E S S E X P R O P E R T Y T R U S T, I N C.
Same-Property Operating Expenses - Quarter to Date and Year to Date as of June 30, 2024 and 2023
(Dollars in thousands)
|
Based on 50,884 apartment homes
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Q2 '24
|
|
|
Q2 '23
|
|
|
% Change
|
|
|
% of Op. Ex.
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
$
|
44,910
|
|
|
$
|
43,257
|
|
|
|
3.8
|
%
|
|
|
37.0
|
%
|
|
Utilities
|
|
|
24,186
|
|
|
|
22,887
|
|
|
|
5.7
|
%
|
|
|
19.9
|
%
|
|
Personnel costs
|
|
|
22,828
|
|
|
|
22,234
|
|
|
|
2.7
|
%
|
|
|
18.8
|
%
|
|
Maintenance and repairs
|
|
|
13,151
|
|
|
|
14,299
|
|
|
|
-8.0
|
%
|
|
|
10.8
|
%
|
|
Administrative
|
|
|
7,347
|
|
|
|
7,040
|
|
|
|
4.4
|
%
|
|
|
6.1
|
%
|
|
Insurance and other
|
|
|
8,999
|
|
|
|
6,477
|
|
|
|
38.9
|
%
|
|
|
7.4
|
%
|
|
Total same-property operating expenses
|
|
$
|
121,421
|
|
|
$
|
116,194
|
|
|
|
4.5
|
%
|
|
|
100.0
|
%
|
| |
|
YTD 2024
|
|
|
YTD 2023
|
|
|
% Change
|
|
|
% of Op. Ex.
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-property operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate taxes
|
|
$
|
89,762
|
|
|
$
|
87,850
|
|
|
|
2.2
|
%
|
|
|
36.7
|
%
|
|
Utilities
|
|
|
49,885
|
|
|
|
46,426
|
|
|
|
7.5
|
%
|
|
|
20.4
|
%
|
|
Personnel costs
|
|
|
45,774
|
|
|
|
44,370
|
|
|
|
3.2
|
%
|
|
|
18.7
|
%
|
|
Maintenance and repairs
|
|
|
27,565
|
|
|
|
28,474
|
|
|
|
-3.2
|
%
|
|
|
11.3
|
%
|
|
Administrative
|
|
|
14,447
|
|
|
|
13,682
|
|
|
|
5.6
|
%
|
|
|
5.9
|
%
|
|
Insurance and other
|
|
|
17,448
|
|
|
|
12,934
|
|
|
|
34.9
|
%
|
|
|
7.0
|
%
|
|
Total same-property operating expenses
|
|
$
|
244,881
|
|
|
$
|
233,736
|
|
|
|
4.8
|
%
|
|
|
100.0
|
%
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Capital Expenditures - June 30, 2024 (1)
(Dollars in thousands, except in footnotes and per apartment home amounts)
|
Revenue Generating Capital Expenditures (2)
|
|
Q2 '24
|
|
|
Trailing 4
Quarters
|
|
| |
|
|
|
|
|
|
|
Same-property portfolio
|
|
$
|
11,293
|
|
|
$
|
49,185
|
|
|
Non-same property portfolio
|
|
|
153
|
|
|
|
1,108
|
|
|
Total revenue generating capital expenditures
|
|
$
|
11,446
|
|
|
$
|
50,293
|
|
| |
|
|
|
|
|
|
|
|
|
Number of same-property interior renovations
|
|
|
200
|
|
|
|
1,352
|
|
|
Number of total consolidated interior renovations
|
|
|
203
|
|
|
|
1,374
|
|
|
Non-Revenue Generating Capital Expenditures (3)
|
|
Q2 '24
|
|
|
Trailing 4
Quarters
|
|
| |
|
|
|
|
|
|
|
Non-revenue generating capital expenditures
|
|
$
|
34,079
|
|
|
$
|
137,064
|
|
|
Average apartment homes in quarter
|
|
|
53,181
|
|
|
|
52,160
|
|
|
Capital expenditures per apartment homes in the quarter
|
|
$
|
641
|
|
|
$
|
2,628
|
|
| (1) |
The Company incurred $0.1 million of capitalized interest, $4.9 million of capitalized overhead and $0.2 million of co-investment fees related to redevelopment in Q2 2024.
|
| (2) |
Represents revenue generating or expense saving expenditures, such as full-scale redevelopments, interior unit turn renovations, enhanced amenities and certain resource management
initiatives. Excludes costs related to smart home automation.
