Essex Property Trust, Inc. · NYSE:ESS
Essex Property Trust — NAREIT Investor Forum 2012
32 slides from Essex Property Trust's conference presentation, Jun 12, 2012
Slide 1: June 12-14, 2012 NAREIT Investor Forum
June 12-14, 2012 NAREIT Investor Forum ESSEX PROPERTY TRUST, INC.
Slide 2: Table of Contents
Table of Contents Pages Section I. Overview: Top Performing REIT 3-5 Section II. Investment Strategy: West Coast Focus 6-13 Section III. Market Update: Focus on Three Major Markets 14-19 Section IV. Core Competencies: How Essex Creates Value 20-26 Section V. Financial Information 27-29
Slide 3: About Essex Property Trust
About Essex Property Trust Multifamily REIT § Supply-constrained coastal markets of California and Washington § 158 properties containing +32,600 units § $7.7 billion in total market capitalization (1) Strategy § Drive rent growth on high occupancy § Add value through redevelopment § Acquire and dev
Slide 4: Essex Strong Historical Performance
Overview Essex Strong Historical Performance = 19% compound annual total return since IPO 27 % total return in 2011 - sector leading 8% year-to-date total return) Total Return Since IPO (2) $2,000 $1,600 $1,200 $800 $400 $0 SS naerr all Equity —NAREIT APT REITs 2010 2011 (2) Source: NAREIT andSNI Fi
Slide 5: Essex Leads NOI Growth in Q1 and Is Projected Leader in 2012
Essex Leads NOI Growth in Q1 and Is Projected Leader in 2012 § ESS is projected to lead the peer group in NOI growth in 2012 Avg. 6.5% Source: Midpoint of Company disclosures. Represents year-over-year growth. Source: Company disclosures. Includes 11 multifamily REITs § Rents and same-property NOI g
Slide 6: II. Investment Strategy: Strong West Coast Fundamentals
Anavia - Anaheim, CA II. Investment Strategy Strong West Coast Fundamentals
Slide 7: Why Focus on the West Coast
Why Focus on the West Coast Robust Rent Growth § Rents declined further and recovered later relative to other major U.S. metros § ESS in top 5 projected rent growth markets over next five years Strong Job Growth § Better than average job growth, especially in high paying industries Favorable Demogra
Slide 8: Research Driven Approach Identifies Top Markets
Research Driven Approach Identifies Top Markets § Approximately 65% of Essex’s NOI is located in the top 5 projected rent growth markets Investment Strategy Source: Axiometrics
Slide 9: Job Growth: Favors Essex Markets
Job Growth: Favors Essex Markets § Job growth in many Essex markets outpaces U.S. average § LA job growth improving and expected to be 1% in 2012 Investment Strategy % Job Growth: April 2012 (Year-Over-Year) Source: BLS
Slide 10: California Population Growing Faster than U.S. Average
§ California population growth has outperformed the U.S. average for the last 3 years California Population Growing Faster than U.S. Average Investment Strategy CA outperforms Source: U.S. Census Bureau
Slide 11: Supply: For-Sale Supply Risk Low
§ Coastal rental markets will have less competition from for-sale as compared to 2003-2007, due to more restrictive lending standards and higher housing costs § Through varying economic cycles, supply remains low - well below 1% of stock in ESS’s markets Supply: For-Sale Supply Risk Low Investment S
Slide 12: Single-Family Prices Restrict Homeownership
Source: National Association of Realtors, Dataquick, Essex § Despite the fall in home prices since 2008, prices remain high in Essex markets Single-Family Prices Restrict Homeownership Investment Strategy Essex Markets Other Markets
Slide 13: Essex Markets are Renter Markets
Essex Markets are Renter Markets Investment Strategy § Low homeownership rates compared to the national average due to unaffordable single family housing results in more renters and better ability to increase rents Source: U.S. Census
Slide 14: III. Market Update
Essex Skyline - Santa Ana, CA III. Market Update Overview on Seattle, Northern CA, and Southern CA
Slide 15: Los Angeles Market Review
Market Update Los Angeles Market Review Rent Growth Forecast Los Ar les: Rents vs hi - + Market rents remain 8% below prior peak Saad levels bad oe + 25% rent growth expected next 4 years + Annual personalincome growth lasttwo 30% BS years = 4.9% Total Reside: Supply + Total supply of stock in ‘12 =
Slide 16: Orange County Market Review
Orange County Market Review Market Update
Slide 17: Southern CA: Recovery Progressing
