10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to _________

001-13106 (Essex Property Trust, Inc.)

333-44467-01 (Essex Portfolio, L.P.)

(Commission File Number)

ESSEX PROPERTY TRUST, INC.

ESSEX PORTFOLIO, L.P.

(Exact name of Registrant as Specified in its Charter)

Maryland	77-0369576
(Essex Property Trust, Inc.)	(Essex Property Trust, Inc.)
California	77-0369575
(Essex Portfolio, L.P.)	(Essex Portfolio, L.P.)
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

1100 Park Place, Suite 200

San Mateo, California 94403

(Address of Principal Executive Offices, Including Zip Code)

(650) 655-7800

(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act: 

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $.0001 par value (Essex Property Trust, Inc.)	ESS	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Essex Property Trust, Inc. Yes ☒ No ☐ Essex Portfolio, L.P. Yes ☒ No ☐

i

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Essex Property Trust, Inc. Yes ☒ No ☐ Essex Portfolio, L.P. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Essex Property Trust, Inc.:

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						Emerging growth company	☐

Essex Portfolio, L.P.:

Large accelerated filer	☐	Accelerated filer	☐	Non-accelerated filer	☒	Smaller reporting company	☐
						Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Essex Property Trust, Inc. ☐ Essex Portfolio, L.P. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Essex Property Trust, Inc. Yes ☐ No ☒ Essex Portfolio, L.P. Yes ☐ No ☒

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: 65,417,355 shares of Common Stock ($.0001 par value) of Essex Property Trust, Inc. were outstanding as of May 5, 2020.

ii

EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the three month period ended March 31, 2020 of Essex Property Trust, Inc., a Maryland corporation, and Essex Portfolio, L.P., a Delaware limited partnership of which Essex Property Trust, Inc. is the sole general partner.

Unless stated otherwise or the context otherwise requires, references to the "Company," "we," "us" or "our" mean collectively Essex Property Trust, Inc. and those entities/subsidiaries owned or controlled by Essex Property Trust, Inc., including Essex Portfolio, L.P., and references to the "Operating Partnership" mean Essex Portfolio, L.P. and those entities/subsidiaries owned or controlled by Essex Portfolio, L.P. Unless stated otherwise or the context otherwise requires, references to "Essex" mean Essex Property Trust, Inc., not including any of its subsidiaries.

Essex operates as a self-administered and self-managed real estate investment trust ("REIT"), and is the sole general partner of the Operating Partnership. As the sole general partner of the Operating Partnership, Essex has exclusive control of the Operating Partnership's day-to-day management.

The Company is structured as an umbrella partnership REIT ("UPREIT") and Essex contributes all net proceeds from its various equity offerings to the Operating Partnership. In return for those contributions, Essex receives a number of Operating Partnership limited partnership units ("OP Units," and the holders of such OP Units, "Unitholders") equal to the number of shares of common stock it has issued in the equity offerings. Contributions of properties to the Company can be structured as tax-deferred transactions through the issuance of OP Units, which is one of the reasons why the Company is structured in the manner outlined above. Based on the terms of the Operating Partnership's partnership agreement, OP Units can be exchanged into Essex common stock on a one-for-one basis. The Company maintains a one-for-one relationship between the OP Units issued to Essex and shares of common stock.

The Company believes that combining the reports on Form 10-Q of Essex and the Operating Partnership into this single report provides the following benefits:

• enhances investors' understanding of Essex and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

• eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both Essex and the Operating Partnership; and

• creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

Management operates Essex and the Operating Partnership as one business. The management of Essex consists of the same members as the management of the Operating Partnership.

All of the Company's property ownership, development, and related business operations are conducted through the Operating Partnership and Essex has no material assets, other than its investment in the Operating Partnership. Essex's primary function is acting as the general partner of the Operating Partnership. As general partner with control of the Operating Partnership, Essex consolidates the Operating Partnership for financial reporting purposes. Therefore, the assets and liabilities of Essex and the Operating Partnership are the same on their respective financial statements. Essex also issues equity from time to time and guarantees certain debt of the Operating Partnership, as disclosed in this report. The Operating Partnership holds substantially all of the assets of the Company, including the Company's ownership interests in its co-investments. The Operating Partnership conducts the operations of the business and is structured as a partnership with no publicly traded equity. Except for the net proceeds from equity offerings by the Company, which are contributed to the capital of the Operating Partnership in exchange for OP Units (on a one-for-one share of common stock per OP Unit basis), the Operating Partnership generates all remaining capital required by the Company's business. These sources of capital include the Operating Partnership's working capital, net cash provided by operating activities, borrowings under its revolving credit facilities, the issuance of secured and unsecured debt and equity securities and proceeds received from disposition of certain properties and co-investments.

The Company believes it is important to understand the few differences between Essex and the Operating Partnership in the context of how Essex and the Operating Partnership operate as a consolidated company. Stockholders' equity, partners' capital and noncontrolling interest are the main areas of difference between the condensed consolidated financial statements of Essex and those of the Operating Partnership. The limited partners of the Operating Partnership are accounted for as partners' capital in the Operating Partnership's condensed consolidated financial statements and as noncontrolling interest in Essex’s condensed consolidated financial statements. The noncontrolling interest in the Operating Partnership's condensed consolidated financial statements include the interest of unaffiliated partners in various consolidated partnerships and co-investment partners. The noncontrolling interest in Essex's condensed consolidated financial statements include (i) the same noncontrolling interest as

iii

presented in the Operating Partnership’s condensed consolidated financial statements and (ii) OP Unitholders. The differences between stockholders' equity and partners' capital result from differences in the equity issued at Essex and Operating Partnership levels.

To help investors understand the significant differences between Essex and the Operating Partnership, this report on Form 10-Q provides separate consolidated financial statements for Essex and the Operating Partnership; a single set of consolidated notes to such financial statements that includes separate discussions of stockholders' equity or partners' capital, and earnings per share/unit, as applicable; and a combined Management's Discussion and Analysis of Financial Condition and Results of Operations.

This report on Form 10-Q also includes separate Part I, Item 4. Controls and Procedures sections and separate Exhibits 31 and 32 certifications for each of Essex and the Operating Partnership in order to establish that the requisite certifications have been made and that Essex and the Operating Partnership are compliant with Rule 13a-15 or Rule 15d-15 of the Securities Exchange Act of 1934 (the "Exchange Act") and 18 U.S.C. §1350.

In order to highlight the differences between Essex and the Operating Partnership, the separate sections in this report on Form 10-Q for Essex and the Operating Partnership specifically refer to Essex and the Operating Partnership. In the sections that combine disclosure of Essex and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company. Although the Operating Partnership is generally the entity that directly or indirectly enters into contracts and co-investments and holds assets and debt, reference to the Company is appropriate because the Company is one business and the Company operates that business through the Operating Partnership. The separate discussions of Essex and the Operating Partnership in this report should be read in conjunction with each other to understand the results of the Company on a consolidated basis and how management operates the Company.

The information furnished in the accompanying unaudited condensed consolidated balance sheets, statements of income and comprehensive income, equity, capital, and cash flows of the Company and the Operating Partnership reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the aforementioned condensed consolidated financial statements for the interim periods and are normal and recurring in nature, except as otherwise noted.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the notes to such unaudited condensed consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations herein. Additionally, these unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2019.

iv

ESSEX PROPERTY TRUST, INC.

ESSEX PORTFOLIO, L.P.

FORM 10-Q

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		Page No.
Item 1.	Condensed Consolidated Financial Statements of Essex Property Trust, Inc. (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	2
	Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019	3
	Condensed Consolidated Statements of Equity for the three months ended March 31, 2020 and 2019	4
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019	6
	Condensed Consolidated Financial Statements of Essex Portfolio, L.P. (Unaudited)
	Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019	8
	Condensed Consolidated Statements of Income and Comprehensive Income for the three months ended March 31, 2020 and 2019	9
	Condensed Consolidated Statements of Capital for the three months ended March 31, 2020 and 2019	10
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2020 and 2019	12
	Notes to Condensed Consolidated Financial Statements	14
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risks	40
Item 4.	Controls and Procedures	41
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	42
Item 1A.	Risk Factors	42
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

1

Part I – Financial Information

Item 1. Condensed Consolidated Financial Statements

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except parenthetical and share amounts)

ASSETS	March 31, 2020			December 31, 2019
Real estate:
Rental properties:
Land and land improvements	$	2,983,314		$	2,773,805
Buildings and improvements	12,263,293			11,264,337
	15,246,607			14,038,142
Less: accumulated depreciation	(3,818,489		)	(3,689,482		)
	11,428,118			10,348,660
Real estate under development	435,865			546,075
Co-investments	997,137			1,335,339
	12,861,120			12,230,074
Cash and cash equivalents-unrestricted	271,877			70,087
Cash and cash equivalents-restricted	10,470			11,007
Marketable securities, net of allowance for credit losses of $13.6 million and zero as of March 31, 2020 and December 31, 2019, respectively	148,139			144,193
Notes and other receivables, net of allowance for credit losses of $0.1 million and zero as of March 31, 2020 and December 31, 2019, respectively (includes related party receivables of $7.7 million and $90.2 million as of March 31, 2020 and December 31, 2019, respectively)	34,867			134,365
Operating lease right-of-use assets	74,428			74,744
Prepaid expenses and other assets	49,940			40,935
Total assets	$	13,450,841		$	12,705,405
LIABILITIES AND EQUITY
Unsecured debt, net	$	5,258,263		$	4,763,206
Mortgage notes payable, net	887,389			990,667
Lines of credit	350,000			55,000
Accounts payable and accrued liabilities	193,564			158,017
Construction payable	50,538			48,912
Dividends payable	142,800			135,384
Operating lease liabilities	76,405			76,740
Other liabilities	41,290			36,565
Total liabilities	7,000,249			6,264,491
Commitments and contingencies
Redeemable noncontrolling interest	32,643			37,410
Equity:
Common stock; $.0001 par value, 670,000,000 shares authorized; 65,412,355 and 66,091,954 shares issued and outstanding, respectively	7			7
Additional paid-in capital	6,959,523			7,121,927
Distributions in excess of accumulated earnings	(708,697		)	(887,619		)
Accumulated other comprehensive loss, net	(22,668		)	(13,888		)
Total stockholders' equity	6,228,165			6,220,427
Noncontrolling interest	189,784			183,077
Total equity	6,417,949			6,403,504
Total liabilities and equity	$	13,450,841		$	12,705,405

See accompanying notes to the unaudited condensed consolidated financial statements.

2

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(In thousands, except share and per share amounts)

	Three Months Ended March 31,
	2020			2019
Revenues:
Rental and other property	$	389,750		$	353,888
Management and other fees from affiliates	2,617			2,335
	392,367			356,223
Expenses:
Property operating, excluding real estate taxes	64,131			58,622
Real estate taxes	43,012			39,418
Corporate-level property management expenses	8,759			8,429
Depreciation and amortization	131,559			120,568
General and administrative	13,982			13,459
Expensed acquisition and investment related costs	87			32
	261,530			240,528
Earnings from operations	130,837			115,695
Interest expense	(55,147		)	(53,643		)
Total return swap income	1,984			2,045
Interest and other income (loss)	(5,221		)	12,261
Equity income from co-investments	21,297			16,276
Gain on early retirement of debt, net	321			1,336
Gain on remeasurement of co-investment	234,694			31,535
Net income	328,765			125,505
Net income attributable to noncontrolling interest	(13,759		)	(6,647		)
Net income available to common stockholders	$	315,006		$	118,858
Comprehensive income	$	319,678		$	123,668
Comprehensive income attributable to noncontrolling interest	(13,452		)	(6,585		)
Comprehensive income attributable to controlling interest	$	306,226		$	117,083
Per share data:
Basic:
Net income available to common stockholders	$	4.77		$	1.81
Weighted average number of shares outstanding during the period	66,043,831			65,702,788
Diluted:
Net income available to common stockholders	$	4.76		$	1.81
Weighted average number of shares outstanding during the period	66,195,415			65,783,869

See accompanying notes to the unaudited condensed consolidated financial statements.

3

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity for the three months ended March 31, 2020 and 2019

(Unaudited)

(In thousands)

	Common stock				Additional paid-in capital			Distributions in excess of accumulated earnings			Accumulated other comprehensive loss			Noncontrolling interest			Total
Three Months Ended March 31, 2020	Shares		Amount
Balances at December 31, 2019	66,092		$	7	$	7,121,927		$	(887,619	)	$	(13,888	)	$	183,077		$	6,403,504
Net income	—		—		—			315,006			—			13,759			328,765
Change in fair value of derivatives and amortization of swap settlements	—		—		—			—			(8,486		)	(296		)	(8,782		)
Change in fair value of marketable debt securities, net	—		—		—			—			(294		)	(11		)	(305		)
Issuance of common stock under:
Stock option and restricted stock plans, net	89		—		8,665			—			—			—			8,665
Sale of common stock, net	—		—		(70		)	—			—			—			(70		)
Equity based compensation costs	—		—		1,619			—			—			79			1,698
Retirement of common stock, net	(776	)	—		(176,311		)	—			—			—			(176,311		)
Cumulative effect upon adoption of ASU No. 2016-13	—		—		—			(190		)	—			—			(190		)
Changes in the redemption value of redeemable noncontrolling interest	—		—		4,741			—			—			26			4,767
Changes in noncontrolling interest from acquisition	—		—		—			—			—			1,349			1,349
Distributions to noncontrolling interest	—		—		—			—			—			(7,879		)	(7,879		)
Redemptions of noncontrolling interest	7		—		(1,048		)	—			—			(320		)	(1,368		)
Common stock dividends ($2.0775 per share)	—		—		—			(135,894		)	—			—			(135,894		)
Balances at March 31, 2020	65,412		$	7	$	6,959,523		$	(708,697	)	$	(22,668	)	$	189,784		$	6,417,949

4

	Common stock				Additional paid-in capital			Distributions in excess of accumulated earnings			Accumulated other comprehensive loss, net			Noncontrolling Interest			Total
Three Months Ended March 31, 2019	Shares		Amount
Balances at December 31, 2018	65,890		$	7	$	7,093,079		$	(812,796	)	$	(13,217	)	$	126,771		$	6,393,844
Net income	—		—		—			118,858			—			6,647			125,505
Reversal of unrealized losses upon the sale of marketable debt securities	—		—		—			—			32			1			33
Change in fair value of derivatives and amortization of swap settlements	—		—		—			—			(1,926		)	(67		)	(1,993		)
Change in fair value of marketable debt securities, net	—		—		—			—			119			4			123
Issuance of common stock under:
Stock option and restricted stock plans, net	51		—		3,204			—			—			—			3,204
Sale of common stock, net	—		—		(20		)	—			—			—			(20		)
Equity based compensation costs	—		—		2,301			—			—			299			2,600
Retirement of common stock, net	(234	)	—		(56,989		)	—			—			—			(56,989		)
Cumulative effect upon adoption of ASU No. 2017-12	—		—		—			—			175			6			181
Changes in the redemption value of redeemable noncontrolling interest	—		—		(3,027		)	—			—			1,260			(1,767		)
Distributions to noncontrolling interest	—		—		—			—			—			(7,164		)	(7,164		)
Redemptions of noncontrolling interest	9		—		(10,394		)	—			—			(1,819		)	(12,213		)
Common stock dividends ($1.95 per share)	—		—		—			(128,149		)	—			—			(128,149		)
Balances at March 31, 2019	65,716		$	7	$	7,028,154		$	(822,087	)	$	(14,817	)	$	125,938		$	6,317,195

See accompanying notes to the unaudited condensed consolidated financial statements.

5

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands, except parenthetical amounts) 

	Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net income	$	328,765		$	125,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	131,559			120,568
Amortization of discount on marketable securities	(2,394		)	(5,311		)
Amortization of discount and debt financing costs, net	2,297			529
Loss on sale of marketable securities	13			58
Provision for credit losses	(50		)	—
Unrealized (gain) loss on equity securities recognized through income	8,696			(4,510		)
Earnings from co-investments	(21,297		)	(16,276		)
Operating distributions from co-investments	19,388			17,804
Accrued interest from notes and other receivables	(355		)	(1,424		)
Equity-based compensation	1,405			2,068
Gain on early retirement of debt, net	(321		)	(1,336		)
Gain on remeasurement of co-investment	(234,694		)	(31,535		)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets	(172		)	(4,730		)
Accounts payable, accrued liabilities, and operating lease liabilities	32,808			53,895
Other liabilities	1,278			454
Net cash provided by operating activities	266,926			255,759
Cash flows from investing activities:
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(458,302		)	(44,984		)
Redevelopment	(18,296		)	(14,157		)
Development acquisitions of and additions to real estate under development	(25,681		)	(39,306		)
Capital expenditures on rental properties	(17,151		)	(17,075		)
Collections of notes and other receivables	98,711			2,500
Proceeds from insurance for property losses	457			1,583
Contributions to co-investments	(21,905		)	(126,248		)
Changes in refundable deposits	96			5
Purchases of marketable securities	(10,731		)	(8,413		)
Sales and maturities of marketable securities	165			16,847
Non-operating distributions from co-investments	7,000			10,000
Net cash used in investing activities	(445,637		)	(219,248		)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	498,140			498,234
Payments on unsecured debt and mortgage notes	(102,563		)	(360,975		)
Proceeds from lines of credit	1,038,426			567,029
Repayments of lines of credit	(743,426		)	(567,029		)
Retirement of common stock	(176,311		)	(56,989		)
Additions to deferred charges	(5,172		)	(5,445		)
Net proceeds from issuance of common stock	(70		)	(20		)
Net proceeds from stock options exercised	14,329			6,699
Payments related to tax withholding for share-based compensation	(5,664		)	(3,495		)
Distributions to noncontrolling interest	(7,478		)	(6,978		)
Redemption of noncontrolling interest	(1,368		)	(12,213		)

6

	Three Months Ended March 31,
	2020			2019
Redemption of redeemable noncontrolling interest	—			(73		)
Common stock dividends paid	(128,879		)	(122,525		)
Net cash provided by (used in) financing activities	379,964			(63,780		)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents	201,253			(27,269		)
Unrestricted and restricted cash and cash equivalents at beginning of period	81,094			151,395
Unrestricted and restricted cash and cash equivalents at end of period	$	282,347		$	124,126
Supplemental disclosure of cash flow information:
Cash paid for interest (net of $4.8 million and $5.9 million capitalized in 2020 and 2019, respectively)	$	52,487		$	41,914
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,715		$	1,694
Supplemental disclosure of noncash investing and financing activities:
Transfers between real estate under development and rental properties, net	$	131,841		$	—
Transfer from real estate under development to co-investments	$	824		$	313
Reclassifications (from) to redeemable noncontrolling interest to/from additional paid in capital and noncontrolling interest	$	(4,767	)	$	1,767
Initial recognition of operating lease right-of-use assets	$	—		$	77,645
Initial recognition of operating lease liabilities	$	—		$	79,693

See accompanying notes to the unaudited condensed consolidated financial statements.

7

ESSEX PORTFOLIO, L.P.  AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except parenthetical and unit amounts)

ASSETS	March 31, 2020			December 31, 2019
Real estate:
Rental properties:
Land and land improvements	$	2,983,314		$	2,773,805
Buildings and improvements	12,263,293			11,264,337
	15,246,607			14,038,142
Less: accumulated depreciation	(3,818,489		)	(3,689,482		)
	11,428,118			10,348,660
Real estate under development	435,865			546,075
Co-investments	997,137			1,335,339
	12,861,120			12,230,074
Cash and cash equivalents-unrestricted	271,877			70,087
Cash and cash equivalents-restricted	10,470			11,007
Marketable securities, net of allowance for credit losses of $13.6 million and zero as of March 31, 2020 and December 31, 2019, respectively	148,139			144,193
Notes and other receivables, net of allowance for credit losses of $0.1 million and zero as of March 31, 2020 and December 31, 2019, respectively (includes related party receivables of $7.7 million and $90.2 million as of March 31, 2020 and December 31, 2019, respectively)	34,867			134,365
Operating lease right-of-use assets	74,428			74,744
Prepaid expenses and other assets	49,940			40,935
Total assets	$	13,450,841		$	12,705,405
LIABILITIES AND CAPITAL
Unsecured debt, net	$	5,258,263		$	4,763,206
Mortgage notes payable, net	887,389			990,667
Lines of credit	350,000			55,000
Accounts payable and accrued liabilities	193,564			158,017
Construction payable	50,538			48,912
Distributions payable	142,800			135,384
Operating lease liabilities	76,405			76,740
Other liabilities	41,290			36,565
Total liabilities	7,000,249			6,264,491
Commitments and contingencies
Redeemable noncontrolling interest	32,643			37,410
Capital:
General Partner:
Common equity (65,412,355 and 66,091,954 units issued and outstanding, respectively)	6,250,833			6,234,315
	6,250,833			6,234,315
Limited Partners:
Common equity (2,296,043 and 2,301,653 units issued and outstanding, respectively)	63,550			57,359
Accumulated other comprehensive loss	(19,519		)	(10,432		)
Total partners' capital	6,294,864			6,281,242
Noncontrolling interest	123,085			122,262
Total capital	6,417,949			6,403,504
Total liabilities and capital	$	13,450,841		$	12,705,405

See accompanying notes to the unaudited condensed consolidated financial statements.

8

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(In thousands, except unit and per unit amounts)

	Three Months Ended March 31,
	2020			2019
Revenues:
Rental and other property	$	389,750		$	353,888
Management and other fees from affiliates	2,617			2,335
	392,367			356,223
Expenses:
Property operating, excluding real estate taxes	64,131			58,622
Real estate taxes	43,012			39,418
Corporate-level property management expenses	8,759			8,429
Depreciation and amortization	131,559			120,568
General and administrative	13,982			13,459
Expensed acquisition and investment related costs	87			32
	261,530			240,528
Earnings from operations	130,837			115,695
Interest expense	(55,147		)	(53,643		)
Total return swap income	1,984			2,045
Interest and other income (loss)	(5,221		)	12,261
Equity income from co-investments	21,297			16,276
Gain on early retirement of debt, net	321			1,336
Gain on remeasurement of co-investment	234,694			31,535
Net income	328,765			125,505
Net income attributable to noncontrolling interest	(2,773		)	(2,476		)
Net income available to common unitholders	$	325,992		$	123,029
Comprehensive income	$	319,678		$	123,668
Comprehensive income attributable to noncontrolling interest	(2,773		)	(2,476		)
Comprehensive income attributable to controlling interest	$	316,905		$	121,192
Per unit data:
Basic:
Net income available to common unitholders	$	4.77		$	1.81
Weighted average number of common units outstanding during the period	68,344,012			68,007,852
Diluted:
Net income available to common unitholders	$	4.76		$	1.81
Weighted average number of common units outstanding during the period	68,495,596			68,088,933

See accompanying notes to the unaudited condensed consolidated financial statements.

9

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Capital for the three months ended March 31, 2020 and 2019

(Unaudited)

(In thousands)

	General Partner					Limited Partners					Accumulated other comprehensive loss			Noncontrolling interest			Total
	Common Equity					Common Equity
Three months ended March 31, 2020	Units		Amount			Units		Amount
Balances at December 31, 2019	66,092		$	6,234,315		2,302		$	57,359		$	(10,432	)	$	122,262		$	6,403,504
Net income	—		315,006			—		10,986			—			2,773			328,765
Change in fair value of derivatives and amortization of swap settlements	—		—			—		—			(8,782		)	—			(8,782		)
Change in fair value of marketable debt securities, net	—		—			—		—			(305		)	—			(305		)
Issuance of common units under:
General partner's stock based compensation, net	89		8,665			—		—			—			—			8,665
Sale of common stock by general partner, net	—		(70		)	—		—			—			—			(70		)
Equity based compensation costs	—		1,619			2		79			—			—			1,698
Retirement of common units, net	(776	)	(176,311		)	—		—			—			—			(176,311		)
Cumulative effect upon adoption of ASU No. 2016-13	—		(190		)	—		—			—			—			(190		)
Changes in the redemption value of redeemable noncontrolling interest	—		4,741			—		(18		)	—			44			4,767
Changes in noncontrolling interest from acquisition	—		—			—		—			—			1,349			1,349
Distributions to noncontrolling interest	—		—			—		—			—			(3,107		)	(3,107		)
Redemptions	7		(1,048		)	(8	)	(84		)				(236		)	(1,368		)
Distributions declared ($2.0775 per unit)	—		(135,894		)	—		(4,772		)	—			—			(140,666		)
Balances at March 31, 2020	65,412		$	6,250,833		2,296		$	63,550		$	(19,519	)	$	123,085		$	6,417,949

10

	General Partner					Limited Partners					Accumulated other comprehensive loss			Noncontrolling interest			Total
	Common Equity					Common Equity
Three months ended March 31, 2019	Units		Amount			Units		Amount
Balances at December 31, 2018	65,890		$	6,280,290		2,305		$	59,061		$	(9,738	)	$	64,231		$	6,393,844
Net income	—		118,858			—		4,171			—			2,476			125,505
Reversal of unrealized losses upon the sale of marketable debt securities	—		—			—		—			33			—			33
Change in fair value of derivatives and amortization of swap settlements	—		—			—		—			(1,993		)	—			(1,993		)
Change in fair value of marketable debt securities, net	—		—			—		—			123			—			123
Issuance of common units under:
General partner's stock based compensation, net	51		3,204			—		—			—			—			3,204
Sale of common stock by general partner, net	—		(20		)	—		—			—			—			(20		)
Equity based compensation costs	—		2,301			3		299			—			—			2,600
Retirement of common units, net	(234	)	(56,989		)	—		—			—			—			(56,989		)
Cumulative effect upon adoption of ASU No. 2017-12	—		—			—		—			181			—			181
Changes in redemption value of redeemable noncontrolling interest	—		(3,027		)	—		(2		)	—			1,262			(1,767		)
Distributions to noncontrolling interest	—		—			—		—			—			(2,667		)	(2,667		)
Redemptions	9		(10,394		)	(9	)	(365		)	—			(1,454		)	(12,213		)
Distributions declared ($1.95 per unit)	—		(128,149		)	—		(4,497		)	—			—			(132,646		)
Balances at March 31, 2019	65,716		$	6,206,074		2,299		$	58,667		$	(11,394	)	$	63,848		$	6,317,195

See accompanying notes to the unaudited condensed consolidated financial statements.

11

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands, except parenthetical amounts)

	Three Months Ended March 31,
	2020			2019
Cash flows from operating activities:
Net income	$	328,765		$	125,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	131,559			120,568
Amortization of discount on marketable securities	(2,394		)	(5,311		)
Amortization of discount and debt financing costs, net	2,297			529
Loss on sale of marketable securities	13			58
Provision for credit losses	(50		)	—
Unrealized (gain) loss on equity securities recognized through income	8,696			(4,510		)
Earnings from co-investments	(21,297		)	(16,276		)
Operating distributions from co-investments	19,388			17,804
Accrued interest from notes and other receivables	(355		)	(1,424		)
Equity-based compensation	1,405			2,068
Gain on early retirement of debt, net	(321		)	(1,336		)
Gain on remeasurement of co-investment	(234,694		)	(31,535		)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets	(172		)	(4,730		)
Accounts payable, accrued liabilities, and operating lease liabilities	32,808			53,895
Other liabilities	1,278			454
Net cash provided by operating activities	266,926			255,759
Cash flows from investing activities:
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(458,302		)	(44,984		)
Redevelopment	(18,296		)	(14,157		)
Development acquisitions of and additions to real estate under development	(25,681		)	(39,306		)
Capital expenditures on rental properties	(17,151		)	(17,075		)
Collections of notes and other receivables	98,711			2,500
Proceeds from insurance for property losses	457			1,583
Contributions to co-investments	(21,905		)	(126,248		)
Changes in refundable deposits	96			5
Purchases of marketable securities	(10,731		)	(8,413		)
Sales and maturities of marketable securities	165			16,847
Non-operating distributions from co-investments	7,000			10,000
Net cash used in investing activities	(445,637		)	(219,248		)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	498,140			498,234
Payments on unsecured debt and mortgage notes	(102,563		)	(360,975		)
Proceeds from lines of credit	1,038,426			567,029
Repayments of lines of credit	(743,426		)	(567,029		)
Retirement of common units	(176,311		)	(56,989		)
Additions to deferred charges	(5,172		)	(5,445		)
Net proceeds from issuance of common units	(70		)	(20		)
Net proceeds from stock options exercised	14,329			6,699
Payments related to tax withholding for share-based compensation	(5,664		)	(3,495		)
Distributions to noncontrolling interest	(2,016		)	(1,959		)
Redemption of noncontrolling interests	(1,368		)	(12,213		)

12

	Three Months Ended March 31,
	2020			2019
Redemption of redeemable noncontrolling interests	—			(73		)
Common units distributions paid	(134,341		)	(127,544		)
Net cash provided by (used in) financing activities	379,964			(63,780		)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents	201,253			(27,269		)
Unrestricted and restricted cash and cash equivalents at beginning of period	81,094			151,395
Unrestricted and restricted cash and cash equivalents at end of period	$	282,347		$	124,126
Supplemental disclosure of cash flow information:
Cash paid for interest (net of $4.8 million and $5.9 million capitalized in 2020 and 2019, respectively)	$	52,487		$	41,914
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,715		$	1,694
Supplemental disclosure of noncash investing and financing activities:
Transfers between real estate under development and rental properties, net	$	131,841		$	—
Transfer from real estate under development to co-investments	$	824		$	313
Reclassifications (from) to redeemable noncontrolling interest to/from general and limited partner capital and noncontrolling interest	$	(4,767	)	$	1,767
Initial recognition of operating lease right-of-use assets	$	—		$	77,645
Initial recognition of operating lease liabilities	$	—		$	79,693

See accompanying notes to the unaudited condensed consolidated financial statements.

