Essex Property Trust, Inc. · NYSE:ESS
Essex Property Trust — Investor Presentation (June 2017)
34 slides from Essex Property Trust's investor presentation, Jun 1, 2017
Slide 1: Investor Presentation June 2017
INVESTOR PRESENTATION JUNE 2017 ESSEX PROPERTY TRUST, ING.
Slide 2: Table of Content
TABLE OF CONTENT PROPERTY TRUS PAGE(S) ABOUT ESSEX 2-3 WEST COAST INVESTMENT STRATEGY 4-12 INVESTMENT OVERVIEW 13-16 FINANCIAL PERFORMANCE, 2017 GUIDANCE, 17-24 & CAPITAL STRUCTURE APPENDIX 25 * ESSEX PORTFOLIO 26-29 ¢ SUSTAINABILITY 30-33 SAFE HARBOR DISCLOSURE Certain statements in this presentati
Slide 3: Only Public Multifamily REIT Dedicated Exclusively to the West Coast
WA & CA REPRESENT 5/4 HIGHEST GDP IN THE WORLD ESSEX IS THE ONLY PUBLIC MULTIFAMILY REIT DEDICATED EXCLUSIVELY TO THE WEST COAST ESSEX PROPERTY TRUST. ING. SEATTLE 17% of NOI) NORTHERN CA 39% of NOI!) San Francisco MD 9% Oakland! 12% Santa Clara 18% SOUTHERN CA “ Ventura 5% Los Angeles 19% Orange Co
Slide 4: Key Strategic Objectives
ESSEX PROPERTY TRUST. ING. KEY STRATEGIC OBJECTIVES Add value through strategic redevelopment Acquire and develop West Coast properties near transportation nodes in submarkets with highest expected rent growth Drive rent growth on high occupancy Maintain strong balance sheet and financial flexibilit
Slide 5: Solid West Coast Fundamentals
SOLID WEST COAST FUNDAMENTALS PROPERTY TRUST, ING.
Slide 6: Solid West Coast Job Growth
ESSEX SOLID WEST COAST JOB GROWTH PROPERTY TRUST. ING. ESS PORTFOLIO WEIGHTED AVERAGE JOB GROWTH CONTINUES TO OUTPACE THE U.S. JOB OPENINGS REMAIN STRONG BUT A TIGHT LABOR POOL IS HAVING AN IMPACT ON EMPLOYERS ABILITY TO HIRE % Trailing 3 Month Job Growth As of April 2017 3% Thinning a 9 73 c ® ° <
Slide 7: Favorable Demographics
ESSEX FAVORABLE DEMOGRAPHICS PROPERTY TRUST. ING. = FAVORABLE DEMOGRAPHIC TRENDS INDICATE CONTINUED STRONG RENTAL DEMAND FROM THE KEY RENTAL COHORT U.S. Population by Age Group 18-34 Year Olds Living with Parents in U.S. (in Millions) (in Millions) 70 | Key Rental Cohort 25 34% 6s Sd 20 32% 60 15 30
Slide 8: Strong Household Income Growth vs. Rent Growth
STRONG HOUSEHOLD INCOME GROWTH VS. RENT ESSEX GROWTH PROPERTY TRUST. ING. = HOUSEHOLD INCOME GROWTH IS OUTPACING RENT GROWTH IN MANY ESS MARKETS, WHICH IS IMPROVING AFFORDABILITY IN THE NORTHERN CALIFORNIA MARKETS CAGR in Household Incomes vs Rents (2016 - 2017E) 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0
Slide 9: Favorable Supply/Demand Imbalance
ESSEX FAVORABLE SUPPLY/DEMAND IMBALANCE PROPERTY TRUST. ING. = IN 2017, WE EXPECT DEMAND AND SUPPLY TO BE IN BALANCE WHICH SHOULD LEAD TO RENTS GROWING CONSISTENT WITH THE LONG-TERM AVERAGE = HISTORICAL SUPPLY/DEMAND IMBALANCE PERPETUATES CONTINUED PENT-UP DEMAND, WHICH SHOULD BENEFIT OUR MARKETS OV
Slide 10: Demand to Exceed Supply in ESS Markets
DEMAND TO EXCEED SUPPLY IN ESS MARKETS PROPERTY TRUS IN ESS’ SUPPLY CONSTRAINED MARKETS, DEMAND IS EXPECTED TO EXCEED SUPPLY RELATIVE TO OTHER MAJOR METROS FOR THE NEXT SEVERAL YEARS New Household Formation to Total New Supply 1,200 " $1, @ core tssexmarkets @ other markets i g @ Essex Portfolio OQu
Slide 11: Limited Supply in ESS Markets
