10-QPeriod: Q2 FY2001

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q2 Ended Jun 30, 2001

Filed August 13, 2001For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its financial results for the quarter ended June 30, 2001, demonstrating solid revenue growth driven by its multifamily property portfolio. Total revenues increased by 20.4% year-over-year for the quarter, fueled by both increased rental income from existing properties and contributions from recently acquired assets. The company's core markets in Northern California, Southern California, and the Pacific Northwest continue to perform well, with strong occupancy rates and rental rate increases, particularly in Northern California. While overall net income saw a modest increase, the company also saw an increase in interest expenses due to higher debt levels from acquisitions and development activities. Significant strategic initiatives include the formation of the Essex Apartment Value Fund, L.P., aimed at further expanding the company's investment and development capabilities in key Western U.S. markets. The company maintains a strong liquidity position with substantial unsecured lines of credit available to fund ongoing operations and future growth.

Key Highlights

  • 1Total revenues grew by 20.4% to $51.045 million in Q2 2001 compared to Q2 2000, primarily driven by rental income.
  • 2Same-store property revenues increased by 8.7% year-over-year for the quarter, with Northern California showing the strongest growth at 13.7%.
  • 3Despite revenue growth, interest expense increased by 49.0% to $9.637 million in Q2 2001 due to increased debt for acquisitions and development.
  • 4The company's core property portfolio remains highly occupied, with a financial occupancy rate of 95.6% for Same Store Properties in Q2 2001.
  • 5Significant development activities are underway with six multifamily residential communities and 1,678 units under development.
  • 6The company announced the initial closing of the Essex Apartment Value Fund, L.P. in July 2001, a new investment vehicle to acquire, develop, and manage multifamily properties.
  • 7Unrestricted cash and cash equivalents increased to $12.666 million as of June 30, 2001, supported by strong operating cash flows and available lines of credit.

Frequently Asked Questions

Essex Property Trust, Inc.'s primary source of revenue is from its multifamily property operations, which accounted for over 99% of its property revenues for the periods presented.

The company's total liabilities increased due to a significant rise in mortgage notes payable, from $502.066 million at December 31, 2000, to $566.024 million at June 30, 2001. This increase is attributed to funding property acquisitions and development activities.

Key growth initiatives include ongoing acquisitions and development of multifamily properties in its core markets. A significant new initiative is the formation of the Essex Apartment Value Fund, L.P., which aims to invest in, develop, and manage multifamily properties, leveraging the company's expertise. The company also has substantial development projects underway.

The company expects continued rental income growth, supported by strong occupancy rates (above 95% historically) and demonstrated ability to increase rental rates in its key markets. The performance of Same Store Properties, especially in Northern California, indicates positive rental momentum.