Essex Property Trust (ESS) 8-K Essex Announces Third Quarter 2016 Results

Exhibit 99.2

Q3 2016 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 – September 30, 2016	S-5
Capitalization Data, Public Bond Covenants, Credit Ratings, and Selected Credit Ratios – September 30, 2016	S-6
Portfolio Summary by County – September 30, 2016	S-7
Operating Income by Quarter – September 30, 2016	S-8
Same-Property Revenue Results by County – Quarters ended September 30, 2016 and 2015, and June 30, 2016	S-9
Same-Property Revenue Results by County – Nine months ended September 30, 2016 and 2015	S-9.1
Same-Property Operating Expenses	S-10
Development Pipeline – September 30, 2016	S-11
Redevelopment Pipeline – September 30, 2016	S-12
Capital Expenditures – September 30, 2016	S-12.1
Co-Investments – September 30, 2016	S-13
Assumptions for 2016 FFO Guidance Range	S-14
Summary of Apartment Community Acquisitions and Dispositions Activity	S-15
Preliminary 2017 MSA Level Forecasts: Supply, Jobs and Apartment Market Conditions	S-16
Reconciliations of Non-GAAP Financial Measures and Other Terms	S-17.1 – S-17.4

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						Nine Months Ended
(Dollars in thousands, except share and per share amounts)	September 30,						September 30,
	2016			2015			2016			2015
Revenues:
Rental and other property	$	327,078		$	302,522		$	958,818		$	876,852
Management and other fees		2,093			2,104			6,145			6,809
		329,171			304,626			964,963			883,661
Expenses:
Property operating		99,361			94,119			289,930			271,367
Depreciation and amortization		110,467			116,308			329,847			336,946
General and administrative		9,647			11,129			28,527			31,223
Merger and integration expenses		-			-			-			3,798
Acquisition and investment related costs		284			381			1,379			1,357
		219,759			221,937			649,683			644,691
Earnings from operations		109,412			82,689			315,280			238,970
Interest expense, net (1)		(53,550	)		(50,053	)		(155,647	)		(148,401	)
Interest and other income		4,943			7,367			19,560			14,820
Equity income from co-investments		9,568			7,179			38,932			15,962
Loss on early retirement of debt		(211	)		-			(211	)		-
Gain on sale of real estate and land		-			-			20,258			7,112
Deferred tax expense on gain on sale of real estate and land		-			-			(4,279	)		-
Gain on remeasurement of co-investment		-			-			-			34,014
Net income		70,162			47,182			233,893			162,477
Net income attributable to noncontrolling interest		(4,601	)		(3,545	)		(14,483	)		(11,295	)
Net income attributable to controlling interest		65,561			43,637			219,410			151,182
Dividends to preferred stockholders		-			(1,314	)		(1,314	)		(3,941	)
Excess of redemption value of preferred stock
over the carrying value		-			-			(2,541	)		-
Net income available to common stockholders	$	65,561		$	42,323		$	215,555		$	147,241
Net income per share - basic	$	1.00		$	0.65		$	3.29		$	2.28
Shares used in income per share - basic		65,507,669			65,138,868			65,455,004			64,714,994
Net income per share - diluted	$	1.00		$	0.65		$	3.29		$	2.27
Shares used in income per share - diluted		65,617,551			65,297,550			65,578,661	��		64,892,770

⁽¹⁾ Refer to page S-17.2, the section titled “Interest Expense, Net” for additional information.

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				Nine Months Ended
Selected Line Item Detail	September 30,				September 30,
(Dollars in thousands)	2016		2015		2016		2015
Rental and other property
Rental	$	305,314	$	284,026	$	896,775	$	820,639
Other property		21,764		18,496		62,043		56,213
Rental and other property	$	327,078	$	302,522	$	958,818	$	876,852
Property operating expenses
Real estate taxes	$	35,580	$	33,591	$	104,540	$	97,820
Administrative and insurance		19,971		19,307		58,933		56,103
Maintenance and repairs		19,406		18,487		55,873		52,650
Utilities		16,811		16,460		47,836		46,209
Property management		7,593		6,274		22,748		18,585
Property operating expenses	$	99,361	$	94,119	$	289,930	$	271,367
Interest and other income
Marketable securities and other interest income	$	3,879	$	3,699	$	12,643	$	10,152
Gain from sale of marketable securities and other investments		1,033		598		2,876		598
Insurance reimbursements and legal settlements		31		3,070		4,041		4,070
Interest and other income	$	4,943	$	7,367	$	19,560	$	14,820
Equity income from co-investments
Equity income from co-investments	$	5,055	$	2,969	$	14,811	$	6,176
Income from preferred equity investments		4,513		2,533		11,075		7,640
Gain on sale of co-investment communities		-		-		13,046		-
Co-investment promote income		-		192		-		192
Income from early redemption of preferred equity investments		-		1,485		-		1,954
Equity income from co-investments	$	9,568	$	7,179	$	38,932	$	15,962
Noncontrolling interest
Limited partners of Essex Portfolio, L.P.	$	2,223	$	1,471	$	7,457	$	5,115
DownREIT limited partners’ distributions		1,423		1,297		4,282		3,894
Third-party ownership interest		955		777		2,744		2,286
Noncontrolling interest	$	4,601	$	3,545	$	14,483	$	11,295

