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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 September 30, 2023

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)
Maryland77-0369576
(Essex Property Trust, Inc.)(Essex Property Trust, Inc.)
California77-0369575
 (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 classTrading
Symbol(s)
Name of each exchange on which registered
Common Stock, $.0001 par value (Essex Property Trust, Inc.)ESSNew 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.YesNoEssex Portfolio, L.P.YesNo

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.YesNoEssex Portfolio, L.P.YesNo
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. 

Essex Property Trust, Inc.:
Large accelerated filer
Accelerated filerNon-accelerated filerSmaller reporting company
Emerging growth company

Essex Portfolio, L.P.:
Large accelerated filerAccelerated filerNon-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.YesNoEssex Portfolio, L.P.YesNo
 
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: 64,184,604 shares of Common Stock ($.0001 par value) of Essex Property Trust, Inc. were outstanding as of October 25, 2023.
ii


EXPLANATORY NOTE

This report combines the reports on Form 10-Q for the three and nine month periods ended September 30, 2023 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.

iii


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 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 condensed 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, 2022.
iv


ESSEX PROPERTY TRUST, INC.
ESSEX PORTFOLIO, L.P.
FORM 10-Q
TABLE OF CONTENTS

PART I. FINANCIAL INFORMATIONPage No.
Item 1.Condensed Consolidated Financial Statements of Essex Property Trust, Inc. (Unaudited)
 
 
 
 
 Condensed Consolidated Financial Statements of Essex Portfolio, L.P. (Unaudited) 
 
 
 
 
 
Item 2.
Item 3.
Item 4.
PART II. OTHER INFORMATION 
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
1

Table of Contents


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)
ASSETSSeptember 30, 2023December 31, 2022
Real estate:
Rental properties:
Land and land improvements$3,036,912 $3,043,321 
Buildings and improvements13,036,033 12,922,906 
 16,072,945 15,966,227 
Less: accumulated depreciation(5,527,559)(5,152,133)
 10,545,386 10,814,094 
Real estate under development23,067 24,857 
Co-investments1,133,515 1,127,491 
11,701,968 11,966,442 
Cash and cash equivalents-unrestricted391,994 33,295 
Cash and cash equivalents-restricted8,503 9,386 
Marketable securities, net of allowance for credit losses of zero as of both September 30, 2023 and December 31, 2022
90,186 112,743 
Notes and other receivables, net of allowance for credit losses of $0.6 million and $0.3 million as of September 30, 2023 and December 31, 2022, respectively (includes related party receivables of $7.2 million and $7.0 million as of September 30, 2023 and December 31, 2022, respectively)
164,603 103,045 
Operating lease right-of-use assets64,636 67,239 
Prepaid expenses and other assets75,757 80,755 
Total assets$12,497,647 $12,372,905 
LIABILITIES AND EQUITY  
Unsecured debt, net$5,316,929 $5,312,168 
Mortgage notes payable, net888,010 593,943 
Lines of credit 52,073 
Accounts payable and accrued liabilities215,201 165,461 
Construction payable22,709 23,159 
Dividends payable155,806 149,166 
Distributions in excess of investments in co-investments50,686 42,532 
Operating lease liabilities65,927 68,696 
Other liabilities45,972 43,441 
Total liabilities6,761,240 6,450,639 
Commitments and contingencies
Redeemable noncontrolling interest29,960 27,150 
Equity:  
Common stock; $0.0001 par value, 670,000,000 shares authorized; 64,184,604 and 64,604,603 shares issued and outstanding, respectively
6 6 
Additional paid-in capital6,660,916 6,750,076 
Distributions in excess of accumulated earnings(1,184,597)(1,080,176)
Accumulated other comprehensive income, net55,358 46,466 
Total stockholders' equity5,531,683 5,716,372 
Noncontrolling interest174,764 178,744 
Total equity5,706,447 5,895,116 
Total liabilities and equity$12,497,647 $12,372,905 
See accompanying notes to the unaudited condensed consolidated financial statements.
2