|
| (3) |
Represents roof replacements, paving, building and mechanical systems, exterior painting, siding, etc. Non-revenue generating capital expenditures does not include costs related to retail,
furniture and fixtures, expenditures in which the Company has been reimbursed or expects to be reimbursed, and expenditures incurred due to changes in governmental regulation that the Company would not have incurred otherwise.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Co-investments and Preferred Equity Investments - June 30, 2024
(Dollars in thousands, except in footnotes)
| |
|
Weighted
Average
Essex
Ownership
Percentage
|
|
|
Apartment
Homes
|
|
|
Total
Undepreciated
Book
Value
|
|
|
Debt
Amount
|
|
|
Essex
Book Value
|
|
|
Weighted
Average
Borrowing
Rate (1)
|
|
|
Remaining
Term of Debt
(in Years)
|
|
|
Three Months
Ended
June 30,
2024
|
|
|
Six Months
Ended
June 30,
2024
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating and Other Non-Consolidated Joint Ventures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI
|
|
|
Wesco I, III, IV, V, VI (2)
|
|
54%
|
|
|
|
5,976
|
|
|
$
|
2,161,592
|
|
|
$
|
1,435,833
|
|
|
$
|
139,728
|
|
|
|
3.5
|
%
|
|
|
2.3
|
|
|
$
|
30,042
|
|
|
$
|
59,339
|
|
|
BEXAEW (3), BEX II, BEX IV, and 500 Folsom
|
|
50%
|
|
|
|
1,603
|
|
|
|
942,192
|
|
|
|
325,025
|
|
|
|
211,582
|
|
|
|
4.8
|
%
|
|
|
12.5
|
|
|
|
9,186
|
|
|
|
25,026
|
|
|
Other (4)
|
|
51%
|
|
|
|
1,631
|
|
|
|
672,023
|
|
|
|
497,025
|
|
|
|
83,161
|
|
|
|
4.6
|
%
|
|
|
7.7
|
|
|
|
8,809
|
|
|
|
17,268
|
|
|
Total Operating and Other Non-Consolidated Joint Ventures
|
|
|
|
|
|
9,210
|
|
|
$
|
3,775,807
|
|
|
$
|
2,257,883
|
|
|
$
|
434,471
|
|
|
|
3.9
|
%
|
|
|
5.0
|
|
|
$
|
48,037
|
|
|
$
|
101,633
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Essex Portion of NOI and
Expenses
|
|
|
NOI
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
25,914
|
|
|
$
|
54,551
|
|
|
Depreciation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(17,380
|
)
|
|
|
(35,850
|
)
|
|
Interest expense and other, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(10,856
|
)
|
|
|
(24,575
|
)
|
|
Equity (loss) income from non-core co-investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(143
|
)
|
|
|
5,727
|
|
|
Insurance reimbursements, legal settlements, and other, net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
24
|
|
|
Co-investment promote income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
1,531
|
|
|
Net income from operating and other co-investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(2,459
|
)
|
|
$
|
1,408
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average
Preferred
Return
|
|
|
Weighted
Average
Expected
Term
|
|
|
Income from Preferred Equity
Investments
|
|
|
Income from preferred equity investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
12,111
|
|
|
$
|
24,336
|
|
|
Impairment loss from unconsolidated co-investment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
-
|
|
|
|
(3,726
|
)
|
|
Preferred Equity Investments (5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
538,562
|
|
|
|
9.7
|
%
|
|
|
1.7
|
|
|
$
|
12,111
|
|
|
$
|
20,610
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Co-investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
973,033
|
|
|
|
|
|
|
|
|
|
|
$
|
9,652
|
|
|
$
|
22,018
|
|
| (1) |
Represents the year-to-date annual weighted average borrowing rate.
|
| (2) |
As of June 30, 2024, the Company’s investments in Wesco I, Wesco III, and Wesco IV were classified as a liability of $63.6 million due to distributions received in excess of the Company's
investment.
|
| (3) |
In March 2024, the Company acquired BEXAEW LLC's 49.9% interest in four communities totaling 1,480 apartment homes. The NOI included in the six months ended June 30, 2024 represents the
Company’s pro-rata share prior to the acquisition.
|
| (4) |
As of June 30, 2024, the Company’s investments in Expo and Century Towers were classified as a liability of $4.7 million due to distributions received in excess of the Company's investment.
The weighted average Essex ownership percentage excludes our investments in non-core technology co-investments which are carried at fair value.
|
| (5) |
As of June 30, 2024, the Company has invested in 23 preferred equity investments.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Assumptions for 2024 FFO Guidance Range
(Dollars in thousands, except per share data)
The guidance projections below are based on current expectations and are forward-looking. The guidance on this page is given for Net Operating Income ("NOI") and
Total and Core FFO. See pages S-17.1 to S-17.4 for the definitions of non-GAAP financial measures and other terms.
