Mortgage Notes Payable

12 Months Ended

Dec. 31, 2025

Essex does not have any indebtedness as all debt is incurred by the Operating Partnership. Mortgage notes payable consisted of the following as of December 31, 2025 and 2024 ($ in thousands):


	December 31,
	2025			2024
Fixed rate mortgage notes payable	$	526,662		$	674,092
Variable rate mortgage notes payable (1)	257,686			315,792
Total mortgage notes payable (2)	$	784,348		$	989,884
Number of properties securing mortgage notes	14			19
Remaining terms	1-21 years			1-22 years
Weighted average interest rate	4.4		%	4.2		%

The aggregate scheduled principal payments of mortgage notes payable as of December 31, 2025 were as follows ($ in thousands):


2026	$	99,405
2027	84,397
2028	68,332
2029	1,456
2030	66,592
Thereafter	466,889
Total	$	787,071

(1)Variable rate mortgage notes payable, including $258.8 million in bonds that have been converted to variable rate through total return swap contracts, consists of multifamily housing mortgage revenue bonds secured by deeds of trust on rental properties and guaranteed by collateral pledge agreements, payable monthly at a variable rate (approximately 3.6% as of December 2025 and 4.2% as of December 2024) including credit enhancement and underwriting fees. Among the terms imposed on the properties, which are security for the bonds, is a requirement that 20% of the apartment homes are subject to tenant income criteria. Once the bonds have been repaid, the properties may no longer be obligated to comply with such tenant income criteria. Principal balances are due in full at various maturity dates from September 2026 through December 2046. In October 2024, the Company assumed $95.0 million of variable rate secured loans as part of its acquisition of its joint venture partner’s interests in the BEX II portfolio. The $95.0 million was paid off in September 2025.

(2)Includes total unamortized discount of $0.2 million and reduced by unamortized debt issuance costs of $2.5 million and $2.6 million as of December 31, 2025 and 2024, respectively.

For the Company’s mortgage notes payable as of December 31, 2025, monthly interest expense and principal amortization, excluding balloon payments, totaled approximately $3.5 million and $0.2 million, respectively. Repayment of debt before the scheduled maturity date could result in prepayment penalties. The prepayment penalty on the majority of the Company’s mortgage notes payable is computed by the greater of (a) 1% of the amount of the principal being prepaid or (b) the present value of the principal being prepaid multiplied by the difference between the interest rate of the mortgage note and the stated yield rate on a U.S. Treasury security which generally has an equivalent remaining term as the mortgage note.