mar-14 | 31-Mar-13 | ||||||||||||||||||||||||
Weighted- | Per | Weighted- | Per | ||||||||||||||||||||||
average | Common | average | Common | ||||||||||||||||||||||
Common | Unit | Common | Unit | ||||||||||||||||||||||
Income | Units | Amount | Income | Units | Amount | ||||||||||||||||||||
Basic: | |||||||||||||||||||||||||
Income from continuing operations available to common unitholders | $ | 23,329 | 39,957 | $ | 0.58 | $ | 26,162 | 39,083 | $ | 0.67 | |||||||||||||||
Income from discontinued operations | - | 39,957 | - | 542 | 39,083 | 0.01 | |||||||||||||||||||
Income available to common unitholders | $ | 23,329 | $ | 0.58 | $ | 26,704 | $ | 0.68 | |||||||||||||||||
Effect of Dilutive Securities (1) | - | 246 | - | 88 | |||||||||||||||||||||
Diluted: | |||||||||||||||||||||||||
Income from continuing operations available to common unitholders (1) | $ | 23,329 | 40,203 | $ | 0.58 | $ | 26,162 | 39,171 | $ | 0.67 | |||||||||||||||
Income from discontinued operations | - | 40,203 | - | 542 | 39,171 | 0.01 | |||||||||||||||||||
Income available to common unitholders | $ | 23,329 | $ | 0.58 | $ | 26,704 | $ | 0.68 | |||||||||||||||||
-1 | The Operating Partnership has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. |
Organization_and_Basis_of_Pres3
Organization and Basis of Presentation (Details) (USD $) | 3 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | |||
Project | |||||
Unit | |||||
Apartment | |||||
Partnership | |||||
Community | |||||
Building | |||||
Schedule of Mergers [Line Items] | ' | ' | ' | ||
Share price (in dollars per share) | $174 | ' | ' | ||
Change in fair value and amortization of derivatives [Abstract] | ' | ' | ' | ||
Balance at beginning | ($59,724,000) | ' | ' | ||
Other comprehensive income (loss) before reclassification, derivative | 472,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | 2,093,000 | ' | ' | ||
Net other comprehensive income (loss) | 2,565,000 | ' | ' | ||
Balance at the end | -57,159,000 | ' | ' | ||
Unrealized gains/(losses) on available for sale securities [Abstract] | ' | ' | ' | ||
Balance at beginning | 764,000 | ' | -748,000 | ||
Other comprehensive income (loss) before reclassification, available for sale securities, total | 1,914,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | -402,000 | ' | ' | ||
Net other comprehensive income (loss) | 1,512,000 | ' | ' | ||
Balance at the end | 764,000 | ' | -748,000 | ||
Accumulated other comprehensive loss, net by component [Abstract] | ' | ' | ' | ||
Balance at beginning | -56,395,000 | ' | -60,472,000 | ||
Other comprehensive income (loss) before reclassification | 2,386,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | 1,691,000 | ' | ' | ||
Net other comprehensive income (loss) | 4,077,000 | ' | ' | ||
Balance at the end | -56,395,000 | ' | -60,472,000 | ||
Pro Forma results in connection with BRE merger | ' | ' | ' | ||
General partner ownership interest (in hundredths) | 94.50% | ' | ' | ||
Operating Partnership units outstanding (in shares) | 2,176,222 | ' | 2,149,802 | ||
Redemption value of Operating Partnership units outstanding | 370,100,000 | ' | 308,500,000 | ||
Number of apartment communities owned | 176 | ' | ' | ||
Apartment units owned (in units) | 37,569 | ' | ' | ||
Ownership interests, number of commercial buildings | 4 | ' | ' | ||
Ownership interests, number of active development projects | 13 | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ||
Total Amortized Cost | 99,537,000 | ' | 90,876,000 | ||
Total Gross Unrealized Gain (Loss) | 811,000 | ' | -792,000 | ||
Total Carrying Value | 100,348,000 | ' | 90,084,000 | ||
Proceeds from sales of available for sale securities | 4,000,000 | 20,300,000 | ' | ||
Gain from sales of available-for-sale securities | 400,000 | 1,800,000 | ' | ||
Variable Interest Entities [Abstract] | ' | ' | ' | ||
Number of DownREIT limited partnerships the company consolidates | 19 | ' | ' | ||
Number of communities within the DownREIT partnership | 12 | ' | ' | ||