| |
|
Six Months Ended
|
|
|
2024 Full-Year Guidance Range
|
|
|
| |
|
June 30, 2024 (1)
|
|
|
Low End
|
|
|
High End
|
|
Comments about 2024 Full-Year Guidance
|
| |
|
|
|
|
|
|
|
|
|
|
|
Total NOI from Consolidated Communities
|
|
$
|
612,098
|
|
|
$
|
1,229,500 |
|
|
$
|
1,242,500 |
|
Includes a range of same-property NOI growth of 1.8% to 2.8%. Reflects acquisitions completed through July
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Management Fees
|
|
|
5,286
|
|
|
|
10,100
|
|
|
|
10,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest Expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, before capitalized interest
|
|
|
(113,735
|
)
|
|
|
(229,900
|
)
|
|
|
(228,900
|
)
|
Updated to reflect investment activity
|
|
Interest capitalized
|
|
|
107
|
|
|
|
100
|
|
|
|
300
|
|
|
|
Net interest expense
|
|
|
(113,628
|
)
|
|
|
(229,800
|
)
|
|
|
(228,600
|
)
|
|
|
Recurring Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and other income
|
|
|
18,685
|
|
|
|
27,100
|
|
|
|
28,100
|
|
|
|
FFO from co-investments
|
|
|
54,312
|
|
|
|
105,100
|
|
|
|
106,300 |
|
Reflects updated timing of preferred equity redemptions and includes investment activity through July
|
|
General and administrative
|
|
|
(29,860
|
)
|
|
|
(58,100
|
)
|
|
|
(59,200
|
)
|
|
|
Corporate-level property management expenses
|
|
|
(23,854
|
)
|
|
|
(47,700
|
)
|
|
|
(48,300
|
)
|
|
|
Non-controlling interest
|
|
|
(6,391
|
)
|
|
|
(13,200
|
)
|
|
|
(12,600
|
)
|
|
|
Total recurring income and expenses
|
|
|
12,892
|
|
|
|
13,200 |
|
|
|
14,300
|
|
|
|
Non-Core Income and Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expensed acquisition and investment related costs
|
|
|
(68
|
)
|
|
|
(68
|
)
|
|
|
(68
|
)
|
|
|
Tax benefit on unconsolidated co-investments
|
|
|
758
|
|
|
|
758
|
|
|
|
758
|
|
|
|
Realized and unrealized gains on marketable securities, net
|
|
|
4,948
|
|
|
|
4,948
|
|
|
|
4,948
|
|
|
|
Provision for credit losses
|
|
|
(66
|
)
|
|
|
(66
|
)
|
|
|
(66
|
)
|
|
|
Equity income from non-core co-investments
|
|
|
5,727
|
|
|
|
5,727
|
|
|
|
5,727
|
|
|
|
Co-Investment promote income
|
|
|
1,531
|
|
|
|
1,531
|
|
|
|
1,531
|
|
|
|
General and administrative and other, net
|
|
|
(8,447
|
)
|
|
|
(20,000
|
)
|
|
|
(20,000
|
)
|
|
|
Insurance reimbursements, legal settlements, and other, net
|
|
|
43,300
|
|
|
|
43,300
|
|
|
|
43,300
|
|
|
|
Total non-core income and expenses
|
|
|
47,683
|
|
|
|
36,130
|
|
|
|
36,130
|
|
|
|
Funds from Operations (2)
|
|
$
|
564,331
|
|
|
$
|
1,059,130
|
|
|
$
|
1,075,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds from Operations per diluted Share
|
|
$
|
8.49
|
|
|
$
|
15.93 |
|
|
$
|
16.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change - Funds from Operations
|
|
|
10.5
|
%
|
|
|
4.5 |
%
|
|
|
6.1 |
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds from Operations (excludes non-core items)
|
|
$
|
516,648
|
|
|
$
|
1,023,000
|
|
|
$
|
1,038,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core Funds from Operations per diluted Share
|
|
$
|
7.77
|
|
|
$
|
15.38 |
|
|
$
|
15.62 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
% Change - Core Funds from Operations
|
|
|
4.7
|
%
|
|
|
2.3 |
%
|
|
|
3.9 |
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - Diluted
|
|
$
|
5.69
|
|
|
$
|
8.23 |
|
|
$
|
8.47 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding - FFO calculation
|
|
|
66,478
|
|
|
|
66,500
|
|
|
|
66,500
|
|
|
| (1) |
All non-core items are excluded from the 2024 actuals and included in the non-core income and expense section of the FFO reconciliation.
|
| (2) |
2024 guidance excludes inestimable projected gain on sale of marketable securities, loss on early retirement of debt, political/legislative costs, and promote income until they are realized
within the reporting period presented in the report.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliation of Projected EPS, FFO and Core FFO per diluted share
With respect to the Company's guidance regarding its projected FFO and Core FFO, which guidance is set forth in the earnings release and on
page S-13 of this supplement, a reconciliation of projected net income per share to projected FFO per share and projected Core FFO per share, as set forth in such guidance, is presented in the table below.
