-- In 2008, the Company received $7.5 million and recognized $6.3 million
of preferred income from the repayment of its preferred interest in the
Waterstone at Fremont Apartments.
-- In 2007, the Company received approximately $33.9 million for its
share of proceeds from the sale of City Heights Apartments, resulting in a
gain on sale of $13.7 million (not included in FFO), and $10.3 million in
fee income (resulting in $10.1 million of FFO).
-- In 2007, gains related to the sale of 13 condominium units at
Peregrine Point generated FFO of $0.3 million.
Net income available to common stockholders for the quarter ended March 31,
2008 totaled $15.7 million, or $0.63 per diluted share, compared to net
income available to common stockholders of $35.3 million, or $1.46 per
diluted share, for the quarter ended March 31, 2007.
SAME-PROPERTY OPERATIONS
Same-property operating results exclude properties that do not have
comparable results. The table below illustrates the percentage change in
same-property revenues, operating expenses, and net operating income
("NOI") for the quarter ended March 31, 2008, compared to the quarter ended
March 31, 2007:
Q1 2008 compared to Q1 2007
-------------------------------------
Revenues Expenses NOI
----------- ----------- -----------
Southern California 2.3% 3.6% 1.8%
Northern California 11.8% 5.8% 14.8%
Seattle Metro 9.7% 5.6% 11.8%
----------- ----------- -----------
Same-property average 5.7% 4.4% 6.4%
=========== =========== ===========
The table below illustrates the sequential percentage change in same-property revenues, expenses, and NOI for the quarter ended March 31, 2008 versus the quarter ended December 31, 2007:
Q1 2008 compared to Q4 2007
-------------------------------------
Revenues Expenses NOI
----------- ----------- -----------
Southern California 0.2% -0.3% 0.4%
Northern California 1.5% -5.3% 5.0%
Seattle Metro 1.1% 2.0% 0.7%
----------- ----------- -----------
Same-property average 0.6% -3.1% 2.5%
=========== =========== ===========
Same-property financial occupancies for the quarters ended are as follows:
3/31/08 12/31/07 3/31/07
----------- ----------- -----------
Southern California 95.1% 95.5% 95.5%
Northern California 97.1% 97.3% 95.3%
Seattle Metro 97.0% 96.5% 95.7%
----------- ----------- -----------
Same-property average 95.9% 96.1% 95.5%
=========== =========== ===========
ACQUISITIONS/DISPOSITIONS
During January 2008, the Company received $7.5 million from a related party
and recognized preferred income of $6.3 million from the repayment of its
preferred interest in Waterstone at Fremont, a 526-unit community located
in Fremont, California.
DEVELOPMENT
In the first quarter, the Company had 16 projects in various stages of
development totaling approximately 3,110 units. The development pipeline
totaled approximately $958 million with $338 million spent as of March 31,
2008.
Construction is near completion at Eastlake 2851 in Seattle, Washington, a
community owned by the Essex Apartment Value Fund II, L.P. ("Fund II").
During the first quarter pre-leasing activities commenced and initial
occupancy began in April 2008. Currently, the community has leased or
pre-leased approximately 62 of the 127 units.
At The Grand, a 238-unit community located in the Lake Merritt area of
Oakland, California, the 22-story high rise has been topped out, and a
third of the exterior skin and windows are in place with interior
improvements currently underway. The Grand is scheduled to open in January
of 2009 and pre-leasing will commence in the fourth quarter of 2008.
In April 2008, the Company purchased approximately 7.1 acres of land in
Sunnyvale, California for the Tasman Place project. Tasman Place will
consist of approximately 284 residential units and 48,300 square feet of
retail space spread out over 3 five-story buildings. The contemporary
Spanish-Mediterranean style property will have a mix of one-bedroom and
two-bedroom units with an average of 934 square feet. Amenities will
include a fitness center, business center, recreation room and a pool and
spa. The total estimated cost of the development is $139 million with
construction commencing in February 2009.
Additional information pertaining to the location of all development
projects, related costs and construction timelines can be found on page S-9
in the Company's Supplemental Financial Information package.
REDEVELOPMENT ACTIVITIES
The Company defines redevelopment communities as existing properties owned
or recently acquired, which have been targeted for additional investment by
the Company with the expectation of increased financial returns through
property improvement. Redevelopment communities typically have apartment
units that are not available for rent and, as a result, may have less than
stabilized operations. As of March 31, 2008, the Company had ownership
interests in 15 redevelopment communities aggregating 4,237 apartment units
with estimated redevelopment costs of $146 million.
Planning, approval and other predevelopment activities continued at
Foothill Commons, Woodland Commons, and Marina Cove. At Marina Cove,
roofing has been replaced and dryer additions are being installed as the
Company awaits city approvals for enhancements to the leasing office and
amenities.
