10-QPeriod: Q1 FY2002

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q1 Ended Mar 31, 2002

Filed May 15, 2002For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its first quarter 2002 results, showing a slight decrease in total revenues to $49.9 million, down from $50.1 million in the prior year's quarter. This was primarily driven by a decline in property revenues from "Same Store Properties" in Northern California and the Pacific Northwest, influenced by rental rate decreases and lower occupancy. However, an increase in interest and other income, along with growth in "Quarterly Acquisition Properties," helped to partially offset these declines. Net income saw a modest increase of 2.2% to $11.3 million, or $0.61 per basic share, compared to $11.0 million, or $0.60 per basic share, in Q1 2001. The company highlighted a significant expansion in its investment activities through the Essex Apartment Value Fund, L.P., which has raised $250 million and is set to be the company's exclusive investment vehicle for new investments. Despite some headwinds in specific regions, the company's overall financial position appears stable, with ample liquidity and a focus on strategic development and investment.

Key Highlights

  • 1Total revenues for Q1 2002 were $49.9 million, a slight decrease of 0.3% from $50.1 million in Q1 2001.
  • 2Net income available to common stockholders increased by 2.2% to $11.3 million ($0.61 per basic share) in Q1 2002, compared to $11.0 million ($0.60 per basic share) in Q1 2001.
  • 3Property revenues from "Same Store Properties" declined by 5.3% due to lower rental rates and occupancy in Northern California and the Pacific Northwest.
  • 4Interest and other income increased significantly by 47.2% to $6.0 million, partially offsetting the decrease in property revenues.
  • 5The Essex Apartment Value Fund, L.P. has reached its final closing with $250 million in commitments and will serve as the primary investment vehicle for new acquisitions and developments.
  • 6The company reported total assets of $1.34 billion as of March 31, 2002, an increase from $1.33 billion at the end of 2001.
  • 7Unrestricted cash and cash equivalents increased by 6.6% to $6.9 million as of March 31, 2002.

Frequently Asked Questions

The primary driver for the decrease in property revenues from "Same Store Properties" was a combination of declining rental rates and a decrease in financial occupancy, particularly in Northern California and the Pacific Northwest regions.

Essex Property Trust is primarily utilizing the Essex Apartment Value Fund, L.P., which has secured $250 million in commitments, as its exclusive investment vehicle for new acquisitions and developments. The company also continues to invest in development and redevelopment projects.

As of March 31, 2002, Essex Property Trust reported $6.9 million in unrestricted cash and cash equivalents, an increase from $6.4 million at the end of 2001. The company also has access to significant lines of credit and expects its operating cash flows to meet short-term liquidity requirements.

Yes, the company noted that conditions in the insurance industry have led to significantly higher costs (over 50% increase from the prior year), increased deductibles, and reduced coverages. In some instances, this has led to a technical non-compliance with loan agreement insurance requirements, though the company does not believe it will materially impact operations.