Total DownREIT Partnership's Outstanding units (shares) | 1,007,879 | ' | 1,007,879 | ||
Redemption value of the variable interest entities | 171,400,000 | ' | 144,600,000 | ||
Assets related to variable interest entities, net intercompany eliminations | 233,400,000 | ' | 194,900,000 | ||
Liabilities related to variable interest entities, net of intercompany eliminations | 218,900,000 | ' | 178,300,000 | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Stock-based compensation expense | 1,233,000 | 1,132,000 | ' | ||
Fair Value of Financial Instruments [Abstract] | ' | ' | ' | ||
Fixed rate debt carrying amount | 2,290,000,000 | ' | ' | ||
Fixed rate debt fair value | 2,420,000,000 | ' | ' | ||
Variable rate debt, carrying amount | 527,600,000 | ' | ' | ||
Variable rate debt fair value | 500,000,000 | ' | ' | ||
Mortgage backed securities carrying value | 60,600,000 | ' | 58,700,000 | ||
Mortgage backed securities fair value | 89,400,000 | ' | 86,200,000 | ||
Capitalization Policy [Abstract] | ' | ' | ' | ||
Capitalized internal costs related to development and redevelopment projects | 1,700,000 | 1,600,000 | ' | ||
Capitalized salaries | 900,000 | 600,000 | ' | ||
Vista Capri [Member] | ' | ' | ' | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ||
Units in the community | 106 | ' | ' | ||
Sales price of communities sold | 14,400,000 | ' | ' | ||
Gain on sale of real estate | 7,900,000 | ' | ' | ||
Stock Options [Member] | ' | ' | ' | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Stock-based compensation expense | 600,000 | 600,000 | ' | ||
Intrinsic value of options exercised | 600,000 | 900,000 | ' | ||
Intrinsic value of the options outstanding and fully vested | 21,100,000 | ' | ' | ||
Unrecognized compensation cost | 6,100,000 | ' | ' | ||
Unrecognized compensation cost, weighted average recognition period, minimum | '1 year | ' | ' | ||
Unrecognized compensation cost, weighted average recognition period, maximum | '5 years | ' | ' | ||
Restricted Stock [Member] | ' | ' | ' | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Stock-based compensation expense | 600,000 | 600,000 | ' | ||
Unrecognized compensation cost | 6,100,000 | ' | ' | ||
Unrecognized compensation cost, weighted average recognition period, minimum | '1 year | ' | ' | ||
Unrecognized compensation cost, weighted average recognition period, maximum | '7 years | ' | ' | ||
2014 LTIP Units [Member] | ' | ' | ' | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Granted (in shares) | 50,500 | ' | ' | ||
Percentage subject to performance based vesting (in hundredths) | 90.00% | ' | ' | ||
Percentage subject to service-based vesting (in hundredths) | 10.00% | ' | ' | ||
Percentage of performance based vesting of 2014 Ltip Units eligible to be earned on absolute total stockholders return (in hundredths) | 0.33% | ' | ' | ||
Percentage of performance based vesting of 2014 Ltip Units eligible to be earned on relative total stockholders return (in hundredths) | 0.66% | ' | ' | ||
Performance period | '1 year | ' | ' | ||
Long Term Incentive Plans - Z-1 Units and 2014 LTIP Units [Member] | ' | ' | ' | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Stock-based compensation expense | 600,000 | 500,000 | ' | ||
Intrinsic value of the options outstanding and fully vested | 22,400,000 | ' | ' | ||
Unrecognized compensation cost | 7,700,000 | ' | ' | ||
Unamortized cost recognition period | '6 years | ' | ' | ||
Investment-Grade Unsecured Bonds [Member] | ' | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ||
Cost/Amortized Cost | 11,772,000 | ' | 15,446,000 | ||
Gross Unrealized Gain (Loss) | 96,000 | ' | 509,000 | ||
Carrying Value | 11,868,000 | ' | 15,955,000 | ||
Investment Funds - US Treasuries [Member] | ' | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ||
Cost/Amortized Cost | 5,017,000 | ' | 3,675,000 | ||
Gross Unrealized Gain (Loss) | 5,000 | ' | 3,000 | ||
Carrying Value | 5,022,000 | ' | 3,678,000 | ||
Common Stock [Member] | ' | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ||
