Item 1. Condensed Consolidated Financial Statements

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Item 1. Condensed Consolidated Financial Statements

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except share amounts)


	March 31, 2026		December 31, 2025
ASSETS
Real estate investments:
Rental properties:
Land and land improvements	$	3,363,169	$	3,363,169
Buildings and improvements	15,121,705		15,073,416
	18,484,874		18,436,585
Less: accumulated depreciation	(6,684,573)		(6,532,003)
	11,800,301		11,904,582
Real estate under development	159,515		157,122
Co-investments	649,313		630,550

	12,609,129		12,692,254
Cash and cash equivalents-unrestricted	38,005		76,241
Cash and cash equivalents-restricted	9,405		9,345
Marketable securities	96,521		98,070
Notes and other receivables, net of allowance for credit losses of $0.6 million as of March 31, 2026 and December 31, 2025, respectively	201,982		141,591
Operating lease right-of-use assets	49,957		50,833
Prepaid expenses and other assets	90,488		90,675
Total assets	$	13,095,487	$	13,159,009
LIABILITIES AND EQUITY
Unsecured debt, net	$	6,017,550	$	6,015,921
Mortgage notes payable, net	784,286		784,348
Lines of credit and commercial paper	4,660		—
Accounts payable and accrued liabilities	254,843		221,351
Construction payable	31,205		24,743
Dividends payable	174,601		173,698
Distributions in excess of investments in co-investments	99,316		98,837

Operating lease liabilities	50,531		51,487
Other liabilities	51,351		51,729
Total liabilities	7,468,343		7,422,114
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest	25,788		28,263
Equity:
Common stock; $0.0001 par value, 670,000,000 shares authorized; 64,309,677 and 64,442,290 shares issued and outstanding, respectively	6		6
Additional paid-in capital	6,638,007		6,683,514
Distributions in excess of accumulated earnings	(1,208,590)		(1,148,195)
Accumulated other comprehensive income, net	6,164		6,047
Total stockholders’ equity	5,435,587		5,541,372
Noncontrolling interest	165,769		167,260
Total equity	5,601,356		5,708,632
Total liabilities and equity	$	13,095,487	$	13,159,009

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended March 31,
	2026		2025
Revenues:
Rental and other property	$	482,443	$	462,089
Management and other fees from affiliates	2,313		2,494
	484,756		464,583
Expenses:
Property operating, excluding real estate taxes	89,131		86,027
Real estate taxes	52,125		52,594
Corporate-level property management expenses	13,398		12,332
Depreciation and amortization	154,895		151,287
General and administrative	20,014		16,292


	329,563		318,532
Gain on sale of real estate and land	—		111,030
Earnings from operations	155,193		257,081
Interest expense	(65,564)		(62,732)
Total return swap income	1,542		1,200
Interest and other income	1,036		4,289
Equity income from co-investments	23,615		13,209
Tax (expense) benefit on unconsolidated technology co-investments	(3,614)		163
Loss on early retirement of debt	—		(762)
Gain on remeasurement of co-investment	—		330
Net income	112,208		212,778
Net income attributable to noncontrolling interest	(6,022)		(9,668)
Net income available to common stockholders	$	106,186	$	203,110
Comprehensive income	$	112,329	$	203,423
Comprehensive income attributable to noncontrolling interest	(6,026)		(9,348)
Comprehensive income attributable to controlling interest	$	106,303	$	194,075
Per share data:
Basic:
Net income available to common stockholders	$	1.65	$	3.16
Weighted average number of shares outstanding during the period	64,454,912		64,314,899
Diluted:
Net income available to common stockholders	$	1.65	$	3.16
Weighted average number of shares outstanding during the period	64,461,621		64,349,899

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Equity for the three months ended March 31, 2026 and 2025

(Unaudited)

(In thousands, except per share amounts)


	Common stock		Additional paid-in capital		Distributions in excess of accumulated earnings		Accumulated other comprehensive income, net		Noncontrolling interest		Total
Three Months Ended March 31, 2026		Shares	Amount
Balances at December 31, 2025		64,442	$	6	$	6,683,514	$	(1,148,195)	$	6,047	$	167,260	$	5,708,632
Net income		—	—		—		106,186		—		6,022		112,208
Reversal of unrealized gains upon the sale of marketable debt securities, net		—	—		—		—		(13)		—		(13)
Change in fair value of derivatives and amortization of swap settlements		—	—		—		—		346		12		358
Change in fair value of marketable debt securities, net		—	—		—		—		(216)		(8)		(224)
Issuance of common stock under:
Stock option and restricted stock plans, net		7	—		(219)		—		—		—		(219)