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 (1)	Three Months Ended									Nine Months Ended
(Dollars in thousands, except share and per share amounts and in footnotes)	September 30,									September 30,
	2016			2015			% Change			2016			2015			% Change
Funds from operations attributable to common stockholders and unitholders (FFO)
Net income available to common stockholders	$	65,561		$	42,323					$	215,555		$	147,241
Adjustments:
Depreciation and amortization		110,467			116,308						329,847			336,946
Gains not included in FFO		-			-						(33,304	)		(41,126	)
Deferred tax expense on gain on sale of real estate and land - Taxable REIT Subsidiary activity		-			-						4,279			-
Depreciation add back from unconsolidated co-investments		12,857			12,800						37,337			36,822
Noncontrolling interest related to Operating Partnership units		2,223			1,471						7,457			5,115
Insurance reimbursements (2)		-			(1,751	)					-			(1,751	)
Depreciation attributable to third party ownership and other (3)		(5	)		(253	)					(3	)		(753	)
Funds from operations attributable to common stockholders and unitholders	$	191,103		$	170,898					$	561,168		$	482,494
FFO per share-diluted	$	2.81		$	2.53			11.1	%	$	8.27		$	7.19			15.0	%
Components of the change in FFO
Non-core items:
Merger and integration expenses	$	-		$	-					$	-		$	3,798
Acquisition and investment related costs		284			381						1,379			1,357
Gain on sale of marketable securities		(1,033	)		(598	)					(2,876	)		(598	)
Loss on early retirement of debt		211			-						211			-
Co-investment promote income		-			(192	)					-			(192	)
Income from early redemption of preferred equity investments		-			(1,485	)					-			(1,954	)
Excess of redemption value of preferred stock over the carrying value		-			-						2,541			-
Insurance reimbursements, legal settlements, and other, net		(31	)		(569	)					(4,041	)		(2,526	)
Core funds from operations attributable to common stockholders and unitholders		190,534			168,435						558,382			482,379
Core FFO per share-diluted	$	2.81		$	2.49			12.9	%	$	8.23		$	7.19			14.5	%
Changes in core items:
Same-property NOI	$	15,587								$	46,468
Non-same property NOI		4,477									17,685
Management and other fees, net		(11	)								(289	)
FFO from co-investments		4,123									12,417
Interest and other income		180									2,491
Interest expense		(3,497	)								(7,246	)
General and administrative		1,482									2,696
Other items, net		(242	)								1,781
	$	22,099								$	76,003
Weighted average number of shares outstanding diluted (4)		67,914,123			67,535,685						67,881,126			67,135,143

⁽¹⁾ Refer to page S-17.1, the section titled “Funds from Operations (“FFO”)” for additional information on the Company’s definition and use of FFO and Core FFO.

⁽²⁾ Insurance reimbursements for replacement costs related to a flood at one of our properties.

⁽³⁾ The Company consolidates Hidden Valley and Hillsdale Garden Apartments.  Noncontrolling interest’s share of net operating income in these investments for the three and nine months ended September 30, 2016 was $1.1 million and $3.1 million respectively.

⁽⁴⁾ Assumes conversion of all outstanding operating partnership interests in the Operating Partnership and excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the DownREIT limited partnership units for cash and does not consider them to be common stock equivalents.

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)
	September 30, 2016			December 31, 2015
Real Estate:
Land and land improvements	$	2,573,923		$	2,522,842
Buildings and improvements		10,139,823			9,808,627
		12,713,746			12,331,469
Less:  accumulated depreciation		(2,269,834	)		(1,949,892	)
		10,443,912			10,381,577
Real estate under development		170,972			242,326
Co-investments		1,122,913			1,036,047
Real estate held for sale, net		-			26,879
		11,737,797			11,686,829
Cash and cash equivalents, including restricted		211,055			123,055
Marketable securities and other investments		153,703			137,485
Notes and other receivables		22,941			19,285
Prepaid expenses and other assets		51,700			38,437
Total assets	$	12,177,196		$	12,005,091
Unsecured debt, net	$	3,375,610		$	3,088,680
Mortgage notes payable, net		2,209,077			2,215,077
Lines of credit, net (1)		-			11,707
Other liabilities		364,498			307,152
Total liabilities		5,949,185			5,622,616
Redeemable noncontrolling interest		44,109			45,452
Equity:
Common stock		6			6
Cumulative redeemable preferred stock, liquidation value		-			73,750
Additional paid-in capital		7,024,827			7,003,317
Distributions in excess of accumulated earnings		(896,120	)		(797,329	)
Accumulated other comprehensive loss, net		(40,095	)		(42,011	)
Total stockholders’ equity		6,088,618			6,237,733
Noncontrolling interest		95,284			99,290
Total equity		6,183,902			6,337,023
Total liabilities and equity	$	12,177,196		$	12,005,091

⁽¹⁾ Lines of credit, net excludes unamortized debt issuance costs as of September 30, 2016 as the net effect resulted in a negative debt balance as of September 30, 2016 and was reclassified to prepaid expenses and other assets on the Consolidated Balance Sheet. The net balance at December 31, 2015 resulted in a positive debt balance and is presented on a net basis.

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 - September 30, 2016

(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	$	315,000			4.5	%		3.9		2016	$	200,000	$	7,668	$	6,128		$	213,796		2.5	%		3.8	%
Bonds public - fixed rate		2,850,000			3.5	%		6.6		2017		365,000		128,007		16,141			509,148		3.0	%		9.1	%
Term loan (1)		225,000			2.4	%		0.2		2018		-		321,328		13,037			334,365		5.4	%		6.0	%
Unamortized net premiums and debt issuance costs		(14,390	)		-			-		2019		75,000		586,954		8,424			670,378		4.3	%		12.0	%
		3,375,610			3.5	%		5.9		2020		-		693,868		3,094			696,962		4.9	%		12.5	%
Mortgage Notes Payable, net										2021		500,000		51,584		(3,640	)		547,944		4.3	%		9.8	%
Fixed rate - secured		1,869,455			4.8	%		3.3		2022		300,000		41,355		(4,095	)		337,260		3.7	%		6.0	%
Variable rate - secured (2)		291,709			1.3	%		19.1		2023		600,000		846		(2,316	)		598,530		3.6	%		10.7	%
Unamortized premiums and debt issuance costs		47,913			-			-		2024		400,000		925		(1,613	)		399,312		4.0	%		7.2	%
Total mortgage notes payable		2,209,077			4.3	%		5.3		2025		500,000		14,611		(938	)		513,673		3.5	%		9.2	%
										2026		450,000		53,593		(331	)		503,262		3.4	%		9.0	%
Unsecured Lines of Credit, net									Thereafter			-		260,425		(368	)		260,057		1.5	%		4.7	%
Line of credit (3)		-			-
Line of credit (4)		-			-				Total		$	3,390,000	$	2,161,164	$	33,523		$	5,584,687		3.8	%		100.0	%
Unamortized debt issuance costs		(3,559	)		-
Total lines of credit (5)		(3,559	)		-
Total debt, net	$	5,581,128			3.8	%

Capitalized interest for the three and nine months ended September 30, 2016 was approximately $3.2 million and $9.4 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. $20.7 million is subject to interest rate cap protection agreements.

