Essex Portfolio 8-K Essex Announces Fourth Quarter 2015 Results and 2016 Guidance

Exhibit 99.2

 

See Company's 10-K and 10-Q for additional disclosures

Q4 2015 Supplemental

 Table of Contents

	Page
Consolidated Operating Results	S-1 – S-2
Consolidated Funds From Operations	S-3
Consolidated Balance Sheets	S-4
Debt Summary – December 31, 2015	S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – December 31, 2015	S-6
Portfolio Summary by County – December 31, 2015	S-7
Operating Income by Quarter – December 31, 2015	S-8
Same-Property Revenue Results by County – Quarters ended December 31, 2015 and 2014, and September 30, 2015	S-9
Same-Property Revenue Results by County – Years ended December 31, 2015 and 2014	S-9.1
Same-Property Operating Expenses	S-10
Development Pipeline – December 31, 2015	S-11
Redevelopment Pipeline – December 31, 2015	S-12
Co-Investments – December 31, 2015	S-13
Assumptions for 2016 FFO Guidance Range	S-14
Summary of Apartment Community Acquisitions and Dispositions Activity	S-15
2016 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions	S-16

 E S S E X  P R O P E R T Y  T R U S T, I N C.    

Consolidated Operating Results	Three Months Ended						Twelve Months Ended
(Dollars in thousands, except share and per share amounts)	December 31,						December 31,
	2015			2014(1)			2015			2014(1)
Revenues:
Rental and other property	$	308,646		$	276,778		$	1,185,498		$	961,591
Management and other fees		2,100			2,490			8,909			9,347
		310,746			279,268			1,194,407			970,938
Expenses:
Property operating		92,141			88,621			363,508			312,546
Depreciation and amortization		116,477			106,703			453,423			360,592
General and administrative		8,867			12,256			40,090			40,878
Merger and integration expenses		—			7,116			3,798			53,530
Acquisition and investment related costs		1,057			1,109			2,414			1,878
		218,542			215,805			863,233			769,424
Earnings from operations		92,204			63,463			331,174			201,514
Interest expense, net(2)		(50,771	)		(47,529	)		(199,172	)		(164,551	)
Interest and other income		4,323			3,126			19,143			11,811
Equity income from co-investments		5,899			18,828			21,861			39,893
Loss on early retirement of debt		(6,114	)		(268	)		(6,114	)		(268	)
Gain on sale of real estate and land		40,221			7,185			47,333			46,039
Gain on remeasurement of co-investment		—			—			34,014			—
Net income		85,762			44,805			248,239			134,438
Net income attributable to noncontrolling interest		(4,824	)		(3,316	)		(16,119	)		(12,288	)
Net income attributable to controlling interest		80,938			41,489			232,120			122,150
Dividends to preferred stockholders		(1,314	)		(1,314	)		(5,255	)		(5,291	)
Net income available to common stockholders	$	79,624		$	40,175		$	226,865		$	116,859
Net income per share - basic	$	1.22		$	0.63		$	3.50		$	2.07
Shares used in income per share - basic		65,336,773			63,362,624			64,871,717			56,546,959
Net income per share - diluted	$	1.22		$	0.63		$	3.49		$	2.06
Shares used in income per share - diluted		65,519,438			63,544,534			65,061,685			56,696,525

(1)	Due to subsequent purchase price allocation adjustments made to the opening balance sheet for the BRE Merger on April 1, 2014, certain amounts do not match prior reported results.
(2)	Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.

See Company's 10-K and 10-Q for additional disclosures
S-1

E S S E X  P R O P E R T Y  T R U S T, I N C.   

Consolidated Operating Results	Three Months Ended				Twelve Months Ended
Selected Line Item Detail	December 31,				December 31,
(Dollars in thousands)	2015		2014		2015		2014
Rental and other property
Rental	$	288,119	$	258,995	$	1,108,758	$	896,278
Other property		20,527		17,783		76,740		65,313
Rental and other property	$	308,646	$	276,778	$	1,185,498	$	961,591
Property operating expenses
Real estate taxes	$	30,734	$	30,421	$	128,555	$	107,873
Administrative and insurance		18,765		19,551		74,868		69,931
Maintenance and repairs		20,352		17,792		73,002		60,234
Utilities		15,988		15,659		62,196		55,718
Property management		6,302		5,198		24,887		18,790
Property operating expenses	$	92,141	$	88,621	$	363,508	$	312,546
Interest and other income
Marketable securities and other interest income	$	4,323	$	3,126	$	14,475	$	10,925
Gain from sale of marketable securities, note prepayment, and other investments		—		—		598		886
Insurance reimbursements		—		—		4,070		—
Interest and other income	$	4,323	$	3,126	$	19,143	$	11,811
Equity income from co-investments
Equity income from co-investments	$	3,541	$	778	$	9,716	$	2,356
Income from preferred equity investments		2,358		3,717		9,999		15,089
Gain on sale of co-investment communities		—		3,347		—		6,558
Co-investment promote income		—		5,736		192		10,640
Income from early redemption of preferred equity investments		—		5,250		1,954		5,250
Equity income from co-investments	$	5,899	$	18,828	$	21,861	$	39,893
Noncontrolling interest
Limited partners of Essex Portfolio, L.P.	$	2,710	$	1,469	$	7,824	$	4,911
DownREIT limited partners' distributions		1,297		1,142		5,191		4,705
Third-party ownership interest		817		705		3,104		2,672
Noncontrolling interest	$	4,824	$	3,316	$	16,119	$	12,288

See Company's 10-K and 10-Q for additional disclosures
S-2

E S S E X  P R O P E R T Y  T R U S T, I N C.  

