-- In 2009, the Company repurchased $95.5 million of its exchangeable
bonds, and recognized a loss of $1.4 million.
-- In 2009 and 2008, the Company recorded severance charges of $0.6
million and $0.7 million, respectively, related to workforce reduction.
-- In 2009, the Company repurchased $1.5 million of its Series G
Cumulative Convertible Preferred Stock at a discount to carrying value,
and the excess of the carrying value over the cash paid to redeem the
Series G stock totaled $0.4 million.
-- In 2008, the Company repurchased $53.3 million of its exchangeable
bonds, and recognized a gain of $4.0 million.
-- In 2008, the Company recorded a loan loss reserve of $0.7 million on a
note receivable.
Net income available to common stockholders for the quarter and year ended
December 31, 2009 totaled $6.8 million or $0.24 per diluted share and $82.2
million or $2.91 per diluted share, respectively, compared to $18.0
million, or $0.68 per diluted share and $52.9 million or $2.09 per diluted
share for the quarter and year ended December 31, 2008, respectively.
SAME-PROPERTY OPERATIONS
Same-property operating results exclude properties that do not have
comparable results. The table below illustrates the percentage change in
same-property revenues, operating expenses, and net operating income
("NOI") for the quarter and year ended December 31, 2009 compared to
December 31, 2008:
Q4 2009 compared to Q4 2008 YTD 2009 compared to YTD 2008
---------------------------- -------------------------------
Revenues Expenses NOI Revenues Expenses NOI
-------- -------- -------- --------- --------- ---------
Southern
California -4.5% 7.3% -10.0% -2.9% 3.2% -5.8%
Northern
California -7.4% -2.3% -9.9% -1.9% -3.0% -1.3%
Seattle
Metro -11.0% 2.7% -18.0% -4.0% 3.6% -7.9%
-------- -------- -------- --------- --------- ---------
Same-proper-
ty average -6.5% 3.5% -11.3% -2.8% 1.3% -4.8%
======== ======== ======== ========= ========= =========
The table below illustrates the sequential percentage change in
same-property revenues, expenses, and NOI for the quarter ended December
31, 2009 versus the quarter ended September 30, 2009:
Q4 2009 compared to Q3 2009
-----------------------------------
Revenues Expenses NOI
---------- ---------- -----------
Southern California -0.7% 2.9% -2.6%
Northern California -1.6% -3.0% -0.8%
Seattle Metro -2.8% -4.1% -1.9%
---------- ---------- -----------
Same-property average -1.3% -0.2% -1.9%
========== ========== ===========
Same-property financial occupancies for the quarters ended are as follows:
12/31/09 9/30/09 12/31/08
---------- ----------- ----------
Southern California 97.1% 96.6% 95.9%
Northern California 97.8% 97.6% 97.6%
Seattle Metro 97.6% 97.1% 97.1%
---------- ----------- ----------
Same-property average 97.4% 97.0% 96.6%
========== =========== ==========
DISPOSITIONS
During the fourth quarter, the Company sold Maple Leaf, a 48-unit community
located in Seattle, Washington for $6.4 million. The community was
acquired in 1997.
ACQUISITIONS
In December, the Company acquired DuPont Lofts, a 115-unit condominium
development project in Irvine, California for $27.0 million. The project
is 85 percent complete and will require an additional six months of
construction and estimated remaining costs of development are $9.1 million,
consisting primarily of unit interior finishes. Following construction,
the Company intends to operate the asset as an apartment community. DuPont
Lofts is located a few blocks from John Wayne International Airport, nearby
major freeways and local shopping and dining. All units feature 11-foot
ceilings, custom finishes, a washer and dryer and a fireplace. Community
amenities will consist of a fitness center, business center, pool and spa
as well as a barbecue area.
Also during the quarter, the Company acquired Regency at Encino, a 75-unit
community located in Encino, California for $16.0 million. The community
features upgraded appliances and finishes in 51 of the units. The Company
intends to renovate the additional 24 units upon normal resident turnover.
Regency at Encino is centrally located providing easy access to multiple
job centers, local dining and shopping and features a washer and dryer in
each unit as well as 9-foot ceilings.
DEVELOPMENT
In November, the Company acquired a 3.6 acre site in Dublin, California for
$5.0 million. The land parcel was previously sold for approximately $17.4
million to a third-party, and the Company was able to opportunistically
purchase the Dublin site from a commercial bank who acquired the land
parcel via foreclosure. The land parcel is located adjacent to the Dublin
Bay Area Rapid Transit ("BART") station. The Company intends to pursue
entitlements on this land parcel for future development.
Construction of Fourth and U (formerly known as "Fourth Street"), a
171-unit development located in Berkeley, California, is nearing completion
as interior finish installation and painting is ongoing. Initial
pre-leasing will commence in the first quarter, and initial occupancy is
expected in April 2010.
Joule Broadway, a 295-unit development located in Seattle, Washington, is
ahead of schedule and the Company anticipates the project will be completed
in June instead of September 2010. Initial pre-leasing will commence in
the first quarter, and initial occupancy is expected in April 2010.