LIMITED SUPPLY IN ESS MARKETS _ESSEX_ PROPERTY TRUST. ING. ESS CA SUPPLY AS A PERCENT OF STOCK HAS HISTORICALLY REMAINED BELOW 1% RELATIVE TO THE NATION, ESS’ CA MARKETS HAVE LESS HOUSING SUPPLY WITH BETTER JOB GROWTH Total Permits as a % of Total Stock Single Family Permits as a % of Single Family
Slide 12: Multifamily Supply Outlook
ESSEX MULTIFAMILY SUPPLY OUTLOOK PROPERTY TRUST. ING. = MULTIFAMILY SUPPLY AS A % OF MULTIFAMILY STOCK IS EXPECTED TO DECREASE IN ESS’ NORTHERN CALIFORNIA AND SEATTLE MARKETS IN 2018 = SUPPLY IS EXPECTED TO REMAIN RELATIVELY FLAT IN OUR SOUTHERN CALIFORNIA MARKETS Multifamily Supply as a % of Multif
Slide 13: Rent Growth Outlook - Axiometrics Forecast
ESSEX RENT GROWTH OUTLOOK-AXIO FORECAST PROPERTY TRUST. ING. «= ESS’ NORTHERN CALIFORNIA MARKETS ARE PROJECTED TO BE THE TOP PERFORMING MARKETS IN 2018 & 2019 = MORE THAN 70% OF ESS’ TOTAL NOI IS IN THE TOP PROJECTED MSA’S BY RENT GROWTH IN 2018 & 2019 Top Projected Rent Growth Markets 18) E CAGR %
Slide 14: Investment Overview
INVESTMENT OVERVIEW PROPERTY TRUST, ING.
Slide 15: Core Competencies to Create Value
ESSEX CORE COMPETENCIES TO CREATE VALUE PROPERTY TRUST, INC. ACQUISITIONS = Improve the NAV/sh, cash flow/sh and growth prospects of the Company DEVELOPMENT = Develop high-quality tenant desired apartment homes near transportation nodes REDEVELOPMENT = Focused on rent justified improvements to maxim
Slide 16: Strategic Capital Allocation
STRATEGIC CAPITAL ALLOCATION SS KEY INVESTMENT TARGETS . Improve portfolio growth through dispositions of select assets . Utilize co-investment platform to maximize total return . Large discounts to NAV (>10%) would likely result in increased disposition activity . Originate preferred equity transac
Slide 17: Development Pipeline Update
ESSEX DEVELOPMENT PIPELINE UPDATE PROPERTY TRUST, ING. = FORECASTED SPEND OF $215M AT PRO RATA SHARE ON DEVELOPMENT PROJECTS IN 2017 Delivery of Development Timeline’) # of Properties Total Cost!!! 2 627 2017 $258 2018 3 1,341 $880 Total 5 1,968 $1,138 ESS Share®) Total Cost $923 = ia Unfunded Cost
Slide 18: Financial Performance, 2017 Guidance, & Capital Structure
FINANCIAL PERFORMANCE, 2017 GUIDANCE, & CAPITAL STRUCTURE PROPERTY TRUST, ING.
Slide 19: Continued Outperformance vs. Peers
ESSEX CONTINUED OUTPERFORMANCE VS. PEERS PROPERTY TRUST. ING. = ESS SAME-PROPERTY NOI GROWTH HAS EXCEEDED THE PEER AVERAGE BY 3.4% ANNUALLY SINCE 2012 = IN 2017, NOL GROWTH IS EXPECTED TO CONTINUE TO OUTPERFORM THE PEER GROUP Same-Property NOI Growth 10% 8.9% 8% 6% 5.5% 4% 3.7% 2.8% 2% 0% (4 2012-20
Slide 20: 2017 Year-to-Date Same-Property Revenue Growth
2017 YEAR-TO-DATE SAME-PROPERTY REVENUE ESSEX GROWTH PROPERTY TRUST, INC. YEAR-TO-DATE SAME-PROPERTY REVENUE GROWTH IS TRACKING FAVORABLE TO THE MIDPOINT OF OUR FULL-YEAR GUIDANCE, BUT CONSISTENT WITH OUR EXPECTATIONS THAT GROWTH WILL DECELERATE THROUGHOUT THE YEAR WE EXPECT NEW SUPPLY DELIVERIES TO
Slide 21: 2017 Full-Year Guidance
ESSEX PROPERTY TRUST. ING. 2017 FULL-YEAR GUIDANCE Current Guidance Change to Midpoint as of Q1’ 17 of Initial Guidance National GDP Forecast 2.2% No Change National Job Growth 1.6% No Change ESS Job Growth 2.2% No Change ESS Market Rent Growth 3.6% No Change ESS Same-Property Revenue Growth 3.5% 0.