13

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

(1) Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. ("Essex" or the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2019.

All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2020 and 2019 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.6% general partnership interest as of both March 31, 2020 and December 31, 2019. Total Operating Partnership limited partnership units ("OP Units," and the holders of such OP Units, "Unitholders") outstanding were 2,296,043 and 2,301,653 as of March 31, 2020 and December 31, 2019, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $505.7 million and $692.5 million as of March 31, 2020 and December 31, 2019, respectively.

As of March 31, 2020, the Company owned or had ownership interests in 250 operating apartment communities, aggregating 60,770 apartment homes, excluding the Company’s ownership interest in preferred interest co-investments, loan investments, one operating commercial building, and a development pipeline comprised of four consolidated projects and two unconsolidated joint venture projects. The operating apartment communities are located in Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas.

Accounting Pronouncements Adopted in the Current Year

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13 "Measurement of Credit Losses on Financial Instruments," which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities, and other financial instruments. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Previously, U.S. GAAP required entities to write down credit losses only when losses were probable and loss reversals were not permitted. The FASB additionally issued various updates to clarify and amend the guidance provided in ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," which, with respect to credit losses, among other things, clarifies and addresses issues related to accrued interest, transfers between classifications of loans or debt securities, recoveries, and variable interest rates. Additionally, in May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," which allows entities to irrevocably elect the fair value option on certain financial instruments. The Company adopted ASU No. 2016-13, ASU No. 2019-04, and ASU No. 2019-05 as of January 1, 2020, using the modified retrospective approach by applying a cumulative effect adjustment of $0.2 million representing estimated accumulated credit losses to the opening balance of retained earnings.

In August 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which eliminates certain disclosure requirements affecting all levels of measurements, and modifies and adds new disclosure requirements for Level 3 measurements. The Company adopted ASU No. 2018-13 as of January 1, 2020. This adoption did not have a material impact on the Company's consolidated results of operations or financial position.

14

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

In March 2020, the FASB issued ASU No. 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Marketable Securities

The Company reports its equity securities and available for sale debt securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds, Level 2 for the unsecured bonds and Level 3 for investments in mortgage backed securities, as defined by the FASB standard for fair value measurements). As of March 31, 2020 and December 31, 2019, $3.2 million and $3.6 million, respectively, of equity securities presented within common stock and stock funds in the tables below, represent investments measured at fair value, using net asset value as a practical expedient, and are not categorized in the fair value hierarchy.

Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, interest income, and amortization of purchase discounts are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

As of March 31, 2020 and December 31, 2019, equity securities and available for sale debt securities consisted primarily of investment-grade unsecured bonds, U.S. treasury securities, common stock and stock funds. As of March 31, 2020 and December 31, 2019, the Company classified its mortgage backed security investment, which matures in September 2020, as held to maturity, and accordingly, this security is stated at its amortized cost. The discount on the mortgage backed security is being amortized to interest income based on an estimated yield and the maturity date of the security.

As of March 31, 2020 and December 31, 2019, marketable securities consist of the following ($ in thousands):

	March 31, 2020
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)			Carrying Value		Allowance for Credit Losses
Equity securities:
Investment funds - debt securities	$	29,685	$	(676	)	$	29,009
Common stock and stock funds	45,395		(4,549		)	40,846
Debt securities:
Available for sale
U.S. treasury securities	2,421		16			2,437		—
Investment-grade unsecured debt	1,050		(248		)	802		—
Held to maturity
Mortgage backed securities	75,045		—			75,045		13,644
Total - Marketable securities	$	153,596	$	(5,457	)	$	148,139	$	13,644

15

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

	December 31, 2019
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)		Carrying Value
Equity securities:
Investment funds - debt securities	$	29,588	$	544	$	30,132
Common stock and stock funds	34,941		2,927		37,868
Debt securities:
Available for sale
U.S. treasury securities	2,421		13		2,434
Investment-grade unsecured bonds	1,048		60		1,108
Held to maturity
Mortgage backed securities	72,651		—		72,651
Total - Marketable securities	$	140,649	$	3,544	$	144,193

The Company uses the specific identification method to determine the cost basis of a debt security sold and to reclassify amounts from accumulated other comprehensive income for such securities. 

For the three months ended March 31, 2020 and 2019, the proceeds from sales and maturities of marketable securities totaled $0.2 million and $16.8 million, respectively, which resulted in $13 thousand and $0.1 million in realized losses, respectively, for such periods.

For the three months ended March 31, 2020 and 2019, the portion of equity security unrealized losses or gains that were recognized in income totaled $8.7 million in losses and $4.5 million in gains, respectively, and were included in interest and other income (loss) on the Company's condensed consolidated statements of income and comprehensive income.

Unrealized losses on Investment-grade unsecured bonds as of March 31, 2020 have not been recognized into income because the debts of the issuers are of high credit quality, management does not intend to sell the securities, it is likely that the Company will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to other market conditions.

The Company monitors the credit quality of its held to maturity mortgage backed security through the review of remittance reports and individual loan watchlists, which are prepared quarterly and provide most recent debt service coverage ratios for each loan within the security, when available. The Company monitors such reports to determine the likelihood that a particular loan within the mortgage backed security may be foreclosed upon.

The Company measures the expected credit loss on its held to maturity mortgage backed security based on the present value of expected future cash flows, which takes into account current market conditions and available credit information obtained from the individual loans held within the mortgage backed security. The following table presents the allowance for credit losses rollforward for the mortgage backed security ($ in thousands):

Balance at December 31, 2019	$	—
Impact of adoption ASC 326 (1)	13,644
Provision for credit losses	—
Balance at March 31, 2020	$	13,644

16

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

⁽¹⁾ As part of the adoption of ASC 326, effective January 1, 2020, the Company recorded a gross up of the mortgage backed security and related allowance for credit losses of $13.6 million. This gross up had no effect on the Company's consolidated results of operations or financial position.

Variable Interest Entities

In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidated the Operating Partnership, 17 DownREIT entities (comprising nine communities), and six co-investments as of both March 31, 2020 and December 31, 2019. The Company consolidates these entities because it is deemed the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were approximately $1.1 billion and $348.9 million, respectively, as of March 31, 2020 and $1.0 billion and $364.3 million, respectively, as of December 31, 2019. Noncontrolling interests in these entities were $122.3 million and $122.5 million as of March 31, 2020 and December 31, 2019, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2020 and December 31, 2019, the Company did not have any VIEs of which it was not deemed to be the primary beneficiary.

Equity-based Compensation

The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, "Equity Based Compensation Plans," in the Company’s annual report on Form 10-K for the year ended December 31, 2019) are being amortized over the expected service periods.

Fair Value of Financial Instruments

Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of March 31, 2020 and December 31, 2019, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.5 billion and $5.2 billion at March 31, 2020 and December 31, 2019, respectively, was approximately $5.6 billion and $5.4 billion, respectively. Management has estimated that the fair value of the Company’s $955.3 million and $660.4 million of variable rate debt at March 31, 2020 and December 31, 2019, respectively, was approximately $949.2 million and $655.8 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of March 31, 2020 and December 31, 2019 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, are carried at fair value as of March 31, 2020 and December 31, 2019.

At March 31, 2020, the Company’s investment in its mortgage backed security had a carrying value of $75.0 million and the Company estimated the fair value to be approximately $75.1 million. At December 31, 2019, the Company’s investment in its mortgage backed security had a carrying value of $72.7 million and the Company estimated the fair value to be approximately $72.7 million. The Company determines the fair value of the mortgage backed security based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing this security. Assumptions such as estimated default rates and discount rates are used to determine the expected, discounted cash flows to estimate fair value.

Capitalization of Costs

The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $9.9 million and $10.7 million during the three months ended March 31, 2020 and 2019, respectively. The Company capitalizes leasing commissions associated with the lease-up of development

17

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented.

Co-investments

The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of income equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments.

Changes in Accumulated Other Comprehensive Loss, Net by Component

Essex Property Trust, Inc.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(13,989	)	$	101		$	(13,888	)
Other comprehensive loss before reclassification	(7,178		)	(294		)	(7,472		)
Amounts reclassified from accumulated other comprehensive loss	(1,308		)	—			(1,308		)
Other comprehensive loss	(8,486		)	(294		)	(8,780		)
Balance at March 31, 2020	$	(22,475	)	$	(193	)	$	(22,668	)

Changes in Accumulated Other Comprehensive Loss, by Component

Essex Portfolio, L.P.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(10,536	)	$	104		$	(10,432	)
Other comprehensive loss before reclassification	(7,429		)	(305		)	(7,734		)
Amounts reclassified from accumulated other comprehensive loss	(1,353		)	—			(1,353		)
Other comprehensive loss	(8,782		)	(305		)	(9,087		)
Balance at March 31, 2020	$	(19,318	)	$	(201	)	$	(19,519	)

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

Redeemable Noncontrolling Interest

The carrying value of redeemable noncontrolling interest in the accompanying condensed consolidated balance sheets was $32.6 million and $37.4 million as of March 31, 2020 and December 31, 2019, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances.

The changes to the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2020 is as follows ($ in thousands):

Balance at December 31, 2019	$	37,410
Reclassification due to change in redemption value and other	(4,767		)
Redemptions	—
Balance at March 31, 2020	$	32,643

Cash, Cash Equivalents and Restricted Cash

Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):

	March 31, 2020		December 31, 2019		March 31, 2019		December 31, 2018
Cash and cash equivalents - unrestricted	$	271,877	$	70,087	$	107,034	$	134,465
Cash and cash equivalents - restricted	10,470		11,007		17,092		16,930
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows	$	282,347	$	81,094	$	124,126	$	151,395

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a real estate investment trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

(2)  Significant Transactions During The Three Months Ended March 31, 2020 and Subsequent Events

Significant Transactions

Acquisitions

In January 2020, the Company purchased Canada Pension Plan Investment Board's ("CPPIB") 45.0% interest in each of a land parcel and six communities totaling 2,020 apartment homes, valued at $1.0 billion on a gross basis. As a result of this acquisition, the Company realized a gain on remeasurement of co-investment of $234.7 million. Furthermore, the Company

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

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Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

recognized $6.5 million in promote income as a result of the transaction, which is included in equity income from co-investments on the condensed consolidated statements of income and comprehensive income.

Co-Investments

Preferred Equity Investments

In the first quarter of 2020, the Company originated two preferred equity investments totaling $91.4 million in two multifamily communities located in California. The investments have a weighted average initial return of 11.3% with most of the proceeds expected to fund in late 2020 and early 2021.

In March 2020, the Company received cash of $11.3 million, including an early redemption fee of $0.2 million, for the partial redemption of a preferred equity investment in a joint venture that holds property located in Los Angeles, CA.

Notes Receivable

In January 2020, the Company received cash of $16.9 million for the full redemption of a mezzanine loan in a property located in Anaheim, CA.

In January 2020, the Company received $85.8 million for the payoff of a related party bridge loan to Wesco V, LLC ("Wesco V"). See Note 6, Related Party Transactions, for additional details.

In March 2020, the Company committed to fund an investment in mezzanine loans totaling $15.0 million as part of the development of a multifamily community located in Los Angeles, CA. The investment has an initial 10.5% interest rate and maturity date of February 2023, with options to extend for up to two years. As of March 31, 2020, the Company had not funded this commitment.

Common Stock

During the three months ended March 31, 2020, the Company repurchased and retired 776,261 shares totaling $176.3 million, including commissions. As of March 31, 2020, the Company had $73.7 million of purchase authority remaining under its $250.0 million stock repurchase plan.

Senior Unsecured Debt

In February 2020, the Operating Partnership issued $500.0 million of senior unsecured notes due on March 15, 2032 with a coupon rate of 2.650% per annum (the "2032 Notes"), which are payable on March 15 and September 15 of each year, beginning on September 15, 2020. The 2032 Notes were offered to investors at a price of 99.628% of par value. The 2032 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are unconditionally guaranteed by Essex. The Company used the net proceeds of this offering to repay indebtedness under its unsecured lines of credit, which had been used to fund the buyout of CPPIB's 45.0% joint venture interests discussed above, as well as repay $100.3 million of secured debt during the quarter.

Subsequent Events

In April 2020, the Company obtained a $200.0 million unsecured term loan with a one-year maturity and two 12-month extension options, exercisable at the Company’s option. The unsecured term loan bears a variable interest rate of LIBOR plus 1.20% and the proceeds will be used to repay all remaining consolidated debt maturing in 2020, of which $169.6 million was prepaid in April 2020.

During and subsequent to the first quarter of 2020, the world is experiencing an unprecedented health pandemic related to a novel coronavirus, COVID-19, creating unprecedented and extraordinary global economic distress, uncertainty and volatility. The extent to which COVID-19 impacts the Company's business, operations and financial results cannot be predicted and will depend on numerous current and evolving factors that the Company is not able to predict or anticipate at this time.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

(3)  Revenues

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Rental income	$	383,498	$	347,805
Other property	6,252		6,083
Management and other fees from affiliates	2,617		2,335
Total revenues	$	392,367	$	356,223

The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Southern California	$	155,642	$	151,463
Northern California	164,079		136,745
Seattle Metro	63,844		60,413
Other real estate assets (1)	6,185		5,267
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Other real estate assets consists of revenues generated from retail space, commercial properties, held for sale properties, and disposition properties.

The following table presents the Company’s rental and other property revenues disaggregated by current property category status ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Same-property (1)	$	346,456	$	335,658
Acquisitions (2)	21,924		987
Development (3)	4,075		1,158
Redevelopment	5,401		5,229
Non-residential/other, net (4)	11,894		10,856
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Properties that have comparable stabilized results as of January 1, 2019 and are consolidated by the Company for the three months ended March 31, 2020 and 2019. A community is generally considered to have reached stabilized operations once it achieves an initial occupancy of 90%.

⁽²⁾ Acquisitions includes properties acquired which did not have comparable stabilized results as of January 1, 2019.

⁽³⁾ Development includes properties developed which did not have stabilized results as of January 1, 2019.

⁽⁴⁾ Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, and three communities located in the California counties of Riverside, Santa Barbara, and Santa Cruz, which the Company does not consider its core markets.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

Deferred Revenues and Remaining Performance Obligations

When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $3.7 million and $3.9 million as of March 31, 2020 and December 31, 2019, respectively, and was included in accounts payable and accrued liabilities within the accompanying condensed consolidated balance sheets. The amount of revenue recognized for the three months ended March 31, 2020 that was included in the December 31, 2019 deferred revenue balance was $0.2 million, which was included in interest and other income (loss) within the condensed consolidated statements of income and comprehensive income.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the revenue recognition accounting standard. As of March 31, 2020, the Company had $3.7 million of remaining performance obligations. The Company expects to recognize approximately 15% of these remaining performance obligations in 2020, an additional 40% through 2022, and the remaining balance thereafter.

(4) Co-investments

The Company has joint ventures and preferred equity investments in co-investments which are accounted for under the equity method. The co-investments, including BEXAEW, BEX II, BEX III, and BEX IV, Wesco I, LLC ("Wesco I"), Wesco III, LLC ("Wesco III"), Wesco IV, LLC ("Wesco IV"), and Wesco V, own, operate, and develop apartment communities. The carrying values of the Company's co-investments as of March 31, 2020 and December 31, 2019 are as follows ($ in thousands, except parenthetical amounts):

	Weighted Average Company Ownership Percentage (1)		3/31/2020		12/31/2019
Ownership interest in:
CPPIB (2)	—	%	$	—	$	345,466
Wesco I, Wesco III, Wesco IV, and Wesco V	51	%	209,742		216,756
BEXAEW, BEX II, BEX III, and BEX IV	50	%	156,869		160,888
Other	48	%	21,023		20,351
Total operating and other co-investments, net			387,634		743,461
Total predevelopment and development co-investments	50	%	158,145		146,944
Total preferred interest co-investments (includes related party investments of $75.3 million and $73.2 million as of March 31, 2020 and December 31, 2019, respectively)			451,358		444,934
Total co-investments, net			$	997,137	$	1,335,339

⁽¹⁾ Weighted average Company ownership percentages are as of March 31, 2020.

⁽²⁾ In January 2020, the Company purchased CPPIB's 45.0% interest in each of a land parcel and six communities totaling 2,020 apartment homes.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

The combined summarized financial information of co-investments is as follows ($ in thousands):

	3/31/2020		12/31/2019
Combined balance sheets: (1)
Rental properties and real estate under development	$	4,287,101	$	4,733,762
Other assets	158,145		139,562
Total assets	$	4,445,246	$	4,873,324
Debt	$	2,522,407	$	2,442,213
Other liabilities	181,761		117,160
Equity	1,741,078		2,313,951
Total liabilities and equity	$	4,445,246	$	4,873,324
Company's share of equity	$	997,137	$	1,335,339

	Three Months Ended March 31,
	2020			2019
Combined statements of income: (1)
Property revenues	$	77,369		$	83,725
Property operating expenses	(25,715		)	(28,719		)
Net operating income	51,654			55,006
Interest expense	(20,853		)	(15,115		)
General and administrative	(4,083		)	(1,928		)
Depreciation and amortization	(28,437		)	(29,935		)
Net income (loss)	$	(1,719	)	$	8,028
Company's share of net income (2)	$	21,297		$	16,276

⁽¹⁾ Includes preferred equity investments held by the Company.

⁽²⁾ Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $2.1 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively.

(5) Notes and Other Receivables

Notes and other receivables consist of the following as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020			December 31, 2019
Note receivable, secured, bearing interest at 9.00%, due May 2021 (Originated May 2017) (1)	$	—		$	16,828
Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018)	13,168			12,838
Related party note receivable, secured, bearing variable rate interest, due February 2020 (Originated November 2019) (2)(3)	—			85,713
Notes and other receivables from affiliates (4)	7,700			4,442
Other receivables	14,065			14,544
Allowance for credit losses	(66		)	—
Total notes and other receivables	$	34,867		$	134,365

⁽¹⁾ In January 2020, the Company received cash of $16.9 million from the payoff of this note receivable.

⁽²⁾ See Note 6, Related Party Transactions, for additional details.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

⁽³⁾ In January 2020, the Company received cash of $85.8 million from the payoff of this note receivable.

⁽⁴⁾ These amounts consist of short-term loans outstanding and due from various joint ventures as of March 31, 2020 and December 31, 2019. See Note 6, Related Party Transactions, for additional details.

In the normal course of business, the Company originates and holds two types of loans: mezzanine loans issued to entities that are pursuing apartment development and short-term bridge loans issued to joint ventures with the Company.

The Company categorizes development project mezzanine loans into risk categories based on relevant information about the ability of the borrowers to service their debt, such as: current financial information, credit documentation, public information, and previous experience with the borrower. The Company initially analyzes each mezzanine loan individually to classify the credit risk of the loan. On a periodic basis the Company evaluates and performs site visits of the development projects associated with the mezzanine loans to confirm whether they are on budget and whether there are any delays in development that could impact the Company's assessment of credit loss.

All bridge loans that the Company issues are, by their nature, short-term and meant only to provide time for the Company’s joint ventures to obtain long-term funding for newly acquired communities. As the Company is a partner in the joint ventures that are borrowing such funds and has performed a detailed review of each community as part of the acquisition process, there is little to no credit risk associated with such loans. As such, the Company does not review credit quality indicators for bridge loans on an ongoing basis.

The Company estimates the allowance for credit losses for each loan type using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made, if necessary, for differences in current loan-specific risk characteristics. For example, in the case of mezzanine loans, adjustments may be made due to differences in track record and experience of the mezzanine loan sponsor as well as the percent of equity that the sponsor has contributed to the project. The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands):

	Mezzanine Loans			Bridge Loans			Total
Balance at December 31, 2019	$	—		$	—		$	—
Impact of adoption ASC 326	147			43			190
Provision for credit losses	(81		)	(43		)	(124		)
Balance at March 31, 2020	$	66		$	—		$	66

No loans were placed on nonaccrual status or charged off during the three months ended March 31, 2020 or 2019.

(6) Related Party Transactions

The Company charges certain fees relating to its co-investments for asset management, property management, development and redevelopment services. These fees from affiliates totaled $3.1 million and $3.4 million during the three months ended March 31, 2020 and 2019, respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of $0.4 million and $1.1 million against general and administrative expenses for the three months ended March 31, 2020 and 2019, respectively.

The Company’s Chairman and founder, Mr. George M. Marcus, is the Chairman of the Marcus & Millichap Company ("MMC"), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Co-Chairman of Marcus & Millichap, Inc. ("MMI"), and Mr. Marcus owns a controlling interest in MMI, a national brokerage firm listed on the New York Stock Exchange. For the three months ended March 31, 2020, the Company paid brokerage commissions totaling $0.2 million to MMC and its affiliates related to real estate transactions.

In November 2019, the Company provided an $85.5 million related party bridge loan to Wesco V in connection with the acquisition of Velo and Ray. The note receivable accrued interest at LIBOR plus 1.30% and was scheduled to mature in

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

February 2020, but was paid off in January 2020. The bridge loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

In August 2019, the Company provided an $89.0 million related party bridge loan to Wesco V in connection with the acquisition of The Courtyards at 65th Street. The note receivable accrued interest at LIBOR plus 1.30% and was paid off in November 2019.

In August 2019, the Company provided a $44.4 million related party bridge loan to BEX IV in connection with the acquisition of 777 Hamilton. The note receivable accrued interest at 3.25%. In November 2019, the term of the bridge loan was extended to

February 2020, but was paid off in December 2019.

In June 2019, the Company acquired Brio, a 300 unit apartment home community located in Walnut Creek, CA. The Company issued DownREIT units to an affiliate of MMC, based on a contract price of $164.9 million. The property was encumbered by $98.7 million of mortgage debt which was assumed by the Company at the time of acquisition. As a result of this transaction, the Company consolidated the property, based on a VIE analysis performed by the Company.

In February 2019, the Company funded a $24.5 million preferred equity investment in an entity whose sponsor is an affiliate of MMC, which owns a multifamily development community located in Mountain View, CA. The investment has an initial preferred return of 11.0% and is scheduled to mature in February 2024.

In October 2018, the Company funded a $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268 apartment home community development located in Burlingame, CA. This investment accrues interest based on an initial 12.0% preferred return. The investment is scheduled to mature in April 2024.

In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400 apartment home community located in Ventura, CA. This investment accrues interest based on a 10.25% preferred return. The investment is scheduled to mature in May 2023. As of March 31, 2020, the Company had funded $22.9 million of the commitment. The remaining committed amount will be funded if and when requested by the sponsors.

In November 2016, the Company provided a $6.6 million mezzanine loan to a limited liability company in which MMC holds a significant ownership interest through subsidiaries. The mezzanine loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets and was paid off in October 2019.

In 2015, the Company made preferred equity investments totaling $20.0 million in three entities affiliated with MMC that own apartment communities in California. The Company earned a 9.5% preferred return on each such investment. One $5.0 million investment, which was scheduled to mature in 2022, was fully redeemed in 2017. Another $5.0 million investment, which was scheduled to mature in 2022, was fully redeemed in 2018. The remaining investment was fully redeemed in February 2019.

As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of March 31, 2020 and December 31, 2019, $7.7 million and $4.4 million, respectively, of short-term loans remained outstanding due from joint venture affiliates and is classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

(7) Debt

Essex does not have indebtedness as debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities.

25

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

Debt consists of the following ($ in thousands):

	March 31, 2020			December 31, 2019			Weighted Average Maturity In Years as of March 31, 2020
Unsecured bonds private placement - fixed rate	$	199,852		$	199,820		1.2
Term loan - variable rate	349,287			349,189			1.9
Bonds public offering - fixed rate	4,709,124			4,214,197			7.7
Unsecured debt, net (1)	5,258,263			4,763,206
Lines of credit (2)	350,000			55,000
Mortgage notes payable, net (3)	887,389			990,667			7.9
Total debt, net	$	6,495,652		$	5,808,873
Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering	3.7		%	3.8		%
Weighted average interest rate on variable rate term loan	2.7		%	2.7		%
Weighted average interest rate on lines of credit	2.4		%	2.5		%
Weighted average interest rate on mortgage notes payable	4.1		%	4.1		%

⁽¹⁾ Includes unamortized discount of $14.1 million and $12.2 million and unamortized debt issuance costs of $27.6 million and $24.5 million, as of March 31, 2020 and December 31, 2019, respectively.

⁽²⁾ Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of March 31, 2020, excludes unamortized debt issuance costs of $4.5 million and $3.8 million as of March 31, 2020 and December 31, 2019, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of March 31, 2020, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of December 2023 with one 18-month extension, exercisable at the Company’s option. As of March 31, 2020, the Company’s $35.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings, and a scheduled maturity date of February 2021.

⁽³⁾ Includes total unamortized premium of $5.0 million and $5.9 million, reduced by unamortized debt issuance costs of $2.4 million and $2.6 million, as of March 31, 2020 and December 31, 2019, respectively.

The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit, as of March 31, 2020 are as follows ($ in thousands):

Remaining in 2020	$	185,493
2021	531,653
2022	693,188
2023	602,945
2024	403,109
Thereafter	3,768,383
Total	$	6,184,771

(8) Segment Information

The Company's segment disclosures present the measure used by the chief operating decision makers for purposes of assessing each segment's performance. The Company's chief operating decision makers are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company's reportable operating segments. NOI represents total property revenues less direct property operating expenses.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

The executive management team generally evaluates the Company's operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California, and Seattle Metro.

Excluded from segment revenues and NOI are management and other fees from affiliates and interest and other income (loss). Non-segment revenues and NOI included in the following schedule also consist of revenues generated from commercial properties and properties that have been sold. Other non-segment assets include items such as real estate under development, co-investments, real estate held for sale, net, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets.

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2020 and 2019 ($ in thousands):

	Three Months Ended March 31,
	2020			2019
Revenues:
Southern California	$	155,642		$	151,463
Northern California	164,079			136,745
Seattle Metro	63,844			60,413
Other real estate assets	6,185			5,267
Total property revenues	$	389,750		$	353,888
Net operating income:
Southern California	$	111,097		$	107,996
Northern California	120,981			101,214
Seattle Metro	44,993			41,699
Other real estate assets	5,536			4,939
Total net operating income	282,607			255,848
Management and other fees from affiliates	2,617			2,335
Corporate-level property management expenses	(8,759		)	(8,429		)
Depreciation and amortization	(131,559		)	(120,568		)
General and administrative	(13,982		)	(13,459		)
Expensed acquisition and investment related costs	(87		)	(32		)
Interest expense	(55,147		)	(53,643		)
Total return swap income	1,984			2,045
Interest and other income (loss)	(5,221		)	12,261
Equity income from co-investments	21,297			16,276
Gain on early retirement of debt, net	321			1,336
Gain on remeasurement of co-investment	234,694			31,535
Net income	$	328,765		$	125,505

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020		December 31, 2019
Assets:
Southern California	$	4,198,656	$	4,233,110
Northern California	5,748,062		4,622,268
Seattle Metro	1,469,297		1,481,061
Other real estate assets	12,103		12,221
Net reportable operating segment - real estate assets	11,428,118		10,348,660
Real estate under development	435,865		546,075
Co-investments	997,137		1,335,339
Cash and cash equivalents, including restricted cash	282,347		81,094
Marketable securities	148,139		144,193
Notes and other receivables	34,867		134,365
Operating lease right-of-use assets	74,428		74,744
Prepaid expenses and other assets	49,940		40,935
Total assets	$	13,450,841	$	12,705,405

(9) Net Income Per Common Share and Net Income Per Common Unit

($ in thousands, except share and unit data):

Essex Property Trust, Inc.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	315,006	66,043,831	$	4.77	$	118,858	65,702,788	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common stockholders	$	315,202	66,195,415	$	4.76	$	118,858	65,783,869	$	1.81

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,300,181 and 2,305,064, which include vested Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended March 31, 2020 and 2019, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $11.0 million and $4.2 million for the three months ended March 31, 2020 and 2019, respectively. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive.

