Essex Property Trust : Q221 Earnings Release

SECOND QUARTER 2021

Earnings Release & Supplemental Financial Information

WALLACE ON SUNSET

200 Apartment Homes

Hollywood, CA

E S S E X P R O P E R T Y T R U S T, I N C .	I N V E S T O R R E L AT I O N S
1100 Park Place, Suite 200	Rylan Burns, GVP of Private Equity & Finance
San Mateo, CA 94403	[phone]

ESSEX ANNOUNCES SECOND QUARTER 2021 RESULTS AND

INCREASES FULL-YEAR2021 GUIDANCE

San Mateo, California-July 29, 2021-Essex Property Trust, Inc. (NYSE: ESS) (the "Company") announced today its second quarter 2021 earnings results and related business activities.

Net Income, Funds from Operations ("FFO"), and Core FFO per diluted share for the three and six months ended June 30, 2021 are detailed below.

	Three Months Ended		Six Months Ended
		June 30,	%	June 30,	%
	2021	2020	Change	2021	2020	Change
Per Diluted Share				$3.59		-40.9%
Net Income	$1.00	$1.29	-22.5%	$6.07
Total FFO	$3.09	$3.21	-3.7%	$6.33	$6.65	-4.8%
Core FFO	$3.04	$3.16	-3.8%	$6.12	$6.64	-7.8%

Second Quarter 2021 Highlights:

• Reported Net Income per diluted share for the second quarter of 2021 of $1.00, compared to $1.29 in the second quarter of 2020. The decrease is largely attributed to a gain on sale recorded in the prior-year period.
• Reported Core FFO per diluted share of $3.04, exceeding the high-end of the Company's guidance range due to better-than-expected operating results.
• Same-propertyrevenues and net operating income ("NOI") declined by 3.0% and 4.2%, respectively, compared to the second quarter of 2020.
• Raised the midpoint of full-yearsame-property revenues to the high-end of the prior guidance range. This represents a 0.5% increase at the midpoint to -1.4%. NOI increased 0.8% at the midpoint to -3.0%.
• Increased full-year Net Income per diluted share guidance range to $5.42 to $5.66. Provided Net Income guidance range for the third quarter of 2021 of $0.85 to $0.97 per diluted share.
• Raised full-year Core FFO per diluted share guidance by $0.09 per share at the midpoint to a range of $12.21 to $12.45. Provided Core FFO guidance range for the third quarter of 2021 of $2.98 to $3.10 per diluted share.
• As of July 27, 2021, the Company's immediately available liquidity is approximately $1.3 billion.

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"We are pleased with our second quarter results, with both Core FFO and same-property revenues exceeding our expectations, leading us to believe the worst of the pandemic is behind us. We experienced strong economic growth in the second quarter, as Covid-19 restrictions were gradually lifted. The momentum in rent growth continued in July, and we have now achieved net effective market rents for the Essex portfolio that are slightly ahead of pre-pandemic levels. While pandemic-related uncertainty will continue, we remain confident in the West Coast economies and strength of our housing markets," commented Michael Schall, President and CEO of the Company.

SAME-PROPERTYOPERATIONS

Same-property operating results exclude any properties that are not comparable for the periods presented. The table below illustrates the percentage change in same-property revenues for the quarter ended June 30, 2021 compared to the quarter ended June 30, 2020, and the sequential percentage change for the quarter ended June 30, 2021 compared to the quarter ended March 31, 2021, by submarket for the Company:

		Q2 2021 vs.	Q2 2021 vs.
		Q2 2020	Q1 2021	% of Total
		Revenue	Revenue	Q2 2021
		Change	Change	Revenues
Southern California
Los Angeles County	-2.4%	-2.3%	18.1%
Orange County	6.1%	2.0%	11.7%
San Diego County	4.3%	1.7%	9.0%
Ventura County	6.8%	1.3%	4.3%
Total Southern California	2.0%	0.0%	43.1%
Northern California
Santa Clara County	-10.9%	-4.3%	17.7%
Alameda County	-6.9%	-2.7%	6.6%
San Mateo County	-10.4%	-2.9%	5.0%
Contra Costa County	2.4%	0.7%	5.9%
San Francisco	-12.1%	-1.0%	2.9%
Total Northern California	-8.4%	-2.8%	38.1%
Seattle Metro	-2.3%	1.1%	18.8%
Same-Property Portfolio	-3.0%	-0.9%	100.0%

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The table below illustrates the components that drove the change in Same-Property Revenues on a year-over- year basis.