Cost/Amortized Cost | 22,103,000 | ' | 13,104,000 | ||
Gross Unrealized Gain (Loss) | 710,000 | ' | -1,304,000 | ||
Carrying Value | 22,813,000 | ' | 11,800,000 | ||
Mortgage Backed Securities [Member] | ' | ' | ' | ||
Schedule of Available-for-sale Securities [Line Items] | ' | ' | ' | ||
Cost/Amortized Cost | 60,645,000 | ' | 58,651,000 | ||
Gross Unrealized Gain (Loss) | 0 | ' | 0 | ||
Carrying Value | 60,645,000 | ' | 58,651,000 | ||
Essex Portfolio, L.P. [Member] | ' | ' | ' | ||
Change in fair value and amortization of derivatives [Abstract] | ' | ' | ' | ||
Balance at beginning | -58,148,000 | ' | ' | ||
Other comprehensive income (loss) before reclassification, derivative | 627,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | 2,093,000 | ' | ' | ||
Net other comprehensive income (loss) | 2,720,000 | ' | ' | ||
Balance at the end | -55,428,000 | ' | ' | ||
Unrealized gains/(losses) on available for sale securities [Abstract] | ' | ' | ' | ||
Balance at beginning | 811,000 | ' | -792,000 | ||
Other comprehensive income (loss) before reclassification, available for sale securities, total | 2,030,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | -427,000 | ' | ' | ||
Net other comprehensive income (loss) | 1,603,000 | ' | ' | ||
Balance at the end | 811,000 | ' | -792,000 | ||
Accumulated other comprehensive loss, net by component [Abstract] | ' | ' | ' | ||
Balance at beginning | -54,617,000 | ' | -58,940,000 | ||
Other comprehensive income (loss) before reclassification | 2,657,000 | ' | ' | ||
Amounts reclassified from accumulated other comprehensive loss | 1,666,000 | ' | ' | ||
Net other comprehensive income (loss) | 4,323,000 | ' | ' | ||
Balance at the end | -54,617,000 | ' | -58,940,000 | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ' | ' | ' | ||
Stock-based compensation expense | 1,233,000 | 1,132,000 | ' | ||
BRE Properties, Inc. [Member] | ' | ' | ' | ||
Schedule of Mergers [Line Items] | ' | ' | ' | ||
Common shares conversion ratio in connection with merger (in shares) | 0.2971 | ' | ' | ||
Cash consideration per share (in dollars per share) | $7.18 | ' | ' | ||
Special dividend (in dollars per share) | $5.15 | ' | ' | ||
Cash consideration before special dividend (in dollars per share) | $12.33 | ' | ' | ||
Number of shares of common stock issued in merger (in shares) | 23,100,000 | ' | ' | ||
Share price (in dollars per share) | $61 | ' | ' | ||
Number of properties contributed | 14 | ' | ' | ||
Value of properties contributed | 1,400,000,000 | ' | ' | ||
Number of operating partnership units issued for properties contributed | 8,600,000 | ' | ' | ||
Business Acquisition, Purchase Price Allocation [Abstract] | ' | ' | ' | ||
Rental properties, excluding co-investments | 5,808,000,000 | ' | ' | ||
Co-investments | 206,000,000 | ' | ' | ||
In-place lease value | 97,000,000 | ' | ' | ||
Other Assets | 96,000,000 | ' | ' | ||
Secured and unsecured debt | -1,736,000,000 | ' | ' | ||
Other liabilities | -129,000,000 | ' | ' | ||
Total consideration | 4,342,000,000 | ' | ' | ||
Pro Forma results in connection with BRE merger | ' | ' | ' | ||
Total revenue | 247,801,000 | 228,721,000 | ' | ||
Net income available to common shareholders | 129,385,000 | [1],[2] | -12,956,000 | [1],[2] | ' |
Earnings per share, diluted (in dollars per share) | $2.12 | [1] | ($0.22) | [1] | ' |
Merger related costs | 16,059,000 | 29,000,000 | ' | ||
Income from discontinued operations | 105,000,000 | ' | ' | ||
Number of BRE properties sold | 3 | ' | ' | ||
BRE Properties, Inc. [Member] | Prepaid Expenses and Other Assets [Member] | ' | ' | ' | ||
Business Acquisition, Purchase Price Allocation [Abstract] | ' | ' | ' | ||
Acquired in-place lease value | 19,000,000 | ' | ' | ||
BRE Properties, Inc. [Member] | Essex Portfolio, L.P. [Member] | ' | ' | ' | ||
Pro Forma results in connection with BRE merger | ' | ' | ' | ||
Total revenue | 247,801,000 | 228,721,000 | ' | ||
Net income available to common shareholders | $130,802,000 | [1],[2] | ($11,455,000) | [1],[2] | ' |