⁽³⁾ The unsecured line of credit facility aggregates to $1 billion. The line matures in 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. 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%.

⁽⁵⁾ For financial statement purposes, unamortized debt issuance costs related to unsecured lines of credit have been reclassified to prepaid expenses and other assets on the Consolidated Balance Sheet because the net effect resulted in a negative debt balance as of September 30, 2016.

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 - September 30, 2016

(Dollars and shares in thousands)

Capitalization Data						Public Bond Covenants (1)		Actual	Requirement
Total debt, net				$	5,581,128
						Adjusted Debt to Adjusted Total Assets:		39%	< 65%
Common stock and potentially dilutive securities
	Common stock outstanding				65,523
	Limited partnership units (1)				2,295
	Options-treasury method				102	Secured Debt to Adjusted Total Assets:		15%	< 40%
Total shares of common stock and potentially dilutive securities					67,920
Common stock price per share as of September 30, 2016				$	222.70
						Interest Coverage:		387%	> 150%
Total equity capitalization				$	15,125,784
Total market capitalization				$	20,706,912	Unsecured Debt Ratio (2):		279%	> 150%
Ratio of debt to total market capitalization					27.0%
						Selected Credit Ratios (3)		Actual
Credit Ratings
Rating Agency		Rating	Outlook			Net Indebtedness Divided by Adjusted EBITDA:		5.7
Fitch		BBB+	Stable
Moody’s		Baa2 (2)	Positive			Unencumbered NOI to Adjusted Total NOI:		67%
Standard & Poor’s		BBB (3)	Positive
						(1)	Refer to page S-17.4 for additional information on the Company’s Public Bond Covenants.
(1)	Assumes conversion of all outstanding operating partnership interests in the Operating Partnership into shares of the Company’s common stock.					(2)	Unsecured Debt Ratio is unsecured assets (excluding investments in co-investments) divided by unsecured indebtedness.
(2)	As of September 30, 2016. Upgraded to Baa1 in October 2016 with a stable outlook.					(3)	Refer to pages S-17.1 to S-17.4, the section titled “Reconciliations of Non-GAAP Financial Measures and Other Terms” for additional information on the Company’s Selected Credit Ratios.
(3)	As of September 30, 2016. Upgraded to BBB+ in October 2016 with a stable outlook.

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 September 30, 2016

	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		1,418		-		10,856	$	2,285	$	1,989	$	2,265		19.8	%		12.4	%		19.2	%
Orange County		5,788		1,144		-		6,932		2,030		1,744		2,004		10.9	%		8.8	%		10.7	%
San Diego County		5,203		616		-		5,819		1,806		1,633		1,797		8.8	%		4.6	%		8.4	%
Ventura County		2,897		373		-		3,270		1,667		2,097		1,693		4.8	%		3.4	%		4.6	%
Other Southern CA		623		249		-		872		1,575		1,510		1,564		0.8	%		1.6	%		0.8	%
Total Southern California		23,949		3,800		-		27,749		2,026		1,837		2,012		45.1	%		30.8	%		43.7	%
Northern California
Santa Clara County		6,160		2,477		852		9,489		2,669		2,677		2,670		16.4	%		29.7	%		17.8	%
Alameda County		3,138		1,548		251		4,937		2,435		2,359		2,420		7.5	%		14.7	%		8.1	%
San Mateo County		1,830		197		320		2,347		2,788		2,820		2,790		5.2	%		2.7	%		4.9	%
Contra Costa County		2,270		49		-		2,319		2,249		4,458		2,273		5.0	%		0.2	%		4.5	%
San Francisco		1,341		463		545		2,349		3,043		3,393		3,099		3.6	%		7.5	%		4.0	%
Other Northern CA		126		-		-		126		2,383		-		2,383		0.3	%		-			0.3	%
Total Northern California		14,865		4,734		1,968		21,567		2,602		2,671		2,611		38.0	%		54.8	%		39.6	%
Seattle Metro		10,239		1,958		-		12,197		1,714		1,603		1,704		16.9	%		14.4	%		16.7	%
Total		49,053		10,492		1,968		61,513	$	2,135	$	2,181	$	2,140		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 September 30, 2016. See the section titled “Net Operating Income (“NOI”) and Same-Property NOI Reconciliations” on page S-17.3.

⁽³⁾ Includes all apartment communities with rents.

⁽⁴⁾ Includes one rental income producing development community in lease-up which consists of 255 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		Q3 ‘16			Q2 ‘16			Q1 ‘16			Q4 ‘15			Q3 ‘15
Rental and other property revenues:
Same-property		45,517	$	291,617		$	284,856		$	279,745		$	276,664		$	272,899
Acquisitions (2)		2,232		17,821			17,463			15,856			12,941			11,594
Development (3)		624		7,108			6,780			6,292			5,146			4,801
Redevelopment		680		4,649			4,609			4,406			4,293			4,214
Non-residential/other, net (4)		-		5,883			5,854			5,879			9,602			9,014
Total rental and other property revenues		49,053		327,078			319,562			312,178			308,646			302,522
Property operating expenses:
Same-property				88,356			85,511			84,256			85,109			85,225
Acquisitions (2)				6,367			6,013			5,575			4,312			4,032
Development (3)				2,342			2,299			2,108			1,383			1,452
Redevelopment				1,204			1,466			1,507			1,653			1,611
Non-residential/other, net (4) (5)				1,092			790			1,044			(316	)		1,799
Total property operating expenses				99,361			96,079			94,490			92,141			94,119
Net operating income (NOI):
Same-property				203,261			199,345			195,489			191,555			187,674
Acquisitions (2)				11,454			11,450			10,281			8,629			7,562
Development (3)				4,766			4,481			4,184			3,763			3,349
Redevelopment				3,445			3,143			2,899			2,640			2,603
Non-residential/other, net (4)				4,791			5,064			4,835			9,918			7,215
Total NOI			$	227,717		$	223,483		$	217,688		$	216,505		$	208,403
Same-property metrics
Operating margin				70	%		70	%		70	%		69	%		69	%
Annualized turnover (6)				63	%		56	%		45	%		45	%		61	%
Financial occupancy (7)				96.5	%		96.0	%		96.0	%		96.0	%		96.0	%

⁽¹⁾ Includes consolidated communities only.