			Q2 2021 vs. Q2 2020		YTD 2021 vs. YTD 2020
Same-Property Revenue Components			$ Amount	%		$ Amount	%
		(in Millions)	Contribution		(in Millions)	Contribution
Prior-PeriodSame-Property Revenues	$		324.7		$	670.3
Scheduled Rents			-12.1	-3.7%		-23.2	-3.5%
Delinquencies			2.6	0.8%		-2.9	-0.4%
Cash Concessions			-8.5	-2.6%		-18.9	-2.8%
Vacancy			6.3	1.9%		6.4	0.9%
Other Income			1.9	0.6%		1.1	0.2%
2021 Same-Property Revenues/Change	$		314.9	-3.0%	$	632.8	-5.6%

			Year-Over-Year Change			Year-Over-Year Change
			Q2 2021 compared to Q2 2020			YTD 2021 compared to YTD 2020
				Operating						Operating
			Revenues	Expenses	NOI			Revenues	Expenses	NOI
Southern California		2.0%	0.3%	2.8%			-2.0%		0.3%		-3.0%
Northern California	-8.4%	2.0%	-12.3%	-9.7%		3.3%		-14.3%
Seattle Metro	-2.3%	-5.0%	-1.0%	-4.7%		0.6%		-7.1%
Same-Property Portfolio			-3.0%	-0.2%	-4.2%			-5.6%		1.5%		-8.4%
							Sequential Change
						Q2 2021 compared to Q1 2021
								Operating
Southern California				Revenues	Expenses		NOI
			0.0%		0.0%		0.0%
Northern California		-2.8%	-1.5%		-3.4%
Seattle Metro		1.1%		-4.9%		4.1%
Same-Property Portfolio			-0.9%	-1.6%		-0.6%
							Financial Occupancies
							Quarter Ended
Southern California				6/30/2021	3/31/2021	6/30/2020
			97.0%	96.7%		94.6%
Northern California		96.2%	96.6%		95.0%
Seattle Metro		96.7%	96.6%		95.3%
Same-Property Portfolio			96.6%	96.7%		94.9%

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INVESTMENT ACTIVITY

Real Estate

In the second quarter of 2021, the Company acquired its joint venture partner's 50.0% interest in The Village at Toluca Lake, a 145-apartment home community located in Burbank, CA for a contract price of $31.8 million. Concurrent with the closing of the acquisition, $29.5 million in mortgage debt encumbering the property was repaid. As a result of the acquisition, the Company reported a remeasurement gain of $2.3 million in the second quarter, which is excluded from Total and Core FFO.

Other Investments

In the second quarter of 2021, the Company received cash proceeds of $36.5 million, including prepayment penalties, from the full redemption of a subordinated loan investment originated in the second quarter of 2020. The Company recorded $4.7 million of income from prepayment penalties as a result of the early redemption, which has been excluded from Core FFO.

DEVELOPMENT ACTIVITY

During the second quarter of 2021 the Company's developments, Mylo in Santa Clara, CA and Patina at Midtown in San Jose, CA, reached stabilization.

The Company's sole development property in lease-up, Wallace on Sunset in Hollywood, CA, is 60.5% leased as of July 27, 2021.

LIQUIDITY AND BALANCE SHEET

Common Stock

In the second quarter of 2021, the Company did not issue any shares of common stock through its equity distribution program or repurchase any shares through its stock repurchase plan.

Balance Sheet

In June 2021, the Company issued $300.0 million of 10-year senior unsecured notes due in June 2031 bearing an interest rate per annum of 2.55% and an effective yield of 2.62%. The proceeds were used to fund the redemption of the Company's outstanding 3.375% senior unsecured notes due in January 2023. The Company incurred $16.5 million in prepayment penalties and write-offs of unamortized costs in the second quarter related to this debt repayment, which has been excluded from Core FFO.

Subsequent to quarter end, Wesco I, LLC, a joint venture in which the Company owns 57.7% interest, refinanced five apartment communities with a new $275.6 million secured term loan. The loan is priced at LIBOR + 1.35% and matures in 2026.

As of July 27, 2021, the Company has approximately $1.3 billion in liquidity via undrawn capacity on its unsecured credit facilities, cash, and marketable securities.

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