§ Occupancy rates and rents in Orange County and Los Angeles have improved since Q2 2009 § Pricing power shifts to the landlord as occupancy pushes over 95% § Essex S. CA portfolio metrics are improving Southern CA: Recovery Progressing Market Update *Year-over-Year growth Source: Axiometrics, Realf
Slide 18: San Jose Market Review
San Jose Market Review Market Update
Slide 19: Seattle Market Review
Seattle Market Review Market Update
Slide 20: IV. Core Competencies: How Essex Creates Value
Bella Villagio - San Jose, CA IV. Core Competencies How Essex Creates Value
Slide 21: Investing Strategy
2001 2004 2009 2010 2011 2012 Investing Strategy § An innovative management team responsive to changing market dynamics with the ability to source and structure unique opportunities within the multifamily space § Disciplined underwriting, rigorous analysis, and total return driven First multifamily
Slide 22: Core Competencies: Acquisitions
§ Acquired $1.2 billion of assets since the beginning of 2010, representing a 30% expansion of gross asset value § Estimated 5.5% yield in 2012, expected to grow to 6.0% in 2013 § Improved the Net Asset Value/sh, cash flow/sh and growth prospects of the Company Active Acquirer Core Competencies: Acq
Slide 23: Developments Under Construction - $574 Million
6 Developments Under Construction - $574 Million Core Competencies: Development Expo (formerly Queen Anne) Seattle, WA 275 units $79.1 million est. total cost Nov 2012 est. initial occupancy ESS - 50% ownership Epic (formerly Cadance) San Jose, CA Phase I & II- 569 units, 17,000 sq. ft. retail Phase
Slide 24: Developments Under Construction - $574 Million
6 Developments Under Construction - $574 Million Core Competencies: Development Santa Monica at La Brea West Hollywood, CA 184 Units, 12,750 sq. ft. retail $75.4 million est. total cost July 2014 est. initial occupancy ESS - 50% ownership Fountain at La Brea West Hollywood, CA 187 Units, 18,200 sq.
Slide 25: Redevelopment and Selective Repositioning
Before After Redevelopment and Selective Repositioning Core Competencies: Value-Add Redevelopment § Capitalize on the strategy of owning Class B quality assets in A locations, which provides a greater potential to unlock value and improve portfolio growth § Focus on rent justified improvements to ma
Slide 26: Diversified Sources of Equity
Diversified Sources of Equity Core Competencies: Fund & Joint Ventures § Co-investment platform facilities growth via private capital § 19% of total portfolio falls under co-investments § Attractive risk adjusted returns via promoted interest Fund II • 14 properties with dispositions in 2012-2014 •
Slide 27: V. Financial Information
Reveal - Woodland Hills, CA V. Financial Information Key Financials and 2012 Guidance
Slide 28: Conservatively Proportioned & Flexible Balance Sheet
Conservatively Proportioned & Flexible Balance Sheet Financial Information § Leverage : 30% on a debt to total market capitalization basis (one of the lowest of the multifamily peer group) § Debt : Debt to adjusted EBITDA is expected to be approximately 7.0X by year-end 2012 § Liquidity : Nearly $47
Slide 29: 2012 Guidance Assumptions
2012 Guidance Assumptions Financial Information FFO Per Share Guidance $6.52-$6.77 , represents 14-18% growth Same Property Revenue Growth (Midpoint) 6.0% Same Property NOI Growth of the Consolidated portfolio (Midpoint) * 8.0% 2012 Market Expectations Job Growth Rent Growth Occupancy Southern Calif
Slide 30: Key Strengths
Key Strengths Conclusion § Proven management team with superior performance track record § Innovative and diverse investment strategies within the multifamily sector § Proven core underwriting and operating competencies generating durable long term results 416 on Broadway - Glendale, CA Santee Court
Slide 31: Safe Harbor Disclosure
Safe Harbor Disclosure Certain statements in this presentation, which are not historical facts, may be considered forward-looking statements within the meaning of the federal securities laws. The forward looking statements, some of which can be identified by terms and phrases such as “forecast”, “es
Slide 32: For additional information, please contact the Company's Investor Relations
For additional information, please contact the Company’s Investor Relations department at (650) 849-1600. Fourth & U - Berkeley, CA 416 on Broadway - Glendale, CA Joule - Seattle, WA Via - Sunnyvale, CA Axis 2300 - Irvine, CA Arbors at Park Rose - Oxnard, CA