⁽²⁾ Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2015.

⁽³⁾ Development includes properties developed which did not have comparable stabilized results as of January 1, 2015.

⁽⁴⁾ Other real estate assets consists mainly of retail space, commercial properties, boat slips, held for sale properties, and disposition properties.

⁽⁵⁾ 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.

⁽⁶⁾ Annualized turnover is defined as the number of apartment homes turned over during the quarter, annualized, divided by the total number of apartment homes.

⁽⁷⁾ 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 Results by County - Third Quarter 2016 vs. Third Quarter 2015 and Second Quarter 2016

(Dollars in thousands, except average monthly rental rates)

						Average Monthly Rental Rate							Financial Occupancy									Gross Revenues							Sequential Gross Revenues
Region - County	Apartment Homes		Q3 '16 % of Actual NOI			Q3 '16		Q3 '15		% Change			Q3 '16			Q3 '15			% Change			Q3 '16		Q3 '15		% Change			Q2 '16		% Change
Southern California
Los Angeles County		7,443		17.3	%	$	2,253	$	2,147		4.9	%		96.6	%		95.6	%		1.0	%	$	50,848	$	47,734		6.5	%	$	49,712		2.3	%
Orange County		5,788		11.9	%		2,030		1,932		5.1	%		96.6	%		96.2	%		0.4	%		35,716		33,835		5.6	%		34,954		2.2	%
San Diego County		4,961		9.1	%		1,788		1,689		5.9	%		96.8	%		95.3	%		1.6	%		27,386		25,266		8.4	%		26,530		3.2	%
Ventura County		2,897		5.2	%		1,667		1,587		5.0	%		97.0	%		96.4	%		0.6	%		14,994		14,170		5.8	%		14,657		2.3	%
Other Southern CA		623		0.8	%		1,575		1,483		6.2	%		91.0	%		92.2	%		-1.3	%		2,766		2,676		3.4	%		2,947		-6.1	%
Total Southern California		21,712		44.3	%		1,990		1,891		5.2	%		96.6	%		95.7	%		0.9	%		131,710		123,681		6.5	%		128,800		2.3	%
Northern California
Santa Clara County		5,874		17.3	%		2,661		2,523		5.5	%		96.7	%		96.3	%		0.4	%		47,445		44,794		5.9	%		46,816		1.3	%
Alameda County		2,914		7.4	%		2,411		2,264		6.5	%		95.7	%		95.8	%		-0.1	%		21,443		19,983		7.3	%		21,093		1.7	%
San Mateo County		1,566		4.7	%		2,677		2,525		6.0	%		97.1	%		96.2	%		0.9	%		13,015		12,099		7.6	%		12,614		3.2	%
Contra Costa County		2,270		5.5	%		2,249		2,110		6.6	%		96.8	%		96.8	%		0.0	%		15,668		14,625		7.1	%		15,274		2.6	%
San Francisco		816		2.0	%		2,447		2,355		3.9	%		95.5	%		96.1	%		-0.6	%		5,921		5,745		3.1	%		5,833		1.5	%
Other Northern CA		126		0.3	%		2,383		2,126		12.1	%		93.8	%		95.5	%		-1.8	%		870		791		10.0	%		851		2.2	%
Total Northern California		13,566		37.2	%		2,525		2,384		5.9	%		96.5	%		96.2	%		0.3	%		104,362		98,037		6.5	%		102,481		1.8	%
Seattle Metro		10,239		18.5	%		1,714		1,582		8.3	%		96.1	%		96.1	%		0.0	%		55,545		51,181		8.5	%		53,575		3.7	%
Total Same-Property		45,517		100.0	%	$	2,087	$	1,969		6.0	%		96.5	%		96.0	%		0.5	%	$	291,617	$	272,899		6.9	%	$	284,856		2.4	%

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 - Nine months ended September 30, 2016 vs. Nine months ended September 30, 2015

(Dollars in thousands, except average monthly rental rates)

			YTD			Average Monthly Rental Rate							Financial Occupancy									Gross Revenues
Region - County	Apartment Homes		2016 % of Actual NOI			YTD 2016		YTD 2015		% Change			YTD 2016			YTD 2015			% Change			YTD 2016		YTD 2015		% Change
Southern California
Los Angeles County		7,443		17.2	%	$	2,226	$	2,109		5.5	%		96.1	%		95.7	%		0.4	%	$	149,817	$	140,524		6.6	%
Orange County		5,788		12.1	%		1,999		1,898		5.3	%		96.3	%		96.2	%		0.1	%		105,107		100,059		5.0	%
San Diego County		4,961		9.0	%		1,757		1,653		6.3	%		96.1	%		95.3	%		0.8	%		79,898		74,371		7.4	%
Ventura County		2,897		5.3	%		1,645		1,556		5.7	%		96.5	%		96.3	%		0.2	%		44,123		41,723		5.8	%
Other Southern CA		623		0.9	%		1,547		1,447		6.9	%		95.7	%		96.0	%		-0.3	%		8,666		8,189		5.8	%
Total Southern California		21,712		44.5	%		1,961		1,856		5.7	%		96.2	%		95.8	%		0.4	%		387,611		364,866		6.2	%
Northern California
Santa Clara County		5,874		17.5	%		2,627		2,454		7.0	%		96.5	%		96.3	%		0.2	%		140,218		130,573		7.4	%
Alameda County		2,914		7.4	%		2,376		2,186		8.7	%		95.8	%		96.1	%		-0.3	%		63,150		58,164		8.6	%
San Mateo County		1,566		4.6	%		2,638		2,453		7.5	%		96.4	%		96.3	%		0.1	%		38,067		35,273		7.9	%
Contra Costa County		2,270		5.4	%		2,207		2,043		8.0	%		96.7	%		96.5	%		0.2	%		45,912		42,483		8.1	%
San Francisco		816		2.0	%		2,425		2,299		5.5	%		94.6	%		95.2	%		-0.6	%		17,507		16,755		4.5	%
Other Northern CA		126		0.3	%		2,274		2,000		13.7	%		96.5	%		96.9	%		-0.4	%		2,560		2,271		12.7	%
Total Northern California		13,566		37.2	%		2,489		2,314		7.6	%		96.3	%		96.2	%		0.1	%		307,414		285,519		7.7	%
Seattle Metro		10,239		18.3	%		1,666		1,541		8.1	%		95.9	%		96.1	%		-0.2	%		161,193		149,661		7.7	%
Total Same-Property		45,517		100.0	%	$	2,052	$	1,921		6.8	%		96.2	%		96.0	%		0.2	%	$	856,218	$	800,046		7.0	%