Equity based compensation costs		—	—		2,851		—		—		99		2,950
Retirement of common stock, net		(206)	—		(50,213)		—		—		—		(50,213)

Changes in the redemption value and redemptions of redeemable noncontrolling interest		67	—		2,324		—		—		151		2,475
Changes in noncontrolling interest from acquisition		—	—		(250)		—		—		250		—
Distributions to noncontrolling interest		—	—		—		—		—		(8,017)		(8,017)

Common stock dividends ($2.59 per share)		—	—		—		(166,581)		—		—		(166,581)
Balances at March 31, 2026		64,310	$	6	$	6,638,007	$	(1,208,590)	$	6,164	$	165,769	$	5,601,356

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	Common stock		Additional paid-in capital		Distributions in excess of accumulated earnings		Accumulated other comprehensive income, net		Noncontrolling Interest		Total
Three Months Ended March 31, 2025		Shares	Amount
Balances at December 31, 2024		64,280	$	6	$	6,668,047	$	(1,155,662)	$	24,655	$	183,344	$	5,720,390
Net income		—	—		—		203,110		—		9,668		212,778
Change in fair value of derivatives and amortization of swap settlements		—	—		—		—		(9,051)		(321)		(9,372)
Change in fair value of marketable debt securities, net		—	—		—		—		16		1		17
Issuance of common stock under:
Stock option and restricted stock plans, net		30	—		5,509		—		—		—		5,509

Equity based compensation costs		—	—		1,985		—		—		70		2,055

Changes in the redemption value of redeemable noncontrolling interest		—	—		(3,175)		—		—		(352)		(3,527)

Distributions to noncontrolling interest		—	—		—		—		—		(8,300)		(8,300)
Redemptions of noncontrolling interest		48	—		(20)		—		—		(8,536)		(8,556)
Common stock dividends ($2.57 per share)		—	—		—		(165,419)		—		—		(165,419)
Balances at March 31, 2025		64,358	$	6	$	6,672,346	$	(1,117,971)	$	15,620	$	175,574	$	5,745,575

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	112,208	$	212,778
Adjustments to reconcile net income to net cash provided by operating activities:
Straight-lined rents	175		529
Depreciation and amortization	154,895		151,287

Amortization of discount and debt financing costs, net	2,657		220
Realized and unrealized gains on marketable securities, net	1,726		91

Provision for credit losses	34		(3)


Equity income from co-investments	(23,615)		(13,209)
Operating distributions from co-investments	4,971		13,709
Accrued interest from notes and other receivables	(1,260)		(2,593)

Gain on the sale of real estate and land	—		(111,030)



Equity-based compensation	2,646		1,958
Loss on early retirement of debt	—		762
Gain on remeasurement of co-investment	—		(330)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets and other assets	574		2,996
Accounts payable, accrued liabilities and operating lease liabilities	32,536		25,385
Other liabilities	(378)		(1,047)
Net cash provided by operating activities	287,169		281,503
Cash flows from investing activities:
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(2,060)		(345,211)
Redevelopment	(8,856)		(12,046)
Development acquisitions of and additions to real estate under development	(14,144)		(7,856)
Capital expenditures on rental properties	(19,788)		(27,914)

Investments in notes receivable	(59,500)		—
Collections of notes and other receivables	—		3,096
Proceeds from insurance for property losses	938		848
Proceeds from dispositions of real estate	—		125,997
Contributions to co-investments	(1,329)		(3,934)

Changes in refundable deposits	—		(2,000)
Purchases of marketable securities	(10,319)		(6,306)
Sales and maturities of marketable securities	9,905		13
Non-operating distributions from co-investments	—		8,000
Net cash used in investing activities	(105,153)		(267,313)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	—		398,416
Payments on unsecured debt and mortgage notes	(270)		(70,362)
Proceeds from lines of credit and commercial paper	217,737		550,897
Repayments of lines of credit and commercial paper	(213,077)		(688,842)

