-- In 2006, the Company recorded promote income from Essex Apartment
Value Fund I in the amount of $1.0 million during the third quarter of
2006.
-- In 2006, gains of $1.1 million, net of taxes and allocated costs,
related to the sale of condominium units at Peregrine Point generated FFO
of approximately $0.5 million.
Net income available to common stockholders for the quarter ended September
30, 2007 totaled $10.0 million, or 39 cents per diluted share, compared to
net income available to common stockholders of $10.7 million, or 45 cents
per diluted share, for the quarter ended September 30, 2006.
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 three and nine months ended September 30, 2007 compared to
September 30, 2006:
Q3 2007 compared to Q3 YTD 2007 compared to YTD
2006 2006
------------------------- -------------------------
Revenues Expenses NOI Revenues Expenses NOI
-------- -------- ----- -------- -------- -----
Southern California 3.7% 3.0% 4.0% 5.1% 2.7% 6.2%
Northern California 8.9% 7.7% 9.5% 8.9% 6.0% 10.3%
Seattle Metro 10.0% 2.1% 14.9% 11.0% 4.1% 15.2%
-------- -------- ----- -------- -------- -----
Same-Property Average 5.8% 3.8% 6.8% 6.8% 3.8% 8.4%
======== ======== ===== ======== ======== =====
The table below illustrates the sequential percentage change in
Same-Property revenues, expenses, and NOI for the quarter ended September
30, 2007 versus the quarter ended June 30, 2007:
Q3 2007 compared to Q2 2007
-------------------------------
Revenues Expenses NOI
--------- --------- ---------
Southern California 1.0% 2.6% 0.2%
Northern California 2.9% 2.3% 3.1%
Seattle Metro 2.8% 4.9% 1.6%
--------- --------- ---------
Same-Property Average 1.7% 3.4% 0.8%
========= ========= =========
Same-Property financial occupancies for the quarters ended are as follows:
--------- --------- ---------
9/30/07 6/30/07 9/30/06
--------- --------- ---------
Southern California 95.6% 95.4% 96.5%
Northern California 97.1% 97.0% 97.3%
Seattle Metro 96.0% 96.6% 97.2%
--------- --------- ---------
Same-Property Average 96.0% 95.9% 96.7%
========= ========= =========
ACQUISITIONS
During the quarter, the Company acquired two communities aggregating a
total of $128.5 million. Year-to-date the Company has invested
approximately $350 million in acquisitions.
In September, the Company acquired Mill Creek at Windermere, a 400-unit
apartment community located in San Ramon, California, for $100.5 million.
Built in 2005, the community features a media room, fitness center,
swimming pool and Jacuzzi, as well as a barbecue area. Unit amenities
include vaulted ceilings, crown molding, full size washer and dryer as well
as large patios or balconies. Mill Creek is located within Windermere, a
2,300-acre master planned community featuring new single-family residences,
excellent K-12 schools, a community college and retail shopping. This
community is the sister property to Canyon Oaks, a 250-unit community the
Company acquired during the second quarter of 2007.
In September, the Company also acquired Thomas Jefferson Apartments for
$28.0 million in a DownREIT transaction. The community, which was managed
by Essex before the acquisition, is a 156-unit apartment community located
in Sunnyvale, California. Built in 1963, the community includes a fitness
center, swimming pools, and private patios or balconies for residents. The
community is located adjacent to Magnolia Lane, another Essex community
purchased in the second quarter of 2007.
DEVELOPMENT
As of September 30, 2007, the development pipeline totaled approximately
$985 million with $239 million of costs incurred to date consisting of 15
projects and 3,111 units. Additional information pertaining to the
location of all development projects related costs and construction
timelines can be found on page S-9 in the Company's Supplemental Financial
Information package.
REDEVELOPMENT
The Company defines redevelopment communities as existing properties owned
or recently acquired, which have been targeted for additional investment by
the Company with the expectation of increased financial returns through
property improvement. Redevelopment communities typically have apartment
units that are not available for rent and, as a result, may have less than
stabilized operations. As of September 30, 2007, the Company had 13
redevelopment communities aggregating 3,891 apartment units with estimated
redevelopment costs of approximately $134 million. These amounts exclude
redevelopment projects owned by the Essex Apartment Value Fund II, L.P. A
summary of the major redevelopment projects can be found on page S-10 in
the Company's Supplemental Financial Information Package.
LIQUIDITY AND BALANCE SHEET
On August 30, 2007 the Company announced that the Company's Board of
Directors had authorized a stock repurchase plan to allow the Company to
acquire shares in an aggregate of up to $200 million. The program
supersedes the common stock repurchase plan that Essex announced on May 16,
2001. During the quarter the Company repurchased and retired 12,600 shares
of its common stock for approximately $1.4 million.
During August 2007, the Company originated a mortgage loan in the amount of
$5.9 million secured by the Coldwater Canyon community purchased in May
2007. The loan has a fixed interest rate of 6.1%, which matures in August
2017. The Company also refinanced an $11.6 million mortgage loan secured
by the Capri at Sunny Hills community in the amount of $19.2 million, with
a fixed interest rate of 5.8%, which matures in August 2012.
During September 2007, the Company assumed two loans in conjunction with
the acquisition of the Thomas Jefferson community. The first loan is for
$14.0 million with a fixed interest rate of 5.7% due in March 2017, and the
second loan is for $6.0 million with a fixed interest rate of 5.9% due in
March 2017.
GUIDANCE
The Company is narrowing its full year 2007 guidance to an estimated FFO
range of $5.56-$5.62 per diluted share. The Company's 2007 earnings
guidance is based on continued regional strength, particularly in Seattle
Metro and Northern California.
CONFERENCE CALL WITH MANAGEMENT
The Company will host an earnings conference call with management on
Thursday, November 1, 2007, at 9:30 a.m. PDT - 12:30 p.m. EDT, which will
be broadcast live via the Internet at www.essexpropertytrust.com, and
accessible via phone by dialing (866) 383-8119 and entering the passcode
64121400.
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 (888) 286-8010 using the passcode,
22014998. If you are unable to access the information via the Company's Web
site, 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 Ended
September 30,
------------------------
Funds from operations 2007 2006
----------- -----------
Net income available to common stockholders $ 9,997 $ 10,686
Adjustments:
Depreciation and amortization 25,612 20,666
Gains not included in FFO (64) (714)
Minority interests and co-investments 1,777 2,216
----------- -----------
Funds from operations $ 37,322 $ 32,854
=========== ===========
This earnings release also presents FFO results that exclude certain
non-recurring items. Management believes that the presentation of such
results is useful to investors because they illuminate underlying
operational trends by excluding significant non-recurring or otherwise
unusual transactions. Our criteria for excluding non-recurring items may
differ from methods of other companies and should not be regarded as a
replacement for corresponding GAAP measures. A reconciliation of FFO for
non-recurring items can be found on page S-3 in the Company's Financial
Supplemental Information package.
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 regarding anticipated timing of the
completion and stabilization of property developments and redevelopments,
the anticipated costs of property developments and redevelopments, and the
Company's development pipeline. 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, 2006.
Contact Information: Contact: Nicole Christian (650) 849-1649