Essex Portfolio, L.P.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	325,992	68,344,012	$	4.77	$	123,029	68,007,852	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common unitholders	$	326,188	68,495,596	$	4.76	$	123,029	68,088,933	$	1.81

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the period ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

(10) Derivative Instruments and Hedging Activities

As of March 31, 2020, the Company had entered into interest rate swap contracts with an aggregate notional amount of $175.0 million that effectively fixed the interest rate on the $175.0 million unsecured term loan at 2.3%. These derivatives qualify for hedge accounting.

As of March 31, 2020 and December 31, 2019, the aggregate carrying value of the interest rate swap contracts was an asset of zero and $1.0 million, respectively, and is included in prepaid expenses and other assets on the condensed consolidated balance sheets, and a liability of $3.4 million and $0.2 million, respectively, and is included in other liabilities on the consolidated balance sheet.

Hedge ineffectiveness related to cash flow hedges, which is included in interest expense on the condensed consolidated statements of income and comprehensive income, was not significant for the three months ended March 31, 2020 and 2019.

Additionally, the Company has four total return swap contracts, with an aggregate notional amount of $255.3 million, that effectively convert $255.3 million of mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index ("SIFMA") plus a spread. The total return swaps provide fair market value protection on the mortgage notes payable to the counterparties during the initial period of the total return swap until the Company's option to call the mortgage notes at par can be exercised. The Company can currently call all of its total return swaps, with $255.3 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting and had a carrying and fair value of zero at both March 31, 2020 and December 31, 2019. These total return swaps are scheduled to mature between September 2021 and November 2022. The realized gains of $2.0 million and $2.0 million for the three months ended March 31, 2020 and 2019, respectively, were reported in the condensed consolidated statements of income and comprehensive income as total return swap income.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2020 and 2019

(Unaudited)

(11) Commitments and Contingencies

The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits have not had a material adverse effect on the Company's financial condition, results of operations or cash flows. While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company.

The Company is subject to various federal, state, and local environmental and other laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current portfolio or on other assets that the Company may acquire in the future, including, without limitation, certain eviction moratoriums and other mandates that have been, or may be, taken in connection with the COVID-19 pandemic. To the extent that an environmental or other matter arises or is identified in the future that has other than a remote risk of having a material impact on the condensed consolidated financial statements, the Company will disclose the estimated range of possible outcomes associated with it, and, if an outcome is probable, accrue an appropriate liability for that matter. The Company will consider whether any such matter results in an impairment of value on the affected property and, if so, impairment will be recognized.

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Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with the Company’s 2019 annual report on Form 10-K for the year ended December 31, 2019. Capitalized terms not defined in this section have the meaning ascribed to them elsewhere in this Quarterly Report on Form 10-Q. The Company makes statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-Q entitled "Forward-Looking Statements."

Essex is a self-administered and self-managed REIT that acquires, develops, redevelops, and manages apartment communities in selected residential areas located on the West Coast of the United States. Essex owns all of its interests in its real estate investments, directly or indirectly through the Operating Partnership. Essex is the sole general partner of the Operating Partnership and, as of March 31, 2020, had an approximately 96.6% general partnership interest in the Operating Partnership.

The Company’s investment strategy has two components: constant monitoring of existing markets, and evaluation of new markets to identify areas with the characteristics that underlie rental growth. The Company’s strong financial condition supports its investment strategy by enhancing its ability to quickly shift acquisition, development, redevelopment, and disposition activities to markets that will optimize the performance of the portfolio.

As of March 31, 2020, the Company owned or had ownership interests in 250 operating apartment communities, comprising 60,770 apartment homes, excluding the Company’s ownership interest in preferred equity co-investments, loan investments, one operating commercial building, and a development pipeline comprised of four consolidated projects and two unconsolidated joint venture projects. 

The Company’s apartment communities are located in the following major regions:

Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties)

Northern California (the San Francisco Bay Area)

Seattle Metro (Seattle metropolitan area)

As of March 31, 2020, the Company’s development pipeline was comprised of four consolidated projects under development, two unconsolidated joint venture projects under development, and various predevelopment projects aggregating 1,761 apartment homes, with total incurred costs of $963.0 million, and estimated remaining project costs of approximately $168.0 million, $151.0 million of which represents the Company's share of estimated remaining costs, for total estimated project costs of $1.1 billion.

The Company’s consolidated apartment communities are as follows:

	As of March 31, 2020			As of March 31, 2019
	Apartment Homes	%		Apartment Homes	%
Southern California	22,675	43	%	22,674	46	%
Northern California	19,748	37	%	16,449	33	%
Seattle Metro	10,343	20	%	10,238	21	%
Total	52,766	100	%	49,361	100	%

Co-investments, including Wesco I, Wesco III, Wesco IV, Wesco V, Canada Pension Plan Investment Board ("CPPIB"), BEXAEW, BEX II, BEX III, and BEX IV communities, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.

Current Material Development – the COVID-19 Pandemic

The United States and other countries around the world are experiencing an unprecedented health pandemic related to COVID-19, which has created considerable instability, disruption, and uncertainty. Governmental authorities in impacted regions are taking increasingly dramatic action in an effort to slow COVID-19’s spread. Federal, state and local jurisdictions have issued varying forms of "Shelter-in-Place" orders, halted public gatherings and restricted business functions outside of one’s home to only those that are considered "essential", resulting in extraordinary job losses and related financial impacts that will affect future operations to an unknown extent. Moreover, eviction moratoriums have been enacted in various formats at

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various levels of government, including regions in which Essex's communities are located, impacting Essex properties. The Company is working to comply with the stated intent of local, county, state and federal laws.  In that regard, the Company has implemented a wide range of practices to protect and support its employees and residents. Such measures include closing the Company's corporate offices and instituting “work from home” measures for corporate associates, closing leasing offices to non-Essex personnel and reducing on-site staff to essential functions so that hygiene and “social distancing” standards can be effectively managed and applied. The Company has transitioned most interactions with leasing staff to on-line and telephonic communications. In addition, common areas and community amenities, such as gyms and pools, have been temporarily closed and community sanitation and cleaning practices have increased. Response to maintenance work orders are limited mostly to emergencies only. Due to the COVID-19 pandemic, the Company's residents, their health, their employment, and, thus, their ability to pay rent, may be impacted. To support residents, as of March 23, 2020, the Company announced that it will, among other things:

• halt evictions for 90 days for residents who have been financially impacted by the COVID-19 pandemic, such as job loss, reduction of work hours, business closure, furlough or layoff;

• avoid rent increases for 90 days by offering lease renewals with no rent increase; and

• create payment plans for residents who are unable to pay their rent as a result of the outbreak and waive late fees for those residents.

The impact of the COVID-19 pandemic on the U.S. and world economies generally, and on the Company's future results in particular, could be significant and will largely depend on future developments, which are highly uncertain and cannot be predicted. This includes new information which may emerge concerning the severity of COVID-19, the success of actions taken to contain or treat COVID-19, future laws that may be enacted, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.

As a result of the impact of the COVID-19 pandemic, the Company's average financial occupancy for the Company’s stabilized apartment communities or "Same-Property" (stabilized properties consolidated by the Company for the quarters ended March 31, 2020 and 2019) portfolio decreased from 96.7% for April 2019 to 95.4% for April 2020. Furthermore, cash delinquencies as a percentage of scheduled rental income for the Company's Same-Property portfolio increased from 0.4% for April 2019 to 5.0% for April 2020. The Company is currently in the process of creating payment plans related to such April 2020 cash delinquencies. As part of this process, the Company will assess a collectability reserve attributable to those deferred payments which is expected to partially mitigate the April 2020 delinquencies.

Comparison of the Three Months Ended March 31, 2020 to the Three Months Ended March 31, 2019

The Company’s average financial occupancy for the Company’s Same-Property portfolio was 96.8% and 96.9% for the three months ended March 31, 2020 and 2019, respectively. Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. The Company believes that financial occupancy is a meaningful measure of occupancy because it considers the value of each vacant apartment home at its estimated market rate.

Market rates are determined using the recently signed effective rates on new leases at the property and are used as the starting point in the determination of the market rates of vacant apartment homes. The Company may increase or decrease these rates based on a variety of factors, including overall supply and demand for housing, concentration of new apartment deliveries within the same submarket which can cause periodic disruption due to greater rental concessions to increase leasing velocity, and rental affordability. Financial occupancy may not completely reflect short-term trends in physical occupancy and financial occupancy rates, and the Company's calculation of financial occupancy may not be comparable to financial occupancy disclosed by other REITs.

The Company does not take into account delinquency and concessions to calculate actual rent for occupied apartment homes and market rents for vacant apartment homes. The calculation of financial occupancy compares contractual rates for occupied apartment homes to estimated market rents for unoccupied apartment homes, and thus the calculation compares the gross value of all apartment homes excluding delinquency and concessions. For apartment communities that are development properties in lease-up without stabilized occupancy figures, the Company believes the physical occupancy rate is the appropriate performance metric. While an apartment community is in the lease-up phase, the Company’s primary motivation is to stabilize the property which may entail the use of rent concessions and other incentives, and thus financial occupancy, which is based on contractual income, is not considered the best metric to quantify occupancy.

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The regional breakdown of the Company’s Same-Property portfolio for financial occupancy for the three months ended March 31, 2020 and 2019 is as follows:

	Three Months Ended March 31,
	2020		2019
Southern California	96.6	%	96.8	%
Northern California	96.9	%	97.1	%
Seattle Metro	96.9	%	96.9	%

The following table provides a breakdown of revenues amounts, including revenues attributable to the Same-Properties:

	Number of Apartment	Three Months Ended March 31,				Dollar		Percentage
Property Revenues ($ in thousands)	Homes	2020		2019		Change		Change
Same-Property Revenues:
Southern California	21,354	$	147,521	$	143,584	$	3,937	2.7	%
Northern California	15,755	135,704		131,661		4,043		3.1	%
Seattle Metro	10,238	63,231		60,413		2,818		4.7	%
Total Same-Property Revenues	47,347	346,456		335,658		10,798		3.2	%
Non-Same Property Revenues		43,294		18,230		25,064		137.5	%
Total Property Revenues		$	389,750	$	353,888	$	35,862	10.1	%

Same-Property Revenues increased by $10.8 million or 3.2% to $346.5 million in the first quarter of 2020 from $335.7 million in the first quarter of 2019. The increase was primarily attributable to an increase of 3.1% in average rental rates from $2,288 per apartment home in the first quarter of 2019 to $2,360 per apartment home in the first quarter of 2020. 

Non-Same Property Revenues increased by $25.1 million or 137.5% to $43.3 million in the first quarter of 2020 from $18.2 million in the first quarter of 2019. The increase was primarily due to revenues generated from the six communities that were consolidated as part of the Company's purchase of CPPIB's 45.0% co-investment interests in the first quarter of 2020.

Management and other fees from affiliates increased by $0.3 million or 13.0% to $2.6 million in the first quarter of 2020 compared to $2.3 million in the first quarter of 2019. The increase was primarily due to the addition of The Courtyards at 65th Street, 777 Hamilton, and Velo and Ray communities to the Company's joint venture portfolio in 2019, offset slightly by the disposition of Mosso joint venture community in the fourth quarter of 2019, and by the consolidation of six communities as part of the Company's purchase of CPPIB's 45.0% co-investment interests.

Property operating expenses, excluding real estate taxes increased $5.5 million or 9.4% to $64.1 million for the first quarter of 2020 compared to $58.6 million for the first quarter of 2019 primarily due to an increase of $2.2 million in maintenance and repairs expenses, an increase of $1.7 million in utilities expenses, and an increase of $1.6 million in administrative expenses. Same-Property operating expenses, excluding real estate taxes, increased by $1.3 million or 2.3% to $57.7 million in the first quarter of 2020 compared to $56.4 million in the first quarter of 2019, primarily due to an increase of $0.7 million in maintenance and repairs expenses and an increase of $0.3 million in utilities expenses.

Real estate taxes increased $3.6 million or 9.1% to $43.0 million for the first quarter of 2020 compared to $39.4 million for the first quarter of 2019, primarily due to the additions of six communities that were consolidated in the first quarter of 2020 as part of the Company's purchase of CPPIB's 45.0% co-investment interests. Same-Property real estate taxes remained relatively flat at $37.0 million in the first quarter of 2020 compared to the first quarter of 2019.

Corporate-level property management expenses increased $0.4 million or 4.8% to $8.8 million in the first quarter of 2020 compared to $8.4 million in the first quarter of 2019, primarily due to an increase in corporate-level property management and staffing costs supporting the communities.

Depreciation and amortization expense increased by $11.0 million or 9.1% to $131.6 million for the first quarter of 2020 compared to $120.6 million for the first quarter of 2019, primarily due to the additions of six communities that were consolidated in the first quarter of 2020 as part of the Company's purchase of CPPIB's 45.0% co-investment interests.

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Interest expense increased by $1.5 million or 2.8% to $55.1 million for the first quarter of 2020 compared to $53.6 million for the first quarter of 2019, primarily due to an increase in average outstanding debt primarily as a result of the issuance of $500.0 million of senior unsecured notes due March 1, 2029 in February and March 2019, $550.0 million of senior unsecured notes due January 15, 2030 in August and October 2019, and $500 million of senior unsecured notes due March 15, 2032 in February 2020, which resulted in an increase of $11.0 million interest expense for the first quarter of 2020. Additionally, there was a $1.1 million decrease in capitalized interest in the first quarter of 2020, due to a decrease in development activity as compared to the same period in 2019. These increases to interest expense were partially offset by debt that was paid off or matured, as well as regular principal amortization during and after the first quarter of 2019, which resulted in a decrease in interest expense of $10.6 million for the first quarter of 2019.

Total return swap income of $2.0 million in the first quarter of 2020 consists of monthly settlements related to the Company's total return swap contracts that were entered into during 2015 in connection with issuing fixed rate tax-exempt mortgage notes.

Interest and other income (loss) decreased by $17.5 million or 142.3% to $5.2 million in loss for the first quarter of 2020 compared to $12.3 million in income for the first quarter of 2019, primarily due to a decrease from unrealized gains (losses) on marketable securities of $13.2 million and a decrease of $4.1 million in marketable securities and other income.

Equity income from co-investments increased by $5.0 million or 30.7% to $21.3 million for the first quarter of 2020 compared to $16.3 million for the first quarter of 2019, primarily due to an increase of $5.6 million in promote income, and an increase of $1.6 million in income from preferred equity investments. The increase was partially offset by a $1.9 million decrease in equity income from co-investments.

Gain on early retirement of debt, net of $0.3 million for the first quarter of 2020 was primarily due to early repayment of $100.3 million secured mortgage notes payable in the first quarter of 2020.

Gain on remeasurement of co-investment of $234.7 million in the first quarter of 2020 resulted from the Company's purchase of CPPIB's 45.0% co-investment interests.

Liquidity and Capital Resources

The United States and other countries around the world are experiencing an unprecedented health pandemic related to COVID-19, which has created considerable instability and disruption in the U.S. and world economies. Governmental authorities in affected regions are taking increasingly dramatic action in an effort to slow down the spread of the disease.

As of March 31, 2020, the Company had $271.9 million of unrestricted cash and cash equivalents and $148.1 million in marketable securities, of which $73.1 million were equity securities or available for sale debt securities. The Company believes that cash flows generated by its operations, existing cash and cash equivalents, marketable securities balances, availability under existing lines of credit, access to capital markets and the ability to generate cash from the disposition of real estate are sufficient to meet all of its reasonably anticipated cash needs during the next twelve months. Due to the COVID-19 pandemic and related economic disruptions, the Company anticipates that it may be required to augment decreased cash flows from operations with its cash reserves, lines of credit, or decreased investment in redevelopment activities and it expects to carefully monitor and manage its cash position in light of ongoing conditions and levels of operations. The timing, source and amounts of cash flows provided by financing activities and used in investing activities are sensitive to changes in interest rates and other fluctuations in the capital markets environment, which can affect the Company's plans for acquisitions, dispositions, development and redevelopment activities.

As of March 31, 2020, Fitch Ratings, Moody’s Investor Service, and Standard and Poor's credit agencies rated the Company and the Operating Partnership, BBB+/Stable, Baa1/Stable, and BBB+/Stable, respectively.

As of March 31, 2020, the Company had two unsecured lines of credit aggregating $1.24 billion. As of March 31, 2020, there was $350.0 million outstanding on the Company's $1.2 billion unsecured line of credit. The underlying interest rate is based on a tiered rate structure tied to the Company's credit ratings and was LIBOR plus 0.825% as of March 31, 2020. This facility is scheduled to mature in December 2023, with one 18-month extension, exercisable at the Company's option. As of March 31, 2020, there was no amount outstanding on the Company's $35.0 million working capital unsecured line of credit. The underlying interest rate on the $35.0 million line is based on a tiered rate structure tied to the Company's credit ratings and was LIBOR plus 0.825% as of March 31, 2020. This facility is scheduled to mature in February 2021.

In February 2020, the Company issued $500.0 million of senior unsecured notes due on March 15, 2032, with a coupon rate of 2.650% (the "2032 Notes"), which are payable on March 15 and September 15 of each year, beginning on September 15, 2020.

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The 2032 Notes were offered to investors at a price of 99.628% of par value. The 2032 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are unconditionally guaranteed by Essex. The Company used the net proceeds of this offering to repay indebtedness under its unsecured lines of credit, which had been used to fund the buyout of CPPIB's 45.0% joint venture interests, as well as repay $100.3 million of secured debt during the quarter.

In September 2018, the Company entered into an equity distribution agreement pursuant to which the Company may offer and sell shares of its common stock having an aggregate gross sales price of up to $900.0 million (the "2018 ATM Program"). In connection with the 2018 ATM Program, the Company may also enter into related forward sale agreements whereby, at the Company’s discretion, it may sell shares of its common stock under the 2018 ATM Program under forward sales agreements. The use of a forward sales agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receiving the proceeds from the sale of shares until a later date. During the three months ended March 31, 2020, the Company did not issue any shares of common stock through the 2018 ATM Program. As of March 31, 2020, there are no outstanding forward purchase agreements, and $826.6 million of shares remain available to be sold under this program.

In December 2015, the Company’s board of directors authorized a stock repurchase plan to allow the Company to acquire shares in an aggregate of up to $250.0 million. In February 2019, the board of directors approved the replenishment of the stock repurchase plan such that, as of such date, the Company had $250.0 million of purchase authority remaining under the stock repurchase plan. During the three months ended March 31, 2020, the Company repurchased and retired 776,261 shares of its common stock totaling $176.3 million, including commissions, at an average price of $227.13 per share. As of March 31, 2020, the Company had $73.7 million of purchase authority remaining under the stock repurchase plan.

Essex pays quarterly dividends from cash available for distribution. Until it is distributed, cash available for distribution is invested by the Company primarily in investment grade securities held available for sale or is used by the Company to reduce balances outstanding under its line of credit. 

Development and Predevelopment Pipeline

The Company defines development projects as new communities that are being constructed, or are newly constructed and are in a phase of lease-up and have not yet reached stabilized operations. As of March 31, 2020, the Company’s development pipeline was comprised of four consolidated projects under development, two unconsolidated joint venture projects under development and various consolidated predevelopment projects, aggregating 1,761 apartment homes, with total incurred costs of $963.0 million, and estimated remaining project costs of approximately $168.0 million, $151.0 million of which represents the Company's share of estimated remaining costs, for total estimated project costs of $1.1 billion.

The Company defines predevelopment projects as proposed communities in negotiation or in the entitlement process with an expected high likelihood of becoming entitled development projects. The Company may also acquire land for future

development purposes or sale.

The Company expects to fund the development and predevelopment pipeline by using a combination of some or all of the following sources: its working capital, amounts available on its lines of credit, construction loans, net proceeds from public and private equity and debt issuances, and proceeds from the disposition of assets, if any.

Redevelopment Pipeline

The Company defines redevelopment communities as existing properties owned or recently acquired, which have been targeted for additional investment by the Company with the expectation of increased financial returns through property improvement. During redevelopment, apartment homes may not be available for rent and, as a result, may have less than stabilized operations. As of March 31, 2020, the Company had ownership interests in four major redevelopment communities aggregating 1,327 apartment homes with estimated redevelopment costs of $132.7 million, of which approximately $11.8 million remains to be expended. The Company has the ability to cease funding of the redevelopment pipeline as needed.

Derivative Activity

The Company uses interest rate swaps and total return swap contracts to manage certain interest rate risks. The valuation of these instruments is determined using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves. The fair values of interest rate swaps and total

35

return swaps are determined using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates (forward curves) derived from observable market interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

Alternative Capital Sources

The Company utilizes co-investments as an alternative source of capital for acquisitions of both operating and development communities. As of March 31, 2020, the Company had an interest in 806 apartment homes in communities actively under development with joint ventures for total estimated costs of $0.6 billion. Total estimated remaining costs are approximately $35.0 million, of which the Company estimates its remaining investment in these development joint ventures will be approximately $17.5 million. In addition, the Company had an interest in 8,652 apartment homes of operating communities with joint ventures for a total book value of $387.6 million as of March 31, 2020.

Off-Balance Sheet Arrangements

The Company has various unconsolidated interests in certain joint ventures. The Company does not believe that these unconsolidated investments have a materially different impact on its liquidity, cash flows, capital resources, credit or market risk than its consolidated operations. See Note 4, Co-investments, in the Notes to Condensed Consolidated Financial Statements for carrying values and combined summarized financial information of these unconsolidated investments.

Critical Accounting Policies and Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures of contingent assets and liabilities. The Company defines critical accounting policies as those accounting policies that require the Company’s management to exercise their most difficult, subjective and complex judgments. The Company’s critical accounting policies and estimates relate principally to the following key areas: (i) accounting for the acquisition of investments in real estate (specifically, the allocation between land and buildings); and (ii) evaluation of events and changes in circumstances indicating whether the Company’s rental properties may be impaired. The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from those estimates made by management.

The Company’s critical accounting policies and estimates have not changed materially from the information reported in Note 2, Summary of Critical and Significant Accounting Policies, in the Company’s annual report on Form 10-K for the year ended December 31, 2019.

Forward-Looking Statements

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this quarterly report on Form 10-Q which are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Exchange Act, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as "expects," "assumes," "anticipates," "may," "will," "intends," "plans," "projects," "believes," "seeks," "future," "estimates," and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s expectations related to the impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations and the impact of any measures taken to mitigate the impact of the pandemic, the Company's intent, beliefs or expectations with respect to the timing of completion of current development and redevelopment projects and the stabilization of such projects, the timing of lease-up and occupancy of its apartment communities, the anticipated operating performance of its apartment communities, the total projected costs of development and redevelopment projects, co-investment activities, qualification as a REIT under the Internal Revenue Code of 1986, as amended, the real estate markets in the geographies in which the Company’s properties are located and in the United States in general, the adequacy of future cash flows to meet anticipated cash needs, its financing activities and the use of proceeds from such activities, the availability of debt and equity financing, general economic conditions including the potential impacts from such economic conditions, including as a result of the COVID-19 pandemic, trends affecting the Company’s financial condition or results of operations, changes to U.S. tax laws and regulations in general or specifically related to REITs or real estate, changes to laws and

36

regulations in jurisdictions in which communities the Company owns are located, and other information that is not historical information.

While the Company's management believes the assumptions underlying its forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed. Factors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: the impact of the COVID-19 pandemic, which remains inherently uncertain as the situation is unprecedented and continuously evolving, and other potential future outbreaks of infectious diseases or other health concerns, and measures taken to limit their impact, could adversely affect the Company’s business and its tenants, and cause a significant downturn in general economic conditions, the real estate industry, and the markets in which the Company's communities are located; the Company may fail to achieve its business objectives; the actual completion of development and redevelopment projects may be subject to delays; the stabilization dates of such projects may be delayed; the Company may abandon or defer development or redevelopment projects for a number of reasons, including changes in local market conditions which make development less desirable, increases in costs of development, increases in the cost of capital or lack of capital availability, resulting in losses; the total projected costs of current development and redevelopment projects may exceed expectations; such development and redevelopment projects may not be completed; development and redevelopment projects and acquisitions may fail to meet expectations; estimates of future income from an acquired property may prove to be inaccurate; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates and operating costs; the Company may be unsuccessful in the management of its relationships with its co-investment partners; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; unexpected difficulties in leasing of development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; the Company’s inability to maintain our investment grade credit rating with the rating agencies; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in this quarterly report on Form 10-Q, in the Company's annual report on Form 10-K for the year ended December 31, 2019, and those risk factors and special considerations set forth in the Company's other filings with the Securities and Exchange Commission (the "SEC") which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Additionally, the risks, uncertainties and other factors set forth above or otherwise referred to in the reports that the Company has filed with the SEC may be further amplified by the global impact of the COVID-19 pandemic. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this report.

Funds from Operations Attributable to Common Stockholders and Unitholders

Funds from Operations Attributable to Common Stockholders and Unitholders ("FFO") is a financial measure that is commonly used in the REIT industry. The Company presents FFO and FFO excluding non-core items (referred to as "Core FFO") as supplemental operating performance measures. FFO and Core FFO are not used by the Company as, nor should they be considered to be, alternatives to net income computed under U.S. GAAP as an indicator of the Company’s operating performance or as alternatives to cash from operating activities computed under U.S. GAAP as an indicator of the Company’s ability to fund its cash needs.

FFO and Core FFO are not meant to represent a comprehensive system of financial reporting and do not present, nor do they intend to present, a complete picture of the Company's financial condition and operating performance. The Company believes that net income computed under U.S. GAAP is the primary measure of performance and that FFO and Core FFO are only meaningful when they are used in conjunction with net income. 

The Company considers FFO and Core FFO to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and

37

useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. The Company believes that its consolidated financial statements, prepared in accordance with U.S. GAAP, provide the most meaningful picture of its financial condition and its operating performance.

In calculating FFO, the Company follows the definition for this measure published by the National Association of Real Estate Investment Trusts ("NAREIT"), which is the leading REIT industry association. The Company believes that, under the NAREIT FFO definition, the two most significant adjustments made to net income are (i) the exclusion of historical cost depreciation and (ii) the exclusion of gains and losses from the sale of previously depreciated properties. The Company agrees that these two NAREIT adjustments are useful to investors for the following reasons:

(a) historical cost accounting for real estate assets in accordance with U.S. GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time. NAREIT stated in its White Paper on Funds from Operations "since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves." Consequently, NAREIT’s definition of FFO reflects the fact that real estate, as an asset class, generally appreciates over time and depreciation charges required by U.S. GAAP do not reflect the underlying economic realities.

(b) REITs were created as a legal form of organization in order to encourage public ownership of real estate as an asset class through investment in firms that were in the business of long-term ownership and management of real estate.  The exclusion, in NAREIT’s definition of FFO, of gains and losses from the sales of previously depreciated operating real estate assets allows investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assists in comparing those operating results between periods.

Management believes that it 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 disclosure of FFO may not be comparable to the Company’s calculation.

The following table is a reconciliation of net income available to common stockholders to FFO and Core FFO for the three months ended March 31, 2020 and 2019 (in thousands, except share and per share amounts):

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Essex Property Trust, Inc.

	Three Months Ended March 31,
	2020			2019
Net income available to common stockholders	$	315,006		$	118,858
Adjustments:
Depreciation and amortization	131,559			120,568
Gains not included in FFO attributable to common stockholders and unitholders	(234,694		)	(31,535		)
Depreciation and amortization from unconsolidated co-investments	12,544			15,190
Noncontrolling interest related to Operating Partnership units	10,986			4,171
Depreciation attributable to third party ownership and other	(134		)	(230		)
Funds from operations attributable to common stockholders and unitholders	$	235,267		$	227,022
Funds from operations attributable to common stockholders and unitholders per share - diluted	$	3.44		$	3.34
Non-core items:
Expensed acquisition and investment related costs	87			32
Loss on sale of marketable securities	13			58
Unrealized (gains) losses on marketable securities	8,696			(4,510		)
Provision for credit losses	(50		)	—
Equity (income) loss from non-core co-investment (1)	110			(314		)
Interest rate hedge ineffectiveness (2)	—			181
Gain on early retirement of debt, net	(321		)	(1,336		)
Co-investment promote income	(6,455		)	(809		)
Income from early redemption of preferred equity investments	(210		)	(100		)
General and administrative and other, net	820			—
Insurance reimbursements, legal settlements, and other, net	43			(210		)
Core Funds from Operations attributable to common stockholders and unitholders	$	238,000		$	220,014
Core Funds from Operations attributable to common stockholders and unitholders per share-diluted	$	3.48		$	3.23
Weighted average number shares outstanding, diluted (3)	68,359,698			68,048,908

⁽¹⁾ Represents the Company's share of co-investment income from Real Estate Technology Ventures, L.P.