| |
|
|
|
|
2024 Guidance Range (1)
|
|
| |
|
Six Months
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Ended June 30,
|
|
|
3rd Quarter 2024
|
|
|
Full-Year 2024
|
|
| |
|
2024
|
|
|
Low
|
|
|
High
|
|
|
Low
|
|
|
High
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EPS - diluted
|
|
$
|
5.69
|
|
|
$
|
1.28 |
|
|
$
|
1.40 |
|
|
$
|
8.23 |
|
|
$
|
8.47 |
|
|
Conversion from GAAP share count
|
|
|
(0.19
|
)
|
|
|
(0.05 |
)
|
|
|
(0.05 |
)
|
|
|
(0.28
|
)
|
|
|
(0.28
|
)
|
|
Impairment loss from unconsolidated co-investments
|
|
|
0.06
|
|
|
|
-
|
|
|
|
-
|
|
|
|
0.06
|
|
|
|
0.06
|
|
|
Depreciation and amortization
|
|
|
4.83
|
|
|
|
2.45
|
|
|
|
2.45
|
|
|
|
9.73
|
|
|
|
9.73
|
|
|
Noncontrolling interest related to Operating Partnership units
|
|
|
0.18
|
|
|
|
0.04
|
|
|
|
0.04
|
|
|
|
0.27
|
|
|
|
0.27
|
|
|
Gain on remeasurement of co-investment
|
|
|
(2.08
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(2.08
|
)
|
|
|
(2.08
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share - diluted
|
|
$
|
8.49
|
|
|
$
|
3.72 |
|
|
$
|
3.84 |
|
|
$
|
15.93 |
|
|
$
|
16.17 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Expensed acquisition and investment related costs
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Tax benefit on unconsolidated co-investments
|
|
|
(0.01
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.01
|
)
|
|
|
(0.01
|
)
|
|
Realized and unrealized gains on marketable securities, net
|
|
|
(0.07
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.07
|
)
|
|
|
(0.07
|
)
|
|
Provision for credit losses
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Equity income from non-core co-investments
|
|
|
(0.09
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.09
|
)
|
|
|
(0.09
|
)
|
|
Co-Investment promote income
|
|
|
(0.02
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.02
|
)
|
|
|
(0.02
|
)
|
|
General and administrative and other, net
|
|
|
0.12
|
|
|
|
0.09
|
|
|
|
0.09
|
|
|
|
0.29
|
|
|
|
0.29
|
|
|
Insurance reimbursements, legal settlements, and other, net
|
|
|
(0.65
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(0.65
|
)
|
|
|
(0.65
|
)
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Core FFO per share - diluted
|
|
$
|
7.77
|
|
|
$
|
3.81 |
|
|
$
|
3.93 |
|
|
$
|
15.38 |
|
|
$
|
15.62 |
|
| (1) |
2024 guidance excludes inestimable projected gain on sale of real estate and land, gain on sale of marketable securities, loss on early retirement of debt, political/legislative costs, and
promote income until they are realized within the reporting period presented in the report.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
ESSEX PROPERTY TRUST, INC. Components to Full-Year 2024E Same-Property Revenue Growth See
Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-13.2 Driven by better-than-expected blended rent growth Original Blended Rent Outlook 1.5% Revised Blended Rent Outlook 2.5% The
Company increased the midpoint of its 2024 same-property revenue growth guidance by 75 basis points to 3.0%. The increase was primarily driven by better-than-expected blended rent growth year-to-date through July. As such, the
Company increased its blended rent growth outlook by 100 basis points to 2.5%.
E S S E X P R O P E R T Y T R U S T, I N C.
Summary of Apartment Community Acquisitions and Dispositions Activity - Year to date as of June 30, 2024
(Dollars in thousands, except for average monthly rent)
|
Acquisitions
|
|
|
|
|
|
|
|
|
Essex
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
Apartment
|
|
|
Ownership
|
|
|
|
|
|
Contract
|
|
|
Price per
|
|
|
Average
|
|
|
Property Name
|
|
|
Location
|
|
|
Homes
|
|
|
Percentage
|
|
Entity
|
|
Date
|
|
Price
|
|
|
Apartment Home (1)
|
|
|
Monthly Rent
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BEXAEW Portfolio (2)
|
|
|
Various
|
|
|
|
1,480
|
|
|
|
100%
|
|
EPLP
|
|
Mar-24
|
|
$
|
251,995
|
|
|
$
|
341
|
|
|
$
|
2,375
|
|
| |
|
|
Q1 2024
|
|
|
|
1,480
|
|
|
|
|
|
|
|
|
|
$
|
251,995
|
|
|
$
|
341
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maxwell Sunnyvale (3)
|
|
|
Sunnyvale, CA
|
|
|
|
75
|
|
|
|
100%
|
|
EPLP
|
|
Apr-24
|
|
$
|
46,600
|
|
|
$
|
621
|
|
|
$
|
3,712
|
|
|
ARLO Mountain View
|
|
|
Mountain View, CA
|
|
|
|
164
|
|
|
|
100%
|
|
EPLP
|
|
May-24
|
|
|
101,100
|
|
|
$
|
592
|
|
|
$
|
3,799
|
|
| |
|
|
Q2 2024
|
|
|
|
239
|
|
|
|
|
|
|
|
|
|
$
|
147,700
|
|
|
$
|
601
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
2024 Total
|
|
|
|
1,719
|
|
|
|
|
|
|
|
|
|
$
|
399,695
|
|
|
$
|
377
|
|
|
|
|
|
| (1) |
Price per apartment home excludes value allocated to retail space.
|
| (2) |
In March 2024, the Company acquired its joint venture partner's 49.9% interest in the BEWAEW portfolio comprising four communities totaling 1,480 apartment homes, for a total purchase
price of $505.0 million on a gross basis.
|
| (3) |
In April 2024, the Company accepted the third-party sponsor’s common equity interest affiliated with its $14.7 million preferred equity investment and acquired Maxwell Sunnyvale based
on a property valuation of $46.6 million.
|
Dispositions
Neither Essex nor its unconsolidated joint ventures sold any apartment communities during the first and second quarters of 2024.