Unit turns continued upon move out of the resident at The Montclaire, and
consisted of standard and deluxe scopes. In addition, the Company has
expanded the exterior renovation scope to include re-siding certain
buildings, new balcony railings, and window replacements for units adjacent
to city streets.
Renovation of the leasing center and restoration of the entrance is
substantially completed at The Renaissance Apartments, a 168-unit community
owned by Fund II. Interior of the units has been renovated with new
appliances, granite countertops and cabinets, and updates to hallways and
corridors throughout the community. The total project cost is $5.3 million
with $4.0 million expended at the end of the quarter.
A summary of the major redevelopment projects can be found on page S-10 in
the Company's Supplemental Financial Information Package.
LIQUIDITY AND BALANCE SHEET
During the first quarter, the Company under its stock repurchase program
repurchased and retired 143,400 shares of its common stock for
approximately $13.7 million, at an average stock price of $95.64 per share.
In January 2008, the Company obtained a mortgage loan in the amount of
$49.9 million secured by Mirabella, a community located in Marina Del Rey,
California. The loan has a fixed interest rate of 5.21%, which matures in
January 2018.
In January 2008, the Company paid-off two mortgage loans aggregating $12.1
million secured by The Bluffs II, a community located in San Diego,
California. The loans for $7.3 million and $4.8 million had fixed interest
rates of 7.49% and 6.89%, respectively.
In March 2008, the Company refinanced two mortgage loans aggregating $9.3
million with a combined weighted average interest rate of 7.0% secured by
Brentwood, a community located in Santa Ana, California, into a $20.6
million loan with a fixed interest rate of 5.47%, which matures in March
2018.
During April 2008, the Company obtained a mortgage loan secured by Park
Hill at Issaquah, a community located in Issaquah, Washington, in the
amount of $31.5 million, with a fixed interest rate of 5.55%, which matures
in April 2018. In conjunction with this transaction, the Company settled a
$30 million forward-starting swap for a $1.7 million payment to the
counterparty. The amortization of the settlement of the swap increases the
effective interest rate on the mortgage loan to 6.1%.
GUIDANCE
The Company tightens its previous full year 2008 FFO Guidance to a range of
$5.90 to $6.15 per diluted share, and its full year 2008 Earnings per Share
("EPS") guidance of $1.85 to $2.10 per diluted share.
CONFERENCE CALL WITH MANAGEMENT
The Company will host an earnings conference call with management to
discuss its quarterly results on Thursday, May 1, 2008, at 9:00 a.m. PDT -
12:00 p.m. EDT, which will be broadcast live via the Internet at
www.essexpropertytrust.com, and accessible via phone by dialing
(888) 679-8037 and entering the passcode #41894200.
A rebroadcast of the live call will be available online for 90 days and
digitally for 7 days. To access the replay online, go to
www.essexpropertytrust.com and select the first quarter earnings link. To
access the replay digitally, dial (888) 286-8010 using the passcode,
38539231. If you are unable to access the information via the Company's Web
site, please contact the Investor Relations department at
investors@essexpropertytrust.com or by calling (650) 494-3700.
CORPORATE PROFILE
Essex Property Trust, Inc., located in Palo Alto, California and traded on
the New York Stock Exchange (
Three Months Ended March 31,
-----------------------------
Funds from operations 2008 2007
-------------- -------------
Net income available to common stockholders $ 15,704 $ 35,303
Adjustments:
Depreciation and amortization 27,734 21,718
Gains not included in FFO - (14,040)
Minority interests and co-investments 2,427 2,406
-------------- -------------
Funds from operations $ 45,865 $ 45,387
============== =============
SAFE HARBOR STATEMENT UNDER THE PRIVATE LITIGATION REFORM ACT OF 1995:
This press release includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements include statements under the caption "Guidance" with respect to,
2008 FFO per share and 2008 earnings per share, and statements and
estimates set forth on pages S-9 and S-10 of the Company's Financial
Supplemental Information Package regarding anticipated timing of the
construction start, construction completion, initial occupancy, and
stabilization of property developments and redevelopments and the
anticipated costs of property developments and redevelopments, and
statements regarding the projects and anticipated costs of the Company's
development pipeline. The Company's actual results may differ materially
from those projected in such forward-looking statements. Factors that
might cause such a difference include, but are not limited to, changes in
market demand for rental units and the impact of competition and
competitive pricing, changes in economic conditions, unexpected delays in
the development and stabilization of development and redevelopment
projects, unexpected difficulties in leasing of development and
redevelopment projects, total costs of renovation and development
investments exceeding our projections and other risks detailed in the
Company's filings with the Securities and Exchange Commission (SEC). All
forward-looking statements are made as of today, and the Company assumes no
obligation to update this information. For more details relating to risk
and uncertainties that could cause actual results to differ materially from
those anticipated in our forward-looking statements, and risks to our
business in general, please refer to our SEC filings, including our most
recent Report on Form 10-K for the year ended December 31, 2007.
Contact Information: Contact: Nicole Christian (650) 849-1649