Equity Transactions

12 Months Ended

Dec. 31, 2024

Equity [Abstract]

Equity Transactions

Equity Transactions

At-the-market Equity Program

In August 2024, the Company entered into a new equity distribution agreement pursuant to which the Company may, at its discretion, offer and sell shares of its common stock having an aggregate gross sales price of up to $900.0 million (the “2024 ATM Program”). The Company may also enter into forward sales agreements of its common stock, set the price, and defer receipt of proceeds until a later date. The 2024 ATM Program replaced the prior equity distribution agreement entered into in September 2021 (the “2021 ATM Program”), which was terminated upon the establishment of the 2024 ATM Program.

For the years ended December 31, 2024 and 2023, the Company did not sell any shares of its common stock through either agreement. As of December 31, 2024 a total of $900.0 million of shares remain available to be sold.

Operating Partnership Units and Long-Term Incentive Plan (“LTIP”) Units

As of December 31, 2024 and 2023, the Operating Partnership had outstanding 2,263,756 and 2,161,175 OP Units respectively. As of December 31, 2024 and 2023 the Operating Partnership had 67,495 and 97,637 vested LTIP units respectively. The Operating Partnership’s general partner, Essex, owned 96.5% and 96.6% of the partnership interests in the Operating Partnership as of December 31, 2024 and 2023, respectively, and Essex is responsible for the management of the Operating Partnership’s business. As the general partner of the Operating Partnership, Essex effectively controls the ability to issue common stock of Essex upon a limited partner’s notice of redemption. Essex has generally acquired OP Units upon a limited partner’s notice of redemption in exchange for shares of its common stock. The redemption provisions of OP Units owned by limited partners that permit Essex to settle in either cash or common stock at the option of Essex were further evaluated in accordance with applicable accounting guidance to determine whether temporary or permanent equity classification on the balance sheet is appropriate. The Operating Partnership evaluated this guidance, including the requirement to settle in unregistered shares, and determined that, with few exceptions, these OP Units meet the requirements to qualify for presentation as permanent equity.

LTIP units represent interests in the Operating Partnership for services rendered or to be rendered by the LTIP unitholder in its capacity as a partner, or in anticipation of becoming a partner, in the Operating Partnership. Upon the occurrence of specified events, LTIP units may over time achieve full parity with common units of the Operating Partnership for all purposes. Upon achieving full parity, LTIP units will be exchanged for an equal number of the OP Units.

The collective redemption value of OP Units and LTIP units owned by the limited partners, not including Essex, was $665.4 million and $560.0 million based on the closing price of Essex’s common stock as of December 31, 2024 and 2023, respectively.

In September 2024, as part of the acquisition of its joint venture partner’s 50% common equity interest in Century Towers, the Company issued 81,737 OP Units at an agreed upon price of $305 per unit. See Note 3, Real Estate Investments, for additional details.