PALO ALTO, CA--(Marketwire - August 5, 2009) - Essex Property Trust, Inc. (
NYSE:
ESS)
announces its second quarter 2009 earnings results and related business
activities.
Funds from Operations ("FFO") for the quarter ended June 30, 2009, totaled
$42.0 million, or $1.43 per diluted share compared to $39.2 million, or
$1.42 per diluted share for the quarter ended June 30, 2008.
Net income available to common stockholders for the quarter ended June 30,
2009 totaled $11.4 million, or $0.43 per diluted share, compared to net
income available to common stockholders of $8.7 million, or $0.35 per
diluted share, for the quarter ended June 30, 2008.
"Our solid second quarter performance was largely due to our strategy to
maintain high occupancy during the quarter throughout all our markets and
resulted in approximately 1% FFO growth, even during this tough economic
climate. Moving forward, our focus on occupancy coupled with our strong
balance sheet and disciplined strategy will prove instrumental in guiding
us through these challenging times," stated Keith R. Guericke, President
and Chief Executive Officer.
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 six months ended June 30, 2009 compared to June
30, 2008:
Q2 2009 compared to Q2 YTD 2009 compared to YTD
2008 2008
-------------------------- --------------------------
Revenues Expenses NOI Revenues Expenses NOI
--------- --------- ---- --------- --------- ----
Southern California -3.0% 2.2% -5.4% -1.6% 1.0% -2.8%
Northern California -0.1% -6.1% 3.2% 2.4% -4.0% 5.8%
Seattle Metro -0.9% 4.4% -3.6% 1.5% 4.9% -0.2%
--------- --------- ---- --------- --------- ----
Same-property
average -1.8% -0.1% -2.6% 0.1% 0.1% 0.1%
========= ========= ==== ========= ========= ====
The table below illustrates the sequential percentage change in
same-property revenues, expenses, and NOI for the quarter ended June 30,
2009 versus the quarter ended March 31, 2009:
Q2 2009 compared to Q1 2009
-----------------------------
Revenues Expenses NOI
--------- --------- -------
Southern California -2.0% 2.1% -3.8%
Northern California -2.3% 3.9% -5.1%
Seattle Metro -3.6% 3.3% -7.0%
--------- --------- -------
Same-property average -2.3% 2.9% -4.7%
========= ========= =======
Same-property financial occupancies for the quarters ended are as follows:
6/30/09 3/31/09 6/30/08
------- ------- -------
Southern California 96.3% 96.5% 95.9%
Northern California 97.6% 97.6% 97.4%
Seattle Metro 96.8% 97.3% 96.4%
------- ------- -------
Same-property average 96.8% 97.0% 96.4%
======= ======= =======
Dispositions
During the second quarter, the Company sold Mountain View Apartments, a
106-unit community located in Camarillo, California for $14.0 million. The
community was acquired in 2004.
Development
In June, the Company was awarded two Gold Nugget Awards and one merit
recognition by the Pacific Coast Builders Conference ("PCBC") for three of
its development communities under construction or completed in 2008
including the following:
-- Eastlake 2851 - Gold Nugget for "Outstanding Low-Rise Apartment
Project"
-- Joule Broadway - Gold Nugget for "Outstanding on the Boards Apartment
Project"
-- The Grand - Merit Award for "Outstanding High Rise Apartment Project"
Commenting on the achievement, Keith R. Guericke, President and Chief
Executive Officer stated, "We are honored to be recognized by PCBC for
these development projects and feel the nomination of three separate
communities in one year demonstrates the commitment of our development team
and their efforts at producing high-quality apartment homes leading to
increased leasing potential represented by better occupancy and superior
rents in the long run."
The Grand, a 238-unit development located in Oakland, California which
began initial occupancy in February is approximately 93 percent leased, and
stabilized operations are expected in the third quarter of 2009.
Studio 40-41, a 149-unit development located in Studio City, California,
owned by Essex Apartment Value Fund II, L.P. ("Fund II") which began
initial occupancy in April is approximately 60 percent leased, and
stabilized operations are expected in the fourth quarter of 2009.
The Company received temporary certificate of occupancy at the end of July
for Cielo, a 119-unit development located in Chatsworth, California, owned
by Fund II. The community is approximately 20 percent leased, and
stabilized operations are expected in the fourth quarter of 2009.
