Essex Property Trust (ESS) 10-K risk factor changes: FY2020 vs FY2019

[removed: | • |] [added: -] changes in the general or local economic climate, including layoffs, plant closings, industry slowdowns, relocations of significant local employers and other events negatively impacting local employment rates and wages and the local economy; [removed: |]

[removed: | • |] [added: -] local economic conditions in which the communities are located, such as oversupply of housing or a reduction in demand for rental housing; [removed: |]

[removed: | • |] [added: -] the attractiveness and desirability of our communities to tenants, including, without limitation, [added: the size and amenity offerings of] our [added: units, our] technology offerings and our ability to identify and cost effectively implement new, relevant technologies, and to keep up with constantly changing consumer demand for the latest [removed: innovations; |][added: innovations, including any increased requirements due to the significant increase in the number of people who continue to “work from home”;]

[removed: | • |] [added: -] inflationary environments in which the costs to operate and maintain communities increase at a rate greater than our ability to increase rents, or deflationary environments where we may be exposed to declining rents more quickly under our short-term leases; [removed: |]

[removed: | • |] [added: -] competition from other available housing alternatives; [removed: |]

[removed: | • |] [added: -] changes in rent control or stabilization laws or other laws regulating [removed: housing; |][added: housing and other increasing regulations on people and businesses in locations where our communicates are located;]

[removed: | • |] [added: -] the Company’s ability to provide for adequate maintenance and insurance; [removed: |]

[removed: | • |] [added: -] declines in the financial condition of our tenants, which may make it more difficult for us to collect rents from some tenants; [removed: |]

[removed: | • |] [added: - any decline in or] tenants' perceptions of the safety, convenience and attractiveness of our communities and the neighborhoods where they are located; and [removed: |]

[removed: | • |] [added: -] changes in interest rates and availability of financing. [removed: |]

In the event of a [removed: recession,] [added: recession or other negative economic effects, including as a result of] the [added: COVID-19 pandemic, the] Company could incur reductions in rental rates, occupancy levels, property valuations and increases in operating costs such as advertising and turnover expenses.

[removed: A] [added: Any such] recession [added: or similar event] may affect consumer confidence and spending and negatively impact the volume and pricing of real estate transactions, which could negatively affect [removed: the Company’s liquidity and its ability to vary its portfolio promptly in response to changes to the economy.]

These laws and regulations may include zoning laws, building codes, rent control or stabilization laws, [added: laws benefiting disabled persons,] federal, state and local tax laws, landlord tenant laws, environmental laws, employment laws, immigration laws and other laws regulating housing or that are generally applicable to the Company's business and operations.

Changes in, or noncompliance with, these regulatory requirements could require the Company to make significant unanticipated [removed: expenditures,] [added: expenditures to address noncompliance,] which could have a material adverse effect on the Company's financial condition, results of operations or cash flows.

As of December 31, [removed: 2019,] [added: 2020,] the Company had [removed: five] [added: three] consolidated development projects and [removed: two] [added: three] unconsolidated joint venture development projects comprised of [removed: 1,960] [added: 1,853] apartment homes for an estimated cost of [removed: $1.3] [added: $1.1] billion, of which [removed: $222.0] [added: $174.0] million remains to be expended, and [removed: $193.0] [added: $118.0] million is the Company's share.

In addition, at December 31, [removed: 2019,] [added: 2020,] the Company had ownership interests in [removed: four] [added: three] major redevelopment projects aggregating [removed: 1,327] [added: 1,112] apartment homes with estimated redevelopment costs of [removed: $132.7] [added: $109.1] million, of which approximately [removed: $14.9] [added: $4.5] million remains to be expended.

[removed: | • |] [added: -] funds may be expended and management's time devoted to projects that may not be completed on time or at all; [removed: |]

[removed: | • |] [added: -] construction costs of a project may exceed original estimates possibly making the project economically unfeasible; [removed: |]

[removed: | • |] [added: -] projects may be delayed due to, without limitation, adverse weather conditions, labor or material shortage, [added: municipal office closures and staff shortages, government recommended] or [added: mandated work stoppages due to health concerns, or] environmental remediation; [removed: |]

[removed: | • |] [added: -] occupancy rates and rents at a completed project may be less than anticipated; [removed: |]

[removed: | • |] [added: -] expenses at completed development or redevelopment projects may be higher than anticipated, including, without limitation, due to costs of [added: litigation over construction contracts by general contractors,] environmental remediation or increased costs for labor, materials and leasing; [removed: |]

[removed: | • |] [added: -] we may be unable to obtain, or experience a delay in obtaining, necessary zoning, occupancy, or other required governmental or third party permits and authorizations, which could result in increased costs or delay or abandonment of opportunities; [removed: |]

[removed: | • |] [added: -] we may be unable to obtain financing with favorable terms, or at all, for the proposed development or redevelopment of a community, which may cause us to delay or abandon an opportunity; and [removed: |]

[removed: | • |] [added: -] we may incur liabilities to third parties during the development process, for example, in connection with managing existing improvements on the site prior to tenant terminations and demolition (such as commercial space) or in connection with providing services to third parties (such as the construction of shared infrastructure or other improvements.) [removed: |]

[removed: In general, the representations and] warranties provided under the transaction agreements related to the sales of the properties may not survive the closing of the transactions.

While the Company [removed: will seek] [added: seeks] to require the sellers to indemnify us with respect to breaches of representations and warranties that survive, such indemnification may be limited and subject to various materiality thresholds, a significant deductible or an aggregate cap on losses.

The geographic concentration of the Company’s communities and fluctuations in local markets may adversely impact the Company’s financial condition and operating results. The Company generated significant amounts of rental revenues for the year ended December 31, [removed: 2019,] [added: 2020,] from the Company’s communities concentrated in Southern California (primarily Los Angeles, Orange, Santa Barbara, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area), and the Seattle metropolitan area.

For the year ended December 31, [removed: 2019, 82%] [added: 2020, 81%] of the Company’s rental revenues were generated from communities located in California.

[removed: | • |] [added: -] the economic climate, which may be adversely impacted by a reduction in [removed: jobs] [added: job growth] or income levels, industry slowdowns, changing demographics and other factors; [removed: |]

[removed: | • |] [added: -] local conditions, such as oversupply of, or reduced demand for, apartment homes; [removed: |]

[removed: | • |] [added: -] rent control or stabilization laws, or other laws regulating rental housing, which could prevent the Company from raising rents to offset increases in operating costs, or the inability or unwillingness of tenants to pay rent increases; [removed: |]

[removed: | • |] [added: -] competition from other available apartments and other housing alternatives and changes in market rental rates; [removed: |]

[removed: | • |] [added: -] economic conditions that could cause an increase in our operating expenses, including increases in property taxes, utilities and routine maintenance; and [removed: |]

[removed: | • |] [added: -] regional specific acts of nature (e.g., earthquakes, fires, floods, etc.). [removed: |]

Any adverse developments in the economy or real estate markets in California or Washington, or any decrease in demand for the Company’s communities resulting from the California [added: or Washington regulatory or business environments, could have an adverse effect on the Company’s business and results of operations.]

Further, changes in U.S. federal tax [removed: law, including U.S. tax legislation enacted in December 2017 (the "2017 Tax Legislation"),] [added: law] could cause state and local governments to alter their taxation of real property.

[removed: Increases in the] Company’s expenses to own and maintain its properties could adversely impact the Company’s financial condition and results of operations.

Competitive housing in a particular area and fluctuations in cost of owner-occupied single- and multifamily homes caused by a decrease in housing prices, mortgage interest rates and/or government programs to promote home ownership or create additional rental and/or other types of housing, [added: or an increase in desire for more space due to work from home needs or increased time spent at home due to COVID-19,] could adversely affect the Company’s ability to retain its tenants, lease apartment homes and increase or maintain rents.

[removed: | • |] [added: -] that the value of mortgaged property may be less than the amounts owed, causing realized or unrealized losses; [removed: |]

[removed: | • |] [added: -] the borrower may not pay indebtedness under the mortgage when due, requiring the Company to foreclose, and the amount recovered in connection with the foreclosure may be less than the amount owed; [removed: |]

- adverse economic or market conditions due to the COVID-19 pandemic leading to a temporary or permanent move by tenants and/or prospective tenants from locations in which our communities are located;

the Company’s liquidity and its ability to vary its portfolio promptly in response to changes to the economy.

The current COVID-19 pandemic, or the future outbreak of other highly infectious or contagious diseases, and the timing and effectiveness of vaccine distribution, could materially and adversely affect our business, financial condition and results of operations. The outbreak of COVID-19, which is present in nearly all regions around the world, including the United States and the specific regions in which our apartment communities are located, has created considerable instability and disruption in the U.S. and world economies.

Considerable uncertainty still surrounds COVID-19, including when the pandemic will conclude, how quickly vaccines can be safely and widely distributed, the effectiveness of such vaccines, and the potential short-term and long-term effects, including but not limited to shifts in consumer housing demand based on geography, affordability, housing type (e.g. multi-family vs. single-family) and unit type (e.g. studio vs. multi-bedroom), mainly resulting from the paradigm shift of work culture, the decentralization of corporate headquarters and the success of “work from home” models.