Earnings per share, diluted (in dollars per share) | $2.07 | [1] | ($0.18) | [1] | ' |
[1] | 2014 supplemental pro forma net income available to common stockholders were adjusted to exclude $16,059 of merger related costs incurred by Essex during the three-months ended March 31, 2014. 2013 supplemental pro forma net income available to common stockholders were adjusted to include these charges plus an additional approximately $29,000 of merger expenses estimated to be incurred by Essex . 2014 and 2013 supplemental proforma earnings per share, diluted, were adjusted accordingly. | ||||
[2] | 2014 supplemental pro forma net income available to common stockholders includes approximately $105 million from discontinued operations related to the sale of three BRE properties that are non-recurring transactions. |
Significant_Transactions_Durin1
Significant Transactions During the First Quarter of 2014 and Subsequent Events (Details) (USD $) | 3 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||||
Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Mar. 31, 2014 | 8-May-14 | Mar. 31, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | 31-May-14 | Mar. 31, 2014 | |
Common Stock [Member] | Subsequent Event [Member] | Secured Debt [Member] | Unsecured Debt [Member] | Essex Apartment Value Fund II, LP [Member] | Piedmont Apartments [Member] | Avery [Member] | ||||
Common Stock [Member] | Subsequent Event [Member] | Unit | Subsequent Event [Member] | Unit | ||||||
Unit | ||||||||||
Acquisitions [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of acquired entity | ' | ' | ' | ' | ' | ' | ' | ' | $76,800,000 | $35,000,000 |
Number of units | ' | ' | ' | ' | ' | ' | ' | 1 | 396 | 121 |
Debt instrument assumed | 1,408,232,000 | ' | 1,404,080,000 | ' | ' | 44,800,000 | ' | ' | ' | ' |
Fixed rate of interest (in hundredths) | ' | ' | ' | ' | ' | 5.60% | ' | ' | ' | ' |
Term of loan | ' | ' | ' | ' | ' | '3 years | ' | ' | ' | ' |
Dispositions [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of units disposed of | ' | ' | ' | ' | ' | ' | ' | 1 | 396 | 121 |
Remaining units communities owned | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' |
Proceed from sale of assets | ' | ' | ' | ' | ' | ' | ' | 23,800,000 | ' | ' |
Gain on sale of assets | 8,268,000 | 1,503,000 | ' | ' | ' | ' | ' | 11,400,000 | ' | ' |
Ownership percentage in Fund II (in hundredths) | ' | ' | ' | ' | ' | ' | ' | 28.20% | ' | ' |
Income from Promotion | ' | ' | ' | ' | ' | ' | ' | 3,800,000 | ' | ' |
Common Stock [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Equity distribution agreement (in shares) | 0 | ' | ' | 958,000 | 197,600 | ' | ' | ' | ' | ' |
Average share price (in dollars per share) | ' | ' | ' | $166.24 | $171.62 | ' | ' | ' | ' | ' |
Proceed from stock issuance, net of fees and commissions | 157,596,000 | 122,905,000 | ' | 157,600,000 | 33,700,000 | ' | ' | ' | ' | ' |
Unsecured Bond Offering [Abstract] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Debt instrument, principal amount | ' | ' | ' | ' | ' | ' | 400,000,000 | ' | ' | ' |
Stated interest rate (in hundredths) | ' | ' | ' | ' | ' | ' | 3.88% | ' | ' | ' |
Net proceeds from issuance of debt | ' | ' | ' | ' | ' | ' | $394,000,000 | ' | ' | ' |
Coinvestments_Details
Co-investments (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | $716,443 | ' | $677,133 |
Balance sheets [Abstract] | ' | ' | ' |
Rental properties and real estate under development | 308,266 | ' | 50,430 |
Other liabilities | 22,281 | ' | 22,189 |
Statement of operations [Abstract] | ' | ' | ' |
Interest expense | -26,055 | -25,211 | ' |
General and administrative | -7,075 | -6,239 | ' |
Equity income in co-investments | 10,526 | 4,211 | ' |
Depreciation and Amortization | -2,986 | -2,930 | ' |
Membership interest in Wesco I [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 136,495 | ' | 142,025 |
Membership interest in Wesco III [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 38,928 | ' | 39,073 |