Consolidated Funds From Operations	Three Months Ended									Twelve Months Ended
(Dollars in thousands, except share and per share amounts and in footnotes)	December 31,									December 31,
	2015			2014			% Change			2015			2014			% Change
Funds from operations attributable to common stockholders and unitholders (FFO)
Net income available to common stockholders	$	79,624		$	40,175					$	226,865		$	116,859
Adjustments:
Depreciation and amortization		116,477			106,703						453,423			360,592
Gains not included in FFO		(40,221	)		(8,399	)					(81,347	)		(50,064	)
Depreciation add back from unconsolidated co-investments		13,004			10,915						49,826			33,975
Noncontrolling interest related to Operating Partnership units		2,710			1,469						7,824			4,911
Insurance reimbursements(1)		—			—						(1,751	)		—
Depreciation attributable to third party ownership and other(2)		(28	)		(335	)					(781	)		(1,331	)
Funds from operations attributable to common stockholders and unitholders	$	171,566		$	150,528					$	654,059		$	464,942
FFO per share-diluted	$	2.53		$	2.29			10.5	%	$	9.72		$	7.89			23.2	%
Components of the change in FFO
Non-core items:
Merger and integration expenses	$	—			7,116					$	3,798			53,530
Acquisition and investment related costs		1,057			1,109						2,414			1,878
Gain on sale of marketable securities, note prepayment, and other investments		—			—						(598	)		(886	)
Gain on sale of land		—			(2,133	)					—			(2,533	)
Loss on early retirement of debt		6,114			268						6,114			268
Co-investment promote income		—			(5,736	)					(192	)		(10,640	)
Income from early redemption of preferred equity investments		—			(5,250	)					(1,954	)		(5,250	)
Insurance reimbursments		—			—						(2,319	)		—
Other non-core adjustments		(444	)		1,142						(651	)		1,852
Core funds from operations attributable to common stockholders and unitholders		178,293			147,044						660,671			503,161
Core FFO per share-diluted	$	2.63		$	2.24			17.4	%	$	9.82		$	8.54			15.0	%
Changes in core items:
Same-property NOI	$	15,164								$	114,324
Non-same property NOI		12,854									58,527
Management and other fees, net		(390	)								(313	)
FFO from co-investments		3,441									18,040
Interest and other income		1,197									3,550
Interest expense		(3,242	)								(34,621	)
General and administrative		2,185									(1,665	)
Other items, net		40									(332	)
	$	31,249								$	157,510
Weighted average number of shares outstanding diluted(3)		67,785,975			65,740,227						67,310,148			58,921,232

(1)	Insurance reimbursements for replacement costs related to a flood at one of our properties.
(2)	The Company consolidates Hidden Valley and Hillsdale Garden Apartments.  Noncontrolling interest's share of net operating income in these investments for the three and twelve months ended December 31, 2015 was $1.0 million and $3.9 million, respectively.
(3)	Assumes conversion of all outstanding operating partnership interests in the Operating Partnership and excludes 744,346 DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT limited partnership units for cash and does not consider them to be common stock equivalents.

See Company's 10-K and 10-Q for additional disclosures
S-3

E S S E X  P R O P E R T Y  T R U S T, I N C.    

Consolidated Balance Sheets
(Dollars in thousands)
	December 31, 2015			December 31, 2014
Real Estate:
Land and land improvements	$	2,522,842		$	2,424,930
Buildings and improvements		9,808,627			8,819,751
		12,331,469			11,244,681
Less:  accumulated depreciation		(1,949,892	)		(1,564,806	)
		10,381,577			9,679,875
Real estate under development		242,326			429,096
Co-investments		1,036,047			1,042,423
Real estate held for sale, net		26,879			56,300
		11,686,829			11,207,694
Cash and cash equivalents		123,055			95,749
Marketable securities and other investments		137,485			117,240
Notes and other receivables		19,285			24,923
Acquired in-place lease value, net		2,857			47,748
Prepaid expenses and other assets		35,580			33,378
Total assets	$	12,005,091		$	11,526,732
Unsecured debt, net	$	3,088,680		$	2,603,548
Mortgage notes payable, net		2,215,077			2,234,317
Lines of credit, net		11,707			242,824
Other liabilities		307,152			286,719
Total liabilities		5,622,616			5,367,408
Redeemable noncontrolling interest		45,452			23,256
Equity:
Common stock		6			6
Cumulative redeemable preferred stock, liquidation value		73,750			73,750
Additional paid-in capital		7,003,317			6,651,165
Distributions in excess of accumulated earnings		(797,329	)		(650,797	)
Accumulated other comprehensive loss, net		(42,011	)		(51,452	)
Total stockholders' equity		6,237,733			6,022,672
Noncontrolling interest		99,290			113,396
Total equity		6,337,023			6,136,068
Total liabilities and equity	$	12,005,091		$	11,526,732

See Company's 10-K and 10-Q for additional disclosures
S-4

E S S E X  P R O P E R T Y  T R U S T, I N C.