Moreover, local, state and national measures taken to limit the spread of COVID-19, including “social distancing” and other restrictions on travel, congregation and business operations have already resulted in significant negative economic impacts.

The prolonged impact of COVID-19 on the U.S. and world economies remains uncertain, but has resulted in increased health issues and mortality rates, increased unemployment, and a world-wide economic downturn, the duration and scope of which cannot currently be predicted.

The extent to which the Company’s financial condition or operating results will continue to be affected by the COVID-19 pandemic will largely depend on future demand and developments, which are highly uncertain and cannot be accurately predicted.

The Company’s operating results depend, in large part, on revenues derived from leasing space in our apartment communities to residential tenants and the ability of tenants to generate sufficient income to pay their rents in a timely manner.

The market and economic challenges created by the COVID-19 pandemic, and measures implemented to prevent its spread, have, and may continue to, adversely affect our returns and profitability.

As a result, our ability to make distributions to Essex’s stockholders and the Operating Partnership’s unitholders may be compromised and we could experience volatility with respect to the market value of our properties and common stock and Operating Partnership units.

The spread of COVID-19 has resulted in increases in unemployment and mass layoffs, and some tenants have experienced deteriorating financial conditions and are unwilling or unable to pay all or part of their rent on a timely basis, or at all, and, the continued spread of COVID-19 as well as a sustained economic downturn may result in further increases or sustainment of these situations.

In some cases, we may be legally required to or otherwise agree to restructure tenants’ rent obligations, and may not be able to do so on terms as favorable to us as those currently in place.

Furthermore, various city, county and state laws restricting rent increases in times of emergency

have come into effect in connection with the COVID-19 pandemic, and numerous state, local, federal and industry-initiated efforts have and may continue to affect our ability to collect rent or enforce remedies for the failure to pay rent, including, among others, limitations or prohibitions on evicting tenants unwilling or unable to pay rent and prohibitions on the ability to collect unpaid rent during certain timeframes.

Additionally, eviction moratoriums have passed in various formats at every level of government and while the Company strives to comply, given some of the conflicting standards and unclear requirements, strict compliance might be difficult.

Some residents’ views about their obligations to pay rent, even when financially capable of meeting their rent obligation, have shifted away from viewing rent as a primary and necessary financial obligation, and this shift may continue or worsen as a result of the eviction moratoriums and the various laws affecting our abilities to collect rent.

In the event of tenant nonpayment, default or bankruptcy, we may incur costs in protecting our investment and re-leasing our property, and have limited ability to renew existing leases or sign new leases at projected rents.

Our properties may also incur significant costs or losses related to legislative mandates, including shelter-in-place orders, business shut-downs, quarantines, infection or other related factors, which may result in a negative impact on our occupancy levels.

For example, many companies initially required, and now are continuing to allow or require, employees to “work from home” for an extended period of time, causing some tenants to move away from the urban centers temporarily or permanently.

Some businesses have been ordered to temporarily shut down, such as indoor dining, and many have permanently closed due to deteriorating economic conditions, which has contributed to the shuttering of some commercial spaces in downtown areas, and the temporary, or possibly permanent, deterioration of neighborhoods in and around some of our urban communities, which may be further worsened by increases in homelessness and crime as a result of the effects of the pandemic on some individuals and communities.

Moreover, we typically conduct aspects of our leasing activity on-site at our apartment communities.

Reductions in the ability and willingness of prospective residents to visit our communities due to the COVID-19 pandemic could reduce rental revenue and ancillary operating revenue produced by our properties.

Additionally, in connection with an outbreak that directly impacts one or more of our corporate offices or apartment communities, we may experience negative publicity and/or an unwillingness of prospective residents to visit or ultimately choose to live in our communities, which could directly affect our rental revenue.

In addition, we have incurred costs associated with protecting our employees and residents, including the purchase of personal protective equipment and disinfecting our properties, and those costs may continue to increase.

There may also be an increased risk of material litigation due to the effects of the COVID-19 pandemic, including litigation brought by our residents or employees.

To the extent our management or personnel are impacted in significant numbers by the COVID-19 pandemic and are not available or allowed to conduct work, our business and operating results may be negatively impacted.

Additionally, our corporate offices remain closed as we have instituted “work from home” measures for our corporate associates, which may impact productivity and our employees’ overall mental health.

Additionally, market fluctuations as a result of the COVID-19 pandemic may affect our ability to obtain necessary funds for our operations from current lenders or new borrowings.

We may be unable to obtain financing for the acquisition of investments or re-financing for existing assets on satisfactory terms, or at all.

In addition, moratoriums on construction and macro-economic factors have caused some construction delays and may cause construction contractors to be unable to perform and governmental inspections and approvals to be delayed or postponed, which may cause the delivery date of certain development projects or investments in third-party development projects to be materially extended.

Market fluctuations and construction delays experienced by the Company’s third-party mezzanine loan borrowers and preferred equity investment sponsors may also negatively impact their ability to repay the Company.

Further, while the Company carries general liability, pollution, and property insurance along with other insurance policies that may provide some coverage for any losses or costs incurred in connection with the COVID-19 pandemic, given the novelty of the issue and the scale of losses incurred throughout the world, there is no guarantee that we will be able to recover all or any portion of our losses and costs under these policies.

We may be additionally impacted by changes in legislation relating to insurance coverages with respect to the pandemic, including, but not limited to, workers’ compensation.

The occurrence of any of the foregoing events or any other related matters could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

The global impact of the COVID-19 pandemic continues to evolve rapidly, and the extent of its effect on our operational and financial performance will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration, scope and severity of the pandemic, the actions taken to contain or mitigate its impact, the timing of distribution and effectiveness of vaccines and the willingness and ability of the public to get vaccinated in a timely manner, and the direct and indirect economic effects of the pandemic and related containment measures, among others.

However, the COVID-19 pandemic presents material uncertainty and risk with respect to our business, financial condition and results of operations.

Moreover, to the extent any of these risks and uncertainties adversely impact us in the ways described above or otherwise, they may also have the effect of heightening many of the other risks set forth in this Annual Report on Form 10-K.

In addition, if in the future there is a further outbreak of COVID-19 or a variation thereof, an outbreak of another highly infectious or contagious disease or other health concern, the Company and our properties may be subject to similar risks as posed by COVID-19.

Uncertainty related to the unknown short- and long-term economic and behavioral impacts of the COVID-19 pandemic make forecasting rental rates and occupancies more difficult, and assets the Company acquires may not perform as expected.

In general, the representations and

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Essex is the sole general partner of the Operating Partnership and, as of December 31, [removed: 2019,] [added: 2020,] had an approximately 96.6% general partner interest in the Operating Partnership.

As of December 31, [removed: 2019,] [added: 2020,] the Company owned or had ownership interests in [removed: 250] [added: 246] operating apartment communities, comprising [removed: 60,570] [added: 60,272] apartment homes, excluding the Company's ownership in preferred equity co-investments, loan investments, one operating commercial building and a development pipeline comprised of [removed: five] [added: three] consolidated projects and [removed: two] [added: three] unconsolidated joint venture projects.

As of December 31, [removed: 2019,] [added: 2020,] the Company’s development pipeline was comprised of [removed: five] [added: three] consolidated projects under development, [removed: two] [added: three] unconsolidated joint venture projects under development, and various predevelopment projects aggregating [removed: 1,960] [added: 1,853] apartment homes, with total incurred costs of [removed: $1.0 billion,] [added: $948.0 million,] and estimated remaining project costs of approximately [removed: $222.0] [added: $174.0] million, [removed: $193.0] [added: $118.0] million of which represents the Company's estimated remaining costs, for total estimated project costs of [removed: $1.3] [added: $1.1] billion.

As of December 31, [removed: 2019,] [added: 2020,] the Company also had an ownership interest in one operating commercial building (totaling approximately [removed: 106,716] [added: 107,000] square feet).

By region, the Company's operating results for [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] and projection for [removed: 2020] [added: 2021] new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing), projection for [removed: 2020] [added: 2021] job growth, and [removed: 2020] [added: 2021] estimated Same-Property revenue [removed: growth] [added: decline] are as follows:

Southern California Region: As of December 31, [removed: 2019,] [added: 2020,] this region represented [removed: 45%] [added: 43%] of the Company’s consolidated operating apartment homes.

Revenues for [removed: "2019] [added: "2020] Same-Properties" (as defined below), or "Same-Property revenues," [removed: increased 3.0%] [added: decreased 4.4%] in [removed: 2019] [added: 2020] as compared to [removed: 2018.][added: 2019.]

In [removed: 2020,] [added: 2021,] the Company projects new residential supply of [removed: 31,400] [added: 26,500] apartment homes and single family homes, which represents [removed: 0.5%] [added: 0.4%] of the total housing stock.

Northern California Region: As of December 31, [removed: 2019,] [added: 2020,] this region represented [removed: 35%] [added: 37%] of the Company’s consolidated operating apartment homes.