⁽²⁾ On January 1, 2019, the Company adopted ASU No. 2017-12 "Derivatives and Hedging - Targeted Improvements to Accounting for Hedging Activities," which resulted in a cumulative effect adjustment of approximately $181,000 from interest expense to accumulated other comprehensive income. As a result of the adoption of this standard, the Company recognizes

qualifying hedge ineffectiveness through accumulated other comprehensive income as opposed to current earnings.

⁽³⁾ Assumes conversion of all outstanding Operating Partnership limited partnership units ("OP Units") into shares of the Company's common stock and excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

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Net Operating Income

Net operating income ("NOI") and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s condensed consolidated statements of income and comprehensive income. The presentation of Same-Property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines Same-Property NOI as Same-Property revenues less Same-Property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and Same-Property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented ($ in thousands):

	Three Months Ended March 31,
	2020			2019
Earnings from operations	$	130,837		$	115,695
Adjustments:
Corporate-level property management expenses	8,759			8,429
Depreciation and amortization	131,559			120,568
Management and other fees from affiliates	(2,617		)	(2,335		)
General and administrative	13,982			13,459
Expensed acquisition and investment related costs	87			32
NOI	282,607			255,848
Less: Non-Same Property NOI	(30,842		)	(13,638		)
Same-Property NOI	$	251,765		$	242,210

Item 3: Quantitative and Qualitative Disclosures About Market Risks

Interest Rate Hedging Activities

The Company’s objective in using derivatives is to add stability to interest expense and to manage its exposure to interest rate movements or other identified risks. To accomplish this objective, the Company uses interest rate swaps as part of its cash flow hedging strategy. As of March 31, 2020, the Company has entered into five interest rate swap contracts to mitigate the risk of changes in the interest-related cash outflows on $175.0 million of the Company's unsecured term debt. As of March 31, 2020, the Company also had $255.3 million of secured variable rate indebtedness. All of the Company's interest rate swaps are designated as cash flow hedges as of March 31, 2020. The following table summarizes the notional amount, carrying value, and estimated fair value of the Company’s cash flow hedge derivative instruments used to hedge interest rates as of March 31, 2020. The notional amount represents the aggregate amount of a particular security that is currently hedged at one time, but does not represent exposure to credit, interest rates or market risks. The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of March 31, 2020.

	Notional Amount		Maturity Date Range	Carrying and Estimated Fair Value			Estimated Carrying Value
							+50			-50
($ in thousands)							Basis Points			Basis Points
Cash flow hedges:
Interest rate swaps	$	175,000	2022	$	(3,449	)	$	(1,842	)	$	(5,095	)
Total cash flow hedges	$	175,000	2022	$	(3,449	)	$	(1,842	)	$	(5,095	)

Additionally, the Company has entered into total return swap contracts, with an aggregate notional amount of $255.3 million that effectively convert $255.3 million of fixed mortgage notes payable to a floating interest rate based on the SIFMA plus a

40

spread and have a carrying value of zero at March 31, 2020. The Company is exposed to insignificant interest rate risk on these swaps as the related mortgages are callable, at par, by the Company, co-terminus with the termination of any related swap. These derivatives do not qualify for hedge accounting.

Interest Rate Sensitive Liabilities

The Company is exposed to interest rate changes primarily as a result of its lines of credit and long-term debt used to maintain liquidity and fund capital expenditures and expansion of the Company's real estate investment portfolio and operations. The Company’s interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower its overall borrowing costs. To achieve its objectives, the Company borrows primarily at fixed rates and may enter into derivative financial instruments such as interest rate swaps, caps, and treasury locks in order to mitigate its interest rate risk on a related financial instrument. The Company does not enter into derivative or interest rate transactions for speculative purposes.

The Company’s interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts and weighted average interest rates by year of expected maturity to evaluate the expected cash flows.

For the Years Ended	2020			2021		2022		2023		2024		Thereafter		Total			Fair value
($ in thousands, except for interest rates)
Fixed rate debt	$	184,999		530,940		342,408		602,093		402,177		3,516,884		$	5,579,501		$	5,622,711
Average interest rate	6.4		%	4.3	%	3.6	%	3.7	%	4.0	%	3.5	%	3.8		%
Variable rate debt (1)	$	494		713		350,780		350,852		932		251,499		$	955,270		$	949,218
Average interest rate	2.8		%	2.8	%	2.7	%	2.4	%	2.8	%	2.6	%	2.6		%

⁽¹⁾ $175.0 million is subject to interest rate protection agreements ($255.3 million is subject to total return swaps).

The table incorporates only those exposures that exist as of March 31, 2020. It does not consider those exposures or positions that could arise after that date. As a result, the Company's ultimate realized gain or loss, with respect to interest rate fluctuations and hedging strategies would depend on the exposures that arise prior to settlement.

Item 4: Controls and Procedures

Essex Property Trust, Inc.

As of March 31, 2020, Essex carried out an evaluation, under the supervision and with the participation of management, including Essex’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Essex's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, Essex’s Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2020, Essex's disclosure controls and procedures were effective to ensure that the information required to be disclosed by Essex in the reports that Essex files or submits under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that Essex files or submits under the Exchange Act is accumulated and communicated to Essex’s management, including Essex’s Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in Essex's internal control over financial reporting, that occurred during the quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, Essex’s internal control over financial reporting.

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Essex Portfolio, L.P.

As of March 31, 2020, the Operating Partnership carried out an evaluation, under the supervision and with the participation of management, including Essex's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Operating Partnership's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that as of March 31, 2020, the Operating Partnership's disclosure controls and procedures were effective to ensure that the information required to be disclosed by the Operating Partnership in the reports that the Operating Partnership files or submits under the Exchange Act was recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that such disclosure controls and procedures were also effective to ensure that information required to be disclosed in the reports that the Operating Partnership files or submits under the Exchange Act is accumulated and communicated to the Operating Partnership’s management, including Essex's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes in the Operating Partnership's internal control over financial reporting, that occurred during the quarter ended March 31, 2020, that have materially affected, or are reasonably likely to materially affect, the Operating Partnership’s internal control over financial reporting.

Part II -- Other Information

Item 1: Legal Proceedings

The Company is subject to various lawsuits in the normal course of its business operations. While the resolution of any such matter cannot be predicted with certainty, the Company is not currently a party to any legal proceedings nor is any legal proceeding currently threatened against the Company that the Company believes, individually or in the aggregate, would have a material adverse effect on the Company's financial condition, results of operations or cash flows.

Item 1A: Risk Factors

In addition to the other information set forth in this quarterly report on Form 10-Q, you should carefully consider the factors discussed in "Part I. Item A. Risk Factors" in the Company's annual report on Form 10-K for the year ended December 31, 2019, which could materially affect the Company's financial condition, results of operations or cash flows. Except as set forth below, there have been no material changes to the Risk Factors disclosed in Item 1A of the Company's annual report on Form 10-K for the year ended December 31, 2019, as filed with the SEC and available at www.sec.gov. The risks described in the Company's annual report on Form 10-K are not the only risks facing the Company. Additional risks and uncertainties not currently known or that the Company currently deems to be immaterial may also materially adversely affect the Company's financial condition, results of operations or cash flows.

The current COVID-19 pandemic, or the future outbreak of other highly infectious or contagious diseases, could materially and adversely affect our business, financial condition and results of operations.

The outbreak of COVID-19, which has rapidly spread to a growing number of countries, including the United States and the specific regions in which our apartment communities are located, has created considerable instability and disruption in the U.S. and world economies. Considerable uncertainty still surrounds COVID-19 and its potential effects, and the extent of and effectiveness of any responses taken on a national and local level. However, measures taken to limit the impact of COVID-19, including “social distancing” and other restrictions on travel, congregation and business operations have already resulted in significant negative economic impacts. The long-term impact of COVID-19 on the U.S. and world economies remains uncertain, but is likely to result in a world-wide economic downturn, the duration and scope of which cannot currently be predicted. The extent to which the Company’s financial condition or operating results will continue to be affected by the COVID-19 pandemic will largely depend on future developments, which are highly uncertain and cannot be accurately predicted.

The Company’s operating results depend, in large part, on revenues derived from leasing space in our apartment communities to residential tenants and the ability of tenants to generate sufficient income to pay their rents in a timely manner. The market and economic challenges created by the COVID-19 pandemic, and measures implemented to prevent its spread, have, and may continue to, adversely affect our returns and profitability. As a result, our ability to make distributions to Essex’s stockholders and the Operating Partnership’s unitholders may be compromised and we could experience volatility with respect to the market value of our properties and common stock and Operating Partnership units. The spread of COVID-19 could result in further increases in unemployment, and tenants that experience deteriorating financial conditions as a result of the pandemic may be unwilling or unable to pay rent on a timely basis, or at all. In some cases, we may be legally required to or otherwise agree to

42

restructure tenants’ rent obligations, and may not be able to do so on terms as favorable to us as those currently in place. Numerous state, local, federal and industry-initiated efforts may also affect our ability to collect rent or enforce remedies for the failure to pay rent, including, among others, limitations or prohibitions on evicting tenants unwilling or unable to pay rent. Additionally, eviction moratoriums have passed in various formats at every level of government, with considerable differences between county and state orders, as well as between individual county orders and how cities are interpreting and enforcing them. This patchwork of conflicting standards may continue to create a great deal of confusion and challenges with compliance. While the Company intends to comply with the framework of local, county, state and federal laws, given the confusion, strict compliance might be difficult. In the event of tenant nonpayment, default or bankruptcy, we may incur costs in protecting our investment and re-leasing our property, and have limited ability to renew existing leases or sign new leases at projected rents.

Our properties may also incur significant costs or losses related to legislative mandates, including shelter-in-place orders, quarantines, infection or other related factors, which may result in a negative impact on our occupancy levels. We typically conduct aspects of our leasing activity on-site at our apartment communities. Reductions in the ability and willingness of prospective residents to visit our communities due to the COVID-19 pandemic could reduce rental revenue and ancillary operating revenue produced by our properties. Additionally, if there is an outbreak that directly impacts one or more of our apartment communities, we may experience negative publicity and/or an unwillingness of prospective residents to visit or ultimately choose to live in our communities, which could directly affect our rental revenue. In addition, we may incur costs associated with protecting our employees and residents and disinfecting our properties. To the extent our management or personnel are impacted in significant numbers by the COVID-19 pandemic and are not available or allowed to conduct work, our business and operating results may be negatively impacted.

Additionally, market fluctuations as a result of the COVID-19 pandemic may affect our ability to obtain necessary funds for our operations from current lenders or new borrowings. We may be unable to obtain financing for the acquisition of investments on satisfactory terms, or at all. In addition, moratoriums on construction and macro-economic factors may cause construction contractors to be unable to perform, which may cause the delivery date of certain development projects or investments in third-party development projects to be extended. Market fluctuations and construction delays experienced by the Company’s third-party mezzanine loan borrowers and preferred equity investment sponsors may also negatively impact their ability to repay the Company. Further, while the Company carries general liability, pollution, and property insurance along with other insurance policies that may provide some coverage for any losses or costs incurred in connection with the COVID-19 pandemic, given the novelty of the issue and the scale of losses incurred throughout the world, there is no guarantee that we will be able to recover all or any portion of our losses and costs under these policies. The occurrence of any of the foregoing events or any other related matters could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

The global impact of the COVID-19 pandemic continues to evolve rapidly, and the extent of its effect on our operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, and the direct and indirect economic effects of the pandemic and related containment measures, among others. However, the COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial condition and results of operations. Moreover, to the extent any of these risks and uncertainties adversely impact us in the ways described above or otherwise, they may also have the effect of heightening many of the other risks set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. In addition, if in the future there is an outbreak of another highly infectious or contagious disease or other health concern, the Company and our properties may be subject to similar risks as posed by COVID-19.

Item 2: Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities; Essex Portfolio, L.P.

During the three months ended March 31, 2020, the Operating Partnership issued OP Units in private placements in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act, in the amounts and for the consideration set forth below:

During the three months ended March 31, 2020, Essex issued an aggregate of 96,662 shares of its common stock upon the exercise of stock options, the vesting of restricted stock awards, and the exchange of OP Units and DownREIT units by limited partners or members into shares of common stock. Essex contributed the net proceeds of $14.3 million from the option exercises during the three months ended March 31, 2020 to the Operating Partnership in exchange for an aggregate of 65,802 OP Units, as required by the Operating Partnership’s partnership agreement. Furthermore, for each share of common stock issued by Essex in connection with vesting of restricted stock awards and the exchange of OP Units and DownREIT units, the

43

Operating Partnership issued OP Units to Essex, as required by the partnership agreement. During the three months ended March 31, 2020, 30,860 OP Units were issued to Essex pursuant to this mechanism.

Stock Repurchases

In February 2019, the board of directors approved the replenishment of the Company's stock repurchase plan such that, as of such date, the Company had $250.0 million of purchase authority remaining under the replenished plan. During the three months ended March 31, 2020 the Company repurchased and retired 776,261 shares of its common stock totaling $176.3 million, including commissions, at an average price of $227.13 per share. As of March 31, 2020, the Company had $73.7 million of purchase authority remaining under the stock repurchase plan.

Item 3: Defaults Upon Senior Securities

None.

Item 4: Mine Safety Disclosures

Not applicable.

Item 5: Other Information

None.

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Item 6: Exhibits

 

A. Exhibits
4.1	Indenture, dated February 11, 2020, among Essex Portfolio, L.P., Essex Property Trust, Inc., and U.S. Bank National Association, as trustee, including the form of 2.650% Senior Notes due 2032 and the guarantee thereof, attached as Exhibit 4.1 to the Company's Current Report on Form 8-K, filed February 11, 2020, and incorporated herein by reference.
10.1*	Deferred Compensation Plan for Non-Employee Directors.†
31.1*	Certification of Michael J. Schall, Chief Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Angela L. Kleiman, Chief Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.3*	Certification of Michael J. Schall, Principal Executive Officer of General Partner, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.4*	Certification of Angela L. Kleiman, Principal Financial Officer of General Partner, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Michael J. Schall, Chief Executive Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2*	Certification of Angela L. Kleiman, Chief Financial Officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.3*	Certification of Michael J. Schall, Principal Executive Officer of General Partner, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.4*	Certification of Angela L. Kleiman, Principal Financial Officer of General Partner, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document - the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

† Management contract or compensatory plan or arrangement.

* Filed or furnished herewith.

** In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.

                    

ESSEX PROPERTY TRUST, INC.

(Registrant)

Date: May 7, 2020

By: /s/ ANGELA L. KLEIMAN

Angela L. Kleiman

Executive Vice President, Chief Financial Officer

(Authorized Officer, Principal Financial Officer)

Date: May 7, 2020

By: /s/ JOHN FARIAS

John Farias

Senior Vice President, Chief Accounting Officer

ESSEX PORTFOLIO, L.P.

By Essex Property Trust, Inc., its general partner

(Registrant)

Date: May 7, 2020

By: /s/ ANGELA L. KLEIMAN

Angela L. Kleiman

Executive Vice President, Chief Financial Officer

(Authorized Officer, Principal Financial Officer)

Date: May 7, 2020

By: /s/ JOHN FARIAS

John Farias

Senior Vice President, Chief Accounting Officer

46

EX-10.1

Exhibit 10.1

ESSEX PROPERTY TRUST, INC.

DEFERRED COMPENSATION PLAN

FOR NON-EMPLOYEE DIRECTORS

EFFECTIVE March 19, 2020

-i-

TABLE OF CONTENTS

		Page
1.	Purpose; Effective Date	1
2.	Eligibility	1
3.	Deferral Elections	1
4.	Accounts	2
5.	Payment of Benefits	3
6.	Administration	4
7.	Amendment and Termination of Plan	5
8.	Miscellaneous	5

-i-

ESSEX PROPERTY TRUST, INC.

DEFERRED COMPENSATION PLAN FOR NON-EMPLOYEE DIRECTORS

1.Purpose; Effective Date. The Board of Directors (the “Board”) of Essex Property Trust, Inc. a Maryland corporation (the “Company”), adopted this Deferred Compensation Plan for Non-Employee Directors (the “Plan”) for the purpose of providing an unfunded nonqualified deferred compensation plan for non-employee directors of the Company. The Plan is effective as of March 19, 2020, although initial deferral elections may be submitted at any time before such date.

2.Eligibility.The persons eligible to defer compensation under the Plan shall consist solely of non-employee directors of the Company (“Directors”).

3.Deferral Elections. A Director may elect to defer compensation under the Plan by submitting a “Participation Agreement” to the Company on a form specified by the Company no later than the applicable deferral deadline. Any Director who has submitted a Participation Agreement is hereafter referred to as a “Participant.” A Participation Agreement submitted by a Participant shall automatically continue from calendar year to calendar year and shall be irrevocable with respect to compensation once the deferral deadline for that compensation has passed, but the Participant may modify or terminate a Participation Agreement for compensation earned in any year by submitting a revised Participation Agreement or otherwise giving written notice to the Company at any time on or prior to the deferral deadline for that compensation.

(a)    Elections by Continuing Directors

(i)    Fees. A Director may elect to defer receipt of all or any portion of the annual retainer, meeting fees and any other fees payable for service as a Director (“Fees”). Except as provided below in Section 3(b), the deferral deadline for an election to defer Fees for services performed in any calendar year shall be the last day of the prior calendar year.

(ii)    Restricted Stock. Any Director having elected to defer the receipt of any Fees which would otherwise be payable in the form of common stock, $0.0001 par value per share, of the Company (“Common Stock”) subject to restrictions on transfer and risks of forfeiture pursuant to prior determinations of the Board shall be deemed by reason of such election, and without need of any further action, to have agreed to forego the issuance of such restricted stock in consideration of the Company's agreement, here evidenced, to credit such restricted stock in the form of DSU Shares (as defined in Section 4(b)) to the Director's Account under the Plan pursuant to Section 4(b) as, when, and if such restricted stock would otherwise have been granted to the Director.

(b)    New Directors. A person who first becomes a Director during a calendar year (or any Director who becomes newly eligible to participate in the Plan) may elect to defer any of the types of compensation referred to in Section 3(a) above that is payable solely for services performed during the remainder of the calendar year after submission of his or her Participation Agreement, subject to all of the provisions of Section 3(a), except that the election shall be made no later than thirty (30) days after the date on which the person becomes newly eligible to participate in the Plan.

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4.Accounts.

(a)    Accounts. The Company shall establish on its books one or two separate accounts (individually, an “Account” and collectively, the “Accounts”) for each Participant: an Account that is the “Stock Account”, which shall be denominated in shares of Common Stock, including fractional shares, and another Account which is the “Cash Account”, which shall be denominated in U.S. dollars.

(b)    Allocation of Deferrals Among Accounts; Transfers Among Accounts. Shares credited in lieu of the issuance of restricted stock in payment of Fees (“DSU Shares”) shall be credited to the Stock Account. All other Fees deferred by a Director shall be credited to the Director's Cash Account. The credit for Fees shall be entered on the Company's books of account at the time that Fees would otherwise be paid to Directors who do not elect to defer the payment of such Fees. The credit for DSU Shares shall be entered on the Company's books of account at the time that the applicable restricted stock would otherwise have been granted to the Director who has elected to defer the receipt of such stock. Amounts initially credited to either of a Participant's Accounts (i.e., Cash or Stock) may not be later transferred to the other of the Participant's Accounts, except as otherwise permitted under Section 4(g)(iv).

(c)    Valuation of Stock; Dividend Credits. With respect to each amount of Fees deferred to a Director's Stock Account, the Stock Account shall be credited with a number of shares equal to the deferred Fees divided by the closing market price of the Common Stock on the day the deferred Fees would have been paid if not for the deferral. As of each date for payment of dividends on the Common Stock, each Participant's Cash Account shall be credited with the total amount of dividends that would have been paid on the number of shares recorded as the balance of that Participant's Stock Account as of the record date for such dividend.

(d)    Vesting of DSU Shares. DSU Shares credited to a Director's Stock Account shall remain subject to forfeiture in accordance with the terms and conditions applicable to the restricted stock for which such DSU Shares were credited in lieu of grant. Notwithstanding any provision of the Plan to the contrary, no Participant or other person shall have any right or claim under the Plan in respect of DSU Shares credited to the Participant's Stock Account but forfeited in accordance with the terms and conditions of said restricted stock.

(e)    Cash Account Earnings. Gain or loss, and earnings and expense, shall be credited to or debited against each Participant's Cash Account based on the performance and return of such publicly available regulated investment company shares as the Participant may select from time to time from among those identified by the Company from time to time for use in measuring its obligations under this Plan, if any. Any such selection shall be made, and changed if desired, in accordance with procedures established by the Company. Following the death of the Participant, his or her beneficiary or beneficiaries shall have the right and responsibility to determine which such shares shall be used. For any period the Company does not elect to identify any such shares for this purpose, interest shall be credited to the Cash Account of each Participant as of the last day of each calendar quarter. The rate of interest to be applied at the end of each calendar quarter shall be the average interest rate paid by the Company on borrowings under the Company's senior revolving credit agreement (or if there are no borrowings in a quarter, at the prime rate) plus 2%. Interest shall be calculated for each calendar

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quarter based upon the average daily balance of the Participant's Cash Account during the quarter.

(f)    Statement of Account. At the end of each calendar quarter, a report shall be issued by the Company to each Participant setting forth the balances of the Participant's Accounts under the Plan.

5.Payment of Benefits.

(a)    Plan Benefits. The Company shall pay Plan benefits to each Participant equal to the Participant's Accounts (subject to the vesting conditions applicable to any DSU Shares). Each Director, upon his or her initial election to defer Fees, shall specify the term of benefit payments with respect to amounts deferred under the Participation Agreement. Except as otherwise provided in this Section 5, such elections shall be irrevocable and no Participant may at any time have compensation deferred under the Plan payable under more than one payment election.

(b)    Commencement of Payments. Benefits shall commence in January of the year following the year in which the Participant's service as a Director of the Company ceases.

(c)    Term of Payments. Participants may elect in their Participation Agreements to have benefits from their Accounts paid in (i) between 2 to 15 annual installments or (ii) a single lump sum payment. If no election is made, then the Participant shall be paid benefits in a single lump sum payment.

(d)    Form of Payments. Benefits payable to a Participant from a Stock Account shall be paid as a distribution of Common Stock (and issued under the Company’s 2018 Stock Award and Incentive Compensation Plan or successor plan) plus cash for fractional shares. Benefits payable to a Participant from a Cash Account shall be paid in cash.

(e)    Payment Timing and Valuation. All lump sum payments or installment payments due under the Plan in any year shall be paid on the first business day in January determined by the Company. All payments shall be based on Account balances as of the close of business on the last trading day of the immediately preceding year. Each installment payment to a Participant shall be paid in the same proportion from each of the Accounts of the Participant subject to the applicable payment election. The amount of each installment payment from each Account shall be determined by dividing the Account balance by the number of remaining installments, including the current installment to be paid.

(f)    Modification of Payment Elections. After a Participant's election under Section 5(c) regarding the term of any benefit payments has otherwise become irrevocable, the Participant may elect to change such term of payments as to all amounts otherwise due him or her provided (1) no such change shall be effective until at least 12 months after the date on which the election is made, (2) the change elections must be made at least 12 months before the originally scheduled payment date, and (3) the change election must include an election to defer commencement of payment of benefits for a period of not less than five (5) years from the year in which payment of such benefits would otherwise have commenced.

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(g)    Designation of Beneficiaries; Death.

(i)    Each Participant shall have the right, at any time, to designate any person or persons as the Participant's beneficiary or beneficiaries (both primary as well as secondary) to whom benefits under this Plan shall be paid in the event of the Participant's death prior to complete distribution of the benefits due under the Plan. Each beneficiary designation shall be in written form prescribed by the Company and will be effective only if filed with the Company during the Participant's lifetime. Such designation may be changed by the Participant at any time without the consent of a beneficiary. If no designated beneficiary survives the Participant, the balance of the Participant's benefits shall be paid to the Participant's surviving spouse or, if no spouse survives, to the Participant's estate.

(ii)    Upon the death of a Participant, any benefits payable to a beneficiary shall be paid in a single lump sum payment in January of the year following death.

(h)    Unforeseeable Emergency. Notwithstanding the foregoing provisions of this Section 5, an accelerated payment from a Participant's Accounts may be made to the Participant in the sole discretion of the Committee based upon a finding that the Participant has suffered an Unforeseeable Emergency. For this purpose, “Unforeseeable Emergency” means a severe financial hardship to the Participant resulting from an illness or accident of the Participant or the Participant's spouse, beneficiary, or dependent (as defined in Section 152 of the Internal Revenue Code of 1986, as amended (the “Code”), without regard to Section 152(b)(1), (b)(2), and (d)(1)(B)), loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant all within the meaning of Code Section 409A. An Unforeseeable Emergency shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise or by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship. The Committee shall be entitled to rely on the truthfulness of facts and representations set forth by the Participant in this request without the need for independent certification. The amount of any accelerated payment under this Section 5(h) shall be limited to the amount reasonably necessary to meet the Participant's needs resulting from the Unforeseeable Emergency, which includes the amount reasonably necessary to cover income and withholding taxes on the accelerated payment. Any such accelerated payment shall be paid as promptly as practicable following approval by the Committee and shall be paid pro-rata from the Participant's Accounts based on the Account balances as of the close of business on the day prior to the payment date.

(i)    Withholding Payroll Taxes. The Company shall withhold from payments made hereunder any taxes required to be withheld from such payments under federal, state or local law.

6.Administration.

(a)    Committee Duties. This Plan shall be administered by the Compensation Committee of the Board (the “Committee”). The Committee shall have responsibility for the

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general administration of the Plan and for carrying out its intent and provisions. The Committee shall interpret the Plan and have such powers and duties as may be necessary to discharge its responsibilities. The Committee may, from time to time, employ other agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with counsel who may be counsel to the Company.

(b)    Binding Effect of Decisions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final and conclusive and binding upon all persons having any interest in the Plan and shall receive maximum deference to the fullest extent allowed by applicable law.

7.Amendment and Termination of the Plan.

(a)    Amendment. The Board may at any time amend the Plan in whole or in part; provided, however, that no amendment shall affect the terms of any previously deferred amounts or the terms of any irrevocable Participation Agreement of any Participant.

(b)    Termination. The Board may at any time partially or completely terminate the Plan.

(i)    Partial Termination. The Board may partially terminate the Plan by instructing the Committee not to accept any additional Participation Agreements and terminating all existing Participation Agreements to the extent such Participation Agreements have not yet become irrevocable. In the event of such a partial termination, the Plan shall continue to operate and be effective with regard to all compensation deferred prior to the effective date of such partial termination.

(ii)    Complete Termination. The Board may completely terminate the Plan. However, the Board may not partially or completely terminate the Plan in any manner that would cause the Plan to fail to comply with the requirements of Code Section 409A. Any distribution on account of Plan termination that permits acceleration of payment shall be consistent with Final Treasury Regulation Section 1.409A-3(j)(4)(ix) or successor guidance thereto.

8.Miscellaneous.

(a)    Unsecured General Creditor. The Accounts shall be established solely for the purpose of measuring the amounts owed to a Participants or beneficiaries under the Plan. Participants and their beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company, nor shall they be beneficiaries of, or have any rights, claims or interests in any mutual fund shares, other investment products or the proceeds therefrom owned or which may be acquired by the Company. Except as may be provided in Section 8(b), any such mutual fund shares, other investment products or other assets of the Company shall not be held under any trust for the benefit of the Participants, their beneficiaries, heirs, successors or assigns, or held in any way as collateral security for the fulfilling of the obligations of the Company under the Plan. Any and all of the Company's assets shall be, and remain, the general, unpledged, unrestricted assets of the Company. The

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Company's obligation under the Plan shall be that of an unfunded and unsecured promise to pay money in the future, and the rights of Participants and beneficiaries shall be no greater than those of unsecured general creditors of the Company.