Partnership interest in Fund II [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 7,235 | ' | 4,166 |
Membership interest in a limited liability company that owns Expo [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 11,877 | ' | 12,041 |
Total operating co-investments [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 194,535 | ' | 197,305 |
Membership interests in limited liability companies with CPPIB that own and are developing Epic, Connolly Station, Mosso I & II, Park 20, and The Village [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 336,417 | ' | 301,538 |
Membership interests in limited liability companies that own and are developing The Huxley and The Dylan [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 19,151 | ' | 18,545 |
Membership interests in limited liability companies that owns and is developing One South Market [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 22,632 | ' | 17,115 |
Total development co-investments [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 378,200 | ' | 337,198 |
Membership interest in Wesco II that owns a preferred equity interest in Park Merced with a preferred return of 10.1% [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 95,115 | ' | 94,711 |
Preferred return rate (in hundredths) | 10.10% | ' | ' |
Preferred interests in related party limited liability companies that owns Sage at Cupertino with a preferred return of 9.5% [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 15,955 | ' | 15,775 |
Preferred return rate (in hundredths) | 9.50% | ' | ' |
Preferred interest in a related party limited liability company that owns Madison Park at Anaheim with a preferred return of 9% [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 13,824 | ' | 13,824 |
Preferred return rate (in hundredths) | 9.00% | ' | ' |
Preferred interest in related party limited liability company that owns an apartment development in Redwood City with a preferred return of 12% [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 9,681 | ' | 9,455 |
Preferred return rate (in hundredths) | 12.00% | ' | ' |
Preferred interest in a limited liability company that owns an apartment development in San Jose with a preferred return of 12% [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 9,133 | ' | 8,865 |
Preferred return rate (in hundredths) | 12.00% | ' | ' |
Total preferred interest investments [Member] | ' | ' | ' |
Investments in joint ventures accounted for under the equity method of accounting [Abstract] | ' | ' | ' |
Total co-investment | 143,708 | ' | 142,630 |
Total co investment [Member] | ' | ' | ' |
Balance sheets [Abstract] | ' | ' | ' |
Rental properties and real estate under development | 1,993,763 | ' | 1,953,328 |
Other assets | 131,716 | ' | 61,578 |
Total assets | 2,125,479 | ' | 2,014,906 |
Debt | 756,117 | ' | 667,641 |
Other liabilities | 82,519 | ' | 125,479 |
Equity | 1,286,843 | ' | 1,221,786 |
Total liabilities and equity | 2,125,479 | ' | 2,014,906 |
Company's share of equity | 716,443 | ' | 677,133 |
Statement of operations [Abstract] | ' | ' | ' |
Property revenues | 27,960 | 27,859 | ' |
Property operating expenses | -11,560 | -9,828 | ' |
Net property operating income | 16,400 | 18,031 | ' |
Gain on sale of real estate | 11,369 | 0 | ' |
Interest expense | -6,023 | -6,778 | ' |
General and administrative | -1,388 | -1,514 | ' |
Equity income in co-investments | 4,759 | 0 | ' |
Depreciation and Amortization | -10,693 | -11,019 | ' |
Net (loss) income | 14,424 | -1,280 | ' |
Company's share of net income | $10,526 | $4,211 | ' |
Notes_and_Other_Receivables_De
Notes and Other Receivables (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2013 | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Notes receivable | $36,105,000 | $68,255,000 | ||
Secured Due December 2014 [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Notes receivable | 3,212,000 | [1] | 3,212,000 | [1] |
Stated interest rate (in hundredths) | 4.00% | ' | ||
Wesco III [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Variable rate basis | 'LIBOR + 2.50% | ' | ||
