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, 2025. Unless otherwise indicated, the notes to condensed consolidated financial statements apply to both the Company and the Operating Partnership.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.7% and 96.6% general partnership interest as of March 31, 2026 and December 31, 2025, respectively. Total Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) outstanding were 2,184,025 and 2,250,339 as of March 31, 2026 and December 31, 2025, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $528.5 million and $588.9 million as of March 31, 2026 and December 31, 2025, respectively. The Company has reserved shares of common stock for such conversions.

As of March 31, 2026, the Company owned or had ownership interests in 259 operating apartment home communities, comprising 63,099 apartment homes, excluding the Company’s ownership interests in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of one consolidated project and various predevelopment projects (collectively, the “Portfolio”). The operating apartment home 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.

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. In addition, disclosures for property, plant and equipment will be required for all capitalized software costs. ASU 2025-06 will be effective for the Company beginning January 1, 2028 and early adoption is permitted. Upon adoption, the new standard may be applied prospectively, retrospectively or using a modified transition approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated results of operations and financial position.

In November 2024, the FASB issued ASU No. 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, the FASB issued ASU No. 2025-01 “Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” ASU 2024-03 requires disaggregated information for specified categories of expenses to be presented in the notes to the financial statements. ASU 2024-03, as clarified by ASU 2025-01, will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. The new standards may be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact of these standards on its consolidated results of operations and financial position.

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 provides for a practical expedient that allows an entity to assume that conditions as of the balance sheet date will remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. ASU 2025-05 is effective for the Company beginning January 1, 2026, with early adoption permitted, and is required to be applied prospectively. The Company adopted ASU 2025-05 as of January 1, 2026. This adoption did not have a material impact on its consolidated results of operations or financial position.

Revenues from tenants renting or leasing apartment homes are recorded when due from tenants and are recognized monthly as they are earned, which generally approximates a straight-line basis, else, adjustments are made to conform to a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 9 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. See Note 3, Revenues, for additional information regarding such revenues.

The Company also generates other property-related revenue associated with the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned.

Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized are determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed.

The Company reports its equity securities and available-for-sale debt securities at fair value, based on quoted market prices (Level 1 for the equity securities and Level 2 for the available for sale debt securities, as defined by the FASB standard for fair value measurements). As of both March 31, 2026 and December 31, 2025, less than $0.1 million of equity securities presented within common stock, preferred stock, and stock funds in the tables below represented investments measured at fair value, using net asset value as a practical expedient, and were 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. Any realized and unrealized gain or loss in equity securities, realized gain in debt securities, and interest income are included in interest and other income in the condensed consolidated statements of income and comprehensive income. There were no other-than-temporary impairment charges for the three months ended March 31, 2026 and 2025.

As of March 31, 2026 and December 31, 2025, equity securities and available for sale debt securities consisted primarily of investment funds-debt securities, common stock, preferred stock and stock funds, U.S. Treasury and agency securities, certificates of deposit, corporate debt securities and municipal debt securities.


	March 31, 2026
	Amortized Cost		Gross Unrealized Gain (loss)		Carrying Value
Equity securities:

Common stock, preferred stock and stock funds	$	48,158	$	19,704	$	67,862

Available for sale debt securities:
U.S. Treasury and agency securities	12,230		(1)		12,229
Certificates of deposit	5,041		—		5,041
Corporate debt securities	10,933		(25)		10,908
Municipal debt securities	475		6		481
Total - Marketable securities	$	76,837	$	19,684	$	96,521


	December 31, 2025
	Amortized Cost		Gross Unrealized Gain		Carrying Value
Equity securities:
Investment funds - debt securities	$	2,677	$	6	$	2,683
Common stock, preferred stock and stock funds	48,738		21,736		70,474

Available for sale debt securities:
U.S. Treasury and agency securities	10,186		103		10,289
Certificates of deposit	5,000		—		5,000
Corporate debt securities	8,954		105		9,059
Municipal debt securities	556		9		565
Total - Marketable securities	$	76,111	$	21,959	$	98,070

In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidated the Operating Partnership, 18 DownREIT entities (comprising ten communities), and four co-investments as of March 31, 2026 and December 31, 2025. The Company consolidated these entities because it was 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 $979.6 million and $243.8 million, respectively, as of March 31, 2026 and $970.6 million and $242.5 million, respectively, as of December 31, 2025. Noncontrolling interests in these entities was $101.2 million as of March 31, 2026 and December 31, 2025. The Company’s financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2026 and December 31, 2025, the Company was not deemed to be the primary beneficiary of any other VIEs and did not have any VIEs of which it was not deemed to be the primary beneficiary.

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, 2025) are being amortized over the expected service periods.

Management estimates that the carrying amounts of the outstanding balances under its lines of credit, commercial paper and notes and other receivables approximate fair value as of March 31, 2026 and December 31, 2025, 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 $5.9 billion as of both March 31, 2026 and December 31, 2025, was approximately $5.7 billion and $5.8 billion, respectively. Management has estimated that the fair value of the Company’s $859.2 million and $854.4 million of variable rate debt at March 31, 2026 and December 31, 2025, respectively, was approximately $857.6 million and $853.2 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and lines of credit compared to those available in the marketplace. Management estimates 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, 2026 and December 31, 2025 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of March 31, 2026 and December 31, 2025.

The Company’s capitalized costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $6.7 million and $6.2 million during the three months ended March 31, 2026 and 2025, respectively. The Company amortizes the capitalized costs over the useful life of the development.

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 the co-investment in the condensed consolidated statements of income and comprehensive income equal to the amount by which the fair value of the co-investment interest, using Level 2 inputs, exceeds the Company’s carrying value of the co-investment. A majority of the co-investments, excluding most 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. 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.


	Change in fair value of derivatives and amortization of swap settlements		Unrealized gain (loss) on available for sale debt securities		Total
Balance at December 31, 2025	$	5,837	$	210	$	6,047

Other comprehensive loss before reclassification	(566)		(216)		(782)
Amounts reclassified from accumulated other comprehensive income	912		(13)		899
Other comprehensive income (loss)	346		(229)		117
Balance at March 31, 2026	$	6,183	$	(19)	$	6,164


	Change in fair value of derivatives and amortization of swap settlements		Unrealized gain (loss) on available for sale debt securities		Total
Balance at December 31, 2025	$	9,921	$	217	$	10,138

Other comprehensive loss before reclassification	(586)		(224)		(810)
Amounts reclassified from accumulated other comprehensive income	944		(13)		931
Other comprehensive income (loss)	358		(237)		121
Balance at March 31, 2026	$	10,279	$	(20)	$	10,259

Amounts reclassified from accumulated other comprehensive income, net in connection with derivatives are recorded in interest expense in 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 on the condensed consolidated statements of income and comprehensive income.

The carrying value of redeemable noncontrolling interests in the accompanying condensed consolidated balance sheets was $25.8 million and $28.3 million as of March 31, 2026 and December 31, 2025, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances.

Highly liquid investments generally 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.


	March 31, 2026		December 31, 2025		March 31, 2025		December 31, 2024
Cash and cash equivalents - unrestricted	$	38,005	$	76,241	$	98,735	$	66,795
Cash and cash equivalents - restricted	9,405		9,345		9,127		9,051
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statements of cash flows	$	47,410	$	85,586	$	107,862	$	75,846

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 ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its Portfolio, its investments in and advances to joint ventures and affiliates, its notes receivable, 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.