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Debt
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Debt DEBT
In June 2023, the Operating Partnership executed a public bond issuance by selling $450.0 million principal amount of 5.500% Senior Notes due 2030 (the "Notes Due 2030"). Interest on the Notes Due 2030 is paid semi-annually in arrears on January 1 and July 1 of each year. The Notes Due 2030 will mature on July 1, 2030, and the Operating Partnership may redeem the Notes Due 2030 at its option and sole discretion at any time prior to May 1, 2030 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In March 2023, the Operating Partnership executed a public bond issuance by selling $500.0 million principal amount of 5.700% Senior Notes due 2028 (the "Notes Due 2028"). Interest on the Notes Due 2028 is paid semi-annually in arrears on April 1 and October 1 of each year. The Notes Due 2028 will mature on April 1, 2028, and the Operating Partnership may redeem the Notes Due 2028 at its option and sole discretion at any time prior to March 1, 2028 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In March 2022, the Operating Partnership executed a public bond issuance by selling $400.0 million principal amount of 3.900% Senior Notes due 2029 (the "Notes Due 2029"). Interest on the Notes Due 2029 is paid semi-annually in arrears on April 1 and October 1 of each year. The Notes Due 2029 will mature on April 1, 2029, and the Operating Partnership may redeem the Notes Due 2029 at its option and sole discretion at any time prior to February 1, 2029 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In September 2021, the Operating Partnership executed a public bond issuance by selling $600.0 million principal amount of 2.350% Senior Notes due 2032 (the "Notes Due 2032"). Interest on the Notes Due 2032 is paid semi-annually in arrears on March 15 and September 15 of each year. The Notes Due 2032 will mature on March 15, 2032, and the Operating Partnership may redeem the Notes Due 2032 at its option and sole discretion at any time prior to December 15, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
In May 2021, the Operating Partnership executed its initial public bond issuance by selling $450.0 million principal amount of 2.550% Senior Notes due 2031 (the "Notes Due 2031"). Interest on the Notes Due 2031 is paid semi-annually in arrears on June 1 and December 1 of each year. The Notes Due 2031 will mature on June 1, 2031, and the Operating Partnership may redeem the Notes Due 2031 at its option and sole discretion at any time prior to March 1, 2031 for cash equal to the outstanding principal amount plus the present value of the remaining scheduled interest payments, plus any accrued but unpaid interest.
The Operating Partnership may redeem the Notes Due 2028, the Notes Due 2029, the Notes Due 2030, the Notes Due 2031 and/or the Notes Due 2032 (collectively, the "Notes") in whole at any time or in part from time to time, at the Operating Partnership’s option and sole discretion, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes being redeemed and (ii) a make-whole premium calculated in accordance with the indenture governing the notes, plus, in each case, accrued and unpaid interest thereon to, but not including, the applicable redemption date. Notwithstanding the foregoing, on or after the par call date, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but not including, the applicable redemption date. The par call date on the Notes Due 2028 is one month prior to the maturity. The par call date on the Notes Due 2029 and the Notes Due 2030 is two months prior to the maturity. The par call date on the Notes Due 2031 and the Notes Due 2032 is three months prior to their maturity dates.
Certain events are considered events of default, which may result in the accelerated maturity of the Notes, including, among other things, a default for 30 days in the payment of any installment of interest under the notes or a default in the payment of the principal amount or redemption price due with respect to the notes, when the same become due and payable.
The Notes are unsecured, and are fully and unconditionally guaranteed by the Company, ESS Holdings Business Trust I, and ESS Holdings Business Trust II (the "Guarantors," and together with the Operating Partnership, the "Obligated Group"), on a joint and several basis. The guarantee of the Notes will be a senior unsecured obligation of each Guarantor. The Guarantors have no material operations separate from the operation of the Operating Partnership and no material assets, other than their respective investments directly or indirectly in the Operating Partnership, and therefore the assets, liabilities, and results of operations of the Obligated Group are not materially different than those reported in the Company's financial statements.
The components of term debt are summarized as follows:
Term DebtJune 30, 2023December 31, 2022Fixed Rate
Variable Rate (2)
Maturity Dates
Secured fixed-rate (1)
$404,336 $521,820 
2.67% - 4.56%
April 2025 - February 2030
Secured variable-rate (1)
883,052 772,604 
6.14% - 6.59%
August 2023 - September 2030
Unsecured fixed-rate5,136,633 4,240,376 
2.35% - 5.70%
January 2025 - March 2032
Unsecured variable-rate848,367 884,624 
6.14% - 6.19%
January 2024 - January 2028
Total7,272,388 6,419,424 
Less: Unamortized debt issuance costs(54,900)(32,962)
Total$7,217,488 $6,386,462 
(1) The loans are collateralized by mortgages on real estate assets and the assignment of rents.
(2) Basis rates include 30-day USD LIBOR, Adjusted Term SOFR and Adjusted Daily Simple SOFR.
The following table summarizes the scheduled maturities of term debt, excluding available extensions, at June 30, 2023:
2023$332,680 
2024335,000 
2025707,289 
2026809,508 
2027869,713 
Thereafter4,218,198 
$7,272,388 
On June 22, 2023, the Company entered into the Third Amended and Restated Credit Agreement (the “Credit Agreement”), which increased the commitment of the revolving credit facility to $1,940.0 million and extended maturity to June 2027. In connection with entering into the Credit Agreement, the Company paid off Tranche 5 and added the Tranche 8 term loan, maturing June 2024, which allowed the Company to draw up to $1,000.0 million in connection with the Life Storage merger. Tranche 8 was undrawn as of June 30, 2023, but was fully drawn on July 20, 2023, in connection with the closing of the merger with Life Storage, Inc. (“Life Storage”).