Framing, plumbing and electrical installation are nearing completion at
Fourth Street, a 171-unit development located in Berkeley, California.
Expected delivery of the community is second quarter of 2010 and the
Company projects stabilized operations in the fourth quarter of 2010.
Community amenities will include a fitness center, game/media room,
business center and a public plaza located in front of the adjacent
historic train station. This unique location is within walking distance to
high-end shopping and dining, a nearby park, the Berkeley train station,
and provides easy access to the freeway.
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.
Liquidity and Balance Sheet
Common Stock
During the second quarter, the Company issued 1,145,450 shares of common
stock at an average price of $67.21 for $75.8 million, net of fees and
commissions through the Company's Controlled Equity Offering Program.
Marketable Securities
During the second quarter, the Company purchased $81.9 million of
investment-grade unsecured REIT bonds. As of June 30, 2009, the Company
owned $105.9 million of investment-grade unsecured REIT bonds which with an
average maturity of 3.8 years and an average yield of 10.3%.
Mortgage Notes Payable
The Company, during the second quarter, obtained fixed rate mortgage loans
totaling $54.2 million, including the following:
-- $35.0 million secured by Highlands at Wynhaven, at a fixed rate of
5.4% which matures in June 2019.
-- $19.2 million secured by Wilshire Promenade, at a fixed rate of 5.4%
which matures in June 2019.
Additionally, during the second quarter, the Company paid-off $20.4 million
in loans secured by Huntington Breakers including a $4.4 million mortgage
loan at a fixed rate of 7.7% and variable rate demand notes totaling $16.0
million.
Guidance
The Company tightens its previous full year 2009 FFO Guidance to a range of
$6.20 to $6.40 per diluted share.
Conference Call with Management
The Company will host an earnings conference call with management to
discuss its quarterly results on Thursday, August 6, at 10:00 a.m. PDT
(1:00 p.m. EDT), which will be broadcast live via the Internet at
www.essexpropertytrust.com, and accessible via phone by dialing (866)
700-6293 and entering the passcode 42684676.
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 second quarter earnings link. To
access the replay digitally, dial (888) 286-8010 using the passcode,
70759980. 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.
Third Quarter Event Schedule
The Company plans to attend the BMO Capital Markets Conference in Chicago,
September 9-11, 2009. During the conference the Company will participate
in a panel discussion as well as host a question and answer session which
will be broadcast via the internet at 2:00 p.m. EDT on Thursday, September
10, 2009. A link to the live broadcast of this presentation will be
available on the Company's website on the "Event Calendar" page. Any
materials distributed during this event will also be made available on the
Company's website on the "Presentations" page.
Corporate Profile
Essex Property Trust, Inc., located in Palo Alto, California and traded on
the New York Stock Exchange (
NYSE:
ESS), is a fully integrated real estate
investment trust ("REIT") that acquires, develops, redevelops, and manages
apartment communities located in highly desirable, supply-constrained
markets. Essex currently has ownership interests in 133 apartment
communities (27,143 units), and has 585 units in various stages of
development.
This press release and accompanying supplemental financial information will
be filed electronically on Form 8-K with the Securities and Exchange
Commission and can be accessed from the Company's Web site at
www.essexpropertytrust.com. If you are unable to obtain the information via
the Web, please contact the Investor Relations Department at (650)
494-3700.
Funds from Operations ("FFO") Reconciliation
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, 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
and ability to pay dividends.
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. 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 Essex's
calculation.
The following table sets forth the Company's calculation of FFO for the
three and six months ended June 30, 2009 and 2008.
Three Months Ended Six Months Ended
June 30, June 30,
Funds from Operations (In --------------------- ---------------------
thousands) 2009 2008 2009 2008
--------- ---------- --------- ----------
Net income available to common
stockholders $ 11,415 $ 8,745 $ 53,680 $ 23,525
Adjustments:
Depreciation and amortization 29,073 28,682 58,277 56,417
Gains not included in FFO,
net of disposition costs (626) - (2,851) -
Noncontrolling interest and
co-investments 2,141 1,808 4,703 4,151
--------- ---------- --------- ----------
Funds from Operations $ 42,003 $ 39,235 $ 113,809 $ 84,093
========= ========== ========= ==========
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
2009 FFO per diluted share, and statements and estimates set forth under
the caption "Development" and on pages S-9 and S-10 of the Company's
Supplemental Financial Information Package regarding 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.