(b)    Trust Fund. The Company shall be responsible for the payment of all benefits provided under the Plan. The Company may establish one or more trusts, with such trustees as the Board may approve, for the purpose of providing for the payment of such benefits, but the Company shall have no obligation to contribute to such trusts except as specifically provided in the applicable trust documents. Such trust or trusts shall be irrevocable, but the assets thereof shall be subject to the claims of the Company's creditors. To the extent any benefits provided under the Plan are actually paid from any such trust, the Company shall have no further obligation with respect thereto, but to the extent not so paid, such benefits shall remain the obligation of, and shall be paid by, the Company.

(c)    Non-assignability. Neither a Participant nor any other person shall have the right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be non-assignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency.

(d)    Governing Law. The provisions of this Plan shall be construed and interpreted according to the laws of the State of California, except to the extent preempted by the Employee Retirement Income Security Act of 1974.

(e)    Validity. In case any provision of this Plan shall beheld illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provisions had never been inserted herein.

(f)    Notice. Any notice or filing required or permitted to be given to the Company or the Committee under the Plan shall be sufficient if in writing and hand delivered, or sent by registered or certified mail, to the Secretary of the Company. Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification.

(g)    Successors. The provisions of this Plan shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity. For avoidance of doubt, with respect to any such corporate transaction and/or “Change in Control Event” (as defined by Code Section 409A), subject to Section 7(b), the Plan and the rights and obligations set forth in the Plan shall remain in effect as is after the consummation of any such transaction.

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(h)    Code Section 409A. Each Participant understands and agrees that each Participant will be entirely responsible for any and all taxes on any benefits payable to a Participant as a result of the Plan. The Plan is intended to be compliant with the provisions of Code Section 409A and shall be interpreted in accordance with such intention. The Company may adopt such conforming amendments as the Company deems advisable or necessary (but without an obligation to do so), in its sole discretion, to comply with Code Section 409A and avoid the imposition of taxes under Code Section 409A. Each payment made pursuant to any provision of the Plan shall be considered a separate payment and not one of a series of payments for purposes of Code Section 409A. In addition, if upon a Participant’s Separation from Service (as defined under Code Section 409A), he/she is then a Specified Employee (as defined under Code Section 409A), then solely to the extent necessary to comply with Code Section 409A and avoid the imposition of taxes under Code Section 409A, the Company shall defer payment of “nonqualified deferred compensation” subject to Code Section 409A payable as a result of and within six (6) months following such Separation from Service until the earlier of (i) the first business day of the seventh month following the Participant’s Separation from Service or (ii) within thirty (30) days after the Company receives written confirmation of the Participant’s death. While it is intended that all payments and benefits provided under the Plan will be exempt from or comply with Code Section 409A, the Company makes no representation or covenant to ensure that the Plan, Plan Agreements and any payments under the Plan are exempt from or compliant with Code Section 409A. The Company will have no liability to any Participant or any other party if a payment or benefit under the Plan is challenged by any taxing authority or is ultimately determined not to be exempt or compliant. In no event whatsoever shall the Company be liable for any additional tax, interest or penalties that may be imposed on a Participant by Code Section 409A or for any damages for failing to comply with Code Section 409A or have any obligation to provide gross-up compensation to any Participant in connection with any Code Section 409A additional taxes, interest or penalties that are imposed on a Participant.

(i)    Claims Procedures. If any Participant (Claimant) believes that benefits are being denied improperly, that the Plan is not being operated properly, that any person has breached his, her, or its duties under the Plan, or that the Claimant's legal rights are being violated with respect to the Plan, the Claimant must file a formal claim with the Committee. This requirement applies to all claims that any Claimant has with respect to the Plan, except to the extent the Committee determines, in its sole discretion, that it does not have the power to grant all relief reasonably being sought by the Claimant. A formal claim must be filed within 90 days after the date the Claimant first knew or should have known of the facts on which the claim is based, unless the Committee in writing consents otherwise. The Committee shall provide a Claimant, on request, with a copy of the claims procedures established as follows. If and when needed, or before then, the Committee shall adopt procedures for considering claims, which it may amend from time to time, as it sees fit. These procedures shall comply with all applicable legal requirements. These procedures may provide that final and binding arbitration will be the ultimate means of contesting a denied claim (even if the Committee or its delegates have failed to follow the prescribed procedures with respect to the claim). The right to receive benefits under this Plan is contingent on a Claimant using the prescribed claims and arbitration procedures to resolve any claim. Therefore, if a Claimant (or his or her successor or assign) seeks to resolve any claim by any means other than the prescribed claims and arbitration provisions, he or she

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must repay all benefits received under this Plan and will not be entitled to any further Plan benefits.

* * *

The foregoing Plan is adopted effective March 19, 2020.

By: /s/ Anne Morrison

Name: Anne Morrison

Title: Secretary and General Counsel

Date: March 19, 2020

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EX-31.1

Exhibit 31.1

ESSEX PROPERTY TRUST, INC.

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael J. Schall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 7, 2020

/s/ Michael J. Schall

Michael J. Schall

Chief Executive Officer and President

Essex Property Trust, Inc.

EX-31.2

Exhibit 31.2

ESSEX PROPERTY TRUST, INC.

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Angela L. Kleiman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Property Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 7, 2020

/s/ Angela L. Kleiman

Angela L. Kleiman

Executive Vice President, Chief Financial Officer

Essex Property Trust, Inc.

EX-31.3

Exhibit 31.3

ESSEX PORTFOLIO, L.P.

Certification of Chief Executive Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael J. Schall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Portfolio, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 7, 2020

/s/ Michael J. Schall

Michael J. Schall

Chief Executive Officer and President

Essex Property Trust, Inc., general partner of

Essex Portfolio, L.P.

EX-31.4

Exhibit 31.4

ESSEX PORTFOLIO, L.P.

Certification of Chief Financial Officer

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Angela L. Kleiman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Essex Portfolio, L.P.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:May 7, 2020

/s/ Angela L. Kleiman

Angela L. Kleiman

Executive Vice President, Chief Financial Officer

Essex Property Trust, Inc., general partner of

Essex Portfolio, L.P.

EX-32.1

Exhibit 32.1

ESSEX PROPERTY TRUST, INC.

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Michael J. Schall, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc.

Date: May 7, 2020	/s/ Michael J. Schall
	Michael J. Schall
	Chief Executive Officer and President
	Essex Property Trust, Inc.

EX-32.2

Exhibit 32.2

ESSEX PROPERTY TRUST, INC.

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Angela L. Kleiman, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “Form 10-Q”) of Essex Property Trust, Inc. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Property Trust, Inc.

Date: May 7, 2020	/s/ Angela L. Kleiman
	Angela L. Kleiman
	Executive Vice President and Chief Financial Officer
	Essex Property Trust, Inc.

EX-32.3

Exhibit 32.3

ESSEX PORTFOLIO, L.P.

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Michael J. Schall, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “Form 10-Q”) of Essex Portfolio, L.P. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Portfolio, L.P.

Date: May 7, 2020	­­/s/ Michael J. Schall
	Michael J. Schall
	Chief Executive Officer and President
	Essex Property Trust, Inc., general partner of
	Essex Portfolio, L.P.

EX-32.4

Exhibit 32.4

ESSEX PORTFOLIO, L.P.

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350 as adopted

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Subsections (a) and (b) of Section 1350, chapter 63 of title 18, United States Code), I, Angela L. Kleiman, hereby certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended March 31, 2020 (the “Form 10-Q”) of Essex Portfolio, L.P. fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Essex Portfolio, L.P.

Date: May 7, 2020	­­­­­/s/ Angela L. Kleiman
	Angela L. Kleiman
	Executive Vice President, Chief Financial Officer
	Essex Property Trust, Inc., general partner of
	Essex Portfolio, L.P.

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Organization and Basis of Presentation (Tables)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Components of marketable securities

As of March 31, 2020 and December 31, 2019, marketable securities consist of the following ($ in thousands):

	March 31, 2020
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)			Carrying Value		Allowance for Credit Losses
Equity securities:
Investment funds - debt securities	$	29,685	$	(676	)	$	29,009
Common stock and stock funds	45,395		(4,549		)	40,846
Debt securities:
Available for sale
U.S. treasury securities	2,421		16			2,437		—
Investment-grade unsecured debt	1,050		(248		)	802		—
Held to maturity
Mortgage backed securities	75,045		—			75,045		13,644
Total - Marketable securities	$	153,596	$	(5,457	)	$	148,139	$	13,644

	December 31, 2019
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)		Carrying Value
Equity securities:
Investment funds - debt securities	$	29,588	$	544	$	30,132
Common stock and stock funds	34,941		2,927		37,868
Debt securities:
Available for sale
U.S. treasury securities	2,421		13		2,434
Investment-grade unsecured bonds	1,048		60		1,108
Held to maturity
Mortgage backed securities	72,651		—		72,651
Total - Marketable securities	$	140,649	$	3,544	$	144,193

Schedule of allowance for credit loss

The following table presents the allowance for credit losses rollforward for the mortgage backed security ($ in thousands):

Balance at December 31, 2019	$	—
Impact of adoption ASC 326 (1)	13,644
Provision for credit losses	—
Balance at March 31, 2020	$	13,644

⁽¹⁾ As part of the adoption of ASC 326, effective January 1, 2020, the Company recorded a gross up of the mortgage backed security and related allowance for credit losses of $13.6 million. This gross up had no effect on the Company's consolidated results of operations or financial position.

The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands):

	Mezzanine Loans			Bridge Loans			Total
Balance at December 31, 2019	$	—		$	—		$	—
Impact of adoption ASC 326	147			43			190
Provision for credit losses	(81		)	(43		)	(124		)
Balance at March 31, 2020	$	66		$	—		$	66

Changes in accumulated other comprehensive income (loss)

Changes in Accumulated Other Comprehensive Loss, Net by Component

Essex Property Trust, Inc.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(13,989	)	$	101		$	(13,888	)
Other comprehensive loss before reclassification	(7,178		)	(294		)	(7,472		)
Amounts reclassified from accumulated other comprehensive loss	(1,308		)	—			(1,308		)
Other comprehensive loss	(8,486		)	(294		)	(8,780		)
Balance at March 31, 2020	$	(22,475	)	$	(193	)	$	(22,668	)

Changes in Accumulated Other Comprehensive Loss, by Component

Essex Portfolio, L.P.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(10,536	)	$	104		$	(10,432	)
Other comprehensive loss before reclassification	(7,429		)	(305		)	(7,734		)
Amounts reclassified from accumulated other comprehensive loss	(1,353		)	—			(1,353		)
Other comprehensive loss	(8,782		)	(305		)	(9,087		)
Balance at March 31, 2020	$	(19,318	)	$	(201	)	$	(19,519	)

Schedule of changes to the redemption value of noncontrolling interests

The changes to the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2020 is as follows ($ in thousands):

Balance at December 31, 2019	$	37,410
Reclassification due to change in redemption value and other	(4,767		)
Redemptions	—
Balance at March 31, 2020	$	32,643

Schedule of cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):

	March 31, 2020		December 31, 2019		March 31, 2019		December 31, 2018
Cash and cash equivalents - unrestricted	$	271,877	$	70,087	$	107,034	$	134,465
Cash and cash equivalents - restricted	10,470		11,007		17,092		16,930
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows	$	282,347	$	81,094	$	124,126	$	151,395

Schedule of restricted cash and cash equivalents

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):

	March 31, 2020		December 31, 2019		March 31, 2019		December 31, 2018
Cash and cash equivalents - unrestricted	$	271,877	$	70,087	$	107,034	$	134,465
Cash and cash equivalents - restricted	10,470		11,007		17,092		16,930
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows	$	282,347	$	81,094	$	124,126	$	151,395

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Debt (Tables)

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Schedule of debt and lines of credit

Debt consists of the following ($ in thousands):

	March 31, 2020			December 31, 2019			Weighted Average Maturity In Years as of March 31, 2020
Unsecured bonds private placement - fixed rate	$	199,852		$	199,820		1.2
Term loan - variable rate	349,287			349,189			1.9
Bonds public offering - fixed rate	4,709,124			4,214,197			7.7
Unsecured debt, net (1)	5,258,263			4,763,206
Lines of credit (2)	350,000			55,000
Mortgage notes payable, net (3)	887,389			990,667			7.9
Total debt, net	$	6,495,652		$	5,808,873
Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering	3.7		%	3.8		%
Weighted average interest rate on variable rate term loan	2.7		%	2.7		%
Weighted average interest rate on lines of credit	2.4		%	2.5		%
Weighted average interest rate on mortgage notes payable	4.1		%	4.1		%

⁽¹⁾ Includes unamortized discount of $14.1 million and $12.2 million and unamortized debt issuance costs of $27.6 million and $24.5 million, as of March 31, 2020 and December 31, 2019, respectively.

⁽²⁾ Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of March 31, 2020, excludes unamortized debt issuance costs of $4.5 million and $3.8 million as of March 31, 2020 and December 31, 2019, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of March 31, 2020, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of December 2023 with one 18-month extension, exercisable at the Company’s option. As of March 31, 2020, the Company’s $35.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings, and a scheduled maturity date of February 2021.

⁽³⁾ Includes total unamortized premium of $5.0 million and $5.9 million, reduced by unamortized debt issuance costs of $2.4 million and $2.6 million, as of March 31, 2020 and December 31, 2019, respectively.

Summary of aggregate scheduled principal payments

The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit, as of March 31, 2020 are as follows ($ in thousands):

Remaining in 2020	$	185,493
2021	531,653
2022	693,188
2023	602,945
2024	403,109
Thereafter	3,768,383
Total	$	6,184,771

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Condensed Consolidated Statement of Capital - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Jan. 01, 2020	Jan. 01, 2019
Increase (Decrease) in Partners' Capital [Roll Forward]
Net income	$ 328,765	$ 125,505
Reversal of unrealized gains upon the sale of marketable debt securities		33
Change in fair value of derivatives and amortization of swap settlements	(8,782)	(1,993)
Change in fair value of marketable debt securities, net	(305)	123
Issuance of common stock under:
Sale of common stock by general partner, net	(70)	(20)
Retirement of common units, net	(176,311)	(56,989)
Changes in the redemption value of redeemable noncontrolling interest	4,767	(1,767)
Changes in noncontrolling interest from acquisition	1,349
Distributions to noncontrolling interest	(7,879)	(7,164)
Redemptions	(1,368)	(12,213)
ASU 2016-13
Issuance of common stock under:
Cumulative effect adjustment			$ (190)
ASU 2017-12
Issuance of common stock under:
Cumulative effect adjustment				$ 181
Essex Portfolio, L.P.
Increase (Decrease) in Partners' Capital [Roll Forward]
Balance at period beginning	6,403,504	6,393,844
Net income	328,765	125,505
Reversal of unrealized gains upon the sale of marketable debt securities		33
Change in fair value of derivatives and amortization of swap settlements	(8,782)	(1,993)
Change in fair value of marketable debt securities, net	(305)	123
Issuance of common stock under:
General partner's stock based compensation, net	8,665	3,204
Sale of common stock by general partner, net	(70)	(20)
Equity based compensation costs	1,698	2,600
Retirement of common units, net	(176,311)	(56,989)
Changes in the redemption value of redeemable noncontrolling interest	4,767	(1,767)
Changes in noncontrolling interest from acquisition	1,349
Distributions to noncontrolling interest	(3,107)	(2,667)
Redemptions	(1,368)	(12,213)
Distributions declared	(140,666)	(132,646)
Balance at period end	6,417,949	6,317,195
Essex Portfolio, L.P. | ASU 2016-13
Issuance of common stock under:
Cumulative effect adjustment			(190)
Essex Portfolio, L.P. | ASU 2017-12
Issuance of common stock under:
Cumulative effect adjustment		181
Essex Portfolio, L.P. | Common Equity | ASU 2016-13
Issuance of common stock under:
Cumulative effect adjustment			(190)
Essex Portfolio, L.P. | Common Equity | General Partner
Increase (Decrease) in Partners' Capital [Roll Forward]
Balance at period beginning	$ 6,234,315	$ 6,280,290
Balance at period beginning (in shares)	66,092	65,890
Net income	$ 315,006	$ 118,858
Issuance of common stock under:
General partner's stock based compensation, net	$ 8,665	$ 3,204
General partner's stock based compensation, net (in shares)	89	51
Sale of common stock by general partner, net	$ (70)	$ (20)
Sale of common stock by general partner, net (in shares)	0
Equity based compensation costs	$ 1,619	2,301
Retirement of common units, net	$ (176,311)	$ (56,989)
Retirement of common units, net (in shares)	(776)	(234)
Changes in the redemption value of redeemable noncontrolling interest	$ 4,741	$ (3,027)
Redemptions	$ (1,048)	$ (10,394)
Redemptions (in shares)	(7)	(9)
Distributions declared	$ (135,894)	$ (128,149)
Balance at period end	$ 6,250,833	$ 6,206,074
Balance at period end (in shares)	65,412	65,716
Essex Portfolio, L.P. | Common Equity | Limited Partners
Increase (Decrease) in Partners' Capital [Roll Forward]
Balance at period beginning	$ 57,359	$ 59,061
Balance at period beginning (in shares)	2,302	2,305
Net income	$ 10,986	$ 4,171
Issuance of common stock under:
Equity based compensation costs	$ 79	$ 299
Equity based compensation costs (in shares)	2	3
Changes in the redemption value of redeemable noncontrolling interest	$ (18)	$ (2)
Redemptions	$ (84)	$ (365)
Redemptions (in shares)	(8)	(9)
Distributions declared	$ (4,772)	$ (4,497)
Balance at period end	$ 63,550	$ 58,667
Balance at period end (in shares)	2,296	2,299
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss
Increase (Decrease) in Partners' Capital [Roll Forward]
Balance at period beginning	$ (10,432)	$ (9,738)
Reversal of unrealized gains upon the sale of marketable debt securities		33
Change in fair value of derivatives and amortization of swap settlements	(8,782)	(1,993)
Change in fair value of marketable debt securities, net	(305)	123
Issuance of common stock under:
Balance at period end	(19,519)	(11,394)
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss | ASU 2016-13
Issuance of common stock under:
Cumulative effect adjustment			$ 0
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss | ASU 2017-12
Issuance of common stock under:
Cumulative effect adjustment		181
Essex Portfolio, L.P. | Noncontrolling Interest
Increase (Decrease) in Partners' Capital [Roll Forward]
Balance at period beginning	122,262	64,231
Net income	2,773	2,476
Issuance of common stock under:
Changes in the redemption value of redeemable noncontrolling interest	44	1,262
Changes in noncontrolling interest from acquisition	1,349
Distributions to noncontrolling interest	(3,107)	(2,667)
Redemptions	(236)	(1,454)
Balance at period end	$ 123,085	$ 63,848

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Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Marketable securities, allowance for credit loss	$ 13,644	$ 0
Notes and other receivables, allowance for credit loss	66	0
Related party receivables	$ 7,700	$ 90,200
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	670,000,000	670,000,000
Common stock, shares issued (in shares)	65,412,355	66,091,954
Common stock, shares outstanding (in shares)	65,412,355	66,091,954
Essex Portfolio, L.P.
Marketable securities, allowance for credit loss	$ 13,600	$ 0
Notes and other receivables, allowance for credit loss	100	0
Related party receivables	$ 7,700	$ 90,200
Essex Portfolio, L.P. | General Partner
Common stock, shares issued (in shares)	65,412,355	66,091,954
Common stock, shares outstanding (in shares)	65,412,355	66,091,954
Essex Portfolio, L.P. | Limited Partners
Common stock, shares issued (in shares)	2,296,043	2,301,653
Common stock, shares outstanding (in shares)	2,296,043	2,301,653

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Label	Element	Value
Accounting Standards Update 2016-13 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 0
Accounting Standards Update 2016-13 [Member] | Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	0
Accounting Standards Update 2017-12 [Member] | AOCI Attributable to Parent [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	175,000
Accounting Standards Update 2017-12 [Member] | Noncontrolling Interest [Member]
Cumulative Effect of New Accounting Principle in Period of Adoption	us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption	$ 6,000

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Debt - Narrative (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) instrument extension	Dec. 31, 2019 USD ($)
Unsecured debt
Debt Instrument [Line Items]
Unamortized discount (premium), net	$ 14,100,000	$ 12,200,000
Unamortized debt issuance expense	27,600,000	24,500,000
Lines of credit
Debt Instrument [Line Items]
Unamortized debt issuance expense	$ 4,500,000	3,800,000
Number of lines of unsecured credit (in instruments) | instrument	2
Aggregate borrowing capacity	$ 1,240,000,000
Number of extension options (in extensions) | extension	1
Extension period	18 months
Lines of credit | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	0.825%
Lines of credit | Working capital line of credit
Debt Instrument [Line Items]
Aggregate borrowing capacity	$ 35,000,000.0
Lines of credit | Working capital line of credit | LIBOR
Debt Instrument [Line Items]
Basis spread on variable rate	0.825%
Mortgage notes payable, net
Debt Instrument [Line Items]
Unamortized discount (premium), net	$ (5,000,000.0)	(5,900,000)
Unamortized debt issuance expense	$ 2,400,000	$ 2,600,000

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Notes and Other Receivables (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2020	Mar. 31, 2020	Dec. 31, 2019
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 34,867	$ 134,365
Notes and other receivables, allowance for credit loss		(66)	0
Notes receivable, secured, bearing interest at 9.00%, due May 2021 (Originated May 2017)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 0	16,828
Stated interest rate		9.00%
Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 13,168	12,838
Stated interest rate		9.90%
Related party note receivable, secured, bearing variable rate interest, due February 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 0	85,713
Notes and other receivables from affiliates
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		7,700	4,442
Other receivables
Accounts, Notes, Loans and Financing Receivable [Line Items]
Notes receivable		$ 14,065	$ 14,544
Affiliated Entity | Notes receivable, secured, bearing interest at 9.00%, due May 2021 (Originated May 2017)
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from redemption of notes receivable	$ 16,900
Affiliated Entity | Related party note receivable, secured, bearing variable rate interest, due February 2020
Accounts, Notes, Loans and Financing Receivable [Line Items]
Proceeds from redemption of notes receivable	$ 85,800

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Organization and Basis of Presentation - Cash, Cash Equivalents and Restricted Cash And Cash Equivalents (Details) - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Cash and cash equivalents-unrestricted	$ 271,877	$ 70,087	$ 107,034	$ 134,465
Cash and cash equivalents-restricted	10,470	11,007	17,092	16,930
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows	$ 282,347	$ 81,094	$ 124,126	$ 151,395

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Organization and Basis of Presentation - Allowance For Credit Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Jan. 01, 2020
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	$ 0
Impact of adoption ASC 326	13,644
Provision for credit losses	(50)
Ending balance	13,644
Mortgage Backed Securities
Financing Receivable, Allowance for Credit Loss [Line Items]
Beginning balance	0
Impact of adoption ASC 326	13,644
Provision for credit losses	0
Ending balance	$ 13,644
Cumulative Effect, Period Of Adoption, Adjustment | Mortgage Backed Securities
Financing Receivable, Allowance for Credit Loss [Line Items]
Impact of adoption ASC 326		$ 13,644

XML

Organization and Basis of Presentation

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. ("Essex" or the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2019.

All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2020 and 2019 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.6% general partnership interest as of both March 31, 2020 and December 31, 2019. Total Operating Partnership limited partnership units ("OP Units," and the holders of such OP Units, "Unitholders") outstanding were 2,296,043 and 2,301,653 as of March 31, 2020 and December 31, 2019, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $505.7 million and $692.5 million as of March 31, 2020 and December 31, 2019, respectively.

As of March 31, 2020, the Company owned or had ownership interests in 250 operating apartment communities, aggregating 60,770 apartment homes, excluding the Company’s ownership interest in preferred interest co-investments, loan investments, one operating commercial building, and a development pipeline comprised of four consolidated projects and two unconsolidated joint venture projects. The operating apartment communities are located in Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas.

Accounting Pronouncements Adopted in the Current Year

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13 "Measurement of Credit Losses on Financial Instruments," which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities, and other financial instruments. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Previously, U.S. GAAP required entities to write down credit losses only when losses were probable and loss reversals were not permitted. The FASB additionally issued various updates to clarify and amend the guidance provided in ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," which, with respect to credit losses, among other things, clarifies and addresses issues related to accrued interest, transfers between classifications of loans or debt securities, recoveries, and variable interest rates. Additionally, in May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," which allows entities to irrevocably elect the fair value option on certain financial instruments. The Company adopted ASU No. 2016-13, ASU No. 2019-04, and ASU No. 2019-05 as of January 1, 2020, using the modified retrospective approach by applying a cumulative effect adjustment of $0.2 million representing estimated accumulated credit losses to the opening balance of retained earnings.

In August 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which eliminates certain disclosure requirements affecting all levels of measurements, and modifies and adds new disclosure requirements for Level 3 measurements. The Company adopted ASU No. 2018-13 as of January 1, 2020. This adoption did not have a material impact on the Company's consolidated results of operations or financial position.

In March 2020, the FASB issued ASU No. 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Marketable Securities

The Company reports its equity securities and available for sale debt securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds, Level 2 for the unsecured bonds and Level 3 for investments in mortgage backed securities, as defined by the FASB standard for fair value measurements). As of March 31, 2020 and December 31, 2019, $3.2 million and $3.6 million, respectively, of equity securities presented within common stock and stock funds in the tables below, represent investments measured at fair value, using net asset value as a practical expedient, and are not categorized in the fair value hierarchy.

Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, interest income, and amortization of purchase discounts are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

As of March 31, 2020 and December 31, 2019, equity securities and available for sale debt securities consisted primarily of investment-grade unsecured bonds, U.S. treasury securities, common stock and stock funds. As of March 31, 2020 and December 31, 2019, the Company classified its mortgage backed security investment, which matures in September 2020, as held to maturity, and accordingly, this security is stated at its amortized cost. The discount on the mortgage backed security is being amortized to interest income based on an estimated yield and the maturity date of the security.

As of March 31, 2020 and December 31, 2019, marketable securities consist of the following ($ in thousands):

	March 31, 2020
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)			Carrying Value		Allowance for Credit Losses
Equity securities:
Investment funds - debt securities	$	29,685	$	(676	)	$	29,009
Common stock and stock funds	45,395		(4,549		)	40,846
Debt securities:
Available for sale
U.S. treasury securities	2,421		16			2,437		—
Investment-grade unsecured debt	1,050		(248		)	802		—
Held to maturity
Mortgage backed securities	75,045		—			75,045		13,644
Total - Marketable securities	$	153,596	$	(5,457	)	$	148,139	$	13,644

	December 31, 2019
	Amortized Cost/Cost		Gross Unrealized Gain (Loss)		Carrying Value
Equity securities:
Investment funds - debt securities	$	29,588	$	544	$	30,132
Common stock and stock funds	34,941		2,927		37,868
Debt securities:
Available for sale
U.S. treasury securities	2,421		13		2,434
Investment-grade unsecured bonds	1,048		60		1,108
Held to maturity
Mortgage backed securities	72,651		—		72,651
Total - Marketable securities	$	140,649	$	3,544	$	144,193

The Company uses the specific identification method to determine the cost basis of a debt security sold and to reclassify amounts from accumulated other comprehensive income for such securities. 

For the three months ended March 31, 2020 and 2019, the proceeds from sales and maturities of marketable securities totaled $0.2 million and $16.8 million, respectively, which resulted in $13 thousand and $0.1 million in realized losses, respectively, for such periods.

For the three months ended March 31, 2020 and 2019, the portion of equity security unrealized losses or gains that were recognized in income totaled $8.7 million in losses and $4.5 million in gains, respectively, and were included in interest and other income (loss) on the Company's condensed consolidated statements of income and comprehensive income.

Unrealized losses on Investment-grade unsecured bonds as of March 31, 2020 have not been recognized into income because the debts of the issuers are of high credit quality, management does not intend to sell the securities, it is likely that the Company will not be required to sell the securities prior to their anticipated recovery, and the decline in fair value is largely due to other market conditions.

The Company monitors the credit quality of its held to maturity mortgage backed security through the review of remittance reports and individual loan watchlists, which are prepared quarterly and provide most recent debt service coverage ratios for each loan within the security, when available. The Company monitors such reports to determine the likelihood that a particular loan within the mortgage backed security may be foreclosed upon.