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 September 30, 2016 and 2015

(Dollars in thousands)

	Q3 '16		Q3 '15		% Change			% of Op. Ex.			YTD 2016		YTD 2015		% Change			% of Op. Ex.
Same-property operating expenses:
Real estate taxes	$	30,447	$	29,477		3.3	%		34.5	%	$	88,911	$	86,978		2.2	%		34.4	%
Maintenance and repairs		17,469		16,889		3.4	%		19.8	%		50,495		48,395		4.3	%		19.6	%
Administrative		15,841		15,590		1.6	%		17.9	%		46,823		45,582		2.7	%		18.1	%
Utilities		14,898		14,745		1.0	%		16.9	%		42,810		41,924		2.1	%		16.6	%
Management fees (1)		6,867		5,668		21.2	%		7.8	%		20,582		16,981		21.2	%		8.0	%
Insurance		2,834		2,856		-0.8	%		3.1	%		8,502		8,559		-0.7	%		3.3	%
Total same-property operating expenses	$	88,356	$	85,225		3.7	%		100.0	%	$	258,123	$	248,419		3.9	%		100.0	%

⁽¹⁾ Reflects the Company's change to property management fee allocation.

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 - September 30, 2016

(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 (3)			% Leased (3)			Construction Start		Initial Occupancy		Stabilized Operations
Development Projects - Consolidated (4)
Station Park Green (5)	San Mateo, CA		100	%		320		35,000	$	67	$	172	$	239	$	239		$	693		0.0	%		0.0	%		Q3 2015		Q1 2018		Q4 2018
Gateway Village (6)	Santa Clara, CA		100	%		476		-		32		194		226		226			475		0.0	%		0.0	%		Q3 2016		Q2 2018		Q3 2019
Total Development Projects - Consolidated						796		35,000		99		366		465		465			584
Land Held for Future Development - Consolidated
Other Projects (5)	Various		100	%						77		-		77		77
Total Development Pipeline - Consolidated						796		35,000		176		366		542		542
Development Projects/Land Held for Future Development - Joint Venture (4)
The Galloway (at Owens)	Pleasanton, CA		55	%		255		5,729		84		5		89		49			341		11.8	%		59.0	%		Q3 2014		Q2 2016		Q2 2017
The Galloway (at Hacienda)	Pleasanton, CA		55	%		251		-		63		23		86		47			343		0.0	%		0.0	%		Q1 2015		Q1 2017		Q1 2018
Century Towers	San Jose, CA		50	%		376		2,006		134		38		172		86			456		0.0	%		0.0	%		Q3 2014		Q1 2017		Q1 2018
500 Folsom (7)	San Francisco, CA		50	%		545		6,000		95		320		415		208			751		0.0	%		0.0	%		Q4 2015		Q4 2018		Q2 2020
Total Development Projects - Joint Venture						1,427		13,735		376		386		762		390		$	528
Grand Total - Development Pipeline						2,223		48,735	$	552	$	752	$	1,304		932
Essex Cost Incurred to Date																(371	)
Essex Remaining Commitment															$	561

⁽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⁾ Calculations are based on multifamily operations only and are as of September 30, 2016. As of October 24, 2016,  Galloway (at Owens) was 64% leased.

⁽⁴⁾ For the third quarter of 2016, the Company's cost includes $3.0 million of capitalized interest, $0.9 million of capitalized overhead and $0.8 million of development fees (such development fees reduced G&A expenses).

⁽⁵⁾ Reflects development of phases one and two. Costs incurred for phases three and four, which consist of 279 apartment homes, are included in Land Held for Future Development.

⁽⁶⁾ Cost incurred to date does not include a deduction of $4.7 million for accumulated depreciation recorded during the period when the property was held as a retail operating asset.

⁽⁷⁾ 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 - September 30, 2016

(Dollars in thousands)

			Total		Estimated		Estimated				NOI
	Apartment		Incurred		Remaining		Total		Project		For the nine months ended
Region/Project Name	Homes		To Date		Cost		Cost		Start Date		2016		2015
Same-property - Redevelopment Projects (1)
Southern California
Hamptons		215	$	11,900	$	11,700	$	23,600		Q1 2014
The Hallie (formerly Monterras)		292		22,200		4,200		26,400		Q1 2014
Seattle Metro
Park Highland		250		9,500		3,000		12,500		Q4 2014
Total Same-Property - Redevelopment Projects		757	$	43,600	$	18,900	$	62,500			$	11,478	$	10,009
Non-same property - Redevelopment Projects
Southern California
Bunker Hill Towers		456	$	52,600	$	34,800	$	87,400		Q3 2013
Total Non-Same Property - Redevelopment Projects		456	$	52,600	$	34,800	$	87,400			$	5,323	$	4,346

⁽¹⁾ Redevelopment activities are ongoing at these communities, but the communities have stabilized operations, therefore results are classified in same-property results.