In [removed: 2020,] [added: 2021,] the Company projects new residential supply of [removed: 17,950] [added: 16,800] apartment homes and single family homes, which represents [removed: 0.8%] [added: 0.7%] of the total housing stock.

Seattle Metro Region: As of December 31, [removed: 2019,] [added: 2020,] this region represented 20% of the Company’s consolidated operating apartment homes.

In [removed: 2020,] [added: 2021,] the Company projects new residential supply of [removed: 13,400] [added: 13,800] apartment homes and single family homes, which represents [removed: 1.0%] [added: 1.1%] of the total housing stock.

Same-Property operating expenses are projected to increase in [removed: 2020] [added: 2021] by [removed: 2.5%] [added: 2.0%] to [removed: 3.5%.][added: 3.0%.]

| | [added: | |] December 31, [removed: 2019] [added: 2020] | | | | | | [added: | | | | | |] December 31, [removed: 2018] [added: 2019] | | | | | [added: | | | |]

| | [added: | |] Apartment Homes | | | [added: | | |] % | | | [added: | | |] Apartment Homes | | | [added: | | |] % | | [added: |]

| Southern California | [removed: 22,674] | | [added: 22,560] | [removed: 45] | [added: | | | | 43 | |] % | | [added: | |] 22,674 | | | [removed: 46] | [added: | | 45 | |] % |

| Northern California | [removed: 17,556] | | [added: 19,319] | [removed: 35] | [added: | | | | 37 | |] % | | [removed: 16,136] | | [added: 17,556] | [removed: 33] | [added: | | | | 35 | |] % |

| Seattle Metro | [removed: 10,343] | | [added: 10,217] | [added: | | | | |] 20 | [added: |] % | | [removed: 10,238] | | [added: 10,343] | [removed: 21] | [added: | | | | 20 | |] % |

| Total | [removed: 50,573] | | [added: 52,096] | [added: | | | | |] 100 | [added: |] % | | [removed: 49,048] | | [added: 50,573] | [added: | | | | |] 100 | [added: |] % |

Co-investments, including Wesco I, Wesco III, Wesco IV, Wesco V, [removed: LLC, CPPIB,] BEXAEW, BEX II, BEX III, and BEX IV communities, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.

Comparison of Year [removed: Ended December] [added: Ended December] 31, [removed: 2019 to] [added: 2019 to] the Year [removed: Ended December] [added: Ended December] 31, 2018

The Company’s average financial occupancy for the Company’s stabilized apartment communities or [removed: "2019] [added: "2020] Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018)] [added: 2019)] decreased [removed: 10] [added: 60] basis points to [removed: 96.6%] [added: 96.0%] in [removed: 2019] [added: 2020] from [removed: 96.7%] [added: 96.6%] in [removed: 2018.][added: 2019.]

Financial occupancy is defined as the percentage resulting from dividing actual rental income by total [removed: potential] [added: scheduled] rental income.

Total [removed: potential] [added: scheduled] rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents.

The regional breakdown of the Company’s [removed: 2019] [added: 2020] Same-Property portfolio for financial occupancy for the years ended December 31, [removed: 2019] [added: 2020] and [removed: 2018] [added: 2019] is as follows:

| | [added: | |] Years [removed: ended December] [added: ended December] 31, | | | | | [added: | | | |]

| | [added: | | | | | 2020 | | | | | |] 2019 | | | [added: | | |] 2018 | | [added: |]

| Southern California | [removed: 96.6] | [added: | 96.0 | |] % | | [removed: 96.7] | [added: | 96.6 | |] % |

| Northern California | [removed: 96.7] | [added: | 96.1 | |] % | | [removed: 96.8] | [added: | 96.7 | |] % |

| Seattle Metro | [removed: 96.6] | [added: | 96.0 | |] % | | [removed: 96.5] | [added: | 96.6 | |] % |

The following table provides a breakdown of revenue amounts, including the revenues attributable to [removed: 2019] [added: 2020] Same-Properties.

| | | [added: | | | |] Number of Apartment | | | [added: | | |] Years [removed: Ended December] [added: Ended December] 31, | | | | | | | | [added: | | | |] Dollar | | | | [added: | |] Percentage | | [added: |]

| Property Revenues ($ in thousands) | | [added: | | | |] Homes | | | [removed: 2019] | | | [added: 2020] | [removed: 2018] | | | | [added: | 2019 | | | | | |] Change | | | | [added: | |] Change | | [added: |]

| [removed: 2019] [added: 2020] Same-Properties: | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

[removed: *2019* *Same-Property] [added: *2020 Same-Property] Revenues* [removed: increased] [added: decreased] by [removed: $45.4] [added: $52.0] million or [removed: 3.4%] [added: 3.9%] to [removed: $1.4] [added: $1.3] billion for [removed: 2019] [added: 2020] compared to $1.3 billion in [removed: 2018.][added: 2019.]

*Management and other fees from affiliates* increased by [removed: $0.3] [added: $0.1] million or [removed: 3.3%] [added: 1.1%] to [removed: $9.5] [added: $9.6] million in [removed: 2019] [added: 2020] from [removed: $9.2] [added: $9.5] million in [removed: 2018.][added: 2019.]

*Property operating expenses, excluding real estate taxes* increased by [removed: $8.7] [added: $22.0] million or [removed: 3.7%] [added: 9.1%] to [removed: $242.5] [added: $263.4] million in [removed: 2019] [added: 2020] compared to [removed: $233.8] [added: $241.4] million in [removed: 2018,] [added: 2019,] primarily due to an increase of [removed: $3.8] [added: $10.2] million in [added: maintenance and repairs expenses, an increase of $7.2 million in] utilities [removed: expenses as well as] [added: expenses, and] an increase of [removed: $3.2] [added: $4.7] million in administrative expenses.

[removed: 2019] [added: 2020] Same-Property operating expenses, excluding real estate taxes, increased by [removed: $6.5] [added: $7.8] million or [removed: 2.9%] [added: 3.5%] to [removed: $232.5] [added: $233.1] million in [removed: 2019] [added: 2020] compared to [removed: $226.0] [added: $225.3] million in [removed: 2018,] [added: 2019,] primarily due to increases of [removed: $2.7] [added: $5.5] million in [removed: both administrative] [added: maintenance and repairs] expenses [added: driven by COVID-19 related expenses] and [added: $3.2 million in] utilities [added: expenses, offset by a decrease of $1.4 million in administrative] expenses.

[removed: 2019] [added: 2020] Same-Property real estate taxes increased by [removed: $1.9] [added: $6.7] million or [removed: 1.3%] [added: 4.7%] to [removed: $145.3] [added: $148.6] million in [removed: 2019] [added: 2020] compared to [removed: $143.4] [added: $141.9] million in [removed: 2018] [added: 2019] primarily due to [removed: increases] [added: an increase] in property valuations [removed: in Southern] and [removed: Northern California, offset by favorable] tax [removed: assessments] [added: rates] in [removed: the] Seattle Metro region.

*Corporate-level property management expenses* increased by [removed: $1.8] [added: $0.5] million or [removed: 5.8%] [added: 1.5%] to [removed: $32.9] [added: $34.6] million in [removed: 2019] [added: 2020] compared to [removed: $31.1] [added: $34.1] million in [removed: 2018,] [added: 2019,] primarily due to an increase in corporate-level property management and staffing costs supporting the communities.

The Company projects an increase of 231,000 jobs or 3.1% in the Southern California region.

Same-Property revenues decreased 4.9% in 2020 as compared to 2019.

The Company projects an increase of 110,500 jobs or 3.4% in the Northern California region.

Same-Property revenues decreased 0.6% in 2020 as compared to 2019.

The Company projects an increase of 55,000 jobs or 3.3% in the Seattle Metro region.

In total, the Company projects a decrease in 2021 Same-Property revenues of between 1.5% to 3.5%.

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Current Material Development – the COVID-19 Pandemic

The United States and other countries around the world are continuing to experience an unprecedented health pandemic related to COVID-19, which has created considerable instability, disruption, and uncertainty.

Governmental authorities in impacted regions are taking dramatic and unpredictable actions in an effort to slow COVID-19’s spread.

Federal, state and local jurisdictions have issued and revised varying forms of "Shelter-in-Place" orders, halted or restricted public gatherings and restricted business to only those that are considered "essential" or requiring businesses to make changes to their operations in a manner that negatively affects profitability, resulting in extraordinary job losses and related financial impacts that will affect future operations to an unknown extent.

Moreover, eviction moratoriums and, laws that limit rent increases during times of emergency and prohibit the ability to collect unpaid rent during certain timeframes, have been enacted in various formats at various levels of government, including regions in which Essex's communities are located, impacting Essex properties.

The Company is working to comply with the stated intent of local, county, state and federal laws.

In that regard, the Company has implemented a wide range of practices to protect and support its employees and residents.