Debt Summary - December 31, 2015
(Dollars in thousands, except in footnotes)
									Scheduled principal payments, unamortized premiums (discounts) and (debt issuance costs) are as follows - excludes lines of credit:
				Weighted Average
	Balance Outstanding			Interest Rate			Maturity In Years			Unsecured		Secured		Unamortized premiums (discounts) and (debt issuance costs)			Total		Weighted Average Interest Rate			Percentage of Total Debt
Unsecured Debt, net
Bonds private - fixed rate		465,000			4.5	%		3.2	2016	$	350,000	$	29,714	$	24,803		$	404,517		3.3	%		7.6	%
Bonds public - fixed rate		2,400,000			3.5	%		6.7	2017		365,000		199,180		16,324			580,504		3.2	%		11.0	%
Term loan(1)		225,000			2.4	%		0.9	2018		—		320,622		13,246			333,868		5.4	%		6.3	%
Unamortized net premiums and debt issuance costs		(1,320	)		—			—	2019		75,000		586,212		8,654			669,866		4.3	%		12.6	%
		3,088,680			3.6	%		5.8	2020		—		693,088		3,323			696,411		5.0	%		13.1	%
Mortgage Notes Payable, net									2021		500,000		50,764		(3,430	)		547,334		4.3	%		10.3	%
Fixed rate - secured	$	1,866,558			4.9	%		3.6	2022		300,000		774		(3,873	)		296,901		3.7	%		5.6	%
Variable rate - secured(2)		291,709			1.2	%		22.6	2023		600,000		846		(1,603	)		599,243		3.6	%		11.3	%
Unamortized premiums and debt issuance costs		56,810			—			—	2024		400,000		925		(899	)		400,026		4.0	%		7.6	%
Total mortgage notes payable		2,215,077			4.4	%		6.1	2025		500,000		14,611		(212	)		514,399		3.5	%		9.7	%
									2026		—		1,106		(102	)		1,004		1.1	%		0.0	%
Unsecured Lines of Credit, net									Thereafter		—		260,425		(741	)		259,684		1.2	%		4.9	%
Line of credit(3)		15,000			1.9	%
Line of credit(4)		—			—				Total	$	3,090,000	$	2,158,267	$	55,490		$	5,303,757		3.9	%		100.0	%
Unamortized debt issuance costs		(3,293	)		—
Total lines of credit(5)		11,707			1.9	%
Total debt, net	$	5,315,464			3.9	%

Capitalized interest for the three and twelve months ended December 31, 2015 was approximately $3.4 million and $15.6 million, respectively.
(1)	The unsecured term loan has a variable interest rate of LIBOR plus 1.05%. The Company has entered into interest rate swap contracts with a notional amount totaling $225 million, which effectively converts the interest rate on of the term loan to a fixed rate of 2.4%.
(2)	$281.7 million of $291.7 million of variable rate debt is tax exempt to the note holders and $267.3 million is subject to interest rate protection agreements or total return swap contracts.
(3)	The unsecured line of credit facility aggregates to $1 billion. In January 2016, the line maturity was extended to December 2019 with one 18-month extension, exercisable at the Company's option.  The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.90%.
(4)	The unsecured line of credit facility is $25 million. In January 2016, the maturity was extended to January 2018. The underlying interest rate on this line is based on a tiered rate structure tied to the Company's corporate ratings and is currently at LIBOR plus 0.90%.

See Company's 10-K and 10-Q for additional disclosures
S-5

E S S E X  P R O P E R T Y  T R U S T, I N C.  

Capitalization Data, Public Bond Covenants, Credit Ratings and Selected Credit Ratios - December 31, 2015

(Dollars and shares in thousands, except per share amounts)

Capitalization Data						Public Bond Covenants		Actual	Requirement
Total debt, net				$	5,315,464
							Debt to Total Assets:	38%	< 65%
Common stock and potentially dilutive securities
	Common stock outstanding				65,379
	Limited partnership units(1)				2,295
	Options-treasury method				238		Secured Debt to Total Assets:	16%	< 40%
Total shares of common stock and potentially dilutive securities					67,912
Common stock price per share as of December 31, 2015				$	239.41
							Interest Coverage:	357%	> 150%
Market value of common stock and potentially dilutive securities				$	16,258,812
Preferred stock				$	73,750		Unsecured Debt Ratio(1) :	292%	> 150%
Total equity capitalization				$	16,332,562
						Selected Credit Ratios		Actual
Total market capitalization				$	21,648,026
Ratio of debt to total market capitalization					24.6%		Net IndebtednessDivided by Adjusted EBITDA(2) (3):	5.8
							Unencumbered NOI to Total NOI:	66%
(1)	Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company's common stock.					(1)	Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
						(2)	Net Indebtedness is total debt less unamortized premiums, discounts, debt issuance costs, unrestricted cash and cash equivalents, and marketable securities.
Credit Ratings						(3)	Adjusted EBITDA annualizes the proforma NOI for current quarter acquisitions and excludes non-routine items in earnings.
Rating Agency		Rating	Outlook
Fitch		BBB+	Stable
Moody's		Baa2	Positive
Standard & Poor's		BBB	Positive

See Company's 10-K and 10-Q for additional disclosures
S-6

E S S E X  P R O P E R T Y  T R U S T, I N C.  

