PALO ALTO, CA--(Marketwire - January 29, 2008) - Essex Property Trust, Inc. (NYSE: ESS), a real estate investment trust (REIT) with apartment communities located in targeted West Coast markets, announced today 2008 estimates for Earnings Per Share (EPS) and Funds From Operations per diluted share (FFO). For the year ended December 31, 2008, the Company estimates that EPS will range from $1.85 to $2.15 per diluted share and the estimates for FFO will range from $5.85 to $6.15 per diluted share.

The Company's 2008 forecast assumes a slowing national economy with estimated GDP growth of 2% and non-farm employment growth of 900,000 jobs.

Property Operations

Apartment operating results for 2008 will vary significantly between the Company's three primary markets. Northern California and Seattle are expected to show continued strength with high occupancy rates, limited concessions and growing rents. In Southern California, strong rental growth is expected in certain regions while other areas will be impacted by competition from new supply and weak demand.

The Company's 2008 guidance is based on the following projected growth in revenue from same-property operations, expressed as a percentage increase compared to its projected 2007 results:

       Northern California       5.5% to 7.0%
       Seattle Metro             5.5% to 7.0%
       Southern California       1.5% to 3.0%
       Combined Total            3.0% to 4.5%

For the consolidated same-property portfolio, operating expenses are expected to increase between 2.5% and 4.0% with an increase in same-property net operating income (NOI) ranging between 4.5% and 5.8%. The projected 2008 non-revenue generating capital expenditures that are needed to extend the useful life of the Company's apartment communities and achieve the forecasted revenue growth are estimated at $950 per unit.

Acquisitions and Dispositions

The 2008 acquisition plan is for an increase in new investments of approximately $100 million, to be financed with proceeds from dispositions (in 1031 exchanges) or joint venture capital. The Company will continue to concentrate its acquisitions efforts on the Seattle metropolitan area and the San Francisco Bay Area. The Company has targeted between $100 million and $200 million in dispositions, primarily in Southern California, and plans to use the net proceeds to fund its 2008 acquisitions and the stock repurchase program announced in 2007. The midpoint for 2008 guidance assumes that acquisition and disposition transactions have no significant impact on FFO.


In 2008, Essex expects to incur approximately $150 million in development costs on its balance sheet and $50 million of development costs in Fund II. Two development projects will be completed and lease-up activities will start in the second quarter. The Company expects that property operating expenses needed to achieve stabilization for the two development projects being leased up (Belmont Station in Los Angeles and 2851 Eastlake in Seattle -- owned by Fund II), will reduce non-same store net operating income and the equity income from Fund II by approximately $1 million in 2008. During the stabilization period (not to exceed one year) the Company capitalizes interest and property taxes on the units in the development project that are not available for lease due to ongoing development activities. In 2008 the company expects to capitalize $14 million of interest cost on the entire development pipeline owned by the REIT (excluding Fund II).


Approximately $30 million will be invested in redevelopment activities during 2008 which include apartment communities in the Company's existing portfolio, as well as assets owned by Fund II. The communities in the redevelopment program are not included in same-property results and these properties are forecasted to increase the consolidated non-same property NOI by approximately $2 million in 2008. The NOI from redevelopment activities includes the estimated vacancy loss on the units while they are being rehabilitated and is forecasted to be $1.8 million in 2008, an increase of approximately $0.6 million over the redevelopment vacancy incurred in 2007. The average yield from the redevelopment program is estimated at 10% (redevelopment related net operating income increases divided by incremental redevelopment costs).

Other Income

In January 2008 the Company collected $7.5 million and recognized other income of $6.3 million from its preferred interest in Waterstone Apartments, located in Fremont, California. FFO of $.23 per share will be reported in the first quarter of 2008 from this transaction. The Company's midpoint of its 2008 guidance range assumes no additional non-recurring income items will be recognized in 2008.