The Company measures the expected credit loss on its held to maturity mortgage backed security based on the present value of expected future cash flows, which takes into account current market conditions and available credit information obtained from the individual loans held within the mortgage backed security. The following table presents the allowance for credit losses rollforward for the mortgage backed security ($ in thousands):

Balance at December 31, 2019	$	—
Impact of adoption ASC 326 (1)	13,644
Provision for credit losses	—
Balance at March 31, 2020	$	13,644

⁽¹⁾ As part of the adoption of ASC 326, effective January 1, 2020, the Company recorded a gross up of the mortgage backed security and related allowance for credit losses of $13.6 million. This gross up had no effect on the Company's consolidated results of operations or financial position.

Variable Interest Entities

In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidated the Operating Partnership, 17 DownREIT entities (comprising nine communities), and six co-investments as of both March 31, 2020 and December 31, 2019. The Company consolidates these entities because it is deemed the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were approximately $1.1 billion and $348.9 million, respectively, as of March 31, 2020 and $1.0 billion and $364.3 million, respectively, as of December 31, 2019. Noncontrolling interests in these entities were $122.3 million and $122.5 million as of March 31, 2020 and December 31, 2019, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2020 and December 31, 2019, the Company did not have any VIEs of which it was not deemed to be the primary beneficiary.

Equity-based Compensation

The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, "Equity Based Compensation Plans," in the Company’s annual report on Form 10-K for the year ended December 31, 2019) are being amortized over the expected service periods.

Fair Value of Financial Instruments

Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of March 31, 2020 and December 31, 2019, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.5 billion and $5.2 billion at March 31, 2020 and December 31, 2019, respectively, was approximately $5.6 billion and $5.4 billion, respectively. Management has estimated that the fair value of the Company’s $955.3 million and $660.4 million of variable rate debt at March 31, 2020 and December 31, 2019, respectively, was approximately $949.2 million and $655.8 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of March 31, 2020 and December 31, 2019 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, are carried at fair value as of March 31, 2020 and December 31, 2019.

At March 31, 2020, the Company’s investment in its mortgage backed security had a carrying value of $75.0 million and the Company estimated the fair value to be approximately $75.1 million. At December 31, 2019, the Company’s investment in its mortgage backed security had a carrying value of $72.7 million and the Company estimated the fair value to be approximately $72.7 million. The Company determines the fair value of the mortgage backed security based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing this security. Assumptions such as estimated default rates and discount rates are used to determine the expected, discounted cash flows to estimate fair value.

Capitalization of Costs

The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $9.9 million and $10.7 million during the three months ended March 31, 2020 and 2019, respectively. The Company capitalizes leasing commissions associated with the lease-up of development

communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented.

Co-investments

The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of income equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments.

Changes in Accumulated Other Comprehensive Loss, Net by Component

Essex Property Trust, Inc.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(13,989	)	$	101		$	(13,888	)
Other comprehensive loss before reclassification	(7,178		)	(294		)	(7,472		)
Amounts reclassified from accumulated other comprehensive loss	(1,308		)	—			(1,308		)
Other comprehensive loss	(8,486		)	(294		)	(8,780		)
Balance at March 31, 2020	$	(22,475	)	$	(193	)	$	(22,668	)

Changes in Accumulated Other Comprehensive Loss, by Component

Essex Portfolio, L.P.

($ in thousands):

	Change in fair value and amortization of swap settlements			Unrealized gain/(loss) on available for sale securities			Total
Balance at December 31, 2019	$	(10,536	)	$	104		$	(10,432	)
Other comprehensive loss before reclassification	(7,429		)	(305		)	(7,734		)
Amounts reclassified from accumulated other comprehensive loss	(1,353		)	—			(1,353		)
Other comprehensive loss	(8,782		)	(305		)	(9,087		)
Balance at March 31, 2020	$	(19,318	)	$	(201	)	$	(19,519	)

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

Redeemable Noncontrolling Interest

The carrying value of redeemable noncontrolling interest in the accompanying condensed consolidated balance sheets was $32.6 million and $37.4 million as of March 31, 2020 and December 31, 2019, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances.

The changes to the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2020 is as follows ($ in thousands):

Balance at December 31, 2019	$	37,410
Reclassification due to change in redemption value and other	(4,767		)
Redemptions	—
Balance at March 31, 2020	$	32,643

Cash, Cash Equivalents and Restricted Cash

Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):

	March 31, 2020		December 31, 2019		March 31, 2019		December 31, 2018
Cash and cash equivalents - unrestricted	$	271,877	$	70,087	$	107,034	$	134,465
Cash and cash equivalents - restricted	10,470		11,007		17,092		16,930
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statement of cash flows	$	282,347	$	81,094	$	124,126	$	151,395

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a real estate investment trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

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Notes and Other Receivables

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Notes and Other Receivables

Notes and Other Receivables

Notes and other receivables consist of the following as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020			December 31, 2019
Note receivable, secured, bearing interest at 9.00%, due May 2021 (Originated May 2017) (1)	$	—		$	16,828
Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018)	13,168			12,838
Related party note receivable, secured, bearing variable rate interest, due February 2020 (Originated November 2019) (2)(3)	—			85,713
Notes and other receivables from affiliates (4)	7,700			4,442
Other receivables	14,065			14,544
Allowance for credit losses	(66		)	—
Total notes and other receivables	$	34,867		$	134,365

⁽¹⁾ In January 2020, the Company received cash of $16.9 million from the payoff of this note receivable.

⁽²⁾ See Note 6, Related Party Transactions, for additional details.

⁽³⁾ In January 2020, the Company received cash of $85.8 million from the payoff of this note receivable.

⁽⁴⁾ These amounts consist of short-term loans outstanding and due from various joint ventures as of March 31, 2020 and December 31, 2019. See Note 6, Related Party Transactions, for additional details.

In the normal course of business, the Company originates and holds two types of loans: mezzanine loans issued to entities that are pursuing apartment development and short-term bridge loans issued to joint ventures with the Company.

The Company categorizes development project mezzanine loans into risk categories based on relevant information about the ability of the borrowers to service their debt, such as: current financial information, credit documentation, public information, and previous experience with the borrower. The Company initially analyzes each mezzanine loan individually to classify the credit risk of the loan. On a periodic basis the Company evaluates and performs site visits of the development projects associated with the mezzanine loans to confirm whether they are on budget and whether there are any delays in development that could impact the Company's assessment of credit loss.

All bridge loans that the Company issues are, by their nature, short-term and meant only to provide time for the Company’s joint ventures to obtain long-term funding for newly acquired communities. As the Company is a partner in the joint ventures that are borrowing such funds and has performed a detailed review of each community as part of the acquisition process, there is little to no credit risk associated with such loans. As such, the Company does not review credit quality indicators for bridge loans on an ongoing basis.

The Company estimates the allowance for credit losses for each loan type using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made, if necessary, for differences in current loan-specific risk characteristics. For example, in the case of mezzanine loans, adjustments may be made due to differences in track record and experience of the mezzanine loan sponsor as well as the percent of equity that the sponsor has contributed to the project. The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands):

	Mezzanine Loans			Bridge Loans			Total
Balance at December 31, 2019	$	—		$	—		$	—
Impact of adoption ASC 326	147			43			190
Provision for credit losses	(81		)	(43		)	(124		)
Balance at March 31, 2020	$	66		$	—		$	66

No loans were placed on nonaccrual status or charged off during the three months ended March 31, 2020 or 2019.

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Net Income Per Common Share and Net Income Per Common Unit

3 Months Ended

Mar. 31, 2020

Earnings Per Share [Abstract]

Net Income Per Common Share and Net Income Per Common Unit

Net Income Per Common Share and Net Income Per Common Unit

($ in thousands, except share and unit data):

Essex Property Trust, Inc.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	315,006	66,043,831	$	4.77	$	118,858	65,702,788	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common stockholders	$	315,202	66,195,415	$	4.76	$	118,858	65,783,869	$	1.81

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,300,181 and 2,305,064, which include vested Series Z-1 Incentive Units, 2014 Long-Term Incentive Plan Units, and 2015 Long-Term Incentive Plan Units for the three months ended March 31, 2020 and 2019, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $11.0 million and $4.2 million for the three months ended March 31, 2020 and 2019, respectively. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned

compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive.

Essex Portfolio, L.P.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	325,992	68,344,012	$	4.77	$	123,029	68,007,852	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common unitholders	$	326,188	68,495,596	$	4.76	$	123,029	68,088,933	$	1.81

Stock options of 116,380 and 106,029 for the three months ended March 31, 2020 and 2019, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the period ended and, therefore, were anti-dilutive. Additionally, the table excludes all DownREIT units for which the Operating Partnership has the ability and intention to redeem the units for cash and does not consider them to be common stock equivalents.

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Significant Transactions During The Three Months Ended March 31, 2020 and Subsequent Events (Details)	1 Months Ended			3 Months Ended
	Apr. 30, 2020 USD ($) extension	Mar. 31, 2020 USD ($)	Jan. 31, 2020 USD ($) community apartment	Mar. 31, 2020 USD ($) shares	Mar. 31, 2019 USD ($)	Feb. 29, 2020 USD ($)
Other Commitments [Line Items]
Gain on remeasurement of co-investment				$ 234,694,000	$ 31,535,000
Commitments to acquire equity method investment				$ 91,400,000
Preferred return rate				11.30%
Notes receivable, term of extension option		2 years
Common Stock
Other Commitments [Line Items]
Shares repurchased during period (in shares) | shares				776,261
Shares repurchased during period, value				$ 176,300,000
Purchase authority remaining under stock repurchase plan		$ 73,700,000		73,700,000
Stock repurchase plan amount		250,000,000.0		250,000,000.0
CPPIB interest
Other Commitments [Line Items]
Investment interest acquired			45.00%
Value of property held by acquired investment			$ 1,000,000,000.0
Gain on remeasurement of co-investment			234,700,000
Promote income			6,500,000
Joint venture that holds property in Los Angeles, CA
Other Commitments [Line Items]
Proceeds from partial redemption of co-investment		11,300,000
Early redemption fee		200,000
Property Located In Anaheim, California
Other Commitments [Line Items]
Proceeds from redemption of notes receivable			$ 16,900,000
Multifamily Development Communities In Los Angeles, California
Other Commitments [Line Items]
Notes receivable, commitment to fund, amount		$ 15,000,000.0		$ 15,000,000.0
Notes receivable, interest rate		10.50%		10.50%
Apartment Building | CPPIB interest
Other Commitments [Line Items]
Number of communities held by acquired investment | community			6
Number of units held by acquired investment | apartment			2,020
Essex Portfolio, L.P.
Other Commitments [Line Items]
Gain on remeasurement of co-investment				$ 234,694,000	$ 31,535,000
Essex Portfolio, L.P. | Senior Notes | 2032 Notes
Other Commitments [Line Items]
Debt issued						$ 500,000,000.0
Debt coupon rate						2.65%
Debt offering price, percentage of par value						99.628%
Repayments of secured debt				$ 100,300,000
Affiliated Entity | Related party bridge loan - Wesco V
Other Commitments [Line Items]
Proceeds from redemption of notes receivable			$ 85,800,000
Subsequent Event | Unsecured Term Loan
Other Commitments [Line Items]
Debt issued	$ 200,000,000.0
Number of extension options (in extensions) | extension	2
Extension period	12 months
Prepayment of debt	$ 169,600,000
Subsequent Event | LIBOR | Unsecured Term Loan
Other Commitments [Line Items]
Basis spread on variable rate	1.20%

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Organization and Basis of Presentation - Accumulated Other Comprehensive Loss Summary (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	$ 6,403,504
Balance at period end	6,417,949
Accumulated Other Comprehensive Loss, Net
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	(13,888)
Other comprehensive loss before reclassification	(7,472)
Amounts reclassified from accumulated other comprehensive loss	(1,308)
Other comprehensive loss	(8,780)
Balance at period end	(22,668)
Change in fair value and amortization of swap settlements
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	(13,989)
Other comprehensive loss before reclassification	(7,178)
Amounts reclassified from accumulated other comprehensive loss	(1,308)
Other comprehensive loss	(8,486)
Balance at period end	(22,475)
Unrealized gain/(loss) on available for sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	101
Other comprehensive loss before reclassification	(294)
Amounts reclassified from accumulated other comprehensive loss	0
Other comprehensive loss	(294)
Balance at period end	$ (193)

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Segment Information

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company's segment disclosures present the measure used by the chief operating decision makers for purposes of assessing each segment's performance. The Company's chief operating decision makers are comprised of several members of its executive management team who use net operating income ("NOI") to assess the performance of the business for the Company's reportable operating segments. NOI represents total property revenues less direct property operating expenses.

The executive management team generally evaluates the Company's operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California, and Seattle Metro.

Excluded from segment revenues and NOI are management and other fees from affiliates and interest and other income (loss). Non-segment revenues and NOI included in the following schedule also consist of revenues generated from commercial properties and properties that have been sold. Other non-segment assets include items such as real estate under development, co-investments, real estate held for sale, net, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets.

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2020 and 2019 ($ in thousands):

	Three Months Ended March 31,
	2020			2019
Revenues:
Southern California	$	155,642		$	151,463
Northern California	164,079			136,745
Seattle Metro	63,844			60,413
Other real estate assets	6,185			5,267
Total property revenues	$	389,750		$	353,888
Net operating income:
Southern California	$	111,097		$	107,996
Northern California	120,981			101,214
Seattle Metro	44,993			41,699
Other real estate assets	5,536			4,939
Total net operating income	282,607			255,848
Management and other fees from affiliates	2,617			2,335
Corporate-level property management expenses	(8,759		)	(8,429		)
Depreciation and amortization	(131,559		)	(120,568		)
General and administrative	(13,982		)	(13,459		)
Expensed acquisition and investment related costs	(87		)	(32		)
Interest expense	(55,147		)	(53,643		)
Total return swap income	1,984			2,045
Interest and other income (loss)	(5,221		)	12,261
Equity income from co-investments	21,297			16,276
Gain on early retirement of debt, net	321			1,336
Gain on remeasurement of co-investment	234,694			31,535
Net income	$	328,765		$	125,505

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020		December 31, 2019
Assets:
Southern California	$	4,198,656	$	4,233,110
Northern California	5,748,062		4,622,268
Seattle Metro	1,469,297		1,481,061
Other real estate assets	12,103		12,221
Net reportable operating segment - real estate assets	11,428,118		10,348,660
Real estate under development	435,865		546,075
Co-investments	997,137		1,335,339
Cash and cash equivalents, including restricted cash	282,347		81,094
Marketable securities	148,139		144,193
Notes and other receivables	34,867		134,365
Operating lease right-of-use assets	74,428		74,744
Prepaid expenses and other assets	49,940		40,935
Total assets	$	13,450,841	$	12,705,405

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Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Interest capitalized	$ 4.8	$ 5.9
Essex Portfolio, L.P.
Interest capitalized	$ 4.8	$ 5.9

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Co-investments

3 Months Ended

Mar. 31, 2020

Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]

Co-investments

Co-investments

The Company has joint ventures and preferred equity investments in co-investments which are accounted for under the equity method. The co-investments, including BEXAEW, BEX II, BEX III, and BEX IV, Wesco I, LLC ("Wesco I"), Wesco III, LLC ("Wesco III"), Wesco IV, LLC ("Wesco IV"), and Wesco V, own, operate, and develop apartment communities. The carrying values of the Company's co-investments as of March 31, 2020 and December 31, 2019 are as follows ($ in thousands, except parenthetical amounts):

	Weighted Average Company Ownership Percentage (1)		3/31/2020		12/31/2019
Ownership interest in:
CPPIB (2)	—	%	$	—	$	345,466
Wesco I, Wesco III, Wesco IV, and Wesco V	51	%	209,742		216,756
BEXAEW, BEX II, BEX III, and BEX IV	50	%	156,869		160,888
Other	48	%	21,023		20,351
Total operating and other co-investments, net			387,634		743,461
Total predevelopment and development co-investments	50	%	158,145		146,944
Total preferred interest co-investments (includes related party investments of $75.3 million and $73.2 million as of March 31, 2020 and December 31, 2019, respectively)			451,358		444,934
Total co-investments, net			$	997,137	$	1,335,339

⁽¹⁾ Weighted average Company ownership percentages are as of March 31, 2020.

⁽²⁾ In January 2020, the Company purchased CPPIB's 45.0% interest in each of a land parcel and six communities totaling 2,020 apartment homes.

The combined summarized financial information of co-investments is as follows ($ in thousands):

	3/31/2020		12/31/2019
Combined balance sheets: (1)
Rental properties and real estate under development	$	4,287,101	$	4,733,762
Other assets	158,145		139,562
Total assets	$	4,445,246	$	4,873,324
Debt	$	2,522,407	$	2,442,213
Other liabilities	181,761		117,160
Equity	1,741,078		2,313,951
Total liabilities and equity	$	4,445,246	$	4,873,324
Company's share of equity	$	997,137	$	1,335,339

	Three Months Ended March 31,
	2020			2019
Combined statements of income: (1)
Property revenues	$	77,369		$	83,725
Property operating expenses	(25,715		)	(28,719		)
Net operating income	51,654			55,006
Interest expense	(20,853		)	(15,115		)
General and administrative	(4,083		)	(1,928		)
Depreciation and amortization	(28,437		)	(29,935		)
Net income (loss)	$	(1,719	)	$	8,028
Company's share of net income (2)	$	21,297		$	16,276

⁽¹⁾ Includes preferred equity investments held by the Company.

⁽²⁾ Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $2.1 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively.

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Organization and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation Policy

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. ("Essex" or the "Company"), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the "Operating Partnership," which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles ("U.S. GAAP") for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2019.

All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements. Certain reclassifications have been made to conform to the current year’s presentation.

New Accounting Pronouncements Adopted in the Current Year

Accounting Pronouncements Adopted in the Current Year

In June 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-13 "Measurement of Credit Losses on Financial Instruments," which amends the current approach to estimate credit losses on certain financial assets, including trade and other receivables, available-for-sale securities, and other financial instruments. Generally, this amendment requires entities to establish a valuation allowance for the expected lifetime losses of these certain financial assets. Subsequent changes in the valuation allowance are recorded in current earnings and reversal of previous losses are permitted. Previously, U.S. GAAP required entities to write down credit losses only when losses were probable and loss reversals were not permitted. The FASB additionally issued various updates to clarify and amend the guidance provided in ASU No. 2016-13. In May 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments - Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments," which, with respect to credit losses, among other things, clarifies and addresses issues related to accrued interest, transfers between classifications of loans or debt securities, recoveries, and variable interest rates. Additionally, in May 2019, the FASB issued ASU No. 2019-05, "Financial Instruments - Credit Losses (Topic 326): Targeted Transition Relief," which allows entities to irrevocably elect the fair value option on certain financial instruments. The Company adopted ASU No. 2016-13, ASU No. 2019-04, and ASU No. 2019-05 as of January 1, 2020, using the modified retrospective approach by applying a cumulative effect adjustment of $0.2 million representing estimated accumulated credit losses to the opening balance of retained earnings.

In August 2018, the FASB issued ASU No. 2018-13 "Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement," which eliminates certain disclosure requirements affecting all levels of measurements, and modifies and adds new disclosure requirements for Level 3 measurements. The Company adopted ASU No. 2018-13 as of January 1, 2020. This adoption did not have a material impact on the Company's consolidated results of operations or financial position.

In March 2020, the FASB issued ASU No. 2020-04 "Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting," which contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU No. 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Marketable Securities

Marketable Securities

The Company reports its equity securities and available for sale debt securities at fair value, based on quoted market prices (Level 1 for the common stock and investment funds, Level 2 for the unsecured bonds and Level 3 for investments in mortgage backed securities, as defined by the FASB standard for fair value measurements). As of March 31, 2020 and December 31, 2019, $3.2 million and $3.6 million, respectively, of equity securities presented within common stock and stock funds in the tables below, represent investments measured at fair value, using net asset value as a practical expedient, and are not categorized in the fair value hierarchy.

Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Unrealized gains and losses in equity securities, realized gains and losses in debt securities, interest income, and amortization of purchase discounts are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

As of March 31, 2020 and December 31, 2019, equity securities and available for sale debt securities consisted primarily of investment-grade unsecured bonds, U.S. treasury securities, common stock and stock funds. As of March 31, 2020 and December 31, 2019, the Company classified its mortgage backed security investment, which matures in September 2020, as held to maturity, and accordingly, this security is stated at its amortized cost. The discount on the mortgage backed security is being amortized to interest income based on an estimated yield and the maturity date of the security.

Variable Interest Entities

Variable Interest Entities

In accordance with accounting standards for consolidation of variable interest entities ("VIEs"), the Company consolidated the Operating Partnership, 17 DownREIT entities (comprising nine communities), and six co-investments as of both March 31, 2020 and December 31, 2019. The Company consolidates these entities because it is deemed the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were approximately $1.1 billion and $348.9 million, respectively, as of March 31, 2020 and $1.0 billion and $364.3 million, respectively, as of December 31, 2019. Noncontrolling interests in these entities were $122.3 million and $122.5 million as of March 31, 2020 and December 31, 2019, respectively. The Company's financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2020 and December 31, 2019, the Company did not have any VIEs of which it was not deemed to be the primary beneficiary.

Equity-based Compensation

Equity-based Compensation

The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, "Equity Based Compensation Plans," in the Company’s annual report on Form 10-K for the year ended December 31, 2019) are being amortized over the expected service periods.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Management believes that the carrying amounts of the outstanding balances under its lines of credit, and notes and other receivables approximate fair value as of March 31, 2020 and December 31, 2019, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.5 billion and $5.2 billion at March 31, 2020 and December 31, 2019, respectively, was approximately $5.6 billion and $5.4 billion, respectively. Management has estimated that the fair value of the Company’s $955.3 million and $660.4 million of variable rate debt at March 31, 2020 and December 31, 2019, respectively, was approximately $949.2 million and $655.8 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and variable rate demand notes compared to those available in the marketplace. Management believes that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities, and dividends payable approximate fair value as of March 31, 2020 and December 31, 2019 due to the short-term maturity of these instruments. Marketable securities, except mortgage backed securities, are carried at fair value as of March 31, 2020 and December 31, 2019.

At March 31, 2020, the Company’s investment in its mortgage backed security had a carrying value of $75.0 million and the Company estimated the fair value to be approximately $75.1 million. At December 31, 2019, the Company’s investment in its mortgage backed security had a carrying value of $72.7 million and the Company estimated the fair value to be approximately $72.7 million. The Company determines the fair value of the mortgage backed security based on unobservable inputs (level 3 of the fair value hierarchy) considering the assumptions that market participants would make in valuing this security. Assumptions such as estimated default rates and discount rates are used to determine the expected, discounted cash flows to estimate fair value.

Capitalization of Costs

Capitalization of Costs

The Company’s capitalized internal costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $9.9 million and $10.7 million during the three months ended March 31, 2020 and 2019, respectively. The Company capitalizes leasing commissions associated with the lease-up of development

communities and amortizes the costs over the life of the leases. The amounts capitalized for leasing commissions are immaterial for all periods presented.

Co-investments

Co-investments

The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company's equity in earnings less distributions received and the Company's share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of co-investments in the consolidated statement of income equal to the amount by which the fair value of the co-investment interest the Company previously owned exceeds its carrying value. A majority of the co-investments, excluding the preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Asset management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments.

Changes in Accumulated Other Comprehensive Loss

Amounts reclassified from accumulated other comprehensive loss in connection with derivatives are recorded in interest expense on the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income (loss) on the condensed consolidated statements of income and comprehensive income.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Highly liquid investments with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt.

Accounting Estimates

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its real estate portfolio, its investments in and advances to joint ventures and affiliates, its notes receivables, and its qualification as a real estate investment trust ("REIT"). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

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Notes and Other Receivables (Tables)

3 Months Ended

Mar. 31, 2020

Receivables [Abstract]

Notes and other receivables

Notes and other receivables consist of the following as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020			December 31, 2019
Note receivable, secured, bearing interest at 9.00%, due May 2021 (Originated May 2017) (1)	$	—		$	16,828
Note receivable, secured, bearing interest at 9.90%, due November 2021 (Originated November 2018)	13,168			12,838
Related party note receivable, secured, bearing variable rate interest, due February 2020 (Originated November 2019) (2)(3)	—			85,713
Notes and other receivables from affiliates (4)	7,700			4,442
Other receivables	14,065			14,544
Allowance for credit losses	(66		)	—
Total notes and other receivables	$	34,867		$	134,365

⁽¹⁾ In January 2020, the Company received cash of $16.9 million from the payoff of this note receivable.

⁽²⁾ See Note 6, Related Party Transactions, for additional details.

⁽³⁾ In January 2020, the Company received cash of $85.8 million from the payoff of this note receivable.

⁽⁴⁾ These amounts consist of short-term loans outstanding and due from various joint ventures as of March 31, 2020 and December 31, 2019. See Note 6, Related Party Transactions, for additional details.

Schedule of allowance for credit loss

The following table presents the allowance for credit losses rollforward for the mortgage backed security ($ in thousands):

Balance at December 31, 2019	$	—
Impact of adoption ASC 326 (1)	13,644
Provision for credit losses	—
Balance at March 31, 2020	$	13,644

⁽¹⁾ As part of the adoption of ASC 326, effective January 1, 2020, the Company recorded a gross up of the mortgage backed security and related allowance for credit losses of $13.6 million. This gross up had no effect on the Company's consolidated results of operations or financial position.