LIQUIDITY AND BALANCE SHEET
Common Stock
During the fourth quarter, the Company issued 464,200 shares of common
stock at an average price of $84.25 for $38.5 million, net of fees and
commissions through the Company's Controlled Equity Offering Program.
During 2009, the Company has issued 2,740,450 shares of common stock for
$198.5 million, net of fees and commissions at an average price of $73.54
per share, and repurchased 350,000 shares for $20.3 million at an average
price of $57.89 per share.
Series G Cumulative Convertible Preferred Stock
During the fourth quarter, the Company repurchased $1.5 million of its
Series G Cumulative Convertible Preferred Stock, at a discount to carrying
value, and the excess of the carrying value over the cash paid to redeem
the Series G stock totaled $0.4 million. During 2009, the Company
repurchased $141.6 million of the original $145.9 million issuance at a
$50.0 million discount to its carrying value.
Exchangeable Bonds
During the fourth quarter, the Company repurchased $95.5 million of its
3.625% exchangeable bonds, and recognized a loss of $1.4 million. During
2008 and 2009, the Company has repurchased $220.0 million of the original
$225.0 million issuance at a net gain of $8.8 million.
Lines of Credit
In December, the Company entered into a new $200 million unsecured line of
credit facility and cancelled the existing $200 million unsecured facility
which was to mature in March 2010. The new unsecured facility has a one
year maturity with two one-year extension options, and the underlying
interest rate on this unsecured facility is based on a tiered rate
structure tied to the Company's corporate ratings and is currently at LIBOR
plus 3.00%.
In the fourth quarter, the Company exercised its option to increase the
borrowing capacity of the secured line of credit facility from $150 million
to $250 million which matures in December 2013.
GUIDANCE
On February 4, 2010, the Company provided 2010 guidance that FFO per
diluted share will range from $4.60 - $4.90 and Earnings per Share will
range from $0.80 - $1.10 per diluted share.
CONFERENCE CALL WITH MANAGEMENT
The Company will host an earnings conference call with management to
discuss its quarterly results and 2010 guidance on Friday, February 5, at
11:00 a.m. PST (2:00 p.m. EST), which will be broadcast live via the
Internet at www.essexpropertytrust.com, and accessible via phone by dialing
(877) 407-4018, no passcode is necessary.
A rebroadcast of the live call will be available online for 90 days and
digitally for 7 days. To access the replay online, go to
www.essexpropertytrust.com and select the third quarter earnings link. To
access the replay digitally, dial (877) 660-6853 using the Account Code -
3055 and the Conference ID - 341967. If you are unable to access the
information via the Company's website, please contact the Investor
Relations department at investors@essexpropertytrust.com or by calling
(650) 494-3700.
CORPORATE PROFILE
Essex Property Trust, Inc., located in Palo Alto, California and traded on
the New York Stock Exchange (
Three Months Year Ended
Ended December 31, December 31,
---------------------- ----------------------
Funds from Operations (In 2009 2008 2009 2008
thousands) ---------- ---------- ---------- ----------
Net income available to
common stockholders $ 6,781 $ 17,954 $ 82,200 $ 52,899
Adjustments:
Depreciation and
amortization 30,349 28,296 118,522 113,294
Gains not included in
FFO, net of disposition
costs (2,852) (5,356) (7,943) (7,849)
Noncontrolling interest
and co-investments 1,510 2,733 7,607 9,181
---------- ---------- ---------- ----------
Funds from Operations $ 35,788 $ 43,627 $ 200,386 $ 167,525
========== ========== ========== ==========
SAFE HARBOR STATEMENT UNDER THE PRIVATE LITIGATION REFORM ACT OF 1995:
This press release includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements include statements under the caption "Guidance" with respect to
2010 FFO per diluted share, and statements and estimates set forth under
the captions "Acquisitions" and "Development" on page 2 of this press
release, the captions "Development Pipeline" and "Redevelopment Pipeline"
and on pages S-9 and S-10 of the Company's Supplemental Financial
Information Package regarding estimated costs of property development, and
redevelopments and the anticipated timing of the construction start,
construction completion, initial occupancy, and stabilization of property
developments and redevelopments. The Company's actual results may differ
materially from those projected in such forward-looking statements.
Factors that might cause such a difference include, but are not limited to,
changes in market demand for rental units and the impact of competition and
competitive pricing, changes in economic conditions, unexpected delays in
the development and stabilization of development and redevelopment
projects, unexpected difficulties in leasing of development and
redevelopment projects, total costs of renovation and development
investments exceeding our projections and other risks detailed in the
Company's filings with the Securities and Exchange Commission (SEC). All
forward-looking statements are made as of today, and the Company assumes no
obligation to update this information. For more details relating to risk
and uncertainties that could cause actual results to differ materially from
those anticipated in our forward-looking statements, and risks to our
business in general, please refer to our SEC filings, including our most
recent Report on Form 10-K for the year ended December 31, 2008.
Contact Information: Nicole Culbertson (650) 849-1649