Basis spread on rate (in hundredths) | 2.50% | ' | ||
Number of bridge loans | 2 | ' | ||
Short term Bridge Loan | 56,800,000 | ' | ||
Note and Other Receivables From Affiliates [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Notes receivable | 25,854,000 | [2] | 60,968,000 | [2] |
Other Receivables [Member] | ' | ' | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ' | ' | ||
Notes receivable | $7,039,000 | $4,075,000 | ||
[1] | The borrower funds an impound account for capital replacement. | |||
[2] | The Company provided two bridge loans totaling $56.8 million to Wesco III at a rate of LIBOR + 2.50%. Wesco III repaid these two loans on Gas Company Lofts and Regency at Mt. View in January 2014 and April 2014, respectively. |
Related_Party_Transactions_Det
Related Party Transactions (Details) (USD $) | 3 Months Ended | 1 Months Ended | 3 Months Ended | ||
In Millions, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 | Jan. 31, 2013 | Sep. 30, 2013 |
Loan | Marcus and Millichamp Company TMMC Affiliate [Member] | MMC [Member] | |||
Related Party Transactions [Abstract] | ' | ' | ' | ' | ' |
Management and other fees from affiliates including management, property management, development and redevelopment fees from co-investments, net of intercompany amounts eliminated by company | $2.60 | $2.80 | ' | ' | ' |
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' |
Preferred return on preferred equity investment, thereafter, maximum (in hundredths) | ' | ' | ' | ' | 13.00% |
Preferred return on preferred equity investment, thereafter, minimum (in hundredths) | ' | ' | ' | ' | 9.00% |
Maximum Term Extended (in years) | ' | ' | ' | ' | '1 year |
Income related to the restructured investment | ' | ' | ' | ' | 0.4 |
Preferred equity interest investment in a related party entity | ' | ' | ' | 8.6 | ' |
Notes to affiliates which have been repaid | ' | ' | 2 | ' | ' |
Notes to affiliates outstanding | ' | ' | 2 | ' | ' |
Short term bridge loan | ' | ' | $56.80 | ' | ' |
Unsecured_Debt_and_Lines_of_Cr2
Unsecured Debt and Lines of Credit (Details) (USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Unsecured debts and line of credit [Abstract] | ' | ' |
Unsecured debt | $1,410,162 | $1,410,023 |
Lines of credit | 135,903 | 219,421 |
Total unsecured debt and lines of credit | 1,546,065 | 1,629,444 |
Bonds Private Placement - Fixed Rate [Member] | ' | ' |
Unsecured debts and line of credit [Abstract] | ' | ' |
Unsecured debt | 465,000 | 465,000 |
Weighted Average Maturity | '5 years | ' |
Term Loan - Variable Rate [Member] | ' | ' |
Unsecured debts and line of credit [Abstract] | ' | ' |
Unsecured debt | 350,000 | 350,000 |
Weighted Average Maturity | '2 years 10 months 24 days | ' |
Weighted average interest rate (in hundredths) | 2.40% | 2.50% |
Bonds Public Offering - Fixed Rate [Member] | ' | ' |
Unsecured debts and line of credit [Abstract] | ' | ' |
Unsecured debt | $595,162 | $595,023 |
Weighted Average Maturity | '8 years 8 months 12 days | ' |
Weighted average interest rate (in hundredths) | 4.00% | 4.00% |
Line of Credit [Member] | ' | ' |
Unsecured debts and line of credit [Abstract] | ' | ' |
Weighted Average Maturity, Line of credit | '5 years | ' |
Weighted average interest rate (in hundredths) | 1.60% | 2.20% |
Segment_Information_Details
Segment Information (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2014 | Mar. 31, 2013 | Dec. 31, 2013 |
Segment | |||
Segment Information [Abstract] | ' | ' | ' |
Number of reportable operating segments defined by geographical regions | 3 | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Property revenues | $159,017 | $145,057 | ' |
Net operating income | 107,044 | 98,731 | ' |
Management and other fees | 2,628 | 2,948 | ' |
Depreciation | -50,312 | -46,787 | ' |
General and administrative | -7,075 | -6,239 | ' |
Merger expenses | -16,059 | 0 | ' |
Cost of management and other fees | -1,477 | -1,701 | ' |
Interest expense before amortization | -26,055 | -25,211 | ' |