Portfolio Summary as of December 31, 2015

	Apartment Homes								Average Monthly Rental Rate(1)						Percent of NOI(2)
Region - County	Consolidated(3)		Unconsolidated Co-investments(4)		Apartment Homes in Development(5)		Total		Consolidated		Unconsolidated Co-investments (6)		Total(7)		Consolidated			Unconsolidated Co-investments(6)			Total(7)
Southern California
Los Angeles County		9,438		1,618		—		11,056	$	2,212	$	1,878	$	2,185		20.1	%		14.1	%		19.5	%
Orange County		5,786		1,144		—		6,930		1,951		1,654		1,924		11.3	%		8.5	%		11.0	%
San Diego County		4,962		616		—		5,578		1,709		1,561		1,700		8.2	%		4.2	%		7.8	%
Ventura County		2,898		373		—		3,271		1,610		2,017		1,635		4.8	%		3.3	%		4.7	%
Other Southern CA		623		581		—		1,204		1,516		1,628		1,552		0.9	%		4.4	%		1.3	%
Total Southern California		23,707		4,332		—		28,039		1,949		1,752		1,932		45.3	%		34.5	%		44.3	%
Northern California
Santa Clara County		6,057		2,477		376		8,910		2,558		2,615		2,568		16.2	%		26.1	%		17.2	%
Alameda County		3,138		1,293		—		4,431		2,340		2,220		2,319		7.2	%		13.9	%		7.9	%
San Mateo County		1,830		197		599		2,626		2,677		2,708		2,679		5.2	%		2.7	%		4.9	%
Contra Costa County		2,270		—		555		2,825		2,139		—		2,139		5.1	%		—			4.6	%
San Francisco MSA		1,341		463		545		2,349		3,011		3,503		3,089		3.5	%		8.0	%		3.9	%
Other Northern CA		230		—		—		230		2,054		—		2,054		0.5	%		—			0.4	%
Total Northern California		14,866		4,430		2,075		21,371		2,495		2,603		2,510		37.7	%		50.7	%		38.9	%
Seattle Metro		10,239		1,958		—		12,197		1,599		1,478		1,589		17.0	%		14.8	%		16.8	%
Total		48,812		10,720		2,075		61,607	$	2,040	$	2,065	$	2,043		100.0	%		100.0	%		100.0	%

(1)	Average monthly rental rate is defined as the total potential monthly rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes) divided by the number of apartment homes.
(2)	Actual NOI for the quarter ended December 31, 2015.
(3)	Includes all apartment communities with rents including one development community in lease-up which consists of 172 apartment homes, excluding commercial space.
(4)	Includes one rental income producing development community in lease-up which consists of 200 apartment homes.
(5)	Includes development communities with no rental income.
(6)	Co-investment amounts weighted for Company's pro rata share.
(7)	At Company's pro rata share.

See Company's 10-K and 10-Q for additional disclosures
S-7

E S S E X  P R O P E R T Y  T R U S T, I N C.   

Operating Income by Quarter⁽¹⁾

(Dollars in thousands, except in footnotes)

	Apartment Homes		Q4 '15			Q3 '15			Q2 '15			Q1 '15			Q4 '14
Rental and other property revenues:
Same-property(2)		42,734	$	257,824		$	254,157		$	248,287		$	242,759		$	239,873
Acquisitions (3)		3,791		24,445			23,099			20,255			14,269			12,579
Development(4)		1,503		12,482			12,038			11,273			9,753			8,146
Redevelopment		680		4,293			4,214			4,078			3,979			4,134
Non-Residential/Other, net (5)		104		9,602			9,014			10,208			9,469			12,046
Total rental and other property revenues		48,812		308,646			302,522			294,101			280,229			276,778
Property operating expenses:
Same-property(2)				78,627			78,682			76,068			74,883			75,840
Acquisitions (3)				8,526			8,003			7,256			4,867			4,166
Development(4)				3,651			4,024			3,868			3,355			3,167
Redevelopment				1,653			1,611			1,534			1,539			1,515
Non-Residential/Other, net (5) (6)				(316	)		1,799			1,351			2,527			3,933
Total property operating expenses				92,141			94,119			90,077			87,171			88,621
Net operating income (NOI):
Same-property(2)				179,197			175,475			172,219			167,876			164,033
Acquisitions (3)				15,919			15,096			12,999			9,402			8,413
Development(4)				8,831			8,014			7,405			6,398			4,979
Redevelopment				2,640			2,603			2,544			2,440			2,619
Non-Residential/Other, net (5)				9,918			7,215			8,857			6,942			8,113
Total NOI			$	216,505		$	208,403		$	204,024		$	193,058		$	188,157
Same-property metrics
Operating margin				70	%		69	%		69	%		69	%		68	%
Annualized turnover(7)				44	%		60	%		55	%		44	%		45	%
Financial occupancy(8)				96.1	%		96.0	%		96.1	%		96.1	%		96.3	%

(1)	Includes consolidated communities only.
(2)	Same-property includes BRE properties acquired April 1, 2014.
(3)	Acquisitions include properties acquired which did not have comparable stabilized results as of April 1, 2014.
(4)	Development includes properties developed which did not have comparable stabilized results as of April 1, 2014.
(5)	Other real estate assets consists mainly of retail space, commercial properties, boat slips, held for sale properties, and disposition properties.
(6)	Includes other expenses and intercompany eliminations pertaining to self-insurance. In Q4'15 there were $1.9 million in reductions to operating expenses related to changes in prior period property tax estimates.
(7)	Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.
(8)	Financial occupancy is defined as the percentage resulting from dividing actual rental revenue by total potential rental revenue (actual rent for occupied apartment homes plus market rent for vacant apartment homes).

See Company's 10-K and 10-Q for additional disclosures
S-8

E S S E X  P R O P E R T Y  T R U S T, I N C.   