Such measures include:

- closing the Company's corporate offices and instituting “work from home” measures for corporate associates;

- closing leasing offices to non-Essex personnel, reducing on-site staff so that hygiene and “social distancing” standards can be effectively managed and applied, and requiring face coverings to be worn;

- transitioning most public interactions with leasing staff to on-line and telephonic communications;

- increasing cleaning practices for common areas and community amenities and temporarily closing common areas and community amenities or opening with limited hours, limited capacity or by reservation only, depending in part on jurisdictional requirements; and

- delaying the response to maintenance orders in certain circumstances in order to promote the protection of the Company's employees and residents.

Due to the COVID-19 pandemic, some of the Company's residents, their health, their employment, and, thus, their ability to pay rent, have been and may continue to be impacted.

To support residents, the Company has implemented the following steps, including, but not limited to:

- assembling a Resident Response Team to effectively and efficiently respond to resident needs and concerns with respect to the pandemic;

- structuring payment plans for residents who are unable to pay their rent as a result of the outbreak and waiving late fees for those residents; and

- establishing the Essex Cares fund for the purpose of supporting the Company’s residents and communities that are experiencing financial hardships caused by the COVID-19 pandemic.

The impact of the COVID-19 pandemic on the U.S. and world economies generally, and on the Company's results in particular, has been, and may continue to be significant.

The long-term impact will largely depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, when a vaccine can be safely and widely distributed and whether employees and employers will continue to promote remote work if and when the pandemic concludes.

This includes new information which may emerge concerning the severity of COVID-19, the success of actions taken to contain or treat

COVID-19, future laws that may be enacted, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.

Primarily as a result of the impact of the COVID-19 pandemic, the Company's cash delinquencies as a percentage of scheduled rental income for the Company’s stabilized apartment communities or "Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2020 and 2019) increased from 0.3% for 2019 to 2.5% for 2020.

The Company has executed some payment plans and will continue to work with residents to execute payment plans related to such cash delinquencies.

As part of this process, the Company assessed the collectability reserve attributable to those deferred payments and the anticipated execution of payment plans in the future, which partially mitigated the delinquencies resulting in actual delinquencies as a percentage of scheduled rent for the Company's Same-Property portfolio of 2.1% for the year ended December 31, 2020.

As of December 31, 2020, the increase in delinquencies has not had a material adverse impact to the Company's liquidity position.

The COVID-19 pandemic has not negatively impacted the Company's ability to access traditional funding sources on the same or reasonably similar terms as were available in recent periods prior to the pandemic, as demonstrated by the Company's financing activity during the year ended December 31, 2020 discussed in the “Liquidity and Capital Resources" section below.

The Company is not at material risk of not meeting the covenants in its credit agreements and is able to timely service its debt and other obligations.

| | | | 2020 | | | | | | 2019 | | |

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The Company projects an increase of 91,850 jobs or 1.2%, and an increase in 2020 Same-Property revenues of between 2.2% to 3.2% in 2020.

Same-Property revenues increased 3.8% in 2019 as compared to 2018.

The Company projects an increase of 72,350 jobs or 2.0%, and an increase in 2020 Same-Property revenues of between 2.6% to 3.6% in 2020.

Same-Property revenues increased 3.8% in 2019 as compared to 2018.

The

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Company projects an increase of 43,200 jobs or 2.4%, and an increase in 2020 Same-Property revenues of between 3.5% to 4.5% in 2020.

In total, the Company projects an increase in 2020 Same-Property revenues of between 2.6% to 3.6%, as renewal and new leases are signed at higher rents in 2020 than 2019.

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| Southern California | | 21,979 | | | $ | 590,943 | | | $ | 573,658 | | | $ | 17,285 | | | 3.0 | % |

| Northern California | | 15,685 | | | 530,970 | | | | 511,679 | | | | 19,291 | | | | 3.8 | % |

| Seattle Metro | | 10,238 | | | 245,398 | | | | 236,525 | | | | 8,873 | | | | 3.8 | % |

| Total 2019 Same-Property revenues | | 47,902 | | | 1,367,311 | | | | 1,321,862 | | | | 45,449 | | | | 3.4 | % |

| 2019 Non-Same Property Revenues | | | | | 83,317 | | | | 69,008 | | | | 14,309 | | | | 20.7 | % |

| Total property revenues | | | | | $ | 1,450,628 | | | $ | 1,390,870 | | | $ | 59,758 | | | 4.3 | % |

The increase was primarily attributable to an increase of 3.4% in average rental rates from $2,242 per apartment home for 2018 to $2,318 per apartment home for 2019.

*2019* *Non-Same Property Revenues* increased by $14.3 million or 20.7% to $83.3 million in 2019 compared to $69.0 million in 2018.

The increase was primarily due to revenues generated from One South Market, which was consolidated in March 2019, Brio, which was acquired in June 2019, Marquis, which was consolidated in December 2018, and Station Park Green - Phase I, a development community that began producing rental income during the first quarter of 2018.

These increases were partially offset by the sales of Domain in the second quarter of 2018 and 8th & Hope in the fourth quarter of 2018.

The increase is primarily due to the addition of The Courtyards at 65th Street, 777 Hamilton, and Velo and Ray communities to the Company's joint venture portfolio in 2019, offset slightly by the disposition of Mosso joint venture community in the fourth quarter of 2019.

*Real estate taxes* increased by $3.6 million or 2.4% to $155.2 million in 2019 compared to $151.6 million in 2018, primarily due to increases in property valuations in Southern and Northern California and property tax expenses for Brio, which was acquired in the second quarter of 2019, offset by favorable tax assessments in the Seattle Metro region.

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*Depreciation and amortization expense* increased by $3.9 million or 0.8% to $483.8 million in 2019 compared to $479.9 million in 2018, primarily due to the completion of the Station Park Green - Phase I development during the first and second quarters of 2018, consolidation of Marquis in the fourth quarter of 2018, consolidation of One South Market in the first quarter of 2019, and the acquisition of Brio in the second quarter of 2019.

The increase was partially offset by the sales of Domain in the second quarter of 2018 and 8th & Hope in the fourth quarter of 2018.

*Impairment loss* of $7.1 million in 2019 related to a consolidated CPPIB co-investment that owned land held for future development in Moorpark, CA.

The impairment charge resulted from the Company’s offer to acquire the joint venture partner’s 45% interest in the co-investment of the land parcel at an amount lower than the carrying value.

The Company's $61.9 million gain in 2018 was attributable to the sales of Domain in the second quarter of 2018 and 8th & Hope in the fourth quarter of 2018, which resulted in gains of $22.3 million and $39.6 million, respectively, for the Company.

Additionally, there was a $5.5 million increase in capitalized interest during 2019, which was due to an increase in development costs as compared to 2018.

*Total return swap income* of $8.4 million in 2019 consists of monthly settlements related to the Company's total return swap contracts that were entered into during 2015, in connection with issuing $257.3 million of fixed rate tax-exempt mortgage notes.

The decrease of $0.3 million or 3.4% from $8.7 million in 2018 was due to less favorable interest rates in 2019.

As of December 31, [removed: 2019,] [added: 2020,] the Company had entered into five interest rate swap contracts to mitigate the risk of changes in the interest-related cash outflows on $175.0 million of the unsecured term debt.

As of December 31, [removed: 2019,] [added: 2020,] the Company also had [removed: $255.4] [added: $225.1] million of secured variable rate indebtedness.

All of the Company’s interest rate swaps are designated as cash flow hedges as of December 31, [removed: 2019.][added: 2020.]

The following table summarizes the notional amount, carrying value, and estimated fair value of the Company’s cash flow hedge derivative instruments used to hedge interest rates as of December 31, [removed: 2019.][added: 2020.]

The table also includes a sensitivity analysis to demonstrate the impact on the Company’s derivative instruments from an increase or decrease in 10-year Treasury bill interest rates by 50 basis points, as of December 31, [removed: 2019.][added: 2020.]

| | | | | | | | | [added: | | | | | | | | | |] Carrying and | | | | [added: | |] Estimated Carrying Value | | | | | | | [added: | |]

| | | | | | | [added: | | | | | |] Maturity | | [added: | | | |] Estimated | | | | [added: | |] \+ 50 | | | | [added: | |] \- 50 | | |

| ($ in thousands) | | [added: | | | |] Notional Amount | | | | [added: | |] Date Range | | [added: | | | |] Fair Value | | | | [added: | |] Basis Points | | | | [added: | |] Basis Points | | |

| Cash flow hedges: | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

| Interest rate swaps | | [added: | | | |] $ | 175,000 | | | [added: | |] 2022 | | [added: | | | |] $ | [removed: 794] [added: (2,373)] | | | [added: | |] $ | [removed: 2,556] [added: (1,412)] | | | [added: | |] $ | [removed: 989] [added: (3,350)] | |

| Total cash flow hedges | | [added: | | | |] $ | 175,000 | | | [added: | |] 2022 | | [added: | | | |] $ | [removed: 794] [added: (2,373)] | | | [added: | |] $ | [removed: 2,556] [added: (1,412)] | | | [added: | |] $ | [removed: 989] [added: (3,350)] | |

Additionally, the Company has entered into total return swap contracts, with an aggregate notional amount of [removed: $255.4] [added: $254.8] million that effectively convert [removed: $255.4] [added: $225.1] million of fixed mortgage notes payable [added: and $29.7 million of mortgage notes payable related] to [added: real estate held for sale that is included in liabilities associated with real estate held for sale on the consolidated balance sheet to] a floating interest rate based on the SIFMA plus a spread and have a carrying value of zero at December 31, [removed: 2019.][added: 2020.]

