10-KPeriod: FY2010

ESSEX PROPERTY TRUST, INC. Annual Report, Year Ended Dec 31, 2010

Filed February 25, 2011For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) is a Real Estate Investment Trust (REIT) focused on owning, operating, and developing apartment communities primarily along the West Coast of the United States, specifically in Southern California, the San Francisco Bay Area, and the Seattle metropolitan area. As of December 31, 2010, the company owned 147 apartment communities with over 30,000 units, demonstrating a significant presence in key West Coast markets. The company's strategy emphasizes a research-driven approach to identify and invest in markets with strong economic fundamentals, limited new supply, and high rental demand. They also focus on property operations aimed at maximizing rental growth and tenant retention. In 2010, Essex made significant acquisitions, adding twelve communities totaling $584 million, and continued its development pipeline with two projects underway. The company maintained strong occupancy rates at 97.0% for its stabilized properties. Management believes current cash flows, available credit, and marketable securities are sufficient to meet 2011 cash needs.

Financial Highlights

33 data points
Beta

Revenue

$410.28M

Net Income

$35.93M

8.8% Net Margin

EPS (Diluted)

$1.14

Total Assets

$3.73B

Cash & Equivalents

$13.75M

Free Cash Flow

$175.53M

Financial Statements
Beta
Revenue$410.28M
Operating Expenses$299.65M
Operating Income$110.63M
Interest Expense$82.76M
Net Income$35.93M
EPS (Basic)$1.14
EPS (Diluted)$1.14
Shares Outstanding (Basic)29.67M
Shares Outstanding (Diluted)29.73M

Key Highlights

  • 1As of December 31, 2010, Essex owned and operated a portfolio of 147 apartment communities comprising 30,072 units, strategically located across Southern California, the San Francisco Bay Area, and the Seattle metropolitan area.
  • 2In 2010, the company actively pursued growth through acquisitions, adding twelve new communities for a total investment of $584 million, reinforcing its West Coast focus.
  • 3Average financial occupancy for stabilized apartment communities remained strong at 97.0% in both 2010 and 2009, indicating consistent demand and effective property management.
  • 4Essex is actively engaged in development and redevelopment, with two active development projects (436 units) and a predevelopment pipeline of 1,126 units, signaling future growth potential.
  • 5The company demonstrated proactive capital management by paying off $242.2 million in mortgage debt and securing $440.6 million in new, lower-interest rate debt, improving its financing structure.
  • 6Essex raised $251.4 million in net proceeds through the issuance of common stock in 2010, utilizing these funds for debt reduction, acquisitions, and development initiatives.
  • 7The company's website is highlighted as a source for SEC filings, including Form 10-K, 10-Q, 8-K, and Proxy Statements, providing easy access to important corporate information.

Frequently Asked Questions

Essex Property Trust, Inc. operates as a self-administered and self-managed real estate investment trust (REIT) primarily focused on the ownership, operation, acquisition, development, and redevelopment of apartment communities. Its geographic concentration is along the West Coast of the United States, specifically in Southern California, the San Francisco Bay Area, and the Seattle metropolitan area.

In 2010, Essex maintained a strong average financial occupancy rate of 97.0% for its stabilized apartment communities. The company was also active in growth, completing twelve acquisitions totaling $584 million and adding to its development pipeline.

Key risks include dependence on key personnel, the impact of capital and credit market conditions on access to and cost of capital, risks associated with debt financing (including potential inability to refinance and covenant compliance), rising interest rates, competition in the real estate market, and risks related to development and redevelopment projects (delays, cost overruns, and failure to achieve expected results). Additionally, geographic concentration in its core markets presents a specific risk.

Essex actively manages its debt by paying down existing mortgage loans and securing new, lower-interest rate debt. In 2010, they paid off $242.2 million and obtained $440.6 million in new fixed-rate secured mortgage loans. They also have access to significant unsecured lines of credit, which were amended and increased in 2010. The company also raised capital through the issuance of common stock to fund its operations and growth strategies.