Same-Property Revenue Results by County - Fourth Quarter 2015 vs. Fourth Quarter 2014 and Third Quarter 2015⁽¹⁾

(Dollars in thousands, except average monthly rental rates)

						Average Monthly Rental Rate							Financial Occupancy									Gross Revenues							Sequential Gross Revenues
Region - County	Apartment Homes		Q4 '15 % of Actual NOI			Q4 '15		Q4 '14		% Change			Q4 '15			Q4 '14			% Change			Q4 '15		Q4 '14		% Change			Q3 '15		% Change
Southern California
Los Angeles County		6,844		16.7	%	$	2,138	$	2,020		5.8	%		96.0	%		95.9	%		0.1	%	$	44,007	$	41,331		6.5	%	$	43,303		1.6	%
Orange County		5,786		13.0	%		1,951		1,849		5.5	%		96.2	%		96.7	%		-0.5	%		34,103		32,532		4.8	%		33,835		0.8	%
San Diego County		4,583		8.7	%		1,694		1,597		6.1	%		96.0	%		96.5	%		-0.5	%		23,696		22,400		5.8	%		23,202		2.1	%
Ventura County		2,898		5.6	%		1,610		1,514		6.3	%		96.0	%		96.4	%		-0.4	%		14,288		13,500		5.8	%		14,170		0.8	%
Other Southern CA		623		1.1	%		1,516		1,407		7.7	%		99.0	%		98.8	%		0.2	%		2,959		2,773		6.7	%		2,676		10.6	%
Total Southern California		20,734		45.1	%		1,895		1,789		5.9	%		96.1	%		96.4	%		-0.3	%		119,053		112,536		5.8	%		117,186		1.6	%
Northern California
Santa Clara County		5,228		16.5	%		2,504		2,285		9.6	%		96.1	%		96.2	%		-0.1	%		39,530		36,112		9.5	%		39,078		1.2	%
Alameda County		2,613		7.1	%		2,309		2,048		12.7	%		95.2	%		96.8	%		-1.7	%		18,184		16,438		10.6	%		17,935		1.4	%
San Mateo County		1,566		4.9	%		2,560		2,344		9.2	%		96.4	%		96.1	%		0.3	%		12,242		11,186		9.4	%		12,098		1.2	%
Contra Costa County		2,270		5.9	%		2,139		1,954		9.5	%		96.6	%		96.1	%		0.5	%		14,799		13,574		9.0	%		14,625		1.2	%
San Francisco MSA		816		2.2	%		2,394		2,219		7.9	%		96.1	%		95.5	%		0.6	%		5,884		5,405		8.9	%		5,745		2.4	%
Other Northern CA		126		0.4	%		2,232		1,899		17.5	%		99.3	%		98.8	%		0.5	%		857		739		16.0	%		790		8.5	%
Total Northern California		12,619		37.0	%		2,395		2,176		10.1	%		96.1	%		96.3	%		-0.2	%		91,496		83,454		9.6	%		90,271		1.4	%
Seattle Metro		9,381		17.9	%		1,594		1,483		7.5	%		96.2	%		95.9	%		0.3	%		47,275		43,883		7.7	%		46,700		1.2	%
Total Same-Property		42,734		100.0	%	$	1,977	$	1,836		7.7	%		96.1	%		96.3	%		-0.2	%	$	257,824	$	239,873		7.5	%	$	254,157		1.4	%

⁽¹⁾ Same-property includes BRE properties acquired April 1, 2014, excluding properties held for sale.

See Company's 10-K and 10-Q for additional disclosures
S-9

E S S E X  P R O P E R T Y  T R U S T, I N C.
Same-Property Revenue Results by County - Twelve months ended December 31, 2015 vs. Twelve months ended December 31, 2014(1)
(Dollars in thousands, except average monthly rental rates)
			YTD	Average Monthly Rental Rate			Financial Occupancy			Gross Revenues
Region - County		Apartment Homes	2015 % of Actual NOI	YTD 2015	YTD 2014	% Change	YTD 2015	YTD 2014	% Change	YTD 2015	YTD 2014	% Change
Southern California
	Los Angeles County	4,400	16.4%	$   2,036	$   1,920	6.0%	96.1%	96.2%	-0.1%	$  108,467	$  102,540	5.8%
	Orange County	2,887	10.7%	2,061	1,941	6.2%	96.3%	96.1%	0.2%	72,093	67,604	6.6%
	San Diego County	2,067	5.1%	1,397	1,308	6.8%	96.1%	96.4%	-0.3%	35,716	33,747	5.8%
	Ventura County	2,898	8.5%	�� 1,569	1,481	5.9%	96.3%	96.5%	-0.2%	56,011	53,077	5.5%
	Other Southern CA	623	1.5%	1,464	1,365	7.3%	96.8%	96.8%	0.0%	11,148	10,445	6.7%
Total Southern California		12,875	42.2%	1,806	1,701	6.2%	96.2%	96.3%	-0.1%	283,435	267,413	6.0%
Northern California
	Santa Clara County	4,279	20.3%	2,402	2,173	10.5%	96.2%	96.1%	0.1%	124,408	112,406	10.7%
	Alameda County	1,542	6.1%	2,086	1,848	12.9%	96.3%	96.9%	-0.6%	39,506	35,478	11.4%
	San Mateo County	768	3.6%	2,470	2,235	10.5%	96.8%	96.6%	0.2%	23,442	21,232	10.4%
	Contra Costa County	1,720	6.6%	2,029	1,842	10.2%	96.6%	96.3%	0.3%	42,681	38,686	10.3%
	San Francisco MSA	645	2.5%	2,277	2,116	7.6%	95.0%	94.7%	0.3%	17,314	16,025	8.0%
	Other Northern CA	126	0.5%	2,058	1,848	11.4%	97.6%	97.8%	-0.2%	3,127	2,852	9.6%
Total Northern California		9,080	39.6%	2,270	2,052	10.6%	96.3%	96.2%	0.1%	250,478	226,679	10.5%
Seattle Metro		6,558	18.2%	1,493	1,388	7.6%	96.2%	96.0%	0.2%	124,143	115,219	7.7%
Total Same-Property		28,513	100.0%	$   1,882	$   1,741	8.1%	96.2%	96.2%	0.0%	$  658,056	$  609,311	8.0%

⁽¹⁾ Same-property excludes BRE properties acquired April 1, 2014, and properties held for sale.