Management has estimated the fair value of the Company’s [removed: $5.2] [added: $5.5] billion of fixed rate debt at December 31, [removed: 2019,] [added: 2020,] to be [removed: $5.4] [added: $6.0] billion.

Management has estimated the fair value of the Company’s [removed: $660.4] [added: $775.1] million of variable rate debt at December 31, [removed: 2019,] [added: 2020,] to be [removed: $655.8] [added: $770.1] million based on the terms of existing mortgage notes payable and variable rate demand notes compared to those available in the marketplace.

| | [added: | |] For the Years Ended December 31, | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| ($ in thousands, except for interest rates) | [removed: 2020] | | 2021 | | [added: | | | |] 2022 | | [added: | | | |] 2023 | | [added: | | | |] 2024 | | [added: | | | | 2025 | | | | | |] Thereafter | [added: | |] Total | | [added: | | | |] Fair value | [added: | |]

| Average interest rate | [removed: 5.8%] | | 4.3% | | [added: | | | |] 3.7% | | [added: | | | |] 3.7% | | [added: | | | |] 4.0% | | [removed: 3.7%] | | | | [added: 3.5% | | | | | | 3.3% | | | | | | | | | | | |]

[removed: | (1) | $175.0] [added: (1)$175.0] million is subject to interest rate protection agreements ($175.0 million is subject to interest rate swaps). [removed: $255.4 million is subject to total return swaps. |]

The table incorporates only those exposures that exist as of December 31, [removed: 2019;] [added: 2020;] it does not consider those exposures or positions that could arise after that date.

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| Fixed rate debt | | | $202,788 | | | | | | $42,408 | | | | | | $602,093 | | | | | | $402,177 | | | | | | $632,035 | | | | | | $3,634,849 | | | $5,516,350 | | | | | | $6,030,203 | | |

| Variable rate debt (1) | | | $713 | | | | | | $350,780 | | | | | | $200,852 | | | | | | $932 | | | | | | $1,019 | | | | | | $220,780 | | | $775,076 | | | | | | $770,075 | | |

| Average interest rate | | | 1.3% | | | | | | 1.8% | | | | | | 1.5% | | | | | | 1.3% | | | | | | 1.3% | | | | | | 1.1% | | | | | | | | | | | |

$225.1 million of variable rate debt in the table above excludes $29.7 million of variable rate debt related to real estate held for sale that is included in liabilities associated with real estate held for sale on the consolidated balance sheet and both amounts are subject to total return swaps.

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| Fixed rate debt | $287,405 | | $530,940 | | $342,408 | | $602,093 | | $402,177 | | $3,016,884 | $5,181,907 | | $5,410,106 |

| Variable rate debt (1) | $652 | | $713 | | $405,780 | | $852 | | $932 | | $251,499 | $660,428 | | $655,849 |

| Average interest rate | 2.4% | | 2.4% | | 2.7% | | 2.4% | | 2.4% | | 2.3% | | | |

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Essex is the sole general partner of the Operating Partnership and as of December 31, [removed: 2019,] [added: 2020,] had an approximately 96.6% general partnership interest in the Operating Partnership.

As of December 31, [removed: 2019,] [added: 2020,] the Company owned or had ownership interests in [removed: 250] [added: 246] operating apartment communities, aggregating [removed: 60,570] [added: 60,272] apartment homes, excluding the Company's ownership in preferred equity co-investments, loan investments, one operating commercial building, and a development pipeline comprised of [removed: five] [added: three] consolidated projects and [removed: two] [added: three] unconsolidated joint venture projects aggregating [removed: 1,960] [added: 1,853] apartment homes (collectively, the "Portfolio").

[removed: | • |] [added: -] Major metropolitan areas that have regional population in excess of one million; [removed: |]

[removed: | • |] [added: -] Constraints on new supply driven by: (i) low availability of developable land sites where competing housing could be economically built; (ii) political growth barriers, such as protected land, urban growth boundaries, and potential lengthy and expensive development permit processes; and (iii) natural limitations to development, such as mountains or waterways; [removed: |]

[removed: | • |] [added: -] Rental demand enhanced by affordability of rents relative to costs of for-sale housing; and [removed: |]

[removed: | • |] [added: -] Housing demand based on job growth, proximity to jobs, high median incomes and the quality of life including related commuting factors. [removed: |]

[added: The Company seeks to increase its portfolio] allocation in markets projected to have the strongest local economies and to decrease allocations in markets projected to have declining economic conditions.

[removed: | • |] [added: -] *Property Management* *–* Oversee delivery and quality of the housing provided to our tenants and manage the properties financial performance. [removed: |]

[removed: | • |] [added: -] *Capital Preservation –* The Company's asset management services are responsible for the planning, budgeting and completion of major capital improvement projects at the Company’s communities. [removed: |]

[removed: | • | *Business Planning and Control –* Comprehensive business plans are implemented in conjunction with significant investment decisions.] These plans include benchmarks for future financial performance based on collaborative discussions between on-site managers, the operations leadership team, and senior management. [removed: |]

[removed: | • |] [added: -] *Development and Redevelopment –* The Company focuses on acquiring and developing apartment communities in supply constrained markets, and redeveloping its existing communities to improve the financial and physical aspects of the Company’s communities. [removed: |]

| Property Name | | [added: | | | |] Location | | [added: | | | |] Apartment Homes | | | [added: | | |] Essex Ownership Percentage | | | [added: | | |] Ownership | | [added: | | | |] Quarter in [removed: 2019] [added: 2020] | | [added: | | | |] Purchase Price | | | [removed: |]

[removed: Generally,] [added: In general,] the Company seeks to [removed: have any] [added: offset the dilutive] impact [removed: of longer-term] [added: on long-term] earnings [removed: dilution resulting] [added: and funds] from [added: operations from] these dispositions [removed: offset by] [added: through] the positive impact [removed: from reinvesting] [added: of reinvestment of] proceeds.

As of December 31, [removed: 2019,] [added: 2020,] the Company's development pipeline was comprised of [removed: five] [added: three] consolidated projects under development and [removed: two] [added: three] unconsolidated joint venture projects under development aggregating [removed: 1,960] [added: 1,853] apartment homes, with total incurred costs of [removed: $1.0 billion,] [added: $948.0 million,] and estimated remaining project costs of approximately [removed: $222.0] [added: $174.0] million, [removed: $193.0] [added: $118.0] million of which represents the Company's estimated remaining costs, for total estimated project costs of [removed: $1.3] [added: $1.1] billion.

As of December 31, [removed: 2019,] [added: 2020,] the Company had various consolidated predevelopment projects.

| | | | | [added: | | | | | | | |] Essex | | [added: | | | |] Estimated | | | [added: | | |] Incurred | | | | [added: | |] Estimated | | |

| Development Pipeline | | [added: | | | |] Location | | [added: | | | |] Ownership% | | [added: | | | |] Apartment Homes | | | [added: | | |] Project Cost (1) | | | | [added: | |] Project Cost(1) | | |

| Development Projects - Consolidated | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Station Park Green - Phase [removed: II] [added: IV] | | [added: | | | |] San Mateo, CA | | [added: | | | |] 100% | | [removed: 199] | | | [removed: $] | [removed: 135] [added: 107] | | | [removed: $] | [removed: 141] | | [added: 66 | | | | | | 94 | | |]

| Mylo [removed: (2)] | | [added: | | | |] Santa Clara, CA | | [added: | | | |] 100% | | [added: | | | |] 476 | | | [removed: 197] | | | [added: 213] | [added: | | | | |] 226 | | |

| Wallace on Sunset [removed: (3)] [added: (2)] | | [added: | | | |] Hollywood, CA | | [added: | | | |] 100% | | [added: | | | |] 200 | | | [removed: 70] | | | [added: 97] | [removed: 105] | | | [added: | | 116 | | |]

| Total Development Projects - Consolidated | | | | | | [removed: 1,154] | | | [removed: 537] | | | | [removed: 700] | | | [added: | | 783 | | | | | | 376 | | | | | | 436 | | |]

| Development Projects - Joint Venture | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Patina at Midtown [removed: (4)] | | [added: | | | |] San Jose, CA | | [added: | | | |] 50% | | [added: | | | |] 269 | | | [removed: 115] | | | [added: 135] | [removed: 136] | | | [added: | | 148 | | |]

| 500 Folsom [removed: (5)] [added: (3)] | | [added: | | | |] San Francisco, CA | | [added: | | | |] 50% | | [added: | | | |] 537 | | | [removed: 377] | | | [added: 400] | [added: | | | | |] 415 | | |

| Total Development Projects - Joint Venture | | | | | | [removed: 806] | | | [removed: 492] | | | | [added: | | | | | 1,070 | | | | | |] 551 | | | [added: | | | 665 | | |]

| Predevelopment Projects - Consolidated | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | |]

| Other Projects | | [added: | | | |] Various | | [added: | | | |] 100% | | [added: | | | |] — | | | [removed: 20] | | | [added: 21] | [removed: 20] | | | [added: | | 21 | | |]

| Total - Consolidated Predevelopment Projects | | | | | | [added: | | | | | | | | | | | |] — | | | [removed: 20] | | | [added: 21] | [removed: 20] | | | [added: | | 21 | | |]

| Grand Total - Development and Predevelopment Pipeline | | | | | | [removed: 1,960] | | | [added: | | | | | | | | | 1,853 | | | | | |] $ | [removed: 1,049] [added: 948] | | | [added: | |] $ | [removed: 1,271] [added: 1,122] | |

[removed: | (1) | Includes] [added: (1)Includes] costs related to the entire project, including both the Company's and joint venture partners' costs. [removed: Includes incurred costs and estimated costs to complete these development projects. For predevelopment projects, only incurred costs are included in estimated costs. |]

[removed: | (5) | Estimated] [added: (3)Estimated] project cost for this development is net of a projected value for low-income housing tax credit proceeds and the value of the tax exempt bond structure. [removed: |]

The Company defines [removed: the] redevelopment [removed: pipeline] [added: communities] as existing properties owned or recently acquired, which have been targeted for additional investment by the Company with the expectation of increased financial returns through property improvement.