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

S-12

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

Capital Expenditures - September 30, 2016

(Dollars in thousands, except in footnotes and per apartment home amounts)

Revenue Generating Capital Expenditures (1) (2)		Q3 2016		Q2 2016		Q1 2016		Q4 2015	Trailing 4 Quarters
Same-property portfolio	$	13,029	$	13,077	$	15,460	$	23,132	$	64,698
Non-same property portfolio		7,196		6,260		8,221		8,999		30,676
Total revenue generating capital expenditures	$	20,225	$	19,337	$	23,681	$	32,131	$	95,374
Number of same-property interior renovations completed		737		869		813		618		3,037
Number of total consolidated interior renovations completed		855		939		917		704		3,415
Non-Revenue Generating Capital Expenditures (3)		Q3 2016		Q2 2016		Q1 2016		Q4 2015	Trailing 4 Quarters
Non-revenue generating capital expenditures	$	18,520	$	16,595	$	5,312	$	14,533	$	54,960
Average apartment homes in quarter		49,053		49,053		48,933		48,686		48,931
Capital expenditures per apartment homes in the quarter	$	378	$	338	$	109	$	299	$	1,123

⁽¹⁾ The Company incurred $0.2 million of capitalized interest, $2.9 million of capitalized overhead and $0.2 million of co-investment redevelopment fees related to redevelopment in Q3 2016.

⁽²⁾ Represents revenue generating or expense saving expenditures such as full-scale redevelopments shown on page S-12, interior unit turn renovations, enhanced amenities and certain resource management initiatives.

⁽³⁾ Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc.

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

S-12.1

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

Co-investments - September 30, 2016	Essex					Total				Essex		Weighted			Remaining		For the Three			For the Nine
(Dollars in thousands)	Ownership			Apartment		Undepreciated		Debt		Book		Average			Term of		Months Ended			Months Ended
	Percentage			Homes		Book Value		Amount		Value		Borrowing Rate			Debt (in Years)		September 30, 2016			September 30, 2016
Operating Non-Consolidated Joint Ventures																	NOI
Wesco I, LLC		50.0	%		2,275	$	565,442	$	307,413	$	94,078		3.7	%		8.7	$	9,449		$	27,924
Wesco III, LLC		50.0	%		993		245,494		133,736		47,585		3.3	%		4.0		3,531			10,592
Wesco IV, LLC		50.0	%		1,116		301,819		153,608		60,868		3.8	%		4.4		4,801			14,323
BEXAEW, LLC		50.0	%		2,191		404,186		240,767		66,346		3.3	%		4.4		7,081			21,435
CPPIB		55.0	%		1,977		781,417		-		426,259		-			-		11,011			31,938
Palm Valley		50.0	%		1,098		370,832		221,736		68,403		2.5	%		0.3		5,863			16,273
Other		50.0% - 55.0	%		587		201,707		139,268		31,319		2.7	%		1.8		3,009			8,782
Total Operating Non-Consolidated Joint Ventures					10,237	$	2,870,897	$	1,196,528	$	794,858		3.3	%		4.4	$	44,745		$	131,267
Development Non-Consolidated Joint Ventures (1)		50.0% - 55.0	%		1,427		375,870		64,406		141,666		3.3	%		0.9		304			271
Total Non-Consolidated Joint Ventures					11,664	$	3,246,767	$	1,260,934	$	936,524						$	45,049		$	131,538
																	Essex Portion of NOI and Expenses
NOI																	$	22,970		$	67,493
Depreciation																		(12,857	)		(37,337	)
Interest expense and other																		(5,058	)		(15,345	)
Gain on sale of co-investments																		-			13,046
Net income from operating co-investments																	$	5,055		$	27,857
												Weighted Average Preferred Return			Weighted Average Expected Term		Income from Preferred Equity Investments
Income from preferred equity investments																	$	4,513		$	11,075
Preferred Equity Investments (2)										$	186,389		10.4	%		2.8	$	4,513		$	11,075
Total Co-investments										$	1,122,913						$	9,568		$	38,932

⁽¹⁾ The Company has interests in four development co-investments, which are detailed on S-11.

⁽²⁾ As of September 30, 2016 the Company has invested in eleven 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

Q3 2016 Earnings Results Supplement

The guidance projections below are based on current expectations and are forward-looking.  The guidance is given for Total and Core FFO.  See pages S-17.1 to S-17.4 for the definitions of non-GAAP financial measures and other terms as well as the reconciliations of earnings per share to FFO per share and Core FFO per share.

(Dollars in thousands, except per share data) (1)	YTD			2016 Guidance Range
	Actuals			Low End			High End			Comments Regarding Changes to Guidance
Net Operating Income ("NOI")
Total NOI from consolidated communities	$	668,888		$	896,600		$	899,000		Includes actual results through Sept and same-property NOI growth of 7.9% to 8.3% for the full year.  Includes investment activity through Oct.
Management Fees		6,145			8,100			8,300
Interest Expense
Interest expense, before capitalized interest		(165,059	)		(221,100	)		(220,300	)
Forecasted interest capitalized		9,412			12,400			12,800
Net interest expense		(155,647	)		(208,700	)		(207,500	)
Recurring Income and Expenses
Interest and other income		12,643			16,500			16,900
FFO from co-investments		63,223			85,900			86,700		Includes actual results through Sept and investment activity completed through Oct.
General and administrative expense		(28,527	)		(40,400	)		(41,400	)
Preferred dividends and non-controlling interest		(8,343	)		(10,800	)		(10,600	)
Total recurring income and expenses		38,996			51,200			51,600
Non-Core Income and Expenses
Gain on sales of marketable securities and land		2,876			2,876			2,876
Loss on early retirement of debt and redemption costs		(2,752	)		(2,752	)		(2,752	)
Acquisition and investment related costs		(1,379	)		(1,700	)		(2,300	)
Other non-core adjustments		4,041			4,041			4,041
Total non-core income and expenses		2,786			2,465			1,865
Funds from Operations attributable to common stockholders and unitholders	$	561,168		$	749,665		$	753,265
Funds from Operations per diluted share	$	8.27		$	11.03		$	11.09
% Change - Funds from Operations		15.0	%		13.5	%		14.1	%
Core Funds from Operations attributable to common stockholders and unitholders	$	558,382		$	747,200		$	751,400
Core Funds from Operations per diluted share	$	8.23		$	11.00		$	11.06
% Change - Core Funds from Operations		14.5	%		12.0	%		12.6	%
EPS - Diluted (2)	$	3.29		$	4.24		$	4.30
Weighted average shares outstanding		67,881			67,950			67,950

⁽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.

