Essex Property Trust, Inc. · NYSE:ESS
Essex Property Trust — UBS REIT Equity Research "Kick the Bricks" Seattle Property Tour (September 2004)
29 slides from Essex Property Trust's conference presentation, Sep 30, 2004
Slide 1: Targeted West Coast Portfolio
TARGETED WEST COAST PORTFOLIO ESSEX UBS REIT Equity Research “Kick the Bricks” Seattle Property Tour September 30, 2004 The Proven Leader In West Coast Apartments we
Slide 2: Essex Property Trust, Inc. (NYSE:ESS)
Essex Property Trust, Inc. (NYSE:ESS)
Slide 3: Overview
Overview Dedicated West Coast multifamily REIT - Formed in 1971 - Initial Public Offering in June 1994 IPO price $19.50/share Consistent operating philosophy through numerous market cycles - Research-based strategy Experienced, committed management with strong track record - Among the highest in tot
Slide 4: Portfolio by region (units)
I Southern California (15,855 units) I San Francisco Bay Area (4,605 units) I Pacific Northwest (5,953 units) Other (578 units) Im Southern California (11,955 units) Ig San Francisco Bay Area (4,355 units) I Pacific Northwest (5,457 units) Mi Other (578 units)
Slide 5: Requirements for Long-Term Success
Requirements for Long-Term Success ° + Stable and high occupancy ea Predictable low risk from new construction x Growing and diverse economy Limited housing supply oni Pacific Region Key Characteristics Permanent constraints to new supply Job growth expectation High cost of home ownership Large and
Slide 6: Research input and analysis model
Input New Construction of Multifamily and Single-Family Housing Cost to Own Single-Family Housing Multifamily Affordability Job Growth > Analysis Research Team and Proprietary Model > Target Acquisition Submarket or Projecions Disposition Submarkets Rent Growth and Occupancy Rates
Slide 7: 2004 Business Plan
2004 Business Plan
Slide 8: 2004 Update
2004 Update Same-property NOI - Guidance for 2004: 0.5% - Actual as of June 30, 2004: (0.4%) Stabilize 3 development communities (limited FFO Impact) - Limited new starts - Development strategy requires a risk premium of about 150 bps over current acquisition cap rates Acquisition Goal of $325 milli
Slide 9: Fund I Sale Update
July 2001 September 2003 August 2004 August 2004 September 2004 Fund | Sale Update Formed Fund | with nine Institutional Investors including Essex Fully invested - $640 million (including leverage) Entered into purchase and sale agreement with United Dominion Realty Trust, Inc. UDR) - Contract price
Slide 10: Fund II Update
Fund Il Update Final Close Eight investors Includes seven of the nine Fund | investors Total Equity Committed: $266 million Essex Ownership: $75 million (28.21%) Approximate Investment Capacity Approximately $750 Structure Very similar to Fund | Investment Strategy: Seattle and Northem California Pr
Slide 11: Same-Property Revenue and NOI
04 Same-Property Revenue and NOI Actual 2004 Through Guidance 6/30/04 Revenues TT Southern California 3.5% 3.9% Northem California (3.6%) 6.89% Pacific Northwest 1.5% 0.2% Total 1.3% 0.16 Operating Expenses 2.7% 1.1% Net Operating Income 0.5% (1.0%)
Slide 12: Seattle: Avg. Rents vs. Jobs
ee Seattle: Avg. Rents vs. Jobs $1,200 ic. frio00 i500 « $800 ao $03 $600 fy i $400 PES ILILELES SE LESS, Teme Rents Jobe Ratio of Rents to Median Incomes. vom Cae 8 PPP PP PP PE I PP PSP PF SF SF oS SF FP ESSEX
Slide 13: LA/Ventura: Avg. Rents vs. Jobs
LA/Ventura: Avg. Rents vs. Jobs °04-’09 : 1.2% th 04-'09: 3.5% qBEEEEEEEEE PPS SF oF ST