Amortization expense | -2,986 | -2,930 | ' |
Interest and other income | 2,879 | 5,023 | ' |
Equity income from co-investments | 10,526 | 4,211 | ' |
Gains on sale of real estate and land | 8,268 | 1,503 | ' |
Income from continuing operations | 27,381 | 29,548 | ' |
Net reportable operating segment - real estate assets | 5,339,988 | ' | 4,188,871 |
Real estate under development | 308,266 | ' | 50,430 |
Co-investments | 716,443 | ' | 677,133 |
Cash and cash equivalents, including restricted cash | 48,671 | ' | 53,766 |
Marketable securities | 100,348 | ' | 90,084 |
Notes and other receivables | 36,105 | ' | 68,255 |
Other non-segment assets | 83,221 | ' | 58,300 |
Total assets | 6,633,042 | ' | 5,186,839 |
Southern California [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Property revenues | 69,687 | 64,740 | ' |
Net operating income | 47,066 | 43,708 | ' |
Net reportable operating segment - real estate assets | 2,551,297 | ' | 1,746,434 |
Northern California [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Property revenues | 56,944 | 50,770 | ' |
Net operating income | 40,353 | 35,283 | ' |
Net reportable operating segment - real estate assets | 1,967,133 | ' | 1,614,159 |
Seattle Metro [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Property revenues | 28,641 | 25,751 | ' |
Net operating income | 19,045 | 16,995 | ' |
Net reportable operating segment - real estate assets | 734,972 | ' | 741,533 |
Other Real Estate Assets [Member] | ' | ' | ' |
Revenues from External Customers and Long-Lived Assets [Line Items] | ' | ' | ' |
Property revenues | 3,745 | 3,796 | ' |
Net operating income | 580 | 2,745 | ' |
Net reportable operating segment - real estate assets | $86,586 | ' | $86,745 |
Net_Income_Per_Common_Share_an2
Net Income Per Common Share and Net Income Per Common Unit (Details) (USD $) | 3 Months Ended | |||
Mar. 31, 2014 | Mar. 31, 2013 | |||
Basic [Abstract] | ' | ' | ||
Income from continuing operations available to common stockholders | $21,912,000 | $24,690,000 | ||
Income from continuing operations available to common stockholders (in shares) | 37,685,073 | 37,003,925 | ||
Income from continuing operations available to common stockholders (in dollars per share) | $0.58 | $0.67 | ||
Income from discontinued operations available to common stockholders | 0 | 513,000 | ||
Income from discontinued operations available to common stockholders (in shares) | 37,685,000 | 37,004,000 | ||
Income from discontinued operations available to common stockholders (in dollars per share) | $0 | $0.01 | ||
Income available to common stockholders | 21,912,000 | 25,203,000 | ||
Income available to common stockholders (in dollars per share) | $0.58 | $0.68 | ||
Effect of dilutive securities | 0 | [1] | 0 | [1] |
Effect of dilutive securities (in shares) | 281,000 | [1] | 88,000 | [1] |
Diluted [Abstract] | ' | ' | ||
Income from continuing operations available to common stockholders | 21,912,000 | 24,690,000 | ||
Adjusted income from continuing operations available to common stockholders (in shares) | 37,931,000 | 37,092,000 | ||
Adjusted income from continuing operations available to common stockholders (in dollars per share) | $0.58 | $0.67 | ||
Adjusted income from discontinued operations available to common stockholders | 0 | 513,000 | ||
Adjusted income from discontinued operations available to common stockholders (in shares) | 37,931,000 | 37,092,000 | ||
Adjusted income from discontinued operations available to common stockholders (in dollars per share) | $0 | $0.01 | ||
Total income (Diluted) | 21,912,000 | 25,203,000 | ||
Total income per common share amount (in dollars per share) | $0.58 | $0.68 | ||
Convertible Limited Partnership Units [Member] | ' | ' | ||
Diluted [Abstract] | ' | ' | ||
Anti-dilutive securities (in shares) | 2,272,179 | 2,079,447 | ||
Net income (loss) allocated to Limited Partners | 1,400,000 | 1,500,000 | ||
Stock Options [Member] | ' | ' | ||
Diluted [Abstract] | ' | ' | ||
Anti-dilutive securities (in shares) | 164,442 | 260,513 | ||