See Company's 10-K and 10-Q for additional disclosures
S-9.1

E S S E X  P R O P E R T Y  T R U S T, I N C.
Same-Property Operating Expenses - Quarter and Year to Date as of December 31, 2015 and 2014
(Dollars in thousands)
	Based on 42,734 apartment homes(1)				Based on 28,513 apartment homes(2)
	Q4 '15	Q4 '14	% Change	% of Op. Ex.	YTD 2015	YTD 2014	% Change	% of Op. Ex.
Same-property operating expenses:
Real estate taxes	$       25,729	$       25,170	2.2%	32.7%	$           56,891	$           55,147	3.2%	29.4%
Maintenance and repairs	17,379	15,722	10.5%	22.1%	42,104	40,431	4.1%	21.8%
Administrative	14,212	14,487	-1.9%	18.1%	38,584	38,285	0.8%	19.9%
Utilities	13,395	13,463	-0.5%	17.0%	36,068	35,946	0.3%	18.6%
Management fees (3)	5,342	4,518	18.2%	6.8%	13,084	12,751	2.6%	6.8%
Insurance	2,570	2,480	3.6%	3.3%	6,792	6,950	-2.3%	3.5%
Total same-property operating expenses	$       78,627	$       75,840	3.7%	100.0%	$         193,523	$         189,510	2.1%	100.0%
(1) Same-property includes BRE properties acquired starting April 1, 2014.
(2) Same-property excludes BRE properties.
(3) During 2015, the Company changed its allocation to property management fees.

See Company's 10-K and 10-Q for additional disclosures
S-10

E S S E X  P R O P E R T Y  T R U S T, I N C.
Development Pipeline - December 31, 2015
(Dollars in millions, except per apartment home amounts in thousands and except in footnotes)
	Project Name	Location	Ownership %	Estimated Apartment Homes	Estimated Commercial sq. feet	Incurred to   Date	Remaining Costs	Estimated Total Cost	Essex Est. Total Cost(1)	Cost per Apartment Home(2)	Average % Occupied	% Leased	Construction Start	Initial Occupancy	Stabilized Operations
Development Projects - Consolidated(3)
	MB 360 Phase II(4)	San Francisco, CA	100%	172	11,500	$       119	$         16	$       135	$           135	$       744	21.3%	66.0%	Q3 2014	Q4 2015	Q2 2016
	Station Park Green	San Mateo, CA	100%	599	35,000	83	271	354	354	567	0.0%	0.0%	Q3 2015	Q3 2017	Q4 2018
Total Development Projects - Consolidated				771	46,500	202	287	489	489	634
Land Held for Future Development - Consolidated
	Other Projects	Various	100%			40	-	40	40
Total Development Pipeline - Consolidated				771	46,500	242	287	529	529
Development Projects/Land Held for Future Development - Joint Venture(3)
	Epic - Phase III	San Jose, CA	55%	200	-	84	8	92	51	460	75.3%	82.0%	Q3 2013	Q3 2015	Q1 2016
	Agora(5)	Walnut Creek, CA	51%	49	32,188	84	11	95	48	1,140	0.0%	0.0%	Q3 2013	Q1 2016	Q2 2016
	Owens	Pleasanton, CA	55%	255	5,729	55	34	89	49	341	0.0%	0.0%	Q3 2014	Q2 2016	Q2 2017
	Hacienda	Pleasanton, CA	55%	251	-	37	49	86	47	343	0.0%	0.0%	Q1 2015	Q3 2016	Q3 2017
	Century Towers	San Jose, CA	50%	376	2,006	93	79	172	86	456	0.0%	0.0%	Q3 2014	Q1 2017	Q1 2018
	500 Folsom(6)	San Francisco, CA	50%	545	6,000	62	319	381	191	691	0.0%	0.0%	Q4 2015	Q4 2018	Q2 2020
Total Development Projects - Joint Venture				1,676	45,923	415	500	915	472	$       517
Grand Total - Development Pipeline				2,447	92,423	$       657	$       787	$    1,444	1,001
Essex Cost Incurred to Date									(459)
Essex Remaining Commitment									$           542

(1)	The Company's share of the estimated total costs of the project.
(2)	Net of the estimated allocation to the retail component of the project.
(3)	For the fourth quarter of 2015, the Company's cost includes $3.2 million of capitalized interest, $0.2 million of capitalized overhead and $0.8 million of development fees (such development fees reduced G&A expenses).
(4)	To date the Company has received $43.9 million of the expected $45.0 million of insurance proceeds for constructions costs related to the fire that occurred in March 2014.
(5)	Apartment homes are built to condominium standards and average approximately 1,600 square feet.
(6)	Estimated total cost is net of a projected value for low income housing tax credit proceeds and tax exempt bonds.