Slide 14: Orange Co MSA: Avg. Rents vs. Jobs
ee Orange Co MSA: Avg. Rents vs. Jobs $1,500 $1400 1.820.000 #1300 $1200 1.520.000 F300 $1,000 g 1.420.000 $200 " 1.220.000 ie 1220900 $200 $500 1.120.000 LPP IOI AE I ID SP OP SES GP ESS Pah PIPPI PM IMAI I PPS SBP oS oF o' ESA. Rents —e— Jobs Ratio of Rents to Median Incomes “BSS PP PP EP PE PPS P
Slide 15: San Diego MSA: Avg. Rents vs. Jobs
San Diego MSA: Avg. Rents vs. Jobs $1,200 $1,100 1,360,000 $1000 $800 Q $500 PP oP oh os os Ps s s St ot ot PPP KP HF SF Mp Ft ss Siva Rents eave Ratio of Rents to Median Incomes SIlGIEISIEIBIEIBIEIBIEISIEIBISIg BE EE EE PP PFI PPE IPE EPP SPP FPF PS FP ESSEX iste)
Slide 16: Bay Area: Avg. Rents vs. Jobs
Bay Area: Avg. Rents vs. Jobs nttlieeetlth FP EEE LS FPS SE asa. Rants oe Jobs ast Job Gro 09: 1.8% ast Market Rent Growth ’04- ’09: 4.2% Ratio of Rents to Median Incomes: Be HIE PPP LEE EEEEEE Bg Dh he ee
Slide 17: History of Success
History of Success
Slide 18: Annual Portfolio Growth
nnual Portfolio Growt Multifamily Units as of December 31, 25.000 snore 2022) 23,609 2,000 20,782 13,673 18,000 15,106 12,000 8,000 4.410 3,000 tl 383800 "0306/30/08 Note: Includes partial ownership interest
Slide 19: Prudent Market Timing
Prudent Market Timin 2 Southern 2% Califomia Seattle 50% Metro Area 17% Southern Califomia 10% San Francisco ortland Pacific Bay Area Metro Area Northwest 17% 5% 20% San Francisco Bay Area 70%
Slide 20: FFO History
FFO History 1995-2004 $5.00 $4. e $4.09" $4.01-4.10 $4.00 $3.87" a $3.24" $3.00 $2.90" $2.52" $2.23" Baas $1.98 See $2.00 mew $1.00 e $0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Guidance 12.9% 12.7% 12.5% 14.4% 19.3% 8.2% 4.4% 6.4% * Restated for the adoption of FAS 123 and FIN 46 E
Slide 21: Dividend History
Dividend Histo $3.50 $3.08 $3.12 $3.16 $3.00 $2.80 $2.51 0. $2.38 $2.15 $1.95 $2.00 2 $1.77 $1.67 $1.69 $17) $1.50 $1.00 1994 1935 1996 1997 1998 1999 2000 2001 2002 2003 2004 Arrwalized
Slide 22: Conservative Payout
Conservative Pay: 100% 91% 85% 77% 77% 78% 70% 68% GG eax 71% 62% 50% 1994- 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Po raforma Note: Dividends as a percentage of FFO
Slide 23: Financial Occupancy
Financial Occupancy For years ended December 31, ge 97% «87% ge ae ge OTK ORK SKK oa, 1ss¢ 198519861987 1998 «38920002001 2002 2003 6/30/2004
Slide 24: Total Return Performance
Total Return Performance = ESS LT ub “ NYSE
Slide 25: Strong Financial Condition
Slide 26: Strong Financial Condition
Strong F al Cond Debt to Total Market Capitalization 39.12% Total Market Capitalization $3.2 billion Debt: Common Stock: | $1254 million $1,742 million 8 39% of capital” 5.4% of capital i Preferred Equity $210 million 7% of capital As of June 30, 2004
Slide 27: Conservative Leverage
Conservative Leverage Total Debt: $1,254 million Interest Expense Coverage 3.5x Tax Exempt -Variable $184 Million Fixed" 69% $870 Million Lines of Credit 16%, $200 Million As of June 30, 2004
Slide 28: Forward-looking Statements
Forward-looking Statemen SAFE HARBOR STATEMENT. UNDER THE PRIVATE SECURITIES LITITIGATION REFORM ACT OF 1995 This presentation includes statements that qualify as forward-looking statements under the Private Securities Litigation Reform Act of 1995, including statements about projected growth in Fun
Slide 29: Targeted West Coast Portfolio
TARGETED WEST COAST PORTFOLIO ESSEX The Proven Leader In West Coast Apartments we