10-KPeriod: FY2008

ESSEX PROPERTY TRUST, INC. Annual Report, Year Ended Dec 31, 2008

Filed February 27, 2009For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) operates as a self-administered REIT focused on owning, operating, and developing apartment communities primarily along the West Coast of the United States. As of December 31, 2008, the company's portfolio consisted of 134 apartment communities with 26,992 units, alongside six office buildings and active development projects. The company's strategy centers on investing in supply-constrained markets with strong rental demand, driven by a research-based approach to identify and manage properties. Despite a challenging economic environment, Essex maintained a strong portfolio occupancy rate of approximately 96.3% for its apartment communities in 2008. The company engaged in strategic acquisitions and dispositions throughout 2008 to optimize its portfolio. However, investors should note significant risks related to debt financing, including substantial upcoming balloon payments and the potential impact of capital and credit market conditions. The company's focus on West Coast markets, particularly California, also presents geographic concentration risk.

Financial Highlights

23 data points
Beta

Revenue

$408.43M

Net Income

$62.14M

15.2% Net Margin

EPS (Diluted)

$2.09

Cash & Equivalents

$41.91M

Free Cash Flow

$181.24M

Financial Statements
Beta
Revenue$408.43M
Operating Expenses$270.45M
Operating Income$137.98M
Interest Expense$85.06M
Net Income$62.14M
EPS (Basic)$2.10
EPS (Diluted)$2.09
Shares Outstanding (Basic)25.21M
Shares Outstanding (Diluted)25.35M

Key Highlights

  • 1As of December 31, 2008, Essex owned or had an interest in 134 apartment communities, totaling 26,992 units, concentrated along the West Coast (Southern California, San Francisco Bay Area, Seattle Metro).
  • 2The company's strategy emphasizes investing in supply-constrained markets with strong rental demand, supported by a proprietary research model.
  • 3In 2008, Essex completed acquisitions totaling $88.4 million and sold properties for $99.6 million (apartments) and $18.9 million (other).
  • 4The company maintained a high average financial occupancy rate of approximately 96.3% across its apartment communities in 2008.
  • 5Essex reported a development pipeline of four projects (988 units) and predevelopment projects (820 units), with significant remaining costs to be incurred.
  • 6Significant debt obligations exist, with approximately $1.76 billion in total indebtedness as of December 31, 2008, and substantial balloon payments scheduled in the coming years.
  • 7The company highlighted risks related to capital and credit market conditions, potential interest rate increases, and upcoming debt maturities.

Frequently Asked Questions

Essex Property Trust, Inc. is a real estate investment trust (REIT) primarily engaged in the ownership, operation, management, acquisition, development, and redevelopment of apartment communities. Its portfolio is concentrated along the West Coast of the United States, specifically in Southern California, the San Francisco Bay Area, and the Seattle metropolitan area.

In 2008, Essex maintained a strong average financial occupancy rate of approximately 96.3% across its 134 apartment communities. The company also engaged in strategic portfolio management, acquiring two communities for $88.4 million and selling three apartment communities for $99.6 million, as well as other properties.

The company identified several key financial risks, including the impact of capital and credit market conditions on its access to and cost of capital, the inherent risks of debt financing with substantial upcoming balloon payments (over $1.76 billion in total debt as of year-end 2008), potential increases in interest rates, and the need to refinance maturing indebtedness. Geographic concentration in California is also noted as a risk.

Essex's strategy involves investing in supply-constrained markets with strong rental demand, utilizing a proprietary research model. The company actively engages in development and redevelopment projects. As of December 31, 2008, it had a pipeline of four development projects (988 units) and predevelopment projects (820 units), indicating ongoing investment in expanding its portfolio.