Essex Portfolio, L.P. [Member] | ' | ' | ||
Basic [Abstract] | ' | ' | ||
Income from continuing operations available to common stockholders | 23,329,000 | 26,162,000 | ||
Income from continuing operations available to common stockholders (in shares) | 39,957,252 | 39,083,371 | ||
Income from continuing operations available to common stockholders (in dollars per share) | $0.58 | $0.67 | ||
Income from discontinued operations available to common stockholders | 0 | 542,000 | ||
Income from discontinued operations available to common stockholders (in shares) | 39,957,000 | 39,083,000 | ||
Income from discontinued operations available to common stockholders (in dollars per share) | $0 | $0.01 | ||
Income available to common stockholders | 23,329,000 | 26,704,000 | ||
Income available to common stockholders (in dollars per share) | $0.58 | $0.68 | ||
Effect of dilutive securities | 0 | [2] | 0 | [2] |
Effect of dilutive securities (in shares) | 281,000 | [2] | 88,000 | [2] |
Diluted [Abstract] | ' | ' | ||
Income from continuing operations available to common stockholders | 23,329,000 | 26,162,000 | ||
Adjusted income from continuing operations available to common stockholders (in shares) | 40,203,000 | 39,171,000 | ||
Adjusted income from continuing operations available to common stockholders (in dollars per share) | $0.58 | $0.67 | ||
Adjusted income from discontinued operations available to common stockholders | 0 | 542,000 | ||
Adjusted income from discontinued operations available to common stockholders (in shares) | 40,203,000 | 39,171,000 | ||
Adjusted income from discontinued operations available to common stockholders (in dollars per share) | $0 | $0.01 | ||
Total income (Diluted) | $23,329,000 | $26,704,000 | ||
Total income per common share amount (in dollars per share) | $0.58 | $0.68 | ||
Essex Portfolio, L.P. [Member] | Stock Options [Member] | ' | ' | ||
Diluted [Abstract] | ' | ' | ||
Anti-dilutive securities (in shares) | 164,442 | 260,513 | ||
[1] | Weighted average convertible limited partnership units of 2,272,179 and 2,079,447 which include vested Series Z-1 incentive units, for the three months ended March 31, 2014, and 2013, respectively, were not included in the determination of diluted EPS because they were anti-dilutive. Income allocated to convertible limited partnership units, which includes vested Series Z-1 units, aggregating $1.4 million and $1.5 million for the three months ended March 31, 2014 and 2013, respectively, have been excluded from income available to common stockholders for the calculation of diluted income per common share since these units are excluded from the diluted weighted average common shares for the period as the effect was anti-dilutive. The Company has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. | |||
[2] | The Operating Partnership has the ability to redeem DownREIT limited partnership units for cash and does not consider them to be potentially dilutive securities. |
Derivative_Instruments_and_Hed1
Derivative Instruments and Hedging Activities (Details) (Designated as Hedging Instrument [Member], USD $) | Mar. 31, 2014 | Dec. 31, 2013 |
In Millions, unless otherwise specified | ||
Interest Rate Cap [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Notional amount of interest rate contracts | $156.90 | ' |
Number of derivative instruments held | 9 | ' |
Interest Rate Swap [Member] | ' | ' |
Derivative [Line Items] | ' | ' |
Notional amount of interest rate contracts | 300 | ' |
Total amount of unsecured loan | 350 | ' |
Interest rate (in hundredths) | 2.40% | ' |
Aggregate carrying value of the interest rate swap contracts | $2.10 | $2.70 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details) (Payment Guarantee [Member], Construction Contracts [Member], USD $) | Mar. 31, 2014 |
In Millions, unless otherwise specified | |
Payment Guarantee [Member] | Construction Contracts [Member] | ' |
Guarantor Obligations [Line Items] | ' |
Maximum exposure of the guarantee | $109.10 |