Other estimates used in providing 2008 guidance include:

--  Interest cost (including amortization of loan fees) of approximately
    $87 million, net of capitalized interest assuming an average borrowing cost
    of 5.8%.  The net interest cost assumes net incremental proceeds of $50
    million from new secured financing and the refinance of maturing
    obligations. The increased mortgage borrowing will be used to pay down the
    bank line of credit and create the borrowing capacity needed to fund 2008
    development activity.
--  Corporate general and administrative ("G&A") expenses of $26 million,
    including the overhead cost related to asset management, property
    management, development and redevelopment activities on assets owned by
    Fund II.
--  Management fees earned will be approximately $5.5 million and do not
    include any promote fees or the formation of a new fund.
--  Weighted average shares of common stock outstanding estimated at 27.5
    million shares.  Minority interest expense is expected to increase by $1
    million for the increase in the dividend payments to the DownREIT limited
    partners and a full year of payments to the Hillsdale Garden property joint
    venture partner.
--  Write-off of costs related to abandoned projects, impairments of
    investments and prepayment obligations from refinancing or repurchasing
    debt or preferred shares are assumed to be insignificant.

Conference Call with Management

The Company will host a conference call with management to discuss its 2008 guidance and fourth quarter results on Thursday, February 7, 2008, at 9:00 a.m. PST (12:00 p.m. EST), which will be broadcast live via the Internet at, and accessible via phone by dialing (866) 700-6067 and entering the passcode 29282673.

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 and select the fourth quarter earnings link. To access the replay digitally, dial (888) 286-8010 using the passcode, 69949969. If you are unable to access the information via the Company's Web site, please contact the Investor Relations department at or by calling (650) 494-3700.

About Essex Property Trust, Inc.

Essex Property Trust, Inc., located in Palo Alto, California and traded on the New York Stock Exchange (ESS), is a fully integrated real estate investment trust (REIT) that acquires, develops and redevelops apartment communities in selected West Coast communities. Essex currently has ownership interests in 133 apartment communities, 26,963 units, and has 1,108 units in various stages of development. Additional information about Essex can be found on the Company's web site at If you would like to receive future press releases via e-mail-please send a request to

Funds From Operations

Funds from Operations, 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, gains/losses on sales of real estate and extraordinary items. Management considers FFO to be a useful financial performance measurement of an equity REIT because, together with net income and cash flows, FFO provides investors with an additional basis to evaluate the performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures.

FFO does not represent net income or cash flows from operations as defined by generally accepted accounting principles (GAAP) and is not intended to indicate whether cash flows will be sufficient to fund cash needs. It 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 does not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to shareholders. FFO also does not represent cash flows generated from operating, investing or financing activities as defined under GAAP.

The following table sets forth the Company's forecast of the midpoint of the 2008 FFO guidance reconciled to its forecast of net income ($ in thousands):

Funds from operations                               2008

Net income available to common stockholders       $ 50,000
        Depreciation and amortization              110,000
        Minority interests and co-investments        5,000
        Funds from operations                     $165,000

Forward-Looking Statements: The statements which are not historical facts contained in this release are forward-looking statements including statements regarding the Company's beliefs and expectations relating to 2008 annual per diluted share GAAP earnings and FFO; 2008 rental growth, 2008 same-property operations growth, 2008 operating expenses, 2008 non-revenue generating capital expenditures, 2008 disposition activities, 2008 other income, 2008 general and administrative expenses, future average borrowing costs, 2008 management fee revenue, the weighted average shares outstanding; growth in GDP and non-farm employment; 2008 interest rates, costs and refinancing; projected acquisition, development and redevelopment activities; and costs and the financial impact of such activities. These forward-looking statements involve risks and uncertainties which could cause actual results to differ materially from such forward-looking statements including, but not limited to, change in the Company's strategy, downturns in the real estate markets in which the Company owns properties, the effect of changes in economic conditions, the effect of changes in interest rates, the impact of competition and competitive pricing, the results of financing efforts, and other risks detailed in the Company's SEC filings. All forward-looking statements and reasons why results may differ included in this press release are made as of the date hereof, and the Company assumes no obligation to update any such forward-looking statement or reason why actual results may differ. For more details relating to risks and uncertainties that could cause actual results to differ materially from those anticipated in our forward-looking statements, please refer to our SEC filings, including our Report on Form 10-K for the year ended December 31, 2006.

Contact Information: Contact: Nicole R. Christian Michael T. Dance (650) 849-1649