Retirement of common stock	(50,213)		—

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	Three Months Ended March 31,
	2026		2025
Additions to deferred charges	(455)		(3,055)
Payments related to debt prepayment penalties	—		(697)


Net proceeds from stock options exercised	586		6,028
Payments related to tax withholding for share-based compensation	(805)		(519)

Distributions to noncontrolling interest	(8,079)		(7,998)
Redemption of noncontrolling interest	—		(8,556)

Common stock dividends paid	(165,616)		(157,486)
Net cash (used in) provided by financing activities	(220,192)		17,826
Net (decrease) increase in unrestricted and restricted cash and cash equivalents	(38,176)		32,016
Unrestricted and restricted cash and cash equivalents at beginning of period	85,586		75,846
Unrestricted and restricted cash and cash equivalents at end of period	$	47,410	$	107,862

Supplemental disclosure of cash flow information:
Cash paid for interest (net of $1.3 million and $0.7 million capitalized in 2026 and 2025, respectively)	$	60,548	$	61,250
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,605	$	1,713
Supplemental disclosure of noncash investing and financing activities:
Issuance of Operating Partnership units for contributed properties	$	250	$	—


Redemption of preferred equity investments upon acquisition of consolidated co-investments	$	—	$	94,669







Reclassifications to redeemable noncontrolling interest from additional paid in capital and noncontrolling interest	$	1,898	$	3,527

Leased assets obtained in exchange for new operating lease liabilities	$	—	$	2,727

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except unit amounts)


	March 31, 2026		December 31, 2025
ASSETS
Real estate investments:
Rental properties:
Land and land improvements	$	3,363,169	$	3,363,169
Buildings and improvements	15,121,705		15,073,416
	18,484,874		18,436,585
Less: accumulated depreciation	(6,684,573)		(6,532,003)
	11,800,301		11,904,582
Real estate under development	159,515		157,122
Co-investments	649,313		630,550

	12,609,129		12,692,254
Cash and cash equivalents-unrestricted	38,005		76,241
Cash and cash equivalents-restricted	9,405		9,345
Marketable securities	96,521		98,070
Notes and other receivables, net of allowance for credit losses of $0.6 million as of March 31, 2026 and December 31, 2025, respectively	201,982		141,591
Operating lease right-of-use assets	49,957		50,833
Prepaid expenses and other assets	90,488		90,675
Total assets	$	13,095,487	$	13,159,009
LIABILITIES AND CAPITAL
Unsecured debt, net	$	6,017,550	$	6,015,921
Mortgage notes payable, net	784,286		784,348
Lines of credit and commercial paper	4,660		—
Accounts payable and accrued liabilities	254,843		221,351
Construction payable	31,205		24,743
Distributions payable	174,601		173,698
Distributions in excess of investments in co-investments	99,316		98,837

Operating lease liabilities	50,531		51,487
Other liabilities	51,351		51,729
Total liabilities	7,468,343		7,422,114
Commitments and contingencies (Note 11)
Redeemable noncontrolling interest	25,788		28,263

Capital:
General Partner:
Common equity (64,309,677 and 64,442,290 units issued and outstanding, respectively)	5,429,423		5,535,325
	5,429,423		5,535,325
Limited Partners:
Common equity (2,184,025 and 2,250,339 units issued and outstanding, respectively)	60,396		61,876
Accumulated other comprehensive income, net	10,259		10,138
Total partners’ capital	5,500,078		5,607,339
Noncontrolling interest	101,278		101,293
Total capital	5,601,356		5,708,632
Total liabilities and capital	$	13,095,487	$	13,159,009

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Income and Comprehensive Income

(Unaudited)

(In thousands, except unit and per unit amounts)


	Three Months Ended March 31,
	2026		2025
Revenues:
Rental and other property	$	482,443	$	462,089
Management and other fees from affiliates	2,313		2,494
	484,756		464,583
Expenses:
Property operating, excluding real estate taxes	89,131		86,027
Real estate taxes	52,125		52,594
Corporate-level property management expenses	13,398		12,332
Depreciation and amortization	154,895		151,287
General and administrative	20,014		16,292


