Reportable Segments

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Reportable Segments

13.Reportable Segments

Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly.

The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market and both on a same store and non-same store basis. While the Company does maintain a non-residential presence, it accounts for approximately 3.7% of total revenues for the nine months ended September 30, 2022 and is designed as an amenity for our residential residents. The chief operating decision maker evaluates the performance of each property on a consolidated residential and non-residential basis. The Company’s geographic consolidated same store operating segments represent its reportable segments.

The Company’s development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below.

All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the nine months and quarters ended September 30, 2022 and 2021, respectively.

The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods.

The following table presents a reconciliation of NOI from our rental real estate for the nine months and quarters ended September 30, 2022 and 2021, respectively (amounts in thousands):

	Nine Months Ended September 30,						Quarter Ended September 30,
	2022			2021			2022			2021
Rental income	$	2,035,477		$	1,818,867		$	695,099		$	623,206
Property and maintenance expense		(365,277	)		(341,261	)		(124,048	)		(116,461	)
Real estate taxes and insurance expense		(302,899	)		(297,780	)		(100,361	)		(96,909	)
Total operating expenses		(668,176	)		(639,041	)		(224,409	)		(213,370	)
Net operating income	$	1,367,301		$	1,179,826		$	470,690		$	409,836

The following tables present NOI from our rental real estate for each segment for the nine months and quarters ended September 30, 2022 and 2021, respectively, as well as total assets and capital expenditures at September 30, 2022 (amounts in thousands):

	Nine Months Ended September 30, 2022						Nine Months Ended September 30, 2021
	Rental Income		Operating Expenses		NOI		Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	351,896	$	103,121	$	248,775	$	316,206	$	99,837	$	216,369
Orange County		91,271		19,681		71,590		80,773		18,865		61,908
San Diego		64,540		14,574		49,966		58,210		13,892		44,318
Subtotal - Southern California		507,707		137,376		370,331		455,189		132,594		322,595
San Francisco		312,401		93,572		218,829		285,212		89,559		195,653
Washington, D.C.		306,161		102,564		203,597		290,255		97,407		192,848
New York		318,756		139,121		179,635		270,776		136,859		133,917
Seattle		210,011		59,222		150,789		190,386		61,092		129,294
Boston		194,640		60,003		134,637		173,953		57,478		116,475
Denver		32,505		9,129		23,376		28,732		8,482		20,250
Total same store		1,882,181		600,987		1,281,194		1,694,503		583,471		1,111,032
Non-same store/other
Non-same store (2)		131,693		54,236		77,457		31,305		15,256		16,049
Other (3)		21,603		12,953		8,650		93,059		40,314		52,745
Total non-same store/other		153,296		67,189		86,107		124,364		55,570		68,794
Totals	$	2,035,477	$	668,176	$	1,367,301	$	1,818,867	$	639,041	$	1,179,826

(1)For the nine months ended September 30, 2022 and 2021, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 72,869 apartment units.

(2)For the nine months ended September 30, 2022 and 2021, non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021, and any properties undergoing major renovations.

(3)Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Quarter Ended September 30, 2022							Quarter Ended September 30, 2021
	Rental Income		Operating Expenses		NOI			Rental Income		Operating Expenses		NOI
Same store (1)
Los Angeles	$	119,269	$	34,783	$	84,486		$	110,180	$	33,568	$	76,612
Orange County		31,252		6,875		24,377			28,263		6,455		21,808
San Diego		22,129		5,018		17,111			20,283		4,717		15,566
Subtotal - Southern California		172,650		46,676		125,974			158,726		44,740		113,986
San Francisco		106,382		31,984		74,398			96,451		30,173		66,278
Washington, D.C.		106,098		35,686		70,412			98,643		34,238		64,405
New York		112,595		46,194		66,401			93,454		45,282		48,172
Seattle		72,756		20,385		52,371			63,936		20,658		43,278
Boston		66,981		20,122		46,859			58,863		19,401		39,462
Denver		11,102		3,191		7,911			9,812		2,950		6,862
All Other Markets		2,148		794		1,354			1,933		697		1,236
Total same store		650,712		205,032		445,680			581,818		198,139		383,679
Non-same store/other
Non-same store (2)		42,707		17,068		25,639			15,702		7,736		7,966
Other (3)		1,680		2,309		(629	)		25,686		7,495		18,191
Total non-same store/other		44,387		19,377		25,010			41,388		15,231		26,157
Totals	$	695,099	$	224,409	$	470,690		$	623,206	$	213,370	$	409,836

(1)For the quarters ended September 30, 2022 and 2021, same store primarily includes all properties acquired or completed that were stabilized prior to July 1, 2021, less properties subsequently sold, which represented 73,402 apartment units.

(2)For the quarters ended September 30, 2022 and 2021, non-same store primarily includes properties acquired after July 1, 2021, plus any properties in lease-up and not stabilized as of July 1, 2021, and any properties undergoing major renovations.

(3)Other includes development, other corporate operations and operations prior to disposition for properties sold.

	Nine Months Ended September 30, 2022
	Total Assets		Capital Expenditures
Same store (1)
Los Angeles	$	2,604,866	$	21,459
Orange County		358,574		4,170
San Diego		227,344		4,206
Subtotal - Southern California		3,190,784		29,835
San Francisco		3,090,195		21,988
Washington, D.C.		3,057,549		22,596
New York		3,424,747		17,365
Seattle		2,089,219		16,569
Boston		1,692,529		16,349
Denver		477,354		939
Total same store		17,022,377		125,641
Non-same store/other
Non-same store (2)		2,517,480		15,524
Other (3)		725,548		542
Total non-same store/other		3,243,028		16,066
Totals	$	20,265,405	$	141,707

(1)Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2021, less properties subsequently sold, which represented 72,869 apartment units.

(2)Non-same store primarily includes properties acquired after January 1, 2021, plus any properties in lease-up and not stabilized as of January 1, 2021, and any properties undergoing major renovations.

(3)Other includes development, other corporate operations and capital expenditures for properties sold.