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Same-Property Delinquencies, Operating Statistics, and Revenue Growth with Concessions on a GAAP basis
(Dollars in millions, except in footnotes and per share amounts)
|
Same-Property Delinquencies - Second Quarter 2024 vs. 2023 and July 2024
|
|
Same-Property Cash Delinquencies as % of Scheduled Rent, by Region
|
| |
|
|
|
|
|
|
|
| |
Preliminary
July 2024
|
Q2
2024
|
Q2
2023
|
|
|
Preliminary
July 2024
|
Q2
2024
|
| |
|
|
|
|
|
|
|
|
Gross delinquencies as % of scheduled rent, excluding rental assistance
|
0.8%
|
1.0%
|
2.1%
|
|
Southern California, excl. Los Angeles
|
0.9%
|
0.6%
|
| |
|
|
|
|
Northern California, excl. Alameda
|
0.2%
|
0.4%
|
|
Rental assistance funds as % of scheduled rent (1)
|
0.0%
|
-0.1%
|
-0.1%
|
|
Seattle
|
0.7%
|
0.8%
|
| |
|
|
|
|
Los Angeles & Alameda Counties (3)
|
1.3%
|
1.9%
|
|
Cash delinquencies as % of scheduled rent, including rental assistance (2)
|
0.8%
|
0.9%
|
2.0%
|
|
Total Same-Property Portfolio (1)(2)
|
0.8%
|
0.9%
|
| (1) |
The Company's same-property portfolio received Emergency Rental Assistance payments of less than $0.1 million and $0.5 million for preliminary July 2024 and the three months ended June 30,
2024, respectively. This compares to $0.4 million for the three months ended June 30, 2023.
|
| (2) |
Represents same-property portfolio delinquencies as a percentage of scheduled rent reflected in the financial statements.
|
| (3) |
Eviction protections for the city and county of Los Angeles ended on April 1, 2023, and Alameda county protections ended on April 29, 2023.
|
|
Same-Property Operating Statistics
|
|
|
Same-Property Revenue Growth with Concessions on a GAAP basis
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Preliminary
July 2024
|
|
|
|
Q2
2024
|
|
|
|
|
|
Q2
2024
|
|
|
|
Q2
2023
|
|
|
YTD
2024
|
|
|
YTD
2023
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New lease rates (1)
|
|
|
1.8%
|
|
|
|
1.7%
|
|
|
Reported rental revenue (1)
|
|
$
|
414.8
|
|
|
$
|
401.1
|
|
|
$
|
824.7
|
|
|
$
|
796.6
|
|
|
Renewal rates (1)
|
|
|
4.2%
|
|
|
|
4.6%
|
|
|
Straight-line rent impact to rental revenue
|
|
|
(0.5
|
)
|
|
|
(0.6
|
)
|
|
|
(0.6
|
)
|
|
-
|
|
|
Blended rates
|
|
|
3.2%
|
|
|
|
3.4%
|
|
|
GAAP rental revenue
|
|
$
|
414.3
|
|
|
$
|
400.5
|
|
|
$
|
824.1
|
|
|
$
|
796.6
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial occupancy
|
|
|
96.2%
|
|
|
|
96.2%
|
|
|
% change - reported rental revenue
|
|
|
3.4
|
%
|
|
|
|
|
|
|
3.5
|
%
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Same-Property Operating Statistics, Excl. Los
Angeles and Alameda Counties (2)
|
|
|
% change - GAAP rental revenue
|
|
|
3.5
|
%
|
|
|
|
|
|
|
3.5
|
%
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Preliminary
July 2024
|
|
|
|
Q2
2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
New lease rates (1)
|
|
|
3.5%
|
|
|
|
3.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Renewal rates (1)
|
|
|
4.8%
|
|
|
|
5.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Blended rates
|
|
|
4.2%
|
|
|
|
4.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial occupancy
|
|
|
96.7%
|
|
|
|
96.5%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Represents the percentage change in similar term lease tradeouts, including the
impact of leasing incentives.