⁽²⁾ See page S-17.3 for a reconciliation to EPS.

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 September 30, 2016          

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

Acquisitions	Location	Apartment Homes		Essex Ownership Percentage					Contract Price			Price per Apartment Home		Average Rent
Property Name							Entity	Date
Mio	San Jose, CA		103		100.0	%	EPLP	Jan-16	$	51,300		$	498	$	2,888
Form 15	San Diego, CA		242		100.0	%	EPLP	Mar-16		97,400			402		2,221
	Q1 2016		345						$	148,700		$	431
Dispositions (1)		Apartment Homes		Essex Ownership Percentage					Sales Price
												Price per Apartment Home
Property Name	Location						Entity	Date
The Heights	Chino Hills, CA		332		50.0	%	JV	Jan-16	$	93,800	(2)		283
Harvest Park	Santa Rosa, CA		104		100.0	%	EPLP	Feb-16		30,500			293
	Q1 2016		436						$	124,300		$	285
Canyon Creek	Northridge, CA		200		50.0	%	JV	Apr-16	$	53,500	(2)		268
	Q2 2016		200						$	53,500		$	268

⁽¹⁾ In January 2016, the Company sold its former headquarters office building, located in Palo Alto, CA for gross proceeds of $18.0 million.

⁽²⁾ The Heights and Canyon Creek sales prices represent the total sales price at 100%.

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.

Preliminary 2017 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		10,750		6,550		17,300		0.7	%		0.5	%		91,700		2.1	%		4.2	%
Orange		6,550		4,650		11,200		1.6	%		1.0	%		36,400		2.3	%		4.2	%
San Diego		3,200		3,900		7,100		0.7	%		0.6	%		34,150		2.4	%		5.2	%
Ventura		450		375		825		0.7	%		0.3	%		5,100		1.7	%		3.9	%
So. Cal.		20,950		15,475		36,425		1.0	%		0.6	%		167,350		2.2	%		4.4	%
San Francisco		4,750		700		5,450		1.3	%		0.8	%		22,500		2.1	%		2.2	%
Oakland		2,850		5,250		8,100		0.9	%		0.8	%		19,000		1.7	%		2.4	%
San Jose		3,250		2,350		5,600		1.4	%		0.8	%		26,850		2.5	%		2.6	%
No. Cal.		10,850		8,300		19,150		1.2	%		0.8	%		68,350		2.2	%		2.5	%
Seattle		10,950		8,650		19,600		2.3	%		1.6	%		44,600		2.7	%		4.6	%
Weighted Average (4)		42,750		32,425		75,175		1.3	%		0.9	%		280,300		2.3	%		3.8	%

All data are based on Essex Property Trust, Inc. forecasts.          

U.S. Economic Assumptions: 2017 G.D.P. Growth:2.2%, 2017 Job Growth: 1.6%                    

⁽¹⁾ Residential Supply: total supply includes the Company's estimate of actual multifamily deliveries including properties with 50+ units and excludes student, senior and 100% affordable housing communities.  Single family estimates based on an average trailing 12 month single family permit. Previous presentations had included multifamily deliveries of 100+ units and excluded student, senior and 100% affordable housing.

⁽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 2017 vs 2016 (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

S-16

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Adjusted EBITDA Reconciliation

Adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) is a component of the credit ratio, "Net Indebtedness Divided by Adjusted EBITDA", presented on page S-6, in the section titled "Selected Credit Ratios", and it is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges. Adjusted EBITDA is not a recognized measurement under U.S. GAAP. Because not all companies use identical calculations, our presentation of Adjusted EBITDA may not be comparable to similarly titled measures of other companies.

The reconciliation of Adjusted EBITDA to Net Income available to common stockholders is presented in the table below (Dollars in thousands):

	Three Months Ended
	September 30,
	2016
Net income available to common stockholders	$	65,561
Add: Net income attributable to noncontrolling interest		4,601
Net Income		70,162
Adjustments:
Acquisition and investment related costs		284
Depreciation and amortization		110,467
Equity income from co-investments		(5,055	)
Gain from sale of marketable securities		(1,033	)
Insurance reimbursements		(31	)
Interest expense, net (1)		53,550
Adjusted EBITDA	$	228,344

⁽¹⁾ Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.

Encumbered

Encumbrance means any mortgage, deed of trust, lien, charge, pledge, security interest, security agreement or other encumbrance of any kind.

Funds From Operations ("FFO")

FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains/losses on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes merger, integration and acquisition costs and items that are not routine or not related to the Company’s core business activities, which is referred to as “Core FFO”, to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and the ability to pay dividends.

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

S-17.1

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Funds From Operations ("FFO") - continued

FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as an alternative to net income as an indicator of the REIT's operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to shareholders. FFO and Core FFO do not represent cash flows generated from operating, investing or financing activities as defined under U.S. GAAP. Management has consistently applied the NAREIT definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the NAREIT definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation.

The reconciliation of diluted FFO and Core FFO are detailed on page S-3 in the section titled "Consolidated Funds From Operations".

Interest Expense, Net

Interest expense, net is a U.S. GAAP measure and is presented on page S-1 titled "Consolidated Operating Results". Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges and is presented in the table below (Dollars in thousands):

	Three Months Ended			Nine Months Ended
	September 30,			September 30,
	2016			2016
Interest expense	$	(56,693	)	$	(164,727	)
Adjustments:
Total return swap income		3,143			9,080
Interest expense, net	$	(53,550	)	$	(155,647	)

Net Indebtedness Divided by Adjusted EBITDA

This credit ratio is presented on page S-6 in the section titled "Selected Credit Ratios". This credit ratio is calculated by dividing net indebtedness by Adjusted EBITDA, as annualized based on the most recent quarter, and adjusted for estimated net operating income from properties acquired during the quarter. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other companies. Net indebtedness is total debt, net less unamortized premiums, discounts, debt issuance costs, unrestricted cash and cash equivalents, and marketable securities. The reconciliation of Adjusted EBITDA is set forth in "Adjusted EBITDA Reconciliation" above. The calculation of this credit ratio and a reconciliation of net indebtedness to total debt, net is presented in the table below (Dollars in thousands):

Total debt, net	$	5,581,128
Adjustments:
Unamortized premiums, discounts, and debt issuance costs		(29,964	)
Cash and cash equivalents-unrestricted		(195,167	)
Marketable securities		(153,703	)
Net Indebtedness	$	5,202,294
Adjusted EBITDA, annualized (1)	$	913,376
Net Indebtedness Divided by Adjusted EBITDA, annualized		5.7

⁽¹⁾ Based on the amount for the most recent quarter, multiplied by four.