Table of Contents


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 September 30,Nine Months Ended September 30,
 2023202220232022
Revenues:
Rental and other property$416,398 $406,862 $1,239,319 $1,183,318 
Management and other fees from affiliates2,785 2,886 8,328 8,313 
 419,183 409,748 1,247,647 1,191,631 
Expenses:  
Property operating, excluding real estate taxes77,020 73,450 224,745 212,069 
Real estate taxes46,876 46,593 138,787 137,594 
Corporate-level property management expenses11,504 10,184 34,387 30,532 
Depreciation and amortization137,357 135,511 410,422 403,561 
General and administrative14,611 15,172 43,735 40,541 
Expensed acquisition and investment related costs31 230 375 248 
Casualty loss  433  
 287,399 281,140 852,884 824,545 
Gain on sale of real estate and land  59,238  
Earnings from operations131,784 128,608 454,001 367,086 
Interest expense(54,161)(51,645)(157,806)(152,499)
Total return swap income690 1,882 2,544 6,709 
Interest and other income (loss)4,406 (6,796)29,055 (31,571)
Equity income from co-investments10,694 10,985 33,802 23,756 
Tax (expense) benefit on unconsolidated co-investments(404)(1,755)(1,237)7,863 
Loss on early retirement of debt, net (2) (2)
Gain on remeasurement of co-investment 17,423  17,423 
Net income93,009 98,700 360,359 238,765 
Net income attributable to noncontrolling interest(5,727)(5,858)(19,925)(15,615)
Net income available to common stockholders$87,282 $92,842 $340,434 $223,150 
Comprehensive income$97,122 $124,797 $369,564 $297,053 
Comprehensive income attributable to noncontrolling interest(5,867)(6,740)(20,238)(17,582)
Comprehensive income attributable to controlling interest$91,255 $118,057 $349,326 $279,471 
Per share data:  
Basic:  
Net income available to common stockholders$1.36 $1.43 $5.30 $3.42 
Weighted average number of shares outstanding during the period64,184,180 65,059,678 64,274,085 65,198,532 
Diluted:  
Net income available to common stockholders$1.36 $1.43 $5.30 $3.42 
Weighted average number of shares outstanding during the period64,186,020 65,067,790 64,275,279 65,225,767 

See accompanying notes to the unaudited condensed consolidated financial statements.
3

Table of Contents


ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2023 and 2022
(Unaudited)
(In thousands)
 Common stockAdditional paid-in capitalDistributions
in excess of accumulated
earnings
Accumulated
other
comprehensive income, net
Noncontrolling interestTotal
Three Months Ended September 30, 2023SharesAmount
Balances at June 30, 202364,183 $6 $6,657,481 $(1,123,594)$51,385 $176,727 $5,762,005 
Net income— — — 87,282 — 5,727 93,009 
Change in fair value of derivatives and amortization of swap settlements— — — — 3,973 140 4,113 
Issuance of common stock under:      
Sale of common stock, net— — (106)— — — (106)
Equity based compensation costs— — 2,211 — — 78 2,289 
Changes in the redemption value of redeemable noncontrolling interest— — 1,317 — — 78 1,395 
Distributions to noncontrolling interest— — — — — (7,973)(7,973)
Redemptions of noncontrolling interest2 — 13 — — (13) 
Common stock dividends ($2.31 per share)
— — — (148,285)— — (148,285)
Balances at September 30, 202364,185 $6 $6,660,916 $(1,184,597)$55,358 $174,764 $5,706,447 


4

Table of Contents


Common stockAdditional paid-in capitalDistributions
in excess of accumulated
earnings
Accumulated
other
comprehensive income, net
Noncontrolling interestTotal
Nine Months Ended September 30, 2023SharesAmount
Balances at December 31, 202264,605 $6 $6,750,076 $(1,080,176)$46,466 $178,744 $5,895,116 
Net income— — — 340,434 — 19,925 360,359 
Change in fair value of derivatives and amortization of swap settlements— — — — 8,892 313 9,205 
Issuance of common stock under:
Stock option and restricted stock plans, net3 — — — — —  
Sale of common stock, net— — (231)— — — (231)
Equity based compensation costs— — 9,598 — — 337 9,935 
Retirement of common stock, net(437)— (95,657)— — — (95,657)
Changes in the redemption value of redeemable noncontrolling interest— — (2,770)— — (40)(2,810)
Distributions to noncontrolling interest— — — — — (24,006)(24,006)
Redemptions of noncontrolling interest14 — (100)— — (509)(609)
Common stock dividends ($6.93 per share)
— — — (444,855)— — (444,855)
Balances at September 30, 202364,185 $6 $6,660,916 $(1,184,597)$55,358 $174,764 $5,706,447 