See Company's 10-K and 10-Q for additional disclosures
S-11

E S S E X  P R O P E R T Y  T R U S T, I N C.
Redevelopment Pipeline - December 31, 2015
(Dollars in thousands, except per apartment home amounts and in footnotes)
		Total	Estimated	Estimated		NOI
	Apartment	Incurred	Remaining	Total	Project	For the year ended
Region/Project Name(1)	Homes	To Date	Cost	Cost	Start Date	2015(4)	2014 (4)
Same-property - Redevelopment Projects (2) (3)
Northern California
Summerhill Park	100	$       7,300	$       2,600	9,900	Q4 2014
Southern California
Hamptons	215	7,200	16,400	23,600	Q1 2014
Monterras	292	20,300	6,100	26,400	Q1 2014
Seattle Metro
Park Highland	250	7,600	4,900	12,500	Q4 2014
Total Same-property - Redevelopment Projects	857	$     42,400	$��    30,000	$     72,400		$        13,557	$       11,544
Non-same property - Redevelopment Projects
Southern California
Bunker Hill Towers	456	$     34,900	$     52,500	$     87,400	Q3 2013
Total Non-same property - Redevelopment Projects	456	$     34,900	$     52,500	$     87,400		$         5,893	$        5,656

(1)	The Company incurred $0.2 million of capitalized interest, $2.4 million of capitalized overhead and $0.2 million of co-investment redevelopment fees related to redevelopment in Q4 2015.
(2)	Redevelopment activities are ongoing at these communities, but the communities have stabilized operations, therefore results are classified in same-property results.
(3)	During the three and twelve months ended December 31, 2015, the Company completed the redevelopment of interiors totaling 618 and 2,370 apartment homes for the same-property portfolio and 704 and 2,996 apartment homes for the total portfolio, respectively.
(4)	Park Highland was acquired on April 1, 2014. As a result, the NOI for the twelve months ended December 31, 2014 reflects three quarters of NOI, amounting to $2.0 million, as opposed to the NOI for the twelve months ended December 31, 2015, which reflects four quarters of NOI, amounting to $2.9 million.

See Company's 10-K and 10-Q for additional disclosures
S-12

E S S E XP R O P E R T YT R U S T, I N C.
Co-investments - December 31, 2015		Essex Ownership Percentage	Apartment Homes		Total Undepreciated Book Value		Debt Amount		Essex Book Value	Weighted Average Borrowing Rate	Remaining Term of Debt (in Years)		For the Three Months Ended December 31, 2015		For the Twelve Months Ended December 31, 2015
(Dollars in thousands)
Operating Non-Consolidated Joint Ventures													NOI
	Wesco I, LLC	50.0%	2,275	$	558,009	$	297,181	$	102,476	3.9%	9.3	$	9,206	$	36,183
	Wesco III, LLC	50.0%	993		237,690		129,599		53,009	3.3%	4.7		3,672		13,647
	Wesco IV, LLC	50.0%	1,116		300,474		155,000		63,417	3.9%	5.2		4,495		17,267
	BEXAEW, LLC	50.0%	2,723		525,540		321,778		88,850	3.0%	5.2		8,183		31,550
	CPPIB	55.0%	1,728		614,651		-		329,723	-	-		9,254		32,266
	Palm Valley	50.0%	1,098		370,832		227,011		68,525	2.5%	1.1		4,943		19,979
	Other	28.2% - 55.0%	587		200,147		134,741		32,927	2.0%	2.6		2,349		7,020
	Total Operating Non-Consolidated Joint Ventures		10,520	$	2,807,343	$	1,265,310	$	738,927	3.2%	5.1	$	42,102	$	157,912
Development Non-Consolidated Joint Ventures(1)		50.0% - 55.0%	1,676		414,950		24,808		190,808	3.3%	1.7		531		611
	Total Non-Consolidated Joint Ventures		12,196	$	3,222,293	$	1,290,118	$	929,735			$	42,633	$	158,523
													Essex Portion of NOI and Expenses
NOI												$	21,880	$	81,265
Depreciation													(13,004)		(49,826)
Interest expense and other													(5,335)		(21,723)
Promote income													-		192
	Net income from operating co-investments											$	3,541	$	9,908

							Income from Preferred Equity Investments
							For the Three Months Ended December 31, 2015		For the TwelveMonths Ended December 31, 2015
				Weighted Average Preferred Return	Weighted Average Expected Term
	Income from preferred equity investments					$	2,358	$	9,999
	Income from early redemption of preferred equity investments						-		1,954
Preferred Equity Investments (2)		$	106,312	9.8%	2.9	$	2,358	$	11,953
	Total Co-investments	$	1,036,047			$	5,899	$	21,861

(1)	The Company has interests in six development co-investments, which are detailed on S-11.
(2)	As of December 31, 2015 the Company has invested in eight preferred equity investments.

See Company's 10-K and 10-Q for additional disclosures
S-13

E S S E X  P R O P E R T Y  T R U S T, I N C.
Assumptions for 2016 FFO Guidance Range
Q4 2015 Earnings Results Supplement
($'s in thousands, except share and per share data) (1)		YTD			2016 Guidance Range
			Actuals			Low End			High End
Net Operating Income ("NOI")
Total NOI from consolidated communities		$	821,990		$	889,900		$	908,100
Management Fees			8,534			7,900			8,900
Interest Expense
Interest expense, before capitalized interest			(214,574	)		(219,600	)		(215,600	)
Forecasted interest capitalized			15,570			12,800			14,800
Net interest expense			(199,004	)		(206,800	)		(200,800	)
Recurring Income and Expenses
Interest and other income			14,476			16,600			17,600
FFO from co-investments			69,540			78,800			81,700
General and administrative expense			(40,534	)		(41,500	)		(43,500	)
Preferred dividends and non-controlling interest			(14,331	)		(14,000	)		(13,600	)
Total recurring income and expenses			29,151			39,900			42,200
Non-Core Income and Expenses
Promote income from co-investment			192
Gains on sales of marketable securities and land			598
Income from early redemption of preferred equity investment			1,954
Loss on early retirement of debt and redemption costs			(6,114	)		(3,000	)		(2,000	)
Merger and integration expenses			(3,798	)
Acquisition and investment related costs			(2,414	)		(2,000	)		(3,000	)
Other non-core adjustments	��		2,970
Total non-core income and expenses			(6,612	)		(5,000	)		(5,000	)
Funds from Operations attributable to common stockholders and unitholders		$	654,059		$	725,900		$	753,400
Funds from Operations per diluted share		$	9.72		$	10.64		$	11.05
% Change - Funds from Operations			23.2	%		9.5	%		13.7	%
Core Funds from Operations attributable to common stockholders and unitholders		$	660,671		$	730,900		$	758,400
Core Funds from Operations per diluted share		$	9.82		$	10.72		$	11.12
% Change - Core Funds from Operations			15.0	%		9.2	%		13.3	%
Weighted average shares outstanding			67,310			68,200			68,200

⁽¹⁾ All non-core items are excluded from the YTD actuals and included in the non-core income and expense section of the FFO reconciliation.