|
|
|
(1) Same-property rental revenue reflects concessions on a cash basis. |
|
|
(2) Excludes Los Angeles and Alameda counties, which are most impacted by
elevated
delinquency related turnover, to illustrate the Company's same-property portfolio performance
outside of these regions.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
Data based on Essex Data Analytics forecasts and third-party
projections. Residential Supply: Total supply includes the Company's estimate of multifamily (“MF”) deliveries of properties with 50+ units and excludes student, senior and 100% affordable housing communities. Multifamily estimates
incorporate a methodological enhancement ("delay-adjusted supply") to reflect the anticipated impact of continued construction delays in Essex markets. Single-family (“SF”) estimates are based on trailing single-family
permits. Residential Supply Forecast (1) Residential Supply Forecast (1) 2023A 2024E Market Total MF/SF Supply Total Supply as a % of Stock Multifamily
Supply Total MF/SF Supply Total Supply as a % of Stock Los Angeles 19,400 0.5% 8,100 16,300 0.4% Orange County 5,300 0.5% 1,400 3,700 0.3% San
Diego 5,800 0.5% 4,200 6,900 0.6% Ventura 600 0.2% 800 1,100 0.4% Southern California 31,100 0.5% 14,500 28,000 0.4% San
Francisco 2,200 0.3% 1,800 2,300 0.3% Oakland 5,300 0.5% 1,900 4,000 0.4% San Jose 3,900 0.5% 2,400 4,400 0.6% Northern California
11,400 0.4% 6,100 10,700 0.4% Seattle 9,700 0.7% 10,900 14,600 1.1% Total 52,200 0.5% 31,500 53,300 0.5% ESSEX PROPERTY TRUST,
INC. MSA Level Supply Forecast: 2023A – 2024E See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-16
ESSEX PROPERTY TRUST, INC. Improving
Net Domestic Migration Trends Support West Coast Housing Demand See Company’s Form 10-K and Form 10-Qs filed with the SEC for additional information S-16.1 Net domestic
migration patterns in the Essex markets have reversed course from COVID-era trends and have steadily improved since 2021. Northern California has been a key benefactor of improving West Coast migration trends, with net domestic
migration turning positive in March 2024. Source: Placer.ai East Coast markets include: Boston, New York, and Washington D.C. Sunbelt markets include: Atlanta, Austin, Charlotte, Dallas, Houston, Miami, Nashville, Orlando,
Phoenix, Raleigh, and Tampa. (1) (2)
E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms
Adjusted EBITDAre Reconciliation
The National Association of Real Estate Investment Trusts ("NAREIT”) defines earnings before interest, taxes, depreciation and amortization for real estate
("EBITDAre") (September 2017 White Paper) as net income (computed in accordance with U.S. generally accepted accounting principles ("U.S. GAAP")) before interest expense, income taxes, depreciation and amortization expense, and further
adjusted for gains and losses from sales of depreciated operating properties, impairment write-downs of depreciated operating properties, impairment write-downs of investments in unconsolidated entities caused by a decrease in value of
depreciated operating properties within the joint venture and adjustments to reflect the Company’s share of EBITDAre of investments in unconsolidated entities.
The Company believes that EBITDAre is useful to investors, creditors and rating agencies as a supplemental measure of the Company’s ability to incur and service
debt because it is a recognized measure of performance by the real estate industry, and by excluding gains or losses related to sales or impairment of depreciated operating properties, EBITDAre can help compare the Company’s credit strength
between periods or as compared to different companies.
Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and is a component of the credit ratio, "Net Indebtedness Divided by Adjusted
EBITDAre, normalized and annualized," presented on page S-6, in the section titled "Selected Credit Ratios," and it is not intended to be a measure of free cash flow for management’s discretionary use, as it does not consider certain cash
requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.
Adjusted EBITDAre is an important metric in evaluating the credit strength of the Company and its ability to service its debt obligations. The Company believes
that Adjusted EBITDAre is useful to investors, creditors and rating agencies because it allows investors to compare the Company’s credit strength to prior reporting periods and to other companies without the effect of items that by their
nature are not comparable from period to period and tend to obscure the Company’s actual credit quality.
EBITDAre and Adjusted EBITDAre are not recognized measurements under U.S. GAAP. Because not all companies use identical calculations, the Company's presentation
of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.
The reconciliations of Net Income available to common stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:
| |
|
Three
|
|
| |
|
Months Ended
|
|
| |
|
June 30,
|
|
|
(Dollars in thousands)
|
|
2024
|
|
| |
|
|
|
|
Net income available to common stockholders
|
|
$
|
92,914
|
|
|
Adjustments:
|
|
|
|
|
|
Net income attributable to noncontrolling interest
|
|
|
6,072
|
|
|
Interest expense, net (1)
|
|
|
58,491
|
|
|
Depreciation and amortization
|
|
|
145,613
|
|
|
Income tax provision
|
|
|
5
|
|
|
Co-investment EBITDAre adjustments
|
|
|
28,845
|
|
|
EBITDAre
|
|
|
331,940
|
|
|
|
|
|
|
|
|
Realized and unrealized gains on marketable securities, net
|
|
|
(1,597
|
)
|
|
Provision for credit losses
|
|
|
19
|
|
|
Equity loss from non-core co-investments
|
|
|
143
|
|
|
Tax benefit on unconsolidated co-investments
|
|
|
(807
|
)
|
|
General and administrative and other, net
|
|
|
5,906
|
|
|
Insurance reimbursements and legal settlements, and other, net
|
|
|
(486
|
)
|
|
Adjusted EBITDAre
|
|
$
|
335,118
|
|
| (1) |
Interest expense, net includes items such as gains on derivatives and the amortization of deferred charges.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms
Disposition Yield
Net operating income that the Company anticipates giving up in the next 12 months less an estimate of property management costs allocated to the project divided
by the gross sales price of the asset.
Acquisition Yield
Net operating income that the Company expects to achieve in the next 12 months less an estimate of property management costs allocated to the project and less an
estimate for capital expenditures per unit divided by the gross sales price of the asset.
Encumbered
Encumbered means any mortgage, deed of trust, lien, charge, pledge, security interest, security agreement or other encumbrance of any kind.