5

Table of Contents


Common stockAdditional paid-in capitalDistributions
in excess of accumulated
earnings
Accumulated
other
comprehensive income, net
Noncontrolling InterestTotal
Three Months Ended September 30, 2022SharesAmount
Balances at June 30, 202265,124 $7 $6,875,863 $(1,073,577)$25,554 $178,738 $6,006,585 
Net income— — — 92,842 — 5,858 98,700 
Change in fair value of derivatives and amortization of swap settlements— — — — 25,304 885 26,189 
Change in fair value of marketable debt securities, net— — — — (89)(3)(92)
Issuance of common stock under:
Stock option and restricted stock plans, net1 — 155 — — — 155 
Sale of common stock, net— — (107)— — — (107)
Equity based compensation costs— — 1,891 — — 66 1,957 
Retirement of common stock, net(372)(1)(97,120)— — — (97,121)
Changes in the redemption value of redeemable noncontrolling interest— — 3,195 — — 532 3,727 
Distributions to noncontrolling interest— — — — — (7,748)(7,748)
Redemptions of noncontrolling interest— — (8,005)— — (563)(8,568)
Common stock dividends ($2.20 per share)
— — — (142,480)— — (142,480)
Balances at September 30, 202264,753 $6 $6,775,872 $(1,123,215)$50,769 $177,765 $5,881,197 

6

Table of Contents


Common stockAdditional paid-in capitalDistributions
in excess of accumulated
earnings
Accumulated
other
comprehensive income (loss), net
Noncontrolling InterestTotal
Nine Months Ended September 30, 2022SharesAmount
Balances at December 31, 202165,248 $7 $6,915,981 $(916,833)$(5,552)$182,905 $6,176,508 
Net income— — — 223,150 — 15,615 238,765 
Change in fair value of derivatives and amortization of swap settlements— — — — 56,124 1,960 58,084 
Change in fair value of marketable debt securities, net— — — — 197 7 204 
Issuance of common stock under:
Stock option and restricted stock plans, net88 — 17,194 — — — 17,194 
Sale of common stock, net— — (314)— — — (314)
Equity based compensation costs— — 6,843 — — 239 7,082 
Retirement of common stock, net(591)(1)(157,950)— — — (157,951)
Changes in the redemption value of redeemable noncontrolling interest— — 4,246 — — 704 4,950 
Contributions from noncontrolling interest— — — — — 125 125 
Distributions to noncontrolling interest— — — — — (22,989)(22,989)
Redemptions of noncontrolling interest8 — (10,128)— — (801)(10,929)
Common stock dividends ($6.60 per share)
— — — (429,532)— — (429,532)
Balances at September 30, 202264,753 $6 $6,775,872 $(1,123,215)$50,769 $177,765 $5,881,197 

See accompanying notes to the unaudited condensed consolidated financial statements.
7

Table of Contents


ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
(In thousands, except parenthetical amounts) 
 Nine Months Ended September 30,
 20232022
Cash flows from operating activities:
Net income$360,359 $238,765 
Adjustments to reconcile net income to net cash provided by operating activities:  
Straight-lined rents1,650 5,529 
Depreciation and amortization410,422 403,561 
Amortization of discount and debt financing costs, net5,028 4,916 
Realized and unrealized (gains) losses on marketable securities, net (4,294)51,126 
Provision for credit losses51 64 
Earnings from co-investments(33,802)(23,756)
Operating distributions from co-investments48,229 86,854 
Accrued interest from notes and other receivables(8,919)(10,748)
Casualty loss433  
Gain on the sale of real estate and land(59,238) 
Equity-based compensation5,943 6,589 
Loss on early retirement of debt, net 2 
Gain on remeasurement of co-investment (17,423)
Changes in operating assets and liabilities: 
Prepaid expenses, receivables, operating lease right-of-use assets, and other assets3,024 15,406 
Accounts payable, accrued liabilities, and operating lease liabilities44,971 38,948 
Other liabilities2,533 8,902 
Net cash provided by operating activities776,390 808,735 
Cash flows from investing activities:  
Additions to real estate:  
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired(23,845)(21,759)
Redevelopment(56,168)(67,974)
Development acquisitions of and additions to real estate under development(6,317)(22,754)
Capital expenditures on rental properties(94,304)(107,105)
Investments in notes receivable(52,888)(160,013)
Collections of notes and other receivables 303,088 
Proceeds from insurance for property losses2,991 4,325 
Proceeds from dispositions of real estate99,388  
Contributions to co-investments(32,169)(159,461)
Changes in refundable deposits10,200 (16,318)
Purchases of marketable securities(11,552)(12,760)
Sales and maturities of marketable securities46,989 30,025 
Non-operating distributions from co-investments15,251 161,324 
Net cash used in investing activities(102,424)(69,382)
Cash flows from financing activities:  
Proceeds from unsecured debt and mortgage notes598,000  
Payments on unsecured debt and mortgage notes(301,678)(24,103)
Proceeds from lines of credit844,021 1,053,663 
Repayments of lines of credit(896,094)(1,175,440)
8