	329,563		318,532
Gain on sale of real estate and land	—		111,030
Earnings from operations	155,193		257,081
Interest expense	(65,564)		(62,732)
Total return swap income	1,542		1,200
Interest and other income	1,036		4,289
Equity income from co-investments	23,615		13,209
Tax (expense) benefit on unconsolidated technology co-investments	(3,614)		163
Loss on early retirement of debt	—		(762)
Gain on remeasurement of co-investment	—		330
Net income	112,208		212,778
Net income attributable to noncontrolling interest	(2,353)		(2,389)
Net income available to common unitholders	$	109,855	$	210,389
Comprehensive income	$	112,329	$	203,423
Comprehensive income attributable to noncontrolling interest	(2,353)		(2,389)
Comprehensive income attributable to controlling interest	$	109,976	$	201,034
Per unit data:
Basic:
Net income available to common unitholders	$	1.65	$	3.16
Weighted average number of common units outstanding during the period	66,681,908		66,621,852
Diluted:
Net income available to common unitholders	$	1.65	$	3.16
Weighted average number of common units outstanding during the period	66,688,617		66,656,852

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Capital for the three months ended March 31, 2026 and 2025

(Unaudited)

(In thousands, except per unit amounts)


	General Partner				Limited Partners				Accumulated other comprehensive income, net		Noncontrolling interest		Total
	Common Equity				Common Equity
Three Months Ended March 31, 2026	Units	Amount		Units		Amount
Balances at December 31, 2025	64,442	$	5,535,325		2,250		$	61,876	$	10,138	$	101,293	$	5,708,632
Net income	—	106,186			—		3,669		—		2,353		112,208
Reversal of unrealized gains upon the sale of marketable debt securities, net	—	—			—		—		(13)		—		(13)

Change in fair value of derivatives and amortization of swap settlements	—	—			—		—		358		—		358
Change in fair value of marketable debt securities, net	—	—			—		—		(224)		—		(224)
Issuance of common units under:
General partner’s stock based compensation, net	7	(219)			—		—		—		—		(219)

Equity based compensation costs	—	2,851			—		99		—		—		2,950
Retirement of common units, net	(206)	(50,213)			—		—		—		—		(50,213)
Changes in the redemption value and redemptions of redeemable noncontrolling interest	67	2,324			(67)		160		—		(9)		2,475
Changes in noncontrolling interest from acquisition	—	(250)			1		250		—		—		—
Distributions to noncontrolling interest	—	—			—		—		—		(2,359)		(2,359)

Distributions declared ($2.59 per unit)	—	(166,581)			—		(5,658)		—		—		(172,239)
Balances at March 31, 2026	64,310	$	5,429,423		2,184		$	60,396	$	10,259	$	101,278	$	5,601,356

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	General Partner				Limited Partners				Accumulated other comprehensive income, net		Noncontrolling interest		Total
	Common Equity				Common Equity
Three Months Ended March 31, 2025	Units	Amount		Units		Amount
Balances at December 31, 2024	64,280	$	5,512,391		2,331		$	73,418	$	29,429	$	105,152	$	5,720,390
Net income	—	203,110			—		7,279		—		2,389		212,778
Change in fair value of derivatives and amortization of swap settlements	—	—			—		—		(9,372)		—		(9,372)
Change in fair value of marketable debt securities	—	—			—		—		17		—		17
Issuance of common units under:
General partner's stock based compensation, net	30	5,509			—		—		—		—		5,509

Equity based compensation costs	—	1,985			—		70		—		—		2,055

Changes in the redemption value of redeemable noncontrolling interest	—	(3,175)			—		(219)		—		(133)		(3,527)

Distributions to noncontrolling interest	—	—			—		—		—		(2,431)		(2,431)
Redemptions	48	(20)			(48)		(5,026)		—		(3,510)		(8,556)
Distributions declared ($2.57 per unit)	—	(165,419)			—		(5,869)		—		—		(171,288)
Balances at March 31, 2025	64,358	$	5,554,381		2,283		$	69,653	$	20,074	$	101,467	$	5,745,575

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Three Months Ended March 31,
	2026		2025
Cash flows from operating activities:
Net income	$	112,208	$	212,778
Adjustments to reconcile net income to net cash provided by operating activities:
Straight-lined rents	175		529
Depreciation and amortization	154,895		151,287

Amortization of discount and debt financing costs, net	2,657		220
Realized and unrealized gains on marketable securities, net	1,726		91

Provision for credit losses	34		(3)