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

S-17.2

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Net Operating Income ("NOI") and Same-Property NOI Reconciliations

Net Operating Income ("NOI") and Same-property NOI are considered by management to be an important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenue less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented (Dollars in thousands):

	Q3'16			YTD 2016			Q3'15			YTD 2015
Earnings from operations	$	109,412		$	315,280		$	82,689		$	238,970
Adjustments:
Depreciation and amortization		110,467			329,847			116,308			336,946
Management and other fees		(2,093	)		(6,145	)		(2,104	)		(6,809	)
General and administrative		9,647			28,527			11,129			31,223
Merger and integration expenses		-			-			-			3,798
Acquisition and investment related costs		284			1,379			381			1,357
NOI		227,717			668,888			208,403			605,485
Less: Non-same property NOI		(24,456	)		(70,793	)		(20,729	)		(53,858	)
Same-Property NOI	$	203,261		$	598,095		$	187,674		$	551,627

Projected EPS, FFO and Core FFO per diluted share

With respect to the Company's guidance regarding its projected FFO and Core FFO for the fourth quarter of 2016 and full-year 2016, which guidance is set forth in the earnings release for the third quarter of 2016 and on page S-14 of this supplement, a reconciliation of projected net income per share to projected FFO per share and projected Core FFO per share, as set forth in such guidance, is presented in the table below.

				2016 Guidance Range
	YTD Actual			4th Quarter 2016						Full Year 2016
				Low			High			Low			High
EPS - diluted	$	3.29		$	0.95		$	1.01		$	4.24		$	4.30
Conversion from GAAP share count		(0.11	)		(0.04	)		(0.04	)		(0.15	)		(0.15	)
Depreciation & amortization expense		5.41			1.82			1.82			7.23			7.23
Noncontrolling interests related to Operating Partnership units		0.11			0.03			0.03			0.14			0.14
Gains on sale of real estate		(0.49	)		-			-			(0.49	)		(0.49	)
Deferred tax expense		0.06			-			-			0.06			0.06
FFO per share - diluted		8.27			2.76			2.82			11.03			11.09
Gains on sales of marketable securities		(0.04	)		-			-			(0.04	)		(0.04	)
Excess of redemption value of preferred stock over carrying value		0.04			-			-			0.04			0.04
Acquisition and investment related costs		0.02			0.01			0.01			0.03			0.03
Other non-core adjustments		(0.06	)		-			-			(0.06	)		(0.06	)
Core FFO per share - diluted	$	8.23		$	2.77		$	2.83		$	11.00		$	11.06

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

S-17.3

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

Reconciliations of Non-GAAP Financial Measures and Other Terms

Public Bond Covenants

Public Bond Covenants refers to certain covenants set forth in instruments governing the Company's unsecured indebtedness. These instruments require the Company to meet specified financial covenants, including covenants relating to net worth, fixed charge coverage, debt service coverage, the amounts of total indebtedness and secured indebtedness, leveraged and certain investment limitations. These covenants may restrict the Company's ability to expand or fully pursue its business strategies. The Company's ability to comply with these covenants may be affected by changes in the Company's operating and financial performance, changes in general business and economic conditions, adverse regulatory developments or other events adversely impacting it. The breach of any of these covenants could result in a default under the Company's indebtedness, which could cause those and other obligations to become due and payable. If any of the Company's indebtedness is accelerated, it may not be able to repay it. For risks related to failure to comply with these covenants, see "Item 1A: Risk Factors - Risks related to Our Indebtedness and Financing" in the Company's Annual Report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission ("SEC").

The ratios set forth on page S-6 in the section titled "Public Bond Covenants" are provided only to show the Company's compliance with certain specified covenants that are contained in indentures related to the Company's issuance of Senior Notes, which indentures are filed by the Company with the SEC. See, for example, the Indenture dated April 11, 2016, filed by the company as Exhibit 4.1 to the Company's Form 8-K, filed on April 11, 2016. These ratios should not be used for any other purpose, including without limitation to evaluate the Company's financial condition or results of operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the Indentures filed by the Company via Form 8-Ks and may differ materially from similar terms used by other companies that present information about their covenant compliance.

Secured Debt

Secured Debt means Debt of the Company or any of its Subsidiaries which is secured by an Encumbrance on any property or assets of the Company or any of its Subsidiaries. The calculation of Secured Debt is set forth on page S-5.

Unencumbered NOI to Adjusted Total NOI

This ratio is presented on page S-6 in the section titled "Selected Credit Ratios". Unencumbered NOI means the sum of NOI for those real estate assets which are not subject to an Encumbrance securing Debt. The ratio of Unencumbered NOI to Adjusted Total NOI for the three months ended September 30, 2016, annualized, is calculated by dividing Unencumbered NOI, annualized for the three months ended September 30, 2016 and as further adjusted for pro forma NOI for properties acquired during the recent quarter, by Adjusted Total NOI as annualized. The calculation and reconciliation of NOI is set forth in "Net Operating Income ("NOI") and Same-Property NOI Reconciliation" above. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other companies. The calculation of this ratio is presented in the table below (Dollars in thousands):

	Annualized
	Q3'16 (1)
NOI	$	910,868
Adjustments:
Other, Net		(4,787	)
Adjusted Total NOI		906,081
Less: Encumbered NOI		(299,591	)
Unencumbered NOI	$	606,490
Encumbered NOI	$	299,591
Unencumbered NOI		606,490
Adjusted Total NOI	$	906,081
Unencumbered NOI to Adjusted Total NOI		67	%

⁽¹⁾ This table is based on the amounts for the most recent quarter, multiplied by four.

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

S-17.4