Table of Contents


 Nine Months Ended September 30,
 20232022
Retirement of common stock(95,657)(157,951)
Additions to deferred charges(1,681)(140)
Net costs from issuance of common stock(231)(314)
Net proceeds from stock options exercised 19,410 
Payments related to tax withholding for share-based compensation (2,216)
Contributions from noncontrolling interest 125 
Distributions to noncontrolling interest(23,532)(22,606)
Redemption of noncontrolling interest(609)(10,929)
Redemption of redeemable noncontrolling interest (478)
Common stock dividends paid(438,689)(423,443)
Net cash used in financing activities(316,150)(744,422)
Net increase (decrease) in unrestricted and restricted cash and cash equivalents357,816 (5,069)
Unrestricted and restricted cash and cash equivalents at beginning of period42,681 58,638 
Unrestricted and restricted cash and cash equivalents at end of period$400,497 $53,569 
Supplemental disclosure of cash flow information:
Cash paid for interest (net of $0.7 million and $1.9 million capitalized in 2023 and 2022, respectively)
$159,758 $149,970 
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases$5,298 $5,225 
Supplemental disclosure of noncash investing and financing activities:  
Transfers between real estate under development and rental properties, net$827 $98,024 
Transfers from real estate under development to co-investments$1,322 $2,090 
Reclassifications to (from) redeemable noncontrolling interest from additional paid in capital and noncontrolling interest$2,810 $(4,950)
Debt assumed in connection with acquisition$ $21,303 

See accompanying notes to the unaudited condensed consolidated financial statements.

9

Table of Contents


ESSEX PORTFOLIO, L.P.  AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
(In thousands, except parenthetical and unit amounts)
ASSETSSeptember 30, 2023December 31, 2022
Real estate:
Rental properties:
Land and land improvements$3,036,912 $3,043,321 
Buildings and improvements13,036,033 12,922,906 
 16,072,945 15,966,227 
Less: accumulated depreciation(5,527,559)(5,152,133)
 10,545,386 10,814,094 
Real estate under development23,067 24,857 
Co-investments1,133,515 1,127,491 
11,701,968 11,966,442 
Cash and cash equivalents-unrestricted391,994 33,295 
Cash and cash equivalents-restricted8,503 9,386 
Marketable securities, net of allowance for credit losses of zero as of both September 30, 2023 and December 31, 2022
90,186 112,743 
Notes and other receivables, net of allowance for credit losses of $0.6 million and $0.3 million as of September 30, 2023 and December 31, 2022, respectively (includes related party receivables of $7.2 million and $7.0 million as of September 30, 2023 and December 31, 2022, respectively)
164,603 103,045 
Operating lease right-of-use assets64,636 67,239 
Prepaid expenses and other assets75,757 80,755 
Total assets$12,497,647 $12,372,905 
LIABILITIES AND CAPITAL  
Unsecured debt, net$5,316,929 $5,312,168 
Mortgage notes payable, net888,010 593,943 
Lines of credit 52,073 
Accounts payable and accrued liabilities215,201 165,461 
Construction payable22,709 23,159 
Distributions payable155,806 149,166 
Distributions in excess of investments in co-investments50,686 42,532 
Operating lease liabilities65,927 68,696 
Other liabilities45,972 43,441 
Total liabilities6,761,240 6,450,639 
Commitments and contingencies
Redeemable noncontrolling interest29,960 27,150 
Capital:  
General Partner:
Common equity (64,184,604 and 64,604,603 units issued and outstanding, respectively)
5,476,325 5,669,906 
5,476,325 5,669,906 
Limited Partners:
Common equity (2,258,812 and 2,272,496 units issued and outstanding, respectively)
47,714 51,454 
    Accumulated other comprehensive income, net61,215 52,010 
Total partners' capital5,585,254 5,773,370 
Noncontrolling interest121,193 121,746 
Total capital5,706,447 5,895,116 
Total liabilities and capital$12,497,647 $12,372,905 