Funds From Operations ("FFO") and Core FFO
FFO, as defined by NAREIT, is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net
income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core
items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the
operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land
and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real
estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance
of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the
Company’s actual operating results.
FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. GAAP and are not intended to indicate whether cash flows will be
sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT's operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether
cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or financing
activities as defined under GAAP. Management has consistently applied the NAREIT definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the NAREIT definition for
this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation.
The reconciliations of diluted FFO and Core FFO are detailed on page S-3 in the section titled "Consolidated Funds From Operations".
Interest Expense, Net
Interest expense, net is presented on page S-1 in the section titled "Consolidated Operating Results". Interest expense, net includes items such as gains on
derivatives and the amortization of deferred charges and is presented in the table below:
| |
|
Three
|
|
|
Six
|
|
| |
|
Months Ended
|
|
|
Months Ended
|
|
| |
|
June 30,
|
|
|
June 30,
|
|
|
(Dollars in thousands)
|
|
2024
|
|
|
2024
|
|
| |
|
|
|
|
|
|
|
Interest expense
|
|
$
|
59,120
|
|
|
$
|
115,053
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Total return swap income
|
|
|
(629
|
)
|
|
|
(1,425
|
)
|
|
Interest expense, net
|
|
$
|
58,491
|
|
|
$
|
113,628
|
|
Immediately Available Liquidity
The Company's immediately available liquidity as of July 26, 2024, consisted of the following:
| |
|
July 26,
|
|
|
(Dollars in millions)
|
|
2024
|
|
| |
|
|
|
|
Unsecured credit facility - committed
|
|
$
|
1,275
|
|
|
Balance outstanding
|
|
|
264 |
|
|
Undrawn portion of line of credit
|
|
$
|
1,011 |
|
|
Cash, cash equivalents & marketable securities
|
|
|
115 |
|
|
Total liquidity
|
|
$
|
1,126 |
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms
Net Indebtedness Divided by Adjusted EBITDAre
This credit ratio is presented on page S-6 in the section titled "Selected Credit Ratios." This credit ratio is calculated by dividing net indebtedness by
Adjusted EBITDAre, as annualized based on the most recent quarter, and adjusted for estimated net operating income from properties acquired or disposed of during the quarter. This ratio is presented by the Company because it provides rating
agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other companies. Net indebtedness is total debt, net less unamortized premiums, discounts, debt issuance costs,
unrestricted cash and cash equivalents, and marketable securities. The reconciliation of Adjusted EBITDAre is set forth in "Adjusted EBITDAre Reconciliation" on page S-17.1 The calculation of this credit ratio and a reconciliation of net
indebtedness to total debt at pro rata share for co-investments, net is presented in the table below:
| |
|
June 30,
|
|
|
(Dollars in thousands)
|
|
2024
|
|
| |
|
|
|
|
Total consolidated debt, net
|
|
$
|
6,282,856
|
|
|
Total debt from co-investments at pro rata share
|
|
|
1,160,303
|
|
|
Adjustments:
|
|
|
|
|
|
Consolidated unamortized premiums, discounts, and debt issuance costs
|
|
|
34,794
|
|
Pro rata co-investments unamortized premiums, discounts, and debt issuance costs
|
|
|
4,466
|
|
|
Consolidated cash and cash equivalents-unrestricted
|
|
|
(55,223
|
)
|
|
Pro rata co-investment cash and cash equivalents-unrestricted
|
|
|
(35,644
|
)
|
|
Marketable securities
|
|
|
(84,291
|
)
|
|
Net Indebtedness
|
|
$
|
7,307,261
|
|
| |
|
|
|
|
|
Adjusted EBITDAre, annualized (1)
|
|
$
|
1,340,472
|
|
|
Other EBITDAre normalization adjustments, net, annualized (2)
|
|
|
2,970
|
|
|
Adjusted EBITDAre, normalized and annualized
|
|
$
|
1,343,442
|
|
| |
|
|
|
|
|
Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized
|
|
|
5.4
|
|
| (1) |
Based on the amount for the most recent quarter, multiplied by four.
|
| (2) |
Adjustments made for properties in lease-up, acquired, or disposed during the most recent quarter and other partial quarter activity, multiplied by four.
|
Net Operating Income ("NOI") and Same-Property NOI Reconciliations
NOI and same-property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s
consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the
operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities.