During redevelopment, apartment homes may not be available for rent and, as a result, [added: the related apartment community] may have less than stabilized operations.

As of December 31, [removed: 2019,] [added: 2020,] the Company had ownership interests in [removed: four] [added: three] major redevelopment communities aggregating [removed: 1,327] [added: 1,112] apartment homes with estimated redevelopment costs of [removed: $132.7] [added: $109.1] million, of which approximately [removed: $14.9] [added: $4.5] million remains to be expended.

During [removed: 2019,] [added: 2020,] the Company made regularly scheduled principal payments and loan payoffs of [removed: $951.6] [added: $316.2] million [removed: of] [added: to] its secured mortgage notes payable at an average interest rate of [removed: 4.2%.][added: 4.4%.]

In February [removed: 2019,] [added: 2020,] the [removed: Company] [added: Operating Partnership] issued [removed: $350.0] [added: $500.0] million of senior unsecured notes due on March [removed: 1, 2029,] [added: 15, 2032,] with a coupon rate of [removed: 4.000% per annum] [added: 2.650%] (the [removed: "2029] [added: "2032] Notes"), which are payable on March [removed: 1] [added: 15] and September [removed: 1] [added: 15] of each year, beginning on September [removed: 1, 2019.][added: 15, 2020.]

The [removed: 2029] [added: 2032] Notes were offered to investors at a price of [removed: 99.188%] [added: 99.628%] of [removed: the principal amount thereof.][added: par value.]

The [removed: 2029] Notes are general unsecured senior obligations of the Operating Partnership, rank equally in right of payment with all other senior [added: unsecured indebtedness of the Operating Partnership and are unconditionally guaranteed by Essex.]

These additional notes have substantially identical terms as the [removed: 2029] [added: 2032] Notes issued in February [removed: 2019.][added: 2020.]

The information contained on the Company's website shall not be deemed to be incorporated into this report.

- *Business Planning and Control –* Comprehensive business plans are implemented in conjunction with significant investment decisions.

Acquisitions are an important component of the Company’s business plan.

The table below summarizes acquisition activity for the year ended December 31, 2020 ($ in millions):

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| CPPIB Portfolio(1) | | | | | | Various | | | | | | 2,020 | | | | | | 100 | | % | | | | EPLP | | | | | | Q1 | | | | | | $ | 463.4 | |

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| Total 2020 | | | | | | | | | | | | 2,020 | | | | | | | | | | | | | | | | | | | | | | | | $ | 463.4 | |

(1)In January 2020, the Company purchased the joint venture partner's 45% membership interest in a land parcel and six communities representing 2,020 apartment homes based on a total valuation of approximately $1.0 billion.

In June 2020, the Company completed a portfolio sale which consisted of two apartment communities with 429 apartment homes, One South Market and Museum Park, both located in San Jose, CA, for a total contract price of $232.0 million, resulting in a gain of $16.6 million for the Company.

In July 2020, the Company sold Delano, a 126 apartment home community located in Redmond, WA, for a total contract price of $51.5 million.

The Company recognized a $22.7 million gain on sale.

In October 2020, the Company sold 416 on Broadway, a 115 apartment home community located in Glendale, CA, for a total contract price of $60.0 million.

The Company recognized a $25.7 million gain on sale.

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| Scripps Mesa Apartments (3) | | | | | | San Diego, CA | | | | | | 51% | | | | | | 264 | | | | | | 16 | | | | | | 102 | | |

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Includes incurred costs and estimated costs to complete these development projects.

For predevelopment projects, only incurred costs are included in estimated costs.

(2)Incurred and estimated project costs for this development is net of cost incurred on the adjacent theatre at the property.

The 2032 Notes are general

The Company used the net proceeds of this offering to repay indebtedness under its unsecured lines of credit, which had been used to fund the buyout of the Canada Pension Plan Investment Board's ("CPPIB" or "CPP") 45.0% joint venture interests, as well as repay $100.3 million of secured debt during the quarter that ended March 31, 2020.

In June 2020, the Operating Partnership issued an additional $150.0 million of the 2032 Notes at a price of 105.660% of par value, plus accrued interest from February 2020 up to, but not including, the date of delivery of the additional notes, with an effective yield of 2.093%.

In April 2020, the Company obtained a $200.0 million unsecured term loan with a one-year maturity and two 12-month extension options, exercisable at the Company’s option.

The unsecured term loan bears a variable interest rate of the London Interbank Offered Rate ("LIBOR") plus 1.20% and the proceeds were used to repay all remaining consolidated debt maturing in 2020.

In August 2020, the Operating Partnership issued $600.0 million of senior unsecured notes, consisting of $300.0 million aggregate principal amount due on January 15, 2031 with a coupon rate of 1.650% (the “2031 Notes”) and $300.0 million aggregate principal amount due on September 1, 2050 with a coupon rate of 2.650% (the “2050 Notes” and together with the 2031 Notes, the “Notes”).

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The Company seeks to increase its portfolio

[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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Acquisitions are an important component of the Company’s business plan, and during 2019, the Company acquired ownership interests in eight communities comprised of 2,007 apartment homes for a total contract price of $856.5 million.

The following is a summary of 2019 acquisitions ($ in millions):

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| One South Market(1) | | San Jose, CA | | 312 | | | 100 | % | | EPLP | | Q1 | | $ | 80.6 | | |

| Brio(2) | | Walnut Creek, CA | | 300 | | | N/A | | | EPLP | | Q2 | | 164.9 | | | (3) |

| The Courtyards at 65th Street | | Emeryville, CA | | 331 | | | 50 | % | | WESCO V | | Q3 | | 178.0 | | | (3) |

| 777 Hamilton | | Menlo Park, CA | | 195 | | | 50 | % | | BEX IV | | Q3 | | 148.0 | | | (3) |

| Township | | Redwood City, CA | | 132 | | | 100 | % | | EPLP | | Q3 | | 88.7 | | | |

| Velo and Ray | | Seattle, WA | | 308 | | | 50 | % | | WESCO V | | Q4 | | 133.0 | | | (3) |

| Pure Redmond | | Redmond, WA | | 105 | | | 100 | % | | EPLP | | Q4 | | 39.1 | | | |

| Hidden Valley(4) | | Simi Valley, CA | | 324 | | | 100 | % | | EPLP | | Q4 | | 24.2 | | | |

| Total 2019 | | | | 2,007 | | | | | | | | | | $ | 856.5 | | |

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| (1) | In March 2019, the Company purchased the joint venture partner's 45% membership interest in the One South Market co-investment based on an estimated property valuation of $179.0 million. In conjunction with the acquisition, $86.0 million of mortgage debt that encumbered the property was repaid. |

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| (2) | In June 2019, the Company acquired Brio for a total contract price of $164.9 million in a DownREIT transaction. As part of the acquisition, the Company assumed $98.7 million of mortgage debt in the community. |

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[removed: FORM 10-K][added: FORM 10-K]

For the fiscal year [removed: ended December] [added: ended December] 31, [removed: 2019][added: 2020]

[removed: Commission file number: 001-13106 (Essex] [added: 001-13106 (Essex] Property Trust, Inc.)