See accompanying notes to the unaudited condensed consolidated financial statements.
10

Table of Contents


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 September 30,Nine Months Ended September 30,
 2023202220232022
Revenues:
Rental and other property$416,398 $406,862 $1,239,319 $1,183,318 
Management and other fees from affiliates2,785 2,886 8,328 8,313 
 419,183 409,748 1,247,647 1,191,631 
Expenses:  
Property operating, excluding real estate taxes77,020 73,450 224,745 212,069 
Real estate taxes46,876 46,593 138,787 137,594 
Corporate-level property management expenses11,504 10,184 34,387 30,532 
Depreciation and amortization137,357 135,511 410,422 403,561 
General and administrative14,611 15,172 43,735 40,541 
Expensed acquisition and investment related costs31 230 375 248 
Casualty loss  433  
 287,399 281,140 852,884 824,545 
Gain on sale of real estate and land  59,238  
Earnings from operations131,784 128,608 454,001 367,086 
Interest expense(54,161)(51,645)(157,806)(152,499)
Total return swap income690 1,882 2,544 6,709 
Interest and other income (loss)4,406 (6,796)29,055 (31,571)
Equity income from co-investments10,694 10,985 33,802 23,756 
Tax (expense) benefit on unconsolidated co-investments(404)(1,755)(1,237)7,863 
Loss on early retirement of debt, net (2) (2)
Gain on remeasurement of co-investment 17,423  17,423 
Net income93,009 98,700 360,359 238,765 
Net income attributable to noncontrolling interest(2,655)(2,611)(7,943)(7,815)
Net income available to common unitholders$90,354 $96,089 $352,416 $230,950 
Comprehensive income$97,122 $124,797 $369,564 $297,053 
Comprehensive income attributable to noncontrolling interest(2,655)(2,611)(7,943)(7,815)
Comprehensive income attributable to controlling interest$94,467 $122,186 $361,621 $289,238 
Per unit data:  
Basic:  
Net income available to common unitholders$1.36 $1.43 $5.30 $3.42 
Weighted average number of common units outstanding during the period66,443,416 67,333,077 66,535,917 67,476,168 
Diluted:
Net income available to common unitholders$1.36 $1.43 $5.30 $3.42 
Weighted average number of common units outstanding during the period66,445,256 67,341,189 66,537,111 67,503,403 

See accompanying notes to the unaudited condensed consolidated financial statements.
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ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES
Condensed Consolidated Statements of Capital for the three and nine months ended September 30, 2023 and 2022
(Unaudited)
(In thousands)
 General PartnerLimited PartnersAccumulated other
comprehensive income, net
Noncontrolling interestTotal
 Common EquityCommon Equity
Three Months Ended September 30, 2023UnitsAmountUnitsAmount
Balances at June 30, 202364,183 $5,533,893 2,260 $49,704 $57,102 $121,306 $5,762,005 
Net income— 87,282 — 3,072 — 2,655 93,009 
Change in fair value of derivatives and amortization of swap settlements— — — — 4,113 — 4,113 
Issuance of common units under:      
Sale of common stock by general partner, net— (106)— — — — (106)
Equity based compensation costs— 2,211 — 78 — — 2,289 
Changes in the redemption value of redeemable noncontrolling interest— 1,317 — 90 — (12)1,395 
Distributions to noncontrolling interest— — — — — (2,754)(2,754)
Redemptions2 13 (1)(11)— (2) 
Distributions declared ($2.31 per unit)
— (148,285)— (5,219)— — (153,504)
Balances at September 30, 202364,185 $5,476,325 2,259 $47,714 $61,215 $121,193 $5,706,447 


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General PartnerLimited PartnersAccumulated other
comprehensive income, net
Noncontrolling interestTotal
Common EquityCommon Equity
Nine Months Ended September 30, 2023UnitsAmountUnitsAmount
Balances at December 31, 202264,605 $5,669,906 2,272 $51,454 $52,010 $121,746 $5,895,116 
Net income— 340,434 — 11,982 — 7,943 360,359 
Change in fair value of derivatives and amortization of swap settlements— — — — 9,205 — 9,205 
Issuance of common units under:
General partner's stock based compensation, net3 — — — — —  
Sale of common stock by general partner, net— (231)— — — — (231)
Equity based compensation costs— 9,598 — 337 —