California Apartment Markets Conference
November 16, 2004
Keith R. Guericke – President and Chief Executive Officer
Essex Property Trust, Inc.
Overview
Dedicated West Coast multifamily REIT
Formed in 1971
Initial Public Offering in June 1994 – $19.50/share
Consistent operating philosophy through numerous
market cycles
Research-based strategy
Experienced, committed management with strong track
record
Among the highest in total return to shareholders
Top four executives have worked together 18 years
Management/Founders currently own approximately
9% of Essex
A Decade of Total Return Performance
Source: SNL Financial LC
Strategically Positioned Among Peers
& nbsp; 5-Year* Total
& nbsp; Annual Return
Essex Property Trust 21.91%
Archstone Communities 17.47%
Avalon Bay 18.77%
BRE Properties 17.19%
Equity Residential 14.96%
*Source: NAREIT ReitWatch, September 30, 2004
Keys to Success
Prudent Operating Principals
Proprietary Research Model
Capital Resources
Entrepreneurial Approach
Operating Principals
Requirements for Long-Term Success
Stable and high occupancy
Predictable low risk from new construction
Expanding and diverse economy
Limited housing supply
Dedicated West Coast Presence
Permanent constraints to new supply
Job growth expectation
High cost of home ownership
Large and dynamic technology component
Proprietary Research Model
Change in
Occupancy
SUPPLY FUNDAMENTALS
New Construction
of Multifamily and
Single-Family Housing
Apartment Vacancy Rates
Current
Market
Conditions
Basic Data Input
DEMAND FUNDAMENTALS
Cost to Own
Single-Family Housing
Diverse Economic Base
Household Growth
Household Income Growth
Job Growth
High Quality of Life
Future
Rents /
Occupancy
Ranking of
24
Submarkets
Analysis
Essex
Model
Excess
Supply
and
Demand
Apply
Changes to
Current
Conditions
Submarket
Projection
Essex Portfolio
Essex – Southern California
Essex – Northern California and Seattle
Essex Portfolio
Essex – Southern California
Essex – Northern California and Seattle
Proven Market Timing
Pacific
Northwest
20%
Southern
California
10%
Q4-1994
San Francisco
Bay Area
70%
Southern
California
58%
Portland
Metro Area
4%
San Francisco
Bay Area
18%
Seattle
Metro Area
18%
Other
2%
Q3-2004
Capital Resources
Attractive financing and well-managed leverage
Access to a variety of capital resources
Common stock offerings
Preferred stock issuances
Discretionary Fund Capital
Essex Apartment Value Fund, L.P.
July 2001
September 2003
August 2004
August 2004
September 2004
October 2004
Fund I Update
Formed Fund I with nine Institutional Investors including
Essex’s 21.4% general and limited partner
Fully invested – $640 million (including leverage)
Entered into purchase and sale agreement with United
Dominion Realty Trust, Inc. (UDR)
Contract price of $756 million
16 apartment communities; 4,646 units
Sold Palermo, 230 units in San Diego, to a condo converter
for $58.2 million
First closing on Fund I sales transaction
Contract price of $264 million
7 properties – 1,777 units
Second closing on Fund 1 sales transaction
Contract price of $322 million
7 properties – 1,904 units, including Essex’s 49.9%
interest in Coronado at Newport North
Remaining assets are expected to close in 2005
Total return to investors in excess of 25 IRR
Essex Apartment Value Fund, L.P.
Final Close:
Total Equity Committed:
Essex Ownership:
Approximate
Investment Capacity:
Investment Strategy:
Fund II Update
Eight investors
Includes seven of the nine Fund I investors
$266 million
$75 million (28.21%)
Approximately $750 (with 65% leverage)
Seattle and Northern California
Primarily through acquisitions
Development limited to 25%
Value-added renovation
Entrepreneurial Approach
Condominium Conversion Opportunities
Development Joint Ventures
Value-Added Real Estate Opportunities
Palermo
San Diego, California
Units: 230
Constructions Cost: $44.9 million
Sold August 2004: $58.2 million
Hidden Valley Apartment Homes
5065 Hidden Park Court – Simi Valley, California
Units: 324
Estimated Cost: $48.3 million
Initial Occupancy: December 2003
Stabilization: November 2004
The Essex on Lake Merritt
One Lakeside Drive – Oakland, California
Units: 270
Constructions Cost: $72.7 million
Stabilized Operations: First Quarter 2003
Sold August 2004: $88 million
Invested $5 million with condo converter (buyer) to participate
in one-third of the condo sales profits.
Pillars of the Industry 2003
Gold Nugget Merit Award 2002
Best Residential Plan
San Francisco Business Journal 2001
Best Land Purchase
San Francisco Business Journal 2001
Recent Northern California Acquisitions
Vista Belvedere – Tiburon
76-Units located in Marin County
UPREIT transaction
Contract price of $17.4 million
$229,605 per door
Economic cap rate of 5.74%
Recent Northern California Acquisitions
The Esplanade Apartments – San Jose
278 Units
Contract price of approximately $60.1 million
$216,157 per door
Economic cap rate of 5.0%
Recent Northern California Acquisitions
Harbor Cove – Foster City
400 Units
Contract price of approximately $67.0 million
$167,735 per door
Economic cap rate of 5.11%
Recent Northern California Acquisitions
Carlmont Woods - Belmont
195 Units
Contract price of approximately $23.2 million
$118,718 per door
Economic cap rate of 5.10%
Forward-looking Statement
SAFE HARBOR STATEMENT
UNDER THE PRIVATE SECURITIES LITITIGATION REFORM ACT OF 1995
This presentation includes statements that qualify as forward-looking
statements under the Private Securities Litigation Reform Act of 1995,
including statements about projected growth in Funds from Operations
and dividends, the Company's 2002 business plan, its projections
regarding internal growth, external growth and redevelopment, its strategy
and projections regarding the growth in its various markets, and its
projections regarding the Essex Apartment Value Fund. The Company's
actual results may differ materially from those projected in such forward-
looking statements due to various factors, including, but not limited to,
changes in economic conditions and market demand for rental units, the
impact of competition and competitive pricing, unexpected delays in the
development and leasing of development and redevelopment projects, and
the other risks detailed in the Company's Securities and Exchange
Commission filings.
THANK YOU!
Keith R. Guericke – President and Chief Executive Officer
Essex Property Trust, Inc.