The following table presents the activity in the allowance for credit losses for notes and other receivables by loan type ($ in thousands):

	Mezzanine Loans			Bridge Loans			Total
Balance at December 31, 2019	$	—		$	—		$	—
Impact of adoption ASC 326	147			43			190
Provision for credit losses	(81		)	(43		)	(124		)
Balance at March 31, 2020	$	66		$	—		$	66

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Condensed Consolidated Statement of Equity (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Common stock dividends (in dollars per share)	$ 2.0775	$ 1.95

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Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Mar. 31, 2020	Dec. 31, 2019
Rental properties:
Land and land improvements	$ 2,983,314	$ 2,773,805
Buildings and improvements	12,263,293	11,264,337
Total rental properties	15,246,607	14,038,142
Less: accumulated depreciation	(3,818,489)	(3,689,482)
Net real estate	11,428,118	10,348,660
Real estate under development	435,865	546,075
Co-investments	997,137	1,335,339
Total real estate	12,861,120	12,230,074
Cash and cash equivalents-unrestricted	271,877	70,087
Cash and cash equivalents-restricted	10,470	11,007
Marketable securities, net of allowance for credit losses of $13.6 million and zero as of March 31, 2020 and December 31, 2019, respectively	148,139	144,193
Notes and other receivables, net of allowance for credit losses of $0.1 million and zero as of March 31, 2020 and December 31, 2019, respectively (includes related party receivables of $7.7 million and $90.2 million as of March 31, 2020 and December 31, 2019, respectively)	34,867	134,365
Operating lease right-of-use assets	74,428	74,744
Prepaid expenses and other assets	49,940	40,935
Total assets	13,450,841	12,705,405
LIABILITIES AND EQUITY/CAPITAL
Unsecured debt, net	5,258,263	4,763,206
Mortgage notes payable, net	887,389	990,667
Lines of credit	350,000	55,000
Accounts payable and accrued liabilities	193,564	158,017
Construction payable	50,538	48,912
Dividends/Distributions payable	142,800	135,384
Operating lease liabilities	76,405	76,740
Other liabilities	41,290	36,565
Total liabilities	7,000,249	6,264,491
Commitments and contingencies
Redeemable noncontrolling interest	32,643	37,410
Equity/Capital:
Common stock; $.0001 par value, 670,000,000 shares authorized; 65,412,355 and 66,091,954 shares issued and outstanding, respectively	7	7
Additional paid-in capital	6,959,523	7,121,927
Distributions in excess of accumulated earnings	(708,697)	(887,619)
Limited Partners:
Accumulated other comprehensive loss, net	(22,668)	(13,888)
Total stockholders' equity	6,228,165	6,220,427
Noncontrolling interest	189,784	183,077
Total equity	6,417,949	6,403,504
Total liabilities and equity/capital	13,450,841	12,705,405
Essex Portfolio, L.P.
Rental properties:
Land and land improvements	2,983,314	2,773,805
Buildings and improvements	12,263,293	11,264,337
Total rental properties	15,246,607	14,038,142
Less: accumulated depreciation	(3,818,489)	(3,689,482)
Net real estate	11,428,118	10,348,660
Real estate under development	435,865	546,075
Co-investments	997,137	1,335,339
Total real estate	12,861,120	12,230,074
Cash and cash equivalents-unrestricted	271,877	70,087
Cash and cash equivalents-restricted	10,470	11,007
Marketable securities, net of allowance for credit losses of $13.6 million and zero as of March 31, 2020 and December 31, 2019, respectively	148,139	144,193
Notes and other receivables, net of allowance for credit losses of $0.1 million and zero as of March 31, 2020 and December 31, 2019, respectively (includes related party receivables of $7.7 million and $90.2 million as of March 31, 2020 and December 31, 2019, respectively)	34,867	134,365
Operating lease right-of-use assets	74,428	74,744
Prepaid expenses and other assets	49,940	40,935
Total assets	13,450,841	12,705,405
LIABILITIES AND EQUITY/CAPITAL
Unsecured debt, net	5,258,263	4,763,206
Mortgage notes payable, net	887,389	990,667
Lines of credit	350,000	55,000
Accounts payable and accrued liabilities	193,564	158,017
Construction payable	50,538	48,912
Dividends/Distributions payable	142,800	135,384
Operating lease liabilities	76,405	76,740
Other liabilities	41,290	36,565
Total liabilities	7,000,249	6,264,491
Commitments and contingencies
Redeemable noncontrolling interest	32,643	37,410
General Partner:
Common equity (65,412,355 and 66,091,954 units issued and outstanding, respectively)	6,250,833	6,234,315
Limited Partners:
Common equity (2,296,043 and 2,301,653 units issued and outstanding, respectively)	63,550	57,359
Accumulated other comprehensive loss, net	(19,519)	(10,432)
Total partners' capital	6,294,864	6,281,242
Noncontrolling interest	123,085	122,262
Total capital	6,417,949	6,403,504
Total liabilities and equity/capital	$ 13,450,841	$ 12,705,405

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Debt - Future Principal Payments (Details) $ in Thousands	Mar. 31, 2020 USD ($)
Debt Disclosure [Abstract]
Remaining in 2020	$ 185,493
2021	531,653
2022	693,188
2023	602,945
2024	403,109
Thereafter	3,768,383
Long-term debt	$ 6,184,771

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Notes and Other Receivables - Allowance for credit loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Jan. 01, 2020
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 0
Impact of adoption ASC 326	0
Provision for credit losses	50
Ending balance	66
Mezzanine Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Impact of adoption ASC 326	66
Provision for credit losses	(81)
Ending balance	66
Bridge Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Impact of adoption ASC 326	0
Provision for credit losses	(43)
Ending balance	0
Mezzanine and Bridge Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0
Impact of adoption ASC 326	66
Provision for credit losses	(124)
Ending balance	$ 66
Cumulative Effect, Period Of Adoption, Adjustment | Mezzanine Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Impact of adoption ASC 326		$ 147
Cumulative Effect, Period Of Adoption, Adjustment | Bridge Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Impact of adoption ASC 326		43
Cumulative Effect, Period Of Adoption, Adjustment | Mezzanine and Bridge Loans
Financing Receivable, Allowance for Credit Loss [Roll Forward]
Impact of adoption ASC 326		$ 190

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Derivative Instruments and Hedging Activities (Details)	3 Months Ended
	Mar. 31, 2020 USD ($) instrument	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Derivative [Line Items]
Total return swap income	$ 1,984,000	$ 2,045,000
Multifamily Housing Mortgage Revenue Bonds
Derivative [Line Items]
Bond subject to interest rate caps	255,300,000
Designated as Hedging Instrument | Interest Rate Swap
Derivative [Line Items]
Derivative, notional amount	$ 175,000,000.0
Interest rate	2.30%
Aggregate carrying value of the interest rate swap contracts, asset	$ 0		$ 1,000,000.0
Aggregate carrying value of the interest rate swap contracts, liability	3,400,000		200,000
Not Designated as Hedging Instrument | Total Return Swap, Callable
Derivative [Line Items]
Derivative, notional amount	255,300,000
Derivative, fair value, net	$ 0		$ 0
Not Designated as Hedging Instrument | Total Return Swap, Callable | Multifamily Housing Mortgage Revenue Bonds
Derivative [Line Items]
Number of derivative instruments | instrument	4

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Significant Transactions During The Three Months Ended March 31, 2020 and Subsequent Events

3 Months Ended

Mar. 31, 2020

Business Combinations [Abstract]

Significant Transactions During The Three Months Ended March 31, 2020 and Subsequent Events

Significant Transactions During The Three Months Ended March 31, 2020 and Subsequent Events

Significant Transactions

Acquisitions

In January 2020, the Company purchased Canada Pension Plan Investment Board's ("CPPIB") 45.0% interest in each of a land parcel and six communities totaling 2,020 apartment homes, valued at $1.0 billion on a gross basis. As a result of this acquisition, the Company realized a gain on remeasurement of co-investment of $234.7 million. Furthermore, the Company

recognized $6.5 million in promote income as a result of the transaction, which is included in equity income from co-investments on the condensed consolidated statements of income and comprehensive income.

Co-Investments

Preferred Equity Investments

In the first quarter of 2020, the Company originated two preferred equity investments totaling $91.4 million in two multifamily communities located in California. The investments have a weighted average initial return of 11.3% with most of the proceeds expected to fund in late 2020 and early 2021.

In March 2020, the Company received cash of $11.3 million, including an early redemption fee of $0.2 million, for the partial redemption of a preferred equity investment in a joint venture that holds property located in Los Angeles, CA.

Notes Receivable

In January 2020, the Company received cash of $16.9 million for the full redemption of a mezzanine loan in a property located in Anaheim, CA.

In January 2020, the Company received $85.8 million for the payoff of a related party bridge loan to Wesco V, LLC ("Wesco V"). See Note 6, Related Party Transactions, for additional details.

In March 2020, the Company committed to fund an investment in mezzanine loans totaling $15.0 million as part of the development of a multifamily community located in Los Angeles, CA. The investment has an initial 10.5% interest rate and maturity date of February 2023, with options to extend for up to two years. As of March 31, 2020, the Company had not funded this commitment.

Common Stock

During the three months ended March 31, 2020, the Company repurchased and retired 776,261 shares totaling $176.3 million, including commissions. As of March 31, 2020, the Company had $73.7 million of purchase authority remaining under its $250.0 million stock repurchase plan.

Senior Unsecured Debt

In February 2020, the Operating Partnership issued $500.0 million of senior unsecured notes due on March 15, 2032 with a coupon rate of 2.650% per annum (the "2032 Notes"), which are payable on March 15 and September 15 of each year, beginning on September 15, 2020. The 2032 Notes were offered to investors at a price of 99.628% of par value. The 2032 Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior unsecured indebtedness of the Operating Partnership and are unconditionally guaranteed by Essex. The Company used the net proceeds of this offering to repay indebtedness under its unsecured lines of credit, which had been used to fund the buyout of CPPIB's 45.0% joint venture interests discussed above, as well as repay $100.3 million of secured debt during the quarter.

Subsequent Events

In April 2020, the Company obtained a $200.0 million unsecured term loan with a one-year maturity and two 12-month extension options, exercisable at the Company’s option. The unsecured term loan bears a variable interest rate of LIBOR plus 1.20% and the proceeds will be used to repay all remaining consolidated debt maturing in 2020, of which $169.6 million was prepaid in April 2020.

During and subsequent to the first quarter of 2020, the world is experiencing an unprecedented health pandemic related to a novel coronavirus, COVID-19, creating unprecedented and extraordinary global economic distress, uncertainty and volatility. The extent to which COVID-19 impacts the Company's business, operations and financial results cannot be predicted and will depend on numerous current and evolving factors that the Company is not able to predict or anticipate at this time.

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Related Party Transactions

3 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

The Company charges certain fees relating to its co-investments for asset management, property management, development and redevelopment services. These fees from affiliates totaled $3.1 million and $3.4 million during the three months ended March 31, 2020 and 2019, respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of $0.4 million and $1.1 million against general and administrative expenses for the three months ended March 31, 2020 and 2019, respectively.

The Company’s Chairman and founder, Mr. George M. Marcus, is the Chairman of the Marcus & Millichap Company ("MMC"), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Co-Chairman of Marcus & Millichap, Inc. ("MMI"), and Mr. Marcus owns a controlling interest in MMI, a national brokerage firm listed on the New York Stock Exchange. For the three months ended March 31, 2020, the Company paid brokerage commissions totaling $0.2 million to MMC and its affiliates related to real estate transactions.

In November 2019, the Company provided an $85.5 million related party bridge loan to Wesco V in connection with the acquisition of Velo and Ray. The note receivable accrued interest at LIBOR plus 1.30% and was scheduled to mature in

February 2020, but was paid off in January 2020. The bridge loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

In August 2019, the Company provided an $89.0 million related party bridge loan to Wesco V in connection with the acquisition of The Courtyards at 65th Street. The note receivable accrued interest at LIBOR plus 1.30% and was paid off in November 2019.

In August 2019, the Company provided a $44.4 million related party bridge loan to BEX IV in connection with the acquisition of 777 Hamilton. The note receivable accrued interest at 3.25%. In November 2019, the term of the bridge loan was extended to

February 2020, but was paid off in December 2019.

In June 2019, the Company acquired Brio, a 300 unit apartment home community located in Walnut Creek, CA. The Company issued DownREIT units to an affiliate of MMC, based on a contract price of $164.9 million. The property was encumbered by $98.7 million of mortgage debt which was assumed by the Company at the time of acquisition. As a result of this transaction, the Company consolidated the property, based on a VIE analysis performed by the Company.

In February 2019, the Company funded a $24.5 million preferred equity investment in an entity whose sponsor is an affiliate of MMC, which owns a multifamily development community located in Mountain View, CA. The investment has an initial preferred return of 11.0% and is scheduled to mature in February 2024.

In October 2018, the Company funded a $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268 apartment home community development located in Burlingame, CA. This investment accrues interest based on an initial 12.0% preferred return. The investment is scheduled to mature in April 2024.

In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400 apartment home community located in Ventura, CA. This investment accrues interest based on a 10.25% preferred return. The investment is scheduled to mature in May 2023. As of March 31, 2020, the Company had funded $22.9 million of the commitment. The remaining committed amount will be funded if and when requested by the sponsors.

In November 2016, the Company provided a $6.6 million mezzanine loan to a limited liability company in which MMC holds a significant ownership interest through subsidiaries. The mezzanine loan was classified within notes and other receivables in the accompanying condensed consolidated balance sheets and was paid off in October 2019.

In 2015, the Company made preferred equity investments totaling $20.0 million in three entities affiliated with MMC that own apartment communities in California. The Company earned a 9.5% preferred return on each such investment. One $5.0 million investment, which was scheduled to mature in 2022, was fully redeemed in 2017. Another $5.0 million investment, which was scheduled to mature in 2022, was fully redeemed in 2018. The remaining investment was fully redeemed in February 2019.

As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of March 31, 2020 and December 31, 2019, $7.7 million and $4.4 million, respectively, of short-term loans remained outstanding due from joint venture affiliates and is classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

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Revenues - Deferred Revenues and Remaining Performance Obligations (Details)	Mar. 31, 2020
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percentage of remaining performance obligations due per period	15.00%
Expected timing of performance obligation satisfaction, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Percentage of remaining performance obligations due per period	40.00%
Expected timing of performance obligation satisfaction, period	2 years

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Organization and Basis of Presentation - Redeemable Noncontrolling Interest (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Stockholders' Equity Attributable to Noncontrolling Interest [Roll Forward]
Beginning balance	$ 37,410
Reclassification due to change in redemption value and other	(4,767)
Redemptions	0
Ending balance	$ 32,643

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Organization and Basis of Presentation - Summary of Financial Securities (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Equity securities:
Gross Unrealized Gain (Loss)	$ (8,696)	$ 4,510
Carrying Value	3,200		$ 3,600
Held to maturity
Equity and Debt Securities, Amortized Cost	153,596		140,649
Equity and Debt Securities, Gross Unrealized Gain (Loss)	(5,457)		3,544
Equity and Debt Securities, Marketable Securities	148,139		144,193
Equity and Debt Securities, Allowance for Credit Loss	13,644		0
Investment funds - debt securities
Equity securities:
Amortized Cost/Cost	29,685		29,588
Gross Unrealized Gain (Loss)	(676)		544
Carrying Value	29,009		30,132
Common stock and stock funds
Equity securities:
Amortized Cost/Cost	45,395		34,941
Gross Unrealized Gain (Loss)	(4,549)		2,927
Carrying Value	40,846		37,868
U.S. treasury securities
Available for sale
Amortized Cost/Cost	2,421		2,421
Gross Unrealized Gain (Loss)	16		13
Carrying Value	2,437		2,434
Allowance for Credit Losses	0
Investment-grade unsecured debt
Available for sale
Amortized Cost/Cost	1,050		1,048
Gross Unrealized Gain (Loss)	(248)		60
Carrying Value	802		1,108
Allowance for Credit Losses	0
Mortgage backed securities
Held to maturity
Amortized Cost/Cost	75,045		72,651
Gross Unrealized Gain (Loss)	0		0
Carrying Value	75,045		$ 72,651
Allowance for Credit Losses	$ 13,644

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Condensed Consolidated Statement of Capital (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Essex Portfolio, L.P.
Distribution declared (in dollars per share)	$ 2.0775	$ 1.95

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Condensed Consolidated Statements of Income and Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Revenues:
Rental and other property	$ 389,750	$ 353,888
Management and other fees from affiliates	2,617	2,335
Revenues	392,367	356,223
Expenses:
Property operating, excluding real estate taxes	64,131	58,622
Real estate taxes	43,012	39,418
Corporate-level property management expenses	8,759	8,429
Depreciation and amortization	131,559	120,568
General and administrative	13,982	13,459
Expensed acquisition and investment related costs	87	32
Total expenses	261,530	240,528
Earnings from operations	130,837	115,695
Interest expense	(55,147)	(53,643)
Total return swap income	1,984	2,045
Interest and other income (loss)	(5,221)	12,261
Equity income from co-investments	21,297	16,276
Gain on early retirement of debt, net	321	1,336
Gain on remeasurement of co-investment	234,694	31,535
Net income	328,765	125,505
Net income attributable to noncontrolling interest	(13,759)	(6,647)
Net income available to common stockholders	315,006	118,858
Comprehensive income	319,678	123,668
Comprehensive income attributable to noncontrolling interest	(13,452)	(6,585)
Comprehensive income attributable to controlling interest	$ 306,226	$ 117,083
Basic:
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.77	$ 1.81
Weighted average number of shares/common units outstanding during the period (in shares)	66,043,831	65,702,788
Diluted:
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.76	$ 1.81
Weighted average number of shares/common units outstanding during the period (in shares)	66,195,415	65,783,869
Essex Portfolio, L.P.
Revenues:
Rental and other property	$ 389,750	$ 353,888
Management and other fees from affiliates	2,617	2,335
Revenues	392,367	356,223
Expenses:
Property operating, excluding real estate taxes	64,131	58,622
Real estate taxes	43,012	39,418
Corporate-level property management expenses	8,759	8,429
Depreciation and amortization	131,559	120,568
General and administrative	13,982	13,459
Expensed acquisition and investment related costs	87	32
Total expenses	261,530	240,528
Earnings from operations	130,837	115,695
Interest expense	(55,147)	(53,643)
Total return swap income	1,984	2,045
Interest and other income (loss)	(5,221)	12,261
Equity income from co-investments	21,297	16,276
Gain on early retirement of debt, net	321	1,336
Gain on remeasurement of co-investment	234,694	31,535
Net income	328,765	125,505
Net income attributable to noncontrolling interest	(2,773)	(2,476)
Net income available to common stockholders	325,992	123,029
Comprehensive income	319,678	123,668
Comprehensive income attributable to noncontrolling interest	(2,773)	(2,476)
Comprehensive income attributable to controlling interest	$ 316,905	$ 121,192
Basic:
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.77	$ 1.81
Weighted average number of shares/common units outstanding during the period (in shares)	68,344,012	68,007,852
Diluted:
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.76	$ 1.81
Weighted average number of shares/common units outstanding during the period (in shares)	68,495,596	68,088,933

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Derivative Instruments and Hedging Activities

3 Months Ended

Mar. 31, 2020

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

As of March 31, 2020, the Company had entered into interest rate swap contracts with an aggregate notional amount of $175.0 million that effectively fixed the interest rate on the $175.0 million unsecured term loan at 2.3%. These derivatives qualify for hedge accounting.

As of March 31, 2020 and December 31, 2019, the aggregate carrying value of the interest rate swap contracts was an asset of zero and $1.0 million, respectively, and is included in prepaid expenses and other assets on the condensed consolidated balance sheets, and a liability of $3.4 million and $0.2 million, respectively, and is included in other liabilities on the consolidated balance sheet.

Hedge ineffectiveness related to cash flow hedges, which is included in interest expense on the condensed consolidated statements of income and comprehensive income, was not significant for the three months ended March 31, 2020 and 2019.

Additionally, the Company has four total return swap contracts, with an aggregate notional amount of $255.3 million, that effectively convert $255.3 million of mortgage notes payable to a floating interest rate based on the Securities Industry and Financial Markets Association Municipal Swap Index ("SIFMA") plus a spread. The total return swaps provide fair market value protection on the mortgage notes payable to the counterparties during the initial period of the total return swap until the Company's option to call the mortgage notes at par can be exercised. The Company can currently call all of its total return swaps, with $255.3 million of the outstanding debt at par. These derivatives do not qualify for hedge accounting and had a carrying and fair value of zero at both March 31, 2020 and December 31, 2019. These total return swaps are scheduled to mature between September 2021 and November 2022. The realized gains of $2.0 million and $2.0 million for the three months ended March 31, 2020 and 2019, respectively, were reported in the condensed consolidated statements of income and comprehensive income as total return swap income.

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Revenues (Tables)

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of revenue

The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Rental income	$	383,498	$	347,805
Other property	6,252		6,083
Management and other fees from affiliates	2,617		2,335
Total revenues	$	392,367	$	356,223

The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Southern California	$	155,642	$	151,463
Northern California	164,079		136,745
Seattle Metro	63,844		60,413
Other real estate assets (1)	6,185		5,267
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Other real estate assets consists of revenues generated from retail space, commercial properties, held for sale properties, and disposition properties.

The following table presents the Company’s rental and other property revenues disaggregated by current property category status ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Same-property (1)	$	346,456	$	335,658
Acquisitions (2)	21,924		987
Development (3)	4,075		1,158
Redevelopment	5,401		5,229
Non-residential/other, net (4)	11,894		10,856
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Properties that have comparable stabilized results as of January 1, 2019 and are consolidated by the Company for the three months ended March 31, 2020 and 2019. A community is generally considered to have reached stabilized operations once it achieves an initial occupancy of 90%.

⁽²⁾ Acquisitions includes properties acquired which did not have comparable stabilized results as of January 1, 2019.

⁽³⁾ Development includes properties developed which did not have stabilized results as of January 1, 2019.

⁽⁴⁾ Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, and three communities located in the California counties of Riverside, Santa Barbara, and Santa Cruz, which the Company does not consider its core markets.

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2020

Segment Reporting [Abstract]

Reconciliation of revenues and operating profit (loss) from segments to consolidated

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2020 and 2019 ($ in thousands):

	Three Months Ended March 31,
	2020			2019
Revenues:
Southern California	$	155,642		$	151,463
Northern California	164,079			136,745
Seattle Metro	63,844			60,413
Other real estate assets	6,185			5,267
Total property revenues	$	389,750		$	353,888
Net operating income:
Southern California	$	111,097		$	107,996
Northern California	120,981			101,214
Seattle Metro	44,993			41,699
Other real estate assets	5,536			4,939
Total net operating income	282,607			255,848
Management and other fees from affiliates	2,617			2,335
Corporate-level property management expenses	(8,759		)	(8,429		)
Depreciation and amortization	(131,559		)	(120,568		)
General and administrative	(13,982		)	(13,459		)
Expensed acquisition and investment related costs	(87		)	(32		)
Interest expense	(55,147		)	(53,643		)
Total return swap income	1,984			2,045
Interest and other income (loss)	(5,221		)	12,261
Equity income from co-investments	21,297			16,276
Gain on early retirement of debt, net	321			1,336
Gain on remeasurement of co-investment	234,694			31,535
Net income	$	328,765		$	125,505

Reconciliation of assets from segment to consolidated

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2020 and December 31, 2019 ($ in thousands):

	March 31, 2020		December 31, 2019
Assets:
Southern California	$	4,198,656	$	4,233,110
Northern California	5,748,062		4,622,268
Seattle Metro	1,469,297		1,481,061
Other real estate assets	12,103		12,221
Net reportable operating segment - real estate assets	11,428,118		10,348,660
Real estate under development	435,865		546,075
Co-investments	997,137		1,335,339
Cash and cash equivalents, including restricted cash	282,347		81,094
Marketable securities	148,139		144,193
Notes and other receivables	34,867		134,365
Operating lease right-of-use assets	74,428		74,744
Prepaid expenses and other assets	49,940		40,935
Total assets	$	13,450,841	$	12,705,405

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Net Income Per Common Share and Net Income Per Common Unit (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Basic:
Net income available to common stockholders/unitholders	$ 315,006	$ 118,858
Weighted average common shares/units (in shares)	66,043,831	65,702,788
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.77	$ 1.81
Effect of Dilutive Securities:
Stock options (in shares)	57,337	81,081
DownREIT units (in shares)	94,247	0
Diluted:
Net income available to common stockholders/unitholders	$ 315,202	$ 118,858
Weighted average common shares/units (in shares)	66,195,415	65,783,869
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.76	$ 1.81
Essex Portfolio, L.P.
Basic:
Net income available to common stockholders/unitholders	$ 325,992	$ 123,029
Weighted average common shares/units (in shares)	68,344,012	68,007,852
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.77	$ 1.81
Effect of Dilutive Securities:
Stock options (in shares)	57,337	81,081
Diluted:
Net income available to common stockholders/unitholders	$ 326,188	$ 123,029
Weighted average common shares/units (in shares)	68,495,596	68,088,933
Net income available to common stockholders/unitholders (in dollars per share)	$ 4.76	$ 1.81
Convertible units
Diluted:
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	2,300,181	2,305,064
Income allocated to convertible OP Units	$ 11,000	$ 4,200
Stock options
Diluted:
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	116,380	106,029
Stock options | Essex Portfolio, L.P.
Diluted:
Antidilutive securities excluded from computation of earnings per share, amount (in shares)	116,380	106,029
Subsidiaries | DownREIT Units
Effect of Dilutive Securities:
Income effect of Dilutive Securities	$ 196	$ 0

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Debt - Debt Summary (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Dec. 31, 2019
Debt Instrument [Line Items]
Unsecured debt, net	$ 5,258,263	$ 4,763,206
Lines of credit	350,000	55,000
Mortgage notes payable, net	887,389	990,667
Total debt	6,495,652	5,808,873
Unsecured bonds private placement - fixed rate
Debt Instrument [Line Items]
Unsecured debt, net	$ 199,852	199,820
Weighted average maturity	1 year 2 months 12 days
Term loan - variable rate
Debt Instrument [Line Items]
Unsecured debt, net	$ 349,287	$ 349,189
Weighted average interest rate	2.70%	2.70%
Weighted average maturity	1 year 10 months 24 days
Bonds public offering - fixed rate
Debt Instrument [Line Items]
Unsecured debt, net	$ 4,709,124	$ 4,214,197
Weighted average interest rate	3.70%	3.80%
Weighted average maturity	7 years 8 months 12 days
Lines of credit
Debt Instrument [Line Items]
Lines of credit	$ 350,000	$ 55,000
Weighted average interest rate	2.40%	2.50%
Mortgage notes payable, net
Debt Instrument [Line Items]
Mortgage notes payable, net	$ 887,389	$ 990,667
Weighted average interest rate	4.10%	4.10%
Weighted average maturity	7 years 10 months 24 days

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Co-investments - Combined Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Equity Method Investment, Summarized Financial Information, Assets [Abstract]
Rental properties and real estate under development	$ 435,865		$ 546,075
Other liabilities	41,290		36,565
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Interest expense	(55,147)	$ (53,643)
General and administrative	(13,982)	(13,459)
Total co-investment
Equity Method Investment, Summarized Financial Information, Assets [Abstract]
Rental properties and real estate under development	4,287,101		4,733,762
Other assets	158,145		139,562
Total assets	4,445,246		4,873,324
Debt	2,522,407		2,442,213
Other liabilities	181,761		117,160
Equity	1,741,078		2,313,951
Total liabilities and equity	4,445,246		4,873,324
Company's share of equity	997,137		$ 1,335,339
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Property revenues	77,369	83,725
Property operating expenses	(25,715)	(28,719)
Net operating income	51,654	55,006
Interest expense	(20,853)	(15,115)
General and administrative	(4,083)	(1,928)
Depreciation and amortization	(28,437)	(29,935)
Net income (loss)	(1,719)	8,028
Company's share of net income	21,297	16,276
Total co-investment | Affiliated Entity
Equity Method Investment, Summarized Financial Information, Income Statement [Abstract]
Company's share of net income	$ 2,100	$ 1,700

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Condensed Consolidated Statement of Equity - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Distributions in Excess of Accumulated Earnings	Accumulated Other Comprehensive Loss, Net	Noncontrolling Interest
Balance at period beginning at Dec. 31, 2018	$ 6,393,844	$ 7	$ 7,093,079	$ (812,796)	$ (13,217)	$ 126,771
Balances (in shares) at Dec. 31, 2018		65,890
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	125,505			118,858		6,647
Reversal of unrealized gains upon the sale of marketable debt securities	33				32	1
Change in fair value of derivatives and amortization of swap settlements	(1,993)				(1,926)	(67)
Change in fair value of marketable debt securities, net	123				119	4
Issuance of common stock under:
Stock option and restricted stock plans, net	3,204		3,204
Stock option and restricted stock plans, net (in shares)		51
Sale of common stock, net	(20)		(20)
Equity based compensation costs	2,600		2,301			299
Retirement of common stock, net	(56,989)	$ 0	(56,989)
Retirement of common stock, net (in shares)		(234)
Changes in the redemption value of redeemable noncontrolling interest	(1,767)		(3,027)			1,260
Distributions to noncontrolling interest	(7,164)					(7,164)
Redemptions of noncontrolling interest	(12,213)		(10,394)			(1,819)
Common stock dividends	(128,149)			(128,149)
Balance at period end at Mar. 31, 2019	6,317,195	$ 7	7,028,154	(822,087)	(14,817)	125,938
Balances (in shares) at Mar. 31, 2019		65,716
Balance at period beginning at Dec. 31, 2019	6,403,504	$ 7	7,121,927	(887,619)	(13,888)	183,077
Balances (in shares) at Dec. 31, 2019		66,092
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	328,765			315,006		13,759
Change in fair value of derivatives and amortization of swap settlements	(8,782)				(8,486)	(296)
Change in fair value of marketable debt securities, net	(305)				(294)	(11)
Issuance of common stock under:
Stock option and restricted stock plans, net	8,665		8,665
Stock option and restricted stock plans, net (in shares)		89
Sale of common stock, net	(70)		(70)
Equity based compensation costs	1,698		1,619			79
Retirement of common stock, net	(176,311)	$ 0	(176,311)
Retirement of common stock, net (in shares)		(776)
Changes in the redemption value of redeemable noncontrolling interest	4,767		4,741			26
Changes in noncontrolling interest from acquisition	1,349					1,349
Distributions to noncontrolling interest	(7,879)					(7,879)
Redemptions of noncontrolling interest	(1,368)		(1,048)			(320)
Redemptions of noncontrolling interest (in shares)		7
Common stock dividends	(135,894)			(135,894)
Balance at period end at Mar. 31, 2020	$ 6,417,949	$ 7	$ 6,959,523	$ (708,697)	$ (22,668)	$ 189,784
Balances (in shares) at Mar. 31, 2020		65,412

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Cover Page - shares	3 Months Ended
	Mar. 31, 2020	May 05, 2020
Entity Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2020
Document Transition Report	false
Entity File Number	001-13106
Entity Registrant Name	ESSEX PROPERTY TRUST, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	77-0369576
Entity Address, Address Line One	1100 Park Place, Suite 200
Entity Address, City or Town	San Mateo
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	94403
City Area Code	650
Local Phone Number	655-7800
Title of each class	Common Stock, $.0001 par value (Essex Property Trust, Inc.)
Trading Symbol	ESS
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		65,417,355
Entity Central Index Key	0000920522
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Amendment Flag	false
Essex Portfolio, L.P.
Entity Information [Line Items]
Entity File Number	333-44467-01
Entity Registrant Name	ESSEX PORTFOLIO, L.P.
Entity Incorporation, State or Country Code	CA
Entity Tax Identification Number	77-0369575
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false