In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring
real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less
same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company
for the periods presented:
| |
|
Three Months Ended
|
|
|
Six Months Ended
|
|
| |
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
|
(Dollars in thousands)
|
|
2024
|
|
|
2023
|
|
|
2024
|
|
|
2023
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings from operations
|
|
$
|
137,450
|
|
|
$
|
134,832
|
|
|
$
|
269,809
|
|
|
$
|
322,217
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate-level property management expenses
|
|
|
12,123
|
|
|
|
11,451
|
|
|
|
23,854
|
|
|
|
22,883
|
|
|
Depreciation and amortization
|
|
|
145,613
|
|
|
|
136,718
|
|
|
|
285,346
|
|
|
|
273,065
|
|
|
Management and other fees from affiliates
|
|
|
(2,573
|
)
|
|
|
(2,778
|
)
|
|
|
(5,286
|
)
|
|
|
(5,543
|
)
|
|
General and administrative
|
|
|
21,136
|
|
|
|
13,813
|
|
|
|
38,307
|
|
|
|
29,124
|
|
|
Expensed acquisition and investment related costs
|
|
|
-
|
|
|
|
5
|
|
|
|
68
|
|
|
|
344
|
|
|
Casualty loss
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
433
|
|
|
Gain on sale of real estate and land
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(59,238
|
)
|
|
NOI
|
|
|
313,749
|
|
|
|
294,041
|
|
|
|
612,098
|
|
|
|
583,285
|
|
|
Less: Non-same property NOI
|
|
|
(20,325
|
)
|
|
|
(9,170
|
)
|
|
|
(32,315
|
)
|
|
|
(20,436
|
)
|
|
Same-Property NOI
|
|
$
|
293,424
|
|
|
$
|
284,871
|
|
|
$
|
579,783
|
|
|
$
|
562,849
|
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
E S S E X P R O P E R T Y T R U S T, I N C.
Reconciliations of Non-GAAP Financial Measures and Other Terms
Public Bond Covenants
Public Bond Covenants refer to certain covenants set forth in instruments governing the Company's unsecured indebtedness. These instruments require the Company to
meet specified financial covenants, including covenants relating to net worth, fixed charge coverage, debt service coverage, the amounts of total indebtedness and secured indebtedness, leverage and certain investment limitations. These
covenants may restrict the Company's ability to expand or fully pursue its business strategies. The Company's ability to comply with these covenants may be affected by changes in the Company's operating and financial performance, changes in
general business and economic conditions, adverse regulatory developments or other events adversely impacting it. The breach of any of these covenants could result in a default under the Company's indebtedness, which could cause those and
other obligations to become due and payable. If any of the Company's indebtedness is accelerated, the Company may not be able to repay it. For risks related to failure to comply with these covenants, see "Item 1A: Risk Factors - Risks
Related to Our Indebtedness and Financings" in the Company's annual report on Form 10-K and other reports filed by the Company with the Securities and Exchange Commission ("SEC").
The ratios set forth on page S-6 in the section titled "Public Bond Covenants" are provided only to show the Company's compliance with certain specified covenants
that are contained in indentures related to the Company's issuance of Senior Notes, which indentures are filed by the Company with the SEC. See, for example, the indenture and supplemental indenture dated March 14, 2024, filed by the
Company as Exhibit 4.1 and Exhibit 4.2 to the Company's Form 8-K, filed on March 14, 2024. These ratios should not be used for any other purpose, including without limitation to evaluate the Company's financial condition or results of
operations, nor do they indicate the Company's covenant compliance as of any other date or for any other period. The capitalized terms in the disclosure are defined in the indentures filed by the Company with the SEC and may differ
materially from similar terms used by other companies that present information about their covenant compliance.
Secured Debt
Secured Debt means debt of the Company or any of its subsidiaries which is secured by an encumbrance on any property or assets of the Company or any of its
subsidiaries. The Company's total amount of Secured Debt is set forth on page S-5.
Unencumbered NOI to Adjusted Total NOI
This ratio is presented on page S-6 in the section titled "Selected Credit Ratios". Unencumbered NOI means the sum of NOI for those real estate assets which are
not subject to an encumbrance securing debt. The ratio of Unencumbered NOI to Adjusted Total NOI for the three months ended June 30, 2024, annualized, is calculated by dividing Unencumbered NOI, annualized for the three months ended June
30, 2024 and as further adjusted for pro forma NOI for properties acquired or sold during the recent quarter, by Adjusted Total NOI as annualized. The calculation and reconciliation of NOI is set forth in "Net Operating Income ("NOI") and
Same-Property NOI Reconciliations" above. This ratio is presented by the Company because it provides rating agencies and investors an additional means of comparing the Company's ability to service debt obligations to that of other
companies.
The calculation of this ratio is presented in the table below:
| |
|
Annualized
|
|
|
(Dollars in thousands)
|
|
Q2 '24 (1)
|
|
| |
|
|
|
|
NOI
|
|
$
|
1,254,996
|
|
|
Adjustments:
|
|
|
|
|
|
NOI from real estate assets sold or held for sale
|
|
|
-
|
|
|
Other, net (2)
|
|
|
(5,848
|
)
|
|
Adjusted Total NOI
|
|
|
1,249,148
|
|
|
Less: Encumbered NOI
|
|
|
(93,263
|
)
|
|
Unencumbered NOI
|
|
$
|
1,155,885
|
|
|
|
|
|
|
|
|
Encumbered NOI
|
|
$
|
93,263
|
|
|
Unencumbered NOI
|
|
|
1,155,885
|
|
|
Adjusted Total NOI
|
|
$
|
1,249,148
|
|
| |
|
|
|
|
|
Unencumbered NOI to Adjusted Total NOI
|
|
|
93
|
%
|
| (1) |
This table is based on the amounts for the most recent quarter, multiplied by four.
|
| (2) |
Includes intercompany eliminations pertaining to self-insurance and other expenses.
|
See Company's Form 10-K and Form 10-Qs filed with the SEC for additional information
S-17.4