10-QPeriod: Q1 FY2001

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q1 Ended Mar 31, 2001

Filed May 14, 2001For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its first quarter 2001 financial results, showcasing robust growth driven primarily by its multifamily property operations. Total revenues significantly increased by 26.7% year-over-year, reaching $50.1 million, bolstered by both same-store property revenue growth and contributions from recently acquired and developed properties. The company's strategic focus on key West Coast markets, including Northern California, Southern California, and the Pacific Northwest, continues to yield positive results, with strong occupancy rates consistently above 95%. While the company experienced an increase in expenses, notably interest expense due to higher debt levels from acquisitions, net income for the quarter was $11.05 million, a slight decrease from the prior year's $12.75 million. This decrease was largely due to the absence of significant real estate sales gains in the current quarter compared to Q1 2000. However, Funds From Operations (FFO) showed a healthy increase of 25%, indicating strong operational performance. The company maintains a solid liquidity position with a substantial line of credit available and is actively engaged in development and redevelopment projects to fuel future growth.

Key Highlights

  • 1Total revenues increased by 26.7% to $50.1 million in Q1 2001 compared to $39.5 million in Q1 2000, driven by property revenues and interest income.
  • 2Net income decreased to $11.05 million ($0.60 per share) in Q1 2001 from $12.75 million ($0.70 per share) in Q1 2000, primarily due to the absence of significant real estate sale gains.
  • 3Funds From Operations (FFO) increased by 25% to $22.38 million in Q1 2001 from $17.87 million in Q1 2000, demonstrating strong operational performance.
  • 4Average financial occupancy for multifamily properties remained strong at 96.2% for the first quarter of 2001, consistent with the prior year.
  • 5The company's total assets were $1.279 billion as of March 31, 2001, a slight decrease from $1.282 billion at December 31, 2000.
  • 6Long-term debt increased to $539.17 million as of March 31, 2001, from $502.07 million at December 31, 2000, reflecting financing for acquisitions and development.
  • 7The company has $44.73 million drawn on its $150 million unsecured lines of credit, indicating significant available liquidity.

Frequently Asked Questions

Essex Property Trust, Inc. is a real estate investment trust (REIT) primarily engaged in the ownership and operation of multifamily properties. Its portfolio is strategically concentrated in Northern California (San Francisco Bay Area), Southern California (Los Angeles, Ventura, Orange, and San Diego counties), and the Pacific Northwest (Seattle and Portland metropolitan areas).

In the first quarter of 2001, Essex Property Trust reported a significant increase in total revenues, up 26.7% to $50.1 million. However, net income decreased by approximately 13.3% to $11.05 million ($0.60 per share) from $12.75 million ($0.70 per share) in the same period of 2000. This decrease was largely attributed to the absence of substantial gains from real estate sales in the current quarter, a factor that had boosted net income in the prior year's first quarter.

Essex Property Trust maintains a strong liquidity position, with $11.83 million in unrestricted cash and cash equivalents as of March 31, 2001. The company has access to a $150 million unsecured line of credit, with $44.73 million drawn at the end of the quarter, providing significant borrowing capacity. Short-term liquidity needs are met through working capital, operating cash flow, and available credit. Long-term funding for acquisitions and development is anticipated from working capital, lines of credit, debt and equity issuances, and property dispositions.

Essex Property Trust is actively engaged in developing six new multifamily residential communities totaling 1,673 units and is involved in four redevelopment communities. As of March 31, 2001, the company had remaining development commitments of approximately $101.5 million, which are expected to be funded through a combination of internal resources, credit facilities, and capital markets.