[removed: Commission file number: 333-44467-01 (Essex] [added: 333-44467-01 (Essex] Portfolio, L.P.)

| Maryland | | [added: | | | |] 77-0369576 | [added: | |]

| (Essex Property Trust, Inc.) | | [added: | | | |] (Essex Property Trust, Inc.) | [added: | |]

| California | | [added: | | | |] 77-0369575 | [added: | |]

| (Essex Portfolio, L.P.) | | [added: | | | |] (Essex Portfolio, L.P.) | [added: | |]

| (State or Other Jurisdiction of Incorporation or Organization) | | [added: | | | |] (I.R.S. Employer Identification Number) | [added: | |]

San [removed: Mateo, California 94403][added: Mateo, California 94403]

[removed: (650) 655-7800][added: (650) 655-7800]

| Title of each class | | [added: | | | |] Trading Symbol(s) | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| Common Stock, $.0001 par value (Essex Property Trust, Inc.) | | [added: | | | |] ESS | | [added: | | | |] New York Stock Exchange | [added: | |]

| Essex Property Trust, Inc. | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |] Essex Portfolio, L.P. | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |]

| Essex Property Trust, Inc. | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |] Essex Portfolio, L.P. | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |]

| Essex Property Trust, Inc. | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |] Essex Portfolio, L.P. | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |]

| Essex Property Trust, Inc. | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |] Essex Portfolio, L.P. | [added: | |] Yes | [added: | |] ☒ | [added: | |] No | [added: | |] ☐ | [added: | |]

| Large accelerated filer | [added: | |] ☒ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Non-accelerated filer | [added: | |] ☐ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | | | | [added: | | | | | | | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

| Large accelerated filer | [added: | |] ☐ | [added: | |] Accelerated filer | [added: | |] ☐ | [added: | |] Non-accelerated filer | [added: | |] ☒ | [added: | |] Smaller reporting company | [added: | |] ☐ | [added: | |]

| | | | | | | [added: | | | | | | | | | | | |] Emerging growth company | [added: | |] ☐ | [added: | |]

| Essex Property Trust, Inc. | [added: | |] ☐ | [added: | |] Essex Portfolio, L.P. | [added: | |] ☐ | [added: | |]

| Essex Property Trust, Inc. | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |] Essex Portfolio, L.P. | [added: | |] Yes | [added: | |] ☐ | [added: | |] No | [added: | |] ☒ | [added: | |]

As of June 30, [removed: 2019,] [added: 2020,] the aggregate market value of the voting stock held by non-affiliates of Essex Property Trust, Inc. was [removed: $19,060,937,030.][added: $14,874,979,309.]

As of February [removed: 18, 2020, 66,172,080] [added: 17, 2021, 64,994,503] shares of common stock ($.0001 par value) of Essex Property Trust, Inc. were outstanding.

Portions of the definitive Proxy Statement to be filed with the Securities and Exchange Commission (the "SEC") pursuant to Regulation 14A in connection with the [removed: 2020] [added: 2021] annual meeting of stockholders of Essex Property Trust, Inc. are incorporated by reference in Part III of this Annual Report on Form 10-K.

Such Proxy Statement will be filed with the SEC within 120 days of [added: December 31, 2020.]

This report combines the annual reports on Form 10-K for the year ended December 31, [removed: 2019] [added: 2020] of Essex Property Trust, Inc., a Maryland corporation, and Essex Portfolio, L.P., a Delaware limited partnership of which Essex Property Trust, Inc. is the sole general partner.

As of December 31, [removed: 2019,] [added: 2020,] Essex owned approximately 96.6% of the ownership interest in the Operating Partnership with the remaining 3.4% interest owned by limited partners.

[removed: | • |] [added: -] enhances investors' understanding of Essex and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business; [removed: |]

[removed: | • |] [added: -] eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the disclosure applies to both Essex and the Operating Partnership; and [removed: |]

[removed: | • |] [added: -] creates time and cost efficiencies through the preparation of one combined report instead of two separate reports. [removed: |]

[removed: 2019 ANNUAL] [added: 2020 ANNUAL] REPORT ON FORM 10-K

| Part I. | | [added: | | | |] Page | [added: | |]

| Item 1. | [removed: [Business](#s5414B510D5A55553A4B9C3114697BC17)] | [removed: [1](#s5414B510D5A55553A4B9C3114697BC17)] | [added: [Business](#i9e78b49d3c5c42cfa6fb60b4d7c56701_16) | | | [3](#i9e78b49d3c5c42cfa6fb60b4d7c56701_16) | | |]

| Item 1A. | [added: | |] [Risk [removed: Factors](#sBBF2EE31F3465BA396483E1CC1D601EB)] [added: Factors](#i9e78b49d3c5c42cfa6fb60b4d7c56701_19)] | [removed: [8](#sBBF2EE31F3465BA396483E1CC1D601EB)] | [added: | [11](#i9e78b49d3c5c42cfa6fb60b4d7c56701_19) | | |]

| Item 1B. | [added: | |] [Unresolved Staff [removed: Comments](#sD753B8570CD55BE0AE2B7D0EF8E3AF60)] [added: Comments](#i9e78b49d3c5c42cfa6fb60b4d7c56701_22)] | [removed: [29](#sD753B8570CD55BE0AE2B7D0EF8E3AF60)] | [added: | [32](#i9e78b49d3c5c42cfa6fb60b4d7c56701_22) | | |]

| Item 2. | [removed: [Properties](#s7817EB5DC13E5188BB3BDBD898BB4296)] | [removed: [30](#s7817EB5DC13E5188BB3BDBD898BB4296)] | [added: [Properties](#i9e78b49d3c5c42cfa6fb60b4d7c56701_25) | | | [33](#i9e78b49d3c5c42cfa6fb60b4d7c56701_25) | | |]

| Item 3. | [added: | |] [Legal [removed: Proceedings](#sFFB5EDFC1CC958058455EE56D9AF993C)] [added: Proceedings](#i9e78b49d3c5c42cfa6fb60b4d7c56701_28)] | [removed: [37](#sFFB5EDFC1CC958058455EE56D9AF993C)] | [added: | [40](#i9e78b49d3c5c42cfa6fb60b4d7c56701_28) | | |]

| Item 4. | [added: | |] [Mine Safety [removed: Disclosures](#s90C9D4BE60E45E02BD3E84D2C1401F50)] [added: Disclosures](#i9e78b49d3c5c42cfa6fb60b4d7c56701_31)] | [removed: [37](#s90C9D4BE60E45E02BD3E84D2C1401F50)] | [added: | [40](#i9e78b49d3c5c42cfa6fb60b4d7c56701_31) | | |]

(Commission File Number)

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| Essex Property Trust, Inc. | | | ☒ | | | | | | | | | | | | Essex Portfolio, L.P. | | | ☐ | | | | | | | | | | | |

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| [Signatures](#i9e78b49d3c5c42cfa6fb60b4d7c56701_250) | | | | | | [S-](#i9e78b49d3c5c42cfa6fb60b4d7c56701_250)[1](#i9e78b49d3c5c42cfa6fb60b4d7c56701_250) | | |

Risk Factors Summary

The following is a summary of the principal risks that could adversely affect our business, operating results, cash flows and financial conditions.

Risks Related to Our Real Estate Investments and Operations

- General real estate investment risks may adversely affect property income and values.

- Short-term leases expose us to the effects of declining market rents, and the Company may be unable to renew leases or relet units as leases expire.

- National and regional economic environments can negatively impact the Company’s liquidity and operating results.

Rent control, or other changes in applicable laws, or noncompliance with applicable laws, could adversely affect the Company's operations or expose us to liability.

- The current COVID-19 pandemic, or the future outbreak of other highly infectious or contagious diseases, and the timing and effectiveness of vaccine distribution, could materially and adversely affect our business, financial condition and results of operations.

- Acquisition of communities as well as development and redevelopment activities each involve various risks and may be delayed, not completed, and/or not achieve expected results.

- Our apartment communities may be subject to unknown or contingent liabilities which could cause us to incur substantial costs, including environmental liabilities or general uninsured losses.

- The geographic concentration of the Company’s communities and fluctuations in local markets may adversely impact the Company’s financial condition and operating results.

- The Company may experience various increased costs, including increased property taxes or costs associated with complying with legislation, to own and maintain its properties.

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December 31, 2019.

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[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

The Company’s portfolio as of December 31, [removed: 2019] [added: 2020] (including communities owned by unconsolidated joint ventures, but excluding communities underlying preferred equity investments) was comprised of [removed: 250] [added: 246] stabilized operating apartment communities (comprising [removed: 60,570] [added: 60,272] apartment homes), of which [removed: 26,695] [added: 26,581] apartment homes are located in Southern California, [removed: 21,642] [added: 21,584] apartment homes are located in Northern California, and [removed: 12,233] [added: 12,107] apartment homes are located in the Seattle metropolitan area.

The Company’s apartment communities accounted for [removed: 99.3%] [added: 99.4%] of the Company’s revenues for the year ended December 31, [removed: 2019.][added: 2020.]

As of December 31, [removed: 2019,] [added: 2020,] the Company’s communities include 103 garden-style, [removed: 137] [added: 134] mid-rise, and [removed: 10] [added: 9] high-rise communities.

The communities have an average of approximately [removed: 242] [added: 245] apartment homes, with a mix of studio, one-, two- and some three-bedroom apartment homes.

[removed: | • |] [added: -] located near employment centers; [removed: |]

[removed: | • |] [added: -] attractive communities that are well maintained; and [removed: |]

[removed: | • |] [added: -] proactive customer service. [removed: |]

The Company owns an office building with approximately [removed: 106,716] [added: 107,000] square feet located in Irvine, CA, of which the Company occupied approximately 14,000 square feet as of December 31, [removed: 2019.][added: 2020.]