As of June 30, 2023, the terms of the Credit Agreement are as follows:
Debt CapacityMaturity Date
Revolving Credit Facility$1,940,000 June 2027
Tranche 1 Term Loan Facility (1)
400,000 January 2027
Tranche 2 Term Loan Facility (1)
425,000 October 2026
Tranche 3 Term Loan Facility (1)
245,000 January 2025
Tranche 4 Term Loan Facility (1)
255,000 June 2026
Tranche 5 Term Loan Facility (2)
— February 2024
Tranche 6 Term Loan Facility (1)
175,000 January 2028
Tranche 7 Term Loan Facility (1)
425,000 July 2029
Tranche 8 Term Loan Facility (3)
$1,000,000 June 2024
$4,865,000 
(1) Term loan amounts have been fully drawn as of June 30, 2023.
(2) The Tranche 5 Term Loan was paid off prior to maturity as part of the June 2023 recast.
(3) The Tranche 8 Term Loan was undrawn as of June 30, 2023, but was fully drawn on July 20, 2023.

Pursuant to the terms of the Credit Agreement, the Company may request an extension of the term of the revolving credit facility for up to two additional periods of six months each, and the term of the Tranche 8 Term Loan Facility for one year, after satisfying certain conditions.

As of June 30, 2023, amounts outstanding under the revolving credit facility bore interest at floating rates, at the Company’s option, equal to either (i) Adjusted Term or Daily Simple SOFR plus the Applicable Margin or (ii) the applicable base rate which is the applicable margin plus the highest of (a) 0.0%, (b) the federal funds rate plus 0.50%, (c) U.S. Bank’s prime rate or (d) the SOFR rate plus 1.00%. Per the Credit Agreement, the applicable SOFR rate margin and applicable base rate margin are based on the Company’s achieved debt rating, with the SOFR rate margin ranging from 0.7% to 2.2% per annum and the applicable base rate margin ranging from 0.00% to 1.20% per annum.

The Credit Agreement is guaranteed by the Company and is not secured by any assets of the Company. The Company's unsecured debt is subject to certain financial covenants. As of June 30, 2023, the Company was in compliance with all of its financial covenants.

In July 2022, the Company completed an accordion transaction in its credit facility, which added a $175.0 million unsecured debt tranche maturing January 2028 and a $425.0 million unsecured debt tranche maturing July 2029. As of June 30, 2023, the interest rates for the tranches are Adjusted Term SOFR/Adjusted Daily Simple SOFR ("ASOFR") + 0.95% and ASOFR + 1.25%, respectively.

All of the Company’s lines of credit are guaranteed by the Company. The following table presents information on the Company’s lines of credit, the proceeds of which are used to repay debt and for general corporate purposes, for the periods indicated:
As of June 30, 2023
Revolving Lines of CreditAmount DrawnCapacityInterest RateMaturity
Basis Rate (1)
Credit Line 1 (2)
$23,250 $140,000 6.44%7/1/2026
SOFR plus 1.35%
Credit Line 2 (3)(4)
252,000 1,940,000 6.04%6/22/2027
ASOFR plus 0.95%
$275,250 $2,080,000 
(1) Term SOFR or Daily Simple SOFR
(2) Secured by mortgages on certain real estate assets. On January 13, 2023 the maturity date was extended to July 1, 2026 with one extension of one year available.
(3) Unsecured. On June 22, 2023, the maturity was extended to June 22, 2027 with two six-month extensions available.
(4) Basis Rate as of June 30, 2023. Rate is subject to change based on our investment grade rating.
As of June 30, 2023, the Company’s percentage of fixed-rate debt to total debt was 73.4%. The weighted average interest rates of the Company’s fixed and variable-rate debt were 3.8% and 6.4%, respectively. The combined weighted average interest rate was 4.5%.