Slide 22: 2017 MSA Level Forecast
2017 MSA LEVEL FORECAST PROPERTY TRUS ESSEX PROPERTY TRUST,INC. 2017 MSA Level Forecast: Supply, Jobs, and Apartment Market Conditions Residential Supply Job Forecast 2 Market Forecast '3) % of MF % of Total Est. New New MF New SF Total Supply to Supply to Jobs % Economic Market Supply Supply Supply
Slide 23: Capital Structure & Liquidity Profile
CAPITAL STRUCTURE & LIQUIDITY PROFILE Secured Debt 10% Unsecured Debt 15% Credit Facility —— 1% Equity 74% Equity m™ Credit Facility Unsecured Debt miSecured Debt Source: Company Disclosures As of 3/31/17 (1) Variable rate debt represents 10.8% of total consolidated debt. DEBT SUMMARY (S$ MILLION) U
Slide 24: Strong Credit Profile
ESSEX PROPERTY TRUST. ING. STRONG CREDIT PROFILE SELECT BALANCE SHEET RATIOS 17 4Q COVENANT TARGETS Secured Debt / Adjusted Total Assets 15% 15% < 40% < 15% Total Debt / Adjusted Total Assets 38% 38% < 65% < 40% Interest Coverage 394% 390% > 150% > 325% Unsecured Debt Ratio 292% 282% > 150% > 250% N
Slide 25: Well Laddered Debt Maturity Schedule
Debt Maturities in Millions ($) WELL LADDERED DEBT MATURITY SCHEDULE Debt Maturity Schedule PROPERTY TRUST. ING. 1,000 300 43 2 600 53 yy 16 55 = 3 — — 400 aa 695, GEG ia — 560 500 500 450 75 302 400 a 0 so 0 5 6 0 ~ 2 a ° - N 2 t wn fe tn o 3 ga a q a a a a 8 8 So So So So So f=} So So So So os a a
Slide 26: Appendix
APPENDIX ESSEX PROPERTY TRUST, ING.
Slide 27: Northern California Portfolio
NORTHERN CALIFORNIA PORTFOLIO PROPERTY TRUST. ING. NORTHERN CALIFORNIA HIGHLIGHTS = Both San Francisco MD and San Jose job growth continue to outpace the U.S. with 2.5% and 1.8%, respectively, over the trailing three month period ended in April. = — Employers continue to expand in Northern Californi
Slide 28: Los Angeles Portfolio
LOS ANGELES PORTFOLIO PROPERTY TRUS LOS ANGELES AREA MAP Los Angeles Totals Highs Units Properties 49 Pro rata % of NOI 19.4% SS Occupancy 96.2% Chatsworth Leke Mano: watlabs ili Claas is pn Angcles Malibu Topetiys Bath Sere iden ‘ Nes gig Kommerce Hin Forence =I | Pell Ga Garcen: Greham South Gote
Slide 29: Orange County Portfolio
ORANGE COUNTY PORTFOLIO PROPERTY TRUS ORANGE COUNTY AREA MAP ORANGE COUNTY HIGHLIGHTS Orange County Totals Se per Sine ad 5 i ® ry Job growth in Orange County lagged the U.S. for the Units 6,932 ane me SnD - =o) trailing three month period ending in April. Properties 23 peste a any = The sectors sho
Slide 30: Seattle Portfolio
SEATTLE PORTFOLIO PROPERTY TRUS SEATTLE AREA MAP Rees Comer * a wi Qs Ser Cathesrt Rca SS North Creek Lnemoay Emons gehen nance @ ic ate AS) Kingston S igh Rock Mofetidke tier ® Woodway aaa \e fichmond Beach f Yoclion LR Kenmore Pete! @ Woodie ianola Pig Sid hi le ) ¥ saps Lake Pack tens e-@ tingday
Slide 31: Commitment to Sustainability
COMMITMENT TO SUSTAINABILITY PROPERTY TRUST, ING.
Slide 32: Awards and Recognitions
AWARDS AND RECOGNITIONS U.S. GREEN BUILDING COUNCIL: LEADERSHIP IN ENERGY AND ENVIRONMENTAL DESIGN (LEED) Since 2005, Essex has developed six apartment communities that are LEED Certified, including two Gold and four Silver certifications, with three additional certifications currently pending. A na
Slide 33: Sustainability Initiatives
SUSTAINABILITY INITIATIVES PROPERTY TRUS SUSTAINABLE COMMITMENT = For the past 10 years, Essex has been incorporating green initiatives within its apartment communities = In 2016, Essex participated in the GRESB Survey for the first time — Achieved GREEN STAR Rated Status * Ranked second among the m
Slide 34: Dedication to Sustainable Living
ESSEX PROPERTY TRUST. ING. DEDICATION TO SUSTAINABLE LIVING SUSTAINABLE INITIATIVES THROUGHOUT THE ORGANIZATION DEVELOPMENT = Since 2009, the Company has achieved: Q LEED* certified status at 6 communities Q GreenPoint Ratings* at 8 properties Q ~~ Pursuing LEED certification on 3 recently completed
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