Furthermore, as of December 31, [removed: 2019,] [added: 2020,] the office building's physical occupancy rate was [removed: 83%] [added: 100%] consisting of [removed: 6] [added: 7] tenants, including the Company.

The table below describes the Company’s operating portfolio as of December 31, [removed: 2019.][added: 2020.]

| | | | | | | [added: | | | | | | | | | | | |] Apartment | | | [added: | | |] Year | | [added: | | | |] Year | | | [added: | | | | | |]

| Communities (1) | | [added: | | | |] Location | | [added: | | | |] Type | | [added: | | | |] Homes | | | [added: | | |] Built | | [added: | | | |] Acquired | | [added: | | | |] Occupancy(2) | [added: | |]

| Southern California | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | |]

| Alpine Village | | [added: | | | |] Alpine, CA | | [added: | | | |] Garden | | [added: | | | |] 301 | | | [added: | | |] 1971 | | [added: | | | |] 2002 | | [removed: 97%] | [added: | | | 98% | | |]

| Anavia | | [added: | | | |] Anaheim, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 250 | | | [added: | | |] 2009 | | [added: | | | |] 2010 | | [added: | | | |] 97% | [added: | |]

| Barkley, The (3)(4) | | [added: | | | |] Anaheim, CA | | [added: | | | |] Garden | | [added: | | | |] 161 | | | [added: | | |] 1984 | | [added: | | | |] 2000 | | [removed: 97%] | [added: | | | 98% | | |]

| Park Viridian | | [added: | | | |] Anaheim, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 320 | | | [added: | | |] 2008 | | [added: | | | |] 2014 | | [added: | | | |] 97% | [added: | |]

| Bonita Cedars | | [added: | | | |] Bonita, CA | | [added: | | | |] Garden | | [added: | | | |] 120 | | | [added: | | |] 1983 | | [added: | | | |] 2002 | | [added: | | | |] 97% | [added: | |]

| Village at Toluca Lake (5) | | [added: | | | |] Burbank, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 145 | | | [added: | | |] 1974 | | [added: | | | |] 2017 | | [removed: 96%] | [added: | | | 95% | | |]

| Camarillo Oaks | | [added: | | | |] Camarillo, CA | | [added: | | | |] Garden | | [added: | | | |] 564 | | | [added: | | |] 1985 | | [added: | | | |] 1996 | | [added: | | | |] 97% | [added: | |]

| Camino Ruiz Square | | [added: | | | |] Camarillo, CA | | [added: | | | |] Garden | | [added: | | | |] 159 | | | [added: | | |] 1990 | | [added: | | | |] 2006 | | [removed: 97%] | [added: | | | 98% | | |]

| Pinnacle at Otay Ranch I & II | | [added: | | | |] Chula Vista, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 364 | | | [added: | | |] 2001 | | [added: | | | |] 2014 | | [removed: 96%] | [added: | | | 98% | | |]

| Mesa Village | | [added: | | | |] Clairemont, CA | | [added: | | | |] Garden | | [added: | | | |] 133 | | | [added: | | |] 1963 | | [added: | | | |] 2002 | | [removed: 98%] | [added: | | | 96% | | |]

| Villa Siena | | [added: | | | |] Costa Mesa, CA | | [added: | | | |] Garden | | [added: | | | |] 272 | | | [added: | | |] 1974 | | [added: | | | |] 2014 | | [added: | | | |] 96% | [added: | |]

| Emerald Pointe | | [added: | | | |] Diamond Bar, CA | | [added: | | | |] Garden | | [added: | | | |] 160 | | | [added: | | |] 1989 | | [added: | | | |] 2014 | | [added: | | | |] 98% | [added: | |]

| Regency at Encino | | [added: | | | |] Encino, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 75 | | | [added: | | |] 1989 | | [added: | | | |] 2009 | | [removed: 97%] | [added: | | | 94% | | |]

| The Havens (6) | | [added: | | | |] Fountain Valley, CA | | [added: | | | |] Garden | | [added: | | | |] 440 | | | [added: | | |] 1969 | | [added: | | | |] 2014 | | [added: | | | |] 96% | [added: | |]

| Valley Park | | [added: | | | |] Fountain Valley, CA | | [added: | | | |] Garden | | [added: | | | |] 160 | | | [added: | | |] 1969 | | [added: | | | |] 2001 | | [removed: 97%] | [added: | | | 98% | | |]

| Capri at Sunny Hills (4) | | [added: | | | |] Fullerton, CA | | [added: | | | |] Garden | | [added: | | | |] 102 | | | [added: | | |] 1961 | | [added: | | | |] 2001 | | [removed: 96%] | [added: | | | 97% | | |]

| Haver Hill (7) | | [added: | | | |] Fullerton, CA | | [added: | | | |] Garden | | [added: | | | |] 264 | | | [added: | | |] 1973 | | [added: | | | |] 2012 | | [added: | | | |] 97% | [added: | |]

| Pinnacle at Fullerton | | [added: | | | |] Fullerton, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 192 | | | [added: | | |] 2004 | | [added: | | | |] 2014 | | [added: | | | |] 96% | [added: | |]

| Wilshire Promenade | | [added: | | | |] Fullerton, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 149 | | | [added: | | |] 1992 | | [added: | | | |] 1997 | | [removed: 97%] | [added: | | | 95% | | |]

| Montejo Apartments | | [added: | | | |] Garden Grove, CA | | [added: | | | |] Garden | | [added: | | | |] 124 | | | [added: | | |] 1974 | | [added: | | | |] 2001 | | [added: | | | |] 98% | [added: | |]

| The Henley I | | [added: | | | |] Glendale, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 83 | | | [added: | | |] 1974 | | [added: | | | |] 1999 | | [removed: 97%] | [added: | | | 95% | | |]

| The Henley II | | [added: | | | |] Glendale, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 132 | | | [added: | | |] 1970 | | [added: | | | |] 1999 | | [removed: 97%] | [added: | | | 95% | | |]

| CBC and The Sweeps | | [added: | | | |] Goleta, CA | | [added: | | | |] Garden | | [added: | | | |] 239 | | | [added: | | |] 1962 | | [added: | | | |] 2006 | | [removed: 98%] | [added: | | | 92% | | |]

| Devonshire | | [added: | | | |] Hemet, CA | | [added: | | | |] Garden | | [added: | | | |] 276 | | | [added: | | |] 1988 | | [added: | | | |] 2002 | | [removed: 97%] | [added: | | | 98% | | |]

| Huntington Breakers | | [added: | | | |] Huntington Beach, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 342 | | | [added: | | |] 1984 | | [added: | | | |] 1997 | | [added: | | | |] 97% | [added: | |]

| The Huntington | | [added: | | | |] Huntington Beach, CA | | [added: | | | |] Garden | | [added: | | | |] 276 | | | [added: | | |] 1975 | | [added: | | | |] 2012 | | [added: | | | |] 96% | [added: | |]

| Axis 2300 | | [added: | | | |] Irvine, CA | | [added: | | | |] Mid-rise | | [added: | | | |] 115 | | | [added: | | |] 2010 | | [added: | | | |] 2010 | | [removed: 97%] | [added: | | | 96% | | |]

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | 26,581 | | | | | | | | | | | | | | | | | | 96% | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | 21,584 | | | | | | | | | | | | | | | | | | 96% | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | 12,107 | | | | | | | | | | | | | | | | | | 96% | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

For an explanation of how financial occupancy is calculated, see "Occupancy Rates" in this Item 2.

(5)This community is owned by BEX III, LLC ("BEX III").

(6)This community is owned by BEXAEW.

(7)This community is owned by Wesco III, LLC ("Wesco III").

(8)This community is owned by BEX II, LLC ("BEX II").

(9)This community is owned by Wesco I, LLC ("Wesco I").

(15)This community is owned by Wesco V, LLC ("Wesco V").

(16)This community is owned by BEX IV, LLC ("BEX IV").

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[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| 416 on Broadway | | Glendale, CA | | Mid-rise | | 115 | | | 2009 | | 2010 | | 97% |

[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | | | | | | 26,695 | | | | | | | 97% |

[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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| One South Market (19) | | San Jose, CA | | High-rise | | 312 | | | 2015 | | 2015 | | 96% |

| Palm Valley | | San Jose, CA | | Mid-rise | | 1,099 | | | 2008 | | 2014 | | 97% |

[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | | | | | | 21,642 | | | | | | | 96% |

| Delano | | Redmond, WA | | Mid-rise | | 126 | | | 2005 | | 2011 | | 97% |

[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

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| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | |

| | | | | | | 12,233 | | | | | | | 97% |

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[*Table of Contents*](#sAA0656F3DF2D5C48A16A28F9C5E99809)

The approximate number of holders of record of the shares of Essex's common stock was [removed: 1,248] [added: 1,191] as of February [removed: 18, 2020.][added: 17, 2021.]

As of February [removed: 18, 2020,] [added: 17, 2021,] there were [removed: 65] [added: 67] holders of record of OP Units, including Essex.