See Company's 10-K and 10-Q for additional disclosures
S-14

E S S E X  P R O P E R T Y  T R U S T, I N C.    

Summary of Apartment Community Acquisitions and Dispositions Activity

Year to date as of December 31, 2015

(Dollars in thousands, except average rent amounts and in footnotes)

Acquisitions
Property Name	Location	Apartment Homes	Essex Ownership Percentage			Entity		Date		Purchase Price		Price per Apartment Home		Average Rent
8th & Hope	Los Angeles, CA	290		100.0	%		EPLP		Feb-15	$	200,000	$	690	$	3,708
The Huxley(1)	Los Angeles, CA	187		100.0	%		EPLP		Mar-15		48,784		522		2,439
The Dylan(1)	Los Angeles, CA	184		100.0	%		EPLP		Mar-15		51,266		557		2,646
	Q1 2015	661								$	300,050	$	605
Reveal(2)	Woodland Hills, CA	438		99.75	%		EPLP		Apr-15	$	73,013	$	337	$	1,936
Avant	Los Angeles, CA	247		100.0	%		EPLP		Jun-15		99,000		401		2,281
	Q2 2015	685								$	172,013	$	360
Avant II	Los Angeles, CA	193		100.0	%		EPLP		Dec-15	$	73,000	$	378	$	2,302
Enso	San Jose, CA	183		100.0	%		EPLP		Dec-15		93,000		508		2,817
	Q4 2015	376								$	166,000	$	441
	2015 Total	1,722								$	638,063	$	472
Dispositions(3)
Property Name	Location	Apartment Homes		Essex Ownership Percentage			Entity		Date		Sales Price		Price per Apartment Home
Pinnacle South Mountain	Phoenix, AZ	552		100.0	%		EPLP		Jan-15	$	63,750	$	115
	Q1 2015	552								$	63,750	$	115
Sharon Green	Menlo Park, CA	296		100.0	%		EPLP		Dec-15	$	245,000	$	828
	Q4 2015	296								$	245,000	$	828
	2015 Total	848								$	308,750	$	364

(1)	In March 2015, the Company purchased the joint venture partner's remaining membership interest in The Huxley and The Dylan co-investments for a purchase price of $100.1 million. The properties are now consolidated.
(2)	In April 2015, the Company purchased the joint venture partner's 49.5% membership interest in the Reveal co-investment for a purchase price of $73.0 million.
(3)	In March 2015, the Company sold two commercial buildings aggregating 120,000 square feet located in Emeryville, CA for $13.0 million.

See Company's 10-K and 10-Q for additional disclosures
S-15

E S S E X  P R O P E R T Y  T R U S T, I N C.
2016 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions
	Residential Supply(1)					Job Forecast(2)		Market Forecast(3)
Market	New MF Supply	New SF Supply	Total Supply	% of MF Supply to MF Stock	% of Total Supply to Total Stock	Est. New Jobs	% Growth	Economic Rent Growth
Los Angeles	10,000	5,700	15,700	0.6%	0.4%	94,600	2.2%	5.4%
Orange	2,850	3,800	6,650	0.7%	0.6%	33,600	2.2%	5.2%
San Diego	3,300	3,800	7,100	0.7%	0.6%	34,500	2.5%	4.9%
Ventura	150	700	850	0.2%	0.3%	5,350	1.8%	5.4%
So. Cal.	16,300	14,000	30,300	0.6%	0.5%	168,050	2.2%	5.2%
San Francisco	4,400	650	5,050	1.1%	0.7%	34,700	3.0%	7.8%
Oakland	1,600	4,300	5,900	0.5%	0.6%	29,300	2.7%	7.0%
San Jose	5,250	2,100	7,350	2.0%	1.1%	31,300	3.0%	7.7%
No. Cal.	11,250	7,050	18,300	1.3%	0.8%	95,300	2.9%	7.5%
Seattle	8,450	7,600	16,050	1.7%	1.3%	43,100	2.7%	4.9%
Weighted Average(4)	36,000	28,650	64,650	1.1%	0.8%	306,450	2.5%	6.0%
All data are based on Essex Property Trust, Inc. forecasts.
U.S. Economic Assumptions:2016 G.D.P. Growth:  2.8%, 2016 Job Growth: 2.0%

(1)	New Residential Supply: MF reflects Company's internal estimate of actual multifamily deliveries; SF is based on 12 month single family trailing permits reported by the US Census Bureau.
(2)	Job Forecast: refers to the difference between total non-farm industry employment (not seasonally adjusted) projected 4Q over 4Q, expressed as total new jobs and growth rates.
(3)	Market Forecast: the estimated rent growth represents the forecasted change in effective market rents for full year 2016 vs 2015 (excludes submarkets not targeted by Essex).
(4)	Weighted Average:markets weighted by scheduled rent in the Company's Portfolio.

See Company's 10-K and 10-Q for additional disclosures
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