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Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Dec. 31, 2019
Cash flows from operating activities:
Net income	$ 328,765	$ 125,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	131,559	120,568
Amortization of discount on marketable securities	(2,394)	(5,311)
Amortization of discount and debt financing costs, net	2,297	529
Loss on sale of marketable securities	13	58
Provision for credit losses	(50)
Unrealized (gain) loss on equity securities recognized through income	8,696	(4,510)
Earnings from co-investments	(21,297)	(16,276)
Operating distributions from co-investments	19,388	17,804
Accrued interest from notes and other receivables	(355)	(1,424)
Equity-based compensation	1,405	2,068
Gain on early retirement of debt, net	(321)	(1,336)
Gain on remeasurement of co-investment	(234,694)	(31,535)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets	(172)	(4,730)
Accounts payable, accrued liabilities, and operating lease liabilities	32,808	53,895
Other liabilities	1,278	454
Net cash provided by operating activities	266,926	255,759
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(458,302)	(44,984)
Redevelopment	(18,296)	(14,157)
Development acquisitions of and additions to real estate under development	(25,681)	(39,306)
Capital expenditures on rental properties	(17,151)	(17,075)
Collections of notes and other receivables	98,711	2,500
Proceeds from insurance for property losses	457	1,583
Contributions to co-investments	(21,905)	(126,248)
Changes in refundable deposits	96	5
Purchases of marketable securities	(10,731)	(8,413)
Sales and maturities of marketable securities	165	16,847
Non-operating distributions from co-investments	7,000	10,000
Net cash used in investing activities	(445,637)	(219,248)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	498,140	498,234
Payments on unsecured debt and mortgage notes	(102,563)	(360,975)
Proceeds from lines of credit	1,038,426	567,029
Repayments of lines of credit	(743,426)	(567,029)
Retirement of common stock	(176,311)	(56,989)
Additions to deferred charges	(5,172)	(5,445)
Net proceeds from issuance of common stock	(70)	(20)
Net proceeds from stock options exercised	14,329	6,699
Payments related to tax withholding for share-based compensation	(5,664)	(3,495)
Distributions to noncontrolling interest	(7,478)	(6,978)
Redemption of noncontrolling interest	(1,368)	(12,213)
Redemption of redeemable noncontrolling interest	0	(73)
Common stock dividends paid	(128,879)	(122,525)
Net cash provided by (used in) financing activities	379,964	(63,780)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents	201,253	(27,269)
Unrestricted and restricted cash and cash equivalents at beginning of period	81,094	151,395	$ 151,395
Unrestricted and restricted cash and cash equivalents at end of period	282,347	124,126	81,094
Supplemental disclosure of cash flow information:
Cash paid for interest (net of $4.8 million and $5.9 million capitalized in 2020 and 2019, respectively)	52,487	41,914
Operating cash flows from operating leases	1,715	1,694
Supplemental disclosure of noncash investing and financing activities:
Transfers between real estate under development and rental properties, net	131,841	0
Transfer from real estate under development to co-investments	824	313
Reclassifications (from) to redeemable noncontrolling interest to/from additional paid in capital and noncontrolling interest	(4,767)	1,767
Initial recognition of operating lease right-of-use assets	0	77,645
Initial recognition of operating lease liabilities	0	79,693
Essex Portfolio, L.P.
Cash flows from operating activities:
Net income	328,765	125,505
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	131,559	120,568
Amortization of discount on marketable securities	(2,394)	(5,311)
Amortization of discount and debt financing costs, net	2,297	529
Loss on sale of marketable securities	13	58
Unrealized (gain) loss on equity securities recognized through income	8,696	(4,510)
Earnings from co-investments	(21,297)	(16,276)
Operating distributions from co-investments	19,388	17,804
Accrued interest from notes and other receivables	(355)	(1,424)
Equity-based compensation	1,405	2,068
Gain on early retirement of debt, net	(321)	(1,336)
Gain on remeasurement of co-investment	(234,694)	(31,535)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets	(172)	(4,730)
Accounts payable, accrued liabilities, and operating lease liabilities	32,808	53,895
Other liabilities	1,278	454
Net cash provided by operating activities	266,926	255,759
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(458,302)	(44,984)
Redevelopment	(18,296)	(14,157)
Development acquisitions of and additions to real estate under development	(25,681)	(39,306)
Capital expenditures on rental properties	(17,151)	(17,075)
Collections of notes and other receivables	98,711	2,500
Proceeds from insurance for property losses	457	1,583
Contributions to co-investments	(21,905)	(126,248)
Changes in refundable deposits	96	5
Purchases of marketable securities	(10,731)	(8,413)
Sales and maturities of marketable securities	165	16,847
Non-operating distributions from co-investments	7,000	10,000
Net cash used in investing activities	(445,637)	(219,248)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	498,140	498,234
Payments on unsecured debt and mortgage notes	(102,563)	(360,975)
Proceeds from lines of credit	1,038,426	567,029
Repayments of lines of credit	(743,426)	(567,029)
Retirement of common stock	(176,311)	(56,989)
Additions to deferred charges	(5,172)	(5,445)
Net proceeds from issuance of common stock	(70)	(20)
Net proceeds from stock options exercised	14,329	6,699
Payments related to tax withholding for share-based compensation	(5,664)	(3,495)
Distributions to noncontrolling interest	(2,016)	(1,959)
Redemption of noncontrolling interest	(1,368)	(12,213)
Redemption of redeemable noncontrolling interest	0	(73)
Common stock dividends paid	(134,341)	(127,544)
Net cash provided by (used in) financing activities	379,964	(63,780)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents	201,253	(27,269)
Unrestricted and restricted cash and cash equivalents at beginning of period	81,094	151,395	151,395
Unrestricted and restricted cash and cash equivalents at end of period	282,347	124,126	$ 81,094
Supplemental disclosure of cash flow information:
Cash paid for interest (net of $4.8 million and $5.9 million capitalized in 2020 and 2019, respectively)	52,487	41,914
Operating cash flows from operating leases	1,715	1,694
Supplemental disclosure of noncash investing and financing activities:
Transfers between real estate under development and rental properties, net	131,841	0
Transfer from real estate under development to co-investments	824	313
Reclassifications (from) to redeemable noncontrolling interest to/from additional paid in capital and noncontrolling interest	(4,767)	1,767
Initial recognition of operating lease right-of-use assets	0	77,645
Initial recognition of operating lease liabilities	$ 0	$ 79,693

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Net Income Per Common Share and Net Income Per Common Unit (Tables)

3 Months Ended

Mar. 31, 2020

Net Income Per Share and Net Income Per Unit [Line Items]

Schedule of net income per common share

Essex Property Trust, Inc.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	315,006	66,043,831	$	4.77	$	118,858	65,702,788	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common stockholders	$	315,202	66,195,415	$	4.76	$	118,858	65,783,869	$	1.81

Essex Portfolio, L.P.

Net Income Per Share and Net Income Per Unit [Line Items]

Schedule of net income per common share

Essex Portfolio, L.P.

	Three Months Ended March 31, 2020					Three Months Ended March 31, 2019
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	325,992	68,344,012	$	4.77	$	123,029	68,007,852	$	1.81
Effect of Dilutive Securities:
Stock options	—		57,337			—		81,081
DownREIT units	196		94,247			—		—
Diluted:
Net income available to common unitholders	$	326,188	68,495,596	$	4.76	$	123,029	68,088,933	$	1.81

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits have not had a material adverse effect on the Company's financial condition, results of operations or cash flows. While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company.

The Company is subject to various federal, state, and local environmental and other laws. Compliance by the Company with existing laws has not had a material adverse effect on the Company. However, the Company cannot predict the impact of new or changed laws or regulations on its current portfolio or on other assets that the Company may acquire in the future, including, without limitation, certain eviction moratoriums and other mandates that have been, or may be, taken in connection with the COVID-19 pandemic. To the extent that an environmental or other matter arises or is identified in the future that has other than a remote risk of having a material impact on the condensed consolidated financial statements, the Company will disclose the estimated range of possible outcomes associated with it, and, if an outcome is probable, accrue an appropriate liability for that matter. The Company will consider whether any such matter results in an impairment of value on the affected property and, if so, impairment will be recognized.

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Co-investments (Tables)

3 Months Ended

Mar. 31, 2020

Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures [Abstract]

Summary of co-investments

The carrying values of the Company's co-investments as of March 31, 2020 and December 31, 2019 are as follows ($ in thousands, except parenthetical amounts):

	Weighted Average Company Ownership Percentage (1)		3/31/2020		12/31/2019
Ownership interest in:
CPPIB (2)	—	%	$	—	$	345,466
Wesco I, Wesco III, Wesco IV, and Wesco V	51	%	209,742		216,756
BEXAEW, BEX II, BEX III, and BEX IV	50	%	156,869		160,888
Other	48	%	21,023		20,351
Total operating and other co-investments, net			387,634		743,461
Total predevelopment and development co-investments	50	%	158,145		146,944
Total preferred interest co-investments (includes related party investments of $75.3 million and $73.2 million as of March 31, 2020 and December 31, 2019, respectively)			451,358		444,934
Total co-investments, net			$	997,137	$	1,335,339

⁽¹⁾ Weighted average Company ownership percentages are as of March 31, 2020.

⁽²⁾ In January 2020, the Company purchased CPPIB's 45.0% interest in each of a land parcel and six communities totaling 2,020 apartment homes.

Summarized financial information for co-investments accounted for under the equity method

The combined summarized financial information of co-investments is as follows ($ in thousands):

	3/31/2020		12/31/2019
Combined balance sheets: (1)
Rental properties and real estate under development	$	4,287,101	$	4,733,762
Other assets	158,145		139,562
Total assets	$	4,445,246	$	4,873,324
Debt	$	2,522,407	$	2,442,213
Other liabilities	181,761		117,160
Equity	1,741,078		2,313,951
Total liabilities and equity	$	4,445,246	$	4,873,324
Company's share of equity	$	997,137	$	1,335,339

	Three Months Ended March 31,
	2020			2019
Combined statements of income: (1)
Property revenues	$	77,369		$	83,725
Property operating expenses	(25,715		)	(28,719		)
Net operating income	51,654			55,006
Interest expense	(20,853		)	(15,115		)
General and administrative	(4,083		)	(1,928		)
Depreciation and amortization	(28,437		)	(29,935		)
Net income (loss)	$	(1,719	)	$	8,028
Company's share of net income (2)	$	21,297		$	16,276

⁽¹⁾ Includes preferred equity investments held by the Company.

⁽²⁾ Includes the Company's share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income and income from early redemption of preferred equity investments. Includes related party income of $2.1 million and $1.7 million for the three months ended March 31, 2020 and 2019, respectively.

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Related Party Transactions (Details) $ in Thousands	1 Months Ended						3 Months Ended		12 Months Ended			23 Months Ended
	Nov. 30, 2019 USD ($)	Aug. 31, 2019 USD ($)	Jun. 30, 2019 USD ($) apartment	Feb. 28, 2019 USD ($)	Oct. 31, 2018 USD ($) apartment	May 31, 2018 USD ($) apartment	Mar. 31, 2020 USD ($)	Mar. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2015 USD ($) investment	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)	Nov. 30, 2016 USD ($)
Related Party Transaction [Line Items]
Payments to acquire preferred equity investments							$ 21,905	$ 126,248
Preferred return rate							11.30%
Commitment to fund preferred equity investment							$ 91,400
Affiliated Entity
Related Party Transaction [Line Items]
Management and other fees from affiliates							3,100	3,400
Development and redevelopment fees							400	$ 1,100
Short-term loans outstanding and due from affiliates							7,700					$ 7,700	$ 4,400
Affiliated Entity | Related party bridge loan - Wesco V
Related Party Transaction [Line Items]
Notes receivable	$ 85,500	$ 89,000
Interest rate	1.30%	1.30%
Affiliated Entity | Related party bridge loan - BEX IV
Related Party Transaction [Line Items]
Notes receivable		$ 44,400
Interest rate		3.25%
Chairman and founder
Related Party Transaction [Line Items]
Payments to acquire preferred equity investments											$ 20,000
Number of preferred equity method investments acquired during period (in investments) | investment											3
Preferred stock, stated interest percentage											9.50%
Redeemed amount									$ 5,000	$ 5,000
Chairman and founder | Multifamily development community in La Mesa, CA
Related Party Transaction [Line Items]
Payments to acquire preferred equity investments				$ 24,500
Preferred return rate				11.00%
Chairman and founder | Apartment home community development development in Burlingame, CA
Related Party Transaction [Line Items]
Number of units acquired | apartment					268
Payments to acquire preferred equity investments					$ 18,600
Preferred return rate					12.00%
Chairman and founder | Marcus & Millichap Company (MMC)
Related Party Transaction [Line Items]
Brokerage commissions							$ 200
Chairman and founder | Marcus & Millichap Company (MMC) | Brio, Walnut Creek, CA
Related Party Transaction [Line Items]
Number of units acquired | apartment			300
Payments to acquire real estate			$ 164,900
Debt assumed in connection with acquisition			$ 98,700
Chairman and founder | Marcus & Millichap Company (MMC) | Apartment home community in Ventura, CA
Related Party Transaction [Line Items]
Number of units acquired | apartment						400
Preferred return rate						10.25%
Commitment to fund preferred equity investment						$ 26,500
Commitment funded amount												$ 22,900
Chairman and founder | Marcus & Millichap Company (MMC) | Related party note due October 2019
Related Party Transaction [Line Items]
Notes receivable														$ 6,600

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Co-investments - Summary of Investments (Details) $ in Thousands	1 Months Ended	3 Months Ended
	Jan. 31, 2020 community apartment	Mar. 31, 2020 USD ($)	Dec. 31, 2019 USD ($)
Schedule of Equity Method Investments [Line Items]
Co-investments		$ 997,137	$ 1,335,339
Total operating and other co-investments, net
Schedule of Equity Method Investments [Line Items]
Co-investments		$ 387,634	743,461
CPPIB
Schedule of Equity Method Investments [Line Items]
Weighted average company ownership percentage		0.00%
Co-investments		$ 0	345,466
Wesco I, Wesco III, Wesco IV, and Wesco V
Schedule of Equity Method Investments [Line Items]
Weighted average company ownership percentage		51.00%
Co-investments		$ 209,742	216,756
BEXAEW, BEX II, BEX III, and BEX IV
Schedule of Equity Method Investments [Line Items]
Weighted average company ownership percentage		50.00%
Co-investments		$ 156,869	160,888
Other
Schedule of Equity Method Investments [Line Items]
Weighted average company ownership percentage		48.00%
Co-investments		$ 21,023	20,351
Total predevelopment and development co-investments
Schedule of Equity Method Investments [Line Items]
Weighted average company ownership percentage		50.00%
Co-investments		$ 158,145	146,944
Total preferred interest co-investments
Schedule of Equity Method Investments [Line Items]
Co-investments		451,358	444,934
Total preferred interest co-investments | Investments in Majority-owned Subsidiaries
Schedule of Equity Method Investments [Line Items]
Co-investments		$ 75,300	$ 73,200
CPPIB interest
Schedule of Equity Method Investments [Line Items]
Investment interest acquired	45.00%
Apartment Building | CPPIB interest
Schedule of Equity Method Investments [Line Items]
Number of communities held by acquired investment | community	6
Number of units held by acquired investment | apartment	2,020

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Segment Information (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) segment	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)	Dec. 31, 2018 USD ($)
Segment Reporting [Abstract]
Number of reportable operating segments (in segments) | segment	3
Revenues from External Customers and Long-Lived Assets [Line Items]
Net operating income	$ 282,607	$ 255,848
Corporate-level property management expenses	(8,759)	(8,429)
Depreciation and amortization	(131,559)	(120,568)
General and administrative	(13,982)	(13,459)
Expensed acquisition and investment related costs	(87)	(32)
Interest expense	(55,147)	(53,643)
Total return swap income	1,984	2,045
Interest and other income (loss)	(5,221)	12,261
Equity income from co-investments	21,297	16,276
Gain on early retirement of debt, net	321	1,336
Gain on remeasurement of co-investment	234,694	31,535
Net income	328,765	125,505
Net reportable operating segment - real estate assets	11,428,118		$ 10,348,660
Real estate under development	435,865		546,075
Co-investments	997,137		1,335,339
Cash and cash equivalents, including restricted cash	282,347	124,126	81,094	$ 151,395
Marketable securities	148,139		144,193
Notes and other receivables	34,867		134,365
Operating lease right-of-use assets	74,428		74,744
Prepaid expenses and other assets	49,940		40,935
Total assets	13,450,841		12,705,405
Rental and Other Property Revenues
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	389,750	353,888
Management and Other Fees From Affiliates Income
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	2,617	2,335
Operating Segments | Southern California
Revenues from External Customers and Long-Lived Assets [Line Items]
Net operating income	111,097	107,996
Net reportable operating segment - real estate assets	4,198,656		4,233,110
Operating Segments | Southern California | Rental and Other Property Revenues
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	155,642	151,463
Operating Segments | Northern California
Revenues from External Customers and Long-Lived Assets [Line Items]
Net operating income	120,981	101,214
Net reportable operating segment - real estate assets	5,748,062		4,622,268
Operating Segments | Northern California | Rental and Other Property Revenues
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	164,079	136,745
Operating Segments | Seattle Metro
Revenues from External Customers and Long-Lived Assets [Line Items]
Net operating income	44,993	41,699
Net reportable operating segment - real estate assets	1,469,297		1,481,061
Operating Segments | Seattle Metro | Rental and Other Property Revenues
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	63,844	60,413
Other real estate assets
Revenues from External Customers and Long-Lived Assets [Line Items]
Net operating income	5,536	4,939
Net reportable operating segment - real estate assets	12,103		$ 12,221
Other real estate assets | Rental and Other Property Revenues
Revenues from External Customers and Long-Lived Assets [Line Items]
Total revenues	$ 6,185	$ 5,267

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Revenues

3 Months Ended

Mar. 31, 2020

Revenue from Contract with Customer [Abstract]

Revenues

Revenues

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Rental income	$	383,498	$	347,805
Other property	6,252		6,083
Management and other fees from affiliates	2,617		2,335
Total revenues	$	392,367	$	356,223

The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Southern California	$	155,642	$	151,463
Northern California	164,079		136,745
Seattle Metro	63,844		60,413
Other real estate assets (1)	6,185		5,267
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Other real estate assets consists of revenues generated from retail space, commercial properties, held for sale properties, and disposition properties.

The following table presents the Company’s rental and other property revenues disaggregated by current property category status ($ in thousands):

	Three Months Ended March 31,
	2020		2019
Same-property (1)	$	346,456	$	335,658
Acquisitions (2)	21,924		987
Development (3)	4,075		1,158
Redevelopment	5,401		5,229
Non-residential/other, net (4)	11,894		10,856
Total rental and other property revenues	$	389,750	$	353,888

⁽¹⁾ Properties that have comparable stabilized results as of January 1, 2019 and are consolidated by the Company for the three months ended March 31, 2020 and 2019. A community is generally considered to have reached stabilized operations once it achieves an initial occupancy of 90%.

⁽²⁾ Acquisitions includes properties acquired which did not have comparable stabilized results as of January 1, 2019.

⁽³⁾ Development includes properties developed which did not have stabilized results as of January 1, 2019.

⁽⁴⁾ Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, and three communities located in the California counties of Riverside, Santa Barbara, and Santa Cruz, which the Company does not consider its core markets.

Deferred Revenues and Remaining Performance Obligations

When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $3.7 million and $3.9 million as of March 31, 2020 and December 31, 2019, respectively, and was included in accounts payable and accrued liabilities within the accompanying condensed consolidated balance sheets. The amount of revenue recognized for the three months ended March 31, 2020 that was included in the December 31, 2019 deferred revenue balance was $0.2 million, which was included in interest and other income (loss) within the condensed consolidated statements of income and comprehensive income.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the revenue recognition accounting standard. As of March 31, 2020, the Company had $3.7 million of remaining performance obligations. The Company expects to recognize approximately 15% of these remaining performance obligations in 2020, an additional 40% through 2022, and the remaining balance thereafter.

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Debt

3 Months Ended

Mar. 31, 2020

Debt Disclosure [Abstract]

Debt

Debt

Essex does not have indebtedness as debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities.

Debt consists of the following ($ in thousands):

	March 31, 2020			December 31, 2019			Weighted Average Maturity In Years as of March 31, 2020
Unsecured bonds private placement - fixed rate	$	199,852		$	199,820		1.2
Term loan - variable rate	349,287			349,189			1.9
Bonds public offering - fixed rate	4,709,124			4,214,197			7.7
Unsecured debt, net (1)	5,258,263			4,763,206
Lines of credit (2)	350,000			55,000
Mortgage notes payable, net (3)	887,389			990,667			7.9
Total debt, net	$	6,495,652		$	5,808,873
Weighted average interest rate on fixed rate unsecured bonds private placement and bonds public offering	3.7		%	3.8		%
Weighted average interest rate on variable rate term loan	2.7		%	2.7		%
Weighted average interest rate on lines of credit	2.4		%	2.5		%
Weighted average interest rate on mortgage notes payable	4.1		%	4.1		%

⁽¹⁾ Includes unamortized discount of $14.1 million and $12.2 million and unamortized debt issuance costs of $27.6 million and $24.5 million, as of March 31, 2020 and December 31, 2019, respectively.

⁽²⁾ Lines of credit, related to the Company's two lines of unsecured credit aggregating $1.24 billion as of March 31, 2020, excludes unamortized debt issuance costs of $4.5 million and $3.8 million as of March 31, 2020 and December 31, 2019, respectively. These debt issuance costs are included in prepaid expenses and other assets on the condensed consolidated balance sheets. As of March 31, 2020, the Company’s $1.2 billion credit facility had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings and a scheduled maturity date of December 2023 with one 18-month extension, exercisable at the Company’s option. As of March 31, 2020, the Company’s $35.0 million working capital unsecured line of credit had an interest rate of LIBOR plus 0.825%, which is based on a tiered rate structure tied to the Company’s credit ratings, and a scheduled maturity date of February 2021.

⁽³⁾ Includes total unamortized premium of $5.0 million and $5.9 million, reduced by unamortized debt issuance costs of $2.4 million and $2.6 million, as of March 31, 2020 and December 31, 2019, respectively.

The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit, as of March 31, 2020 are as follows ($ in thousands):

Remaining in 2020	$	185,493
2021	531,653
2022	693,188
2023	602,945
2024	403,109
Thereafter	3,768,383
Total	$	6,184,771

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Organization and Basis of Presentation - Accumulated Other Comprehensive Loss - Partnership (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($)
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	$ 6,403,504
Balance at period end	6,417,949
Essex Portfolio, L.P. | Accumulated Other Comprehensive Loss, Net
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	(10,432)
Other comprehensive loss before reclassification	(7,734)
Amounts reclassified from accumulated other comprehensive loss	(1,353)
Other comprehensive loss	(9,087)
Balance at period end	(19,519)
Essex Portfolio, L.P. | Change in fair value and amortization of swap settlements
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	(10,536)
Other comprehensive loss before reclassification	(7,429)
Amounts reclassified from accumulated other comprehensive loss	(1,353)
Other comprehensive loss	(8,782)
Balance at period end	(19,318)
Essex Portfolio, L.P. | Unrealized gain/(loss) on available for sale securities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at period beginning	104
Other comprehensive loss before reclassification	(305)
Amounts reclassified from accumulated other comprehensive loss	0
Other comprehensive loss	(305)
Balance at period end	$ (201)

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Organization and Basis of Presentation - Narrative (Details) $ in Thousands	3 Months Ended		12 Months Ended
	Mar. 31, 2020 USD ($) community building investment partnership apartment project shares	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($) community investment partnership shares	Jan. 01, 2020 USD ($)
Real Estate Properties [Line Items]
Apartment communities owned (in communities) | community	250
Apartment units owned (in apartments) | apartment	60,770
Ownership interest, number of commercial buildings (in commercial buildings) | building	1
Ownership interest, number of active development projects (in projects) | project	4
Ownership interest, number of unconsolidated joint venture projects (in projects) | project	2
Equity securities	$ 3,200		$ 3,600
Sales and maturities of marketable securities	200	$ 16,800
Marketable securities, realized gain (loss)	13	(100)
Gain (loss) on sale of equity securities	$ (8,696)	4,510
DownREIT limited partnerships consolidated by company (in partnerships) | partnership	17		17
Communities within DownREIT partnerships (in communities) | community	9		9
Number of previously consolidated co-investments considered VIE (in investments) | investment	6		6
Assets related to variable interest entities net of intercompany eliminations	$ 1,100,000		$ 1,000,000
Liabilities related to variable interest entities net of intercompany eliminations	348,900		364,300
Noncontrolling interest in variable interest entity	122,300		122,500
Fixed rate debt carrying amount	5,500,000		5,200,000
Fixed rate debt fair value	5,600,000		5,400,000
Variable rate debt, carrying amount	955,300		660,400
Variable rate debt fair value	949,200		655,800
Investments in mortgage back securities, fair value	75,100		72,700
Capitalized internal costs related to development and redevelopment projects	9,900	10,700
Redeemable noncontrolling interest	32,643		37,410
Mortgage backed securities
Real Estate Properties [Line Items]
Investments in mortgage backed securities, carrying value	75,045		$ 72,651
Interest And Other Income
Real Estate Properties [Line Items]
Gain (loss) on sale of equity securities	$ 8,700	4,500
Essex Portfolio, L.P.
Real Estate Properties [Line Items]
Operating Partnership units outstanding (in shares) | shares	2,296,043		2,301,653
Redemption value of operating partnership units outstanding	$ 505,700		$ 692,500
Gain (loss) on sale of equity securities	(8,696)	$ 4,510
Redeemable noncontrolling interest	$ 32,643		$ 37,410
Partnership Interest
Real Estate Properties [Line Items]
Ownership interest in partnership	96.60%		96.60%
Distributions in Excess of Accumulated Earnings
Real Estate Properties [Line Items]
Cumulative effect adjustment				$ (190)
ASU 2016-13
Real Estate Properties [Line Items]
Cumulative effect adjustment				(190)
ASU 2016-13 | Essex Portfolio, L.P.
Real Estate Properties [Line Items]
Cumulative effect adjustment				(190)
ASU 2016-13 | Distributions in Excess of Accumulated Earnings
Real Estate Properties [Line Items]
Cumulative effect adjustment				$ 200

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Revenues - Disaggregation of Revenue (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2020 USD ($) community	Mar. 31, 2019 USD ($)	Dec. 31, 2019 USD ($)
Disaggregation of Revenue [Line Items]
Rental and other property	$ 389,750	$ 353,888
Management and other fees from affiliates	2,617	2,335
Total revenues	$ 392,367	356,223
Occupancy threshold for classification as stabilized	90.00%
Apartment communities owned (in communities) | community	250
Deferred revenue	$ 3,700		$ 3,900
Deferred revenue, revenue recognized	200
Deferred revenue balance from contracts with remaining performance obligations	3,700
Rental income
Disaggregation of Revenue [Line Items]
Rental and other property	383,498	347,805
Other property
Disaggregation of Revenue [Line Items]
Rental and other property	6,252	6,083
Rental and other property revenues
Disaggregation of Revenue [Line Items]
Rental and other property	389,750	353,888
Rental and other property revenues | Same-property
Disaggregation of Revenue [Line Items]
Rental and other property	346,456	335,658
Rental and other property revenues | Acquisitions
Disaggregation of Revenue [Line Items]
Rental and other property	21,924	987
Rental and other property revenues | Development
Disaggregation of Revenue [Line Items]
Rental and other property	4,075	1,158
Rental and other property revenues | Redevelopment
Disaggregation of Revenue [Line Items]
Rental and other property	5,401	5,229
Rental and other property revenues | Non-residential/other, net
Disaggregation of Revenue [Line Items]
Rental and other property	$ 11,894	10,856
Apartment communities owned (in communities) | community	3
Rental and other property revenues | Operating Segments | Southern California
Disaggregation of Revenue [Line Items]
Rental and other property	$ 155,642	151,463
Rental and other property revenues | Operating Segments | Northern California
Disaggregation of Revenue [Line Items]
Rental and other property	164,079	136,745
Rental and other property revenues | Operating Segments | Seattle Metro
Disaggregation of Revenue [Line Items]
Rental and other property	63,844	60,413
Rental and other property revenues | Other real estate assets
Disaggregation of Revenue [Line Items]
Rental and other property	$ 6,185	$ 5,267