Equity income from co-investments	(23,615)		(13,209)
Operating distributions from co-investments	4,971		13,709
Accrued interest from notes and other receivables	(1,260)		(2,593)

Gain on the sale of real estate and land	—		(111,030)



Equity-based compensation	2,646		1,958
Loss on early retirement of debt	—		762
Gain on remeasurement of co-investment	—		(330)
Changes in operating assets and liabilities:
Prepaid expenses, receivables, operating lease right-of-use assets and other assets	574		2,996
Accounts payable, accrued liabilities and operating lease liabilities	32,536		25,385
Other liabilities	(378)		(1,047)
Net cash provided by operating activities	287,169		281,503
Cash flows from investing activities:
Additions to real estate:
Acquisitions of real estate and acquisition related capital expenditures, net of cash acquired	(2,060)		(345,211)
Redevelopment	(8,856)		(12,046)
Development acquisitions of and additions to real estate under development	(14,144)		(7,856)
Capital expenditures on rental properties	(19,788)		(27,914)

Investments in notes receivable	(59,500)		—
Collections of notes and other receivables	—		3,096
Proceeds from insurance for property losses	938		848
Proceeds from dispositions of real estate	—		125,997
Contributions to co-investments	(1,329)		(3,934)
Changes in refundable deposits	—		(2,000)
Purchases of marketable securities	(10,319)		(6,306)
Sales and maturities of marketable securities	9,905		13
Non-operating distributions from co-investments	—		8,000
Net cash used in investing activities	(105,153)		(267,313)
Cash flows from financing activities:
Proceeds from unsecured debt and mortgage notes	—		398,416
Payments on unsecured debt and mortgage notes	(270)		(70,362)
Proceeds from lines of credit and commercial paper	217,737		550,897
Repayments of lines of credit and commercial paper	(213,077)		(688,842)

Retirement of common units	(50,213)		—
Additions to deferred charges	(455)		(3,055)

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	Three Months Ended March 31,
	2026		2025
Payments related to debt prepayment penalties	—		(697)


Net proceeds from stock options exercised	586		6,028
Payments related to tax withholding for share-based compensation	(805)		(519)

Distributions to noncontrolling interest	(2,294)		(2,333)
Redemption of noncontrolling interests	—		(8,556)

Common units distributions paid	(171,401)		(163,151)
Net cash (used in) provided by financing activities	(220,192)		17,826
Net (decrease) increase in unrestricted and restricted cash and cash equivalents	(38,176)		32,016
Unrestricted and restricted cash and cash equivalents at beginning of period	85,586		75,846
Unrestricted and restricted cash and cash equivalents at end of period	$	47,410	$	107,862

Supplemental disclosure of cash flow information:
Cash paid for interest (net of $1.3 million and $0.7 million capitalized in 2026 and 2025, respectively)	$	60,548	$	61,250
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	1,605	$	1,713
Supplemental disclosure of noncash investing and financing activities:
Issuance of Operating Partnership units for contributed properties	$	250	$	—


Redemption of preferred equity investments upon acquisition of co-investments	$	—	$	94,669







Reclassifications to redeemable noncontrolling interest from general and limited partner capital and noncontrolling interest	$	1,898	$	3,527

Leased assets obtained in exchange for new operating lease liabilities	$	—	$	2,727

See accompanying notes to the unaudited condensed consolidated financial statements.

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ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(1) Organization and Basis of Presentation

The accompanying unaudited condensed consolidated financial statements present the accounts of Essex Property Trust, Inc. (“Essex” or the “Company”), which include the accounts of the Company and Essex Portfolio, L.P. and its subsidiaries (the “Operating Partnership,” which holds the operating assets of the Company), prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q. In the opinion of management, all adjustments necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included and are normal and recurring in nature. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements included in the Company’s annual report on Form 10-K for the year ended December 31, 2025. Unless otherwise indicated, the notes to condensed consolidated financial statements apply to both the Company and the Operating Partnership.

All significant intercompany accounts and transactions have been eliminated in the unaudited condensed consolidated financial statements.

The unaudited condensed consolidated financial statements for the three months ended March 31, 2026 and 2025 include the accounts of the Company and the Operating Partnership. Essex is the sole general partner of the Operating Partnership, with a 96.7% and 96.6% general partnership interest as of March 31, 2026 and December 31, 2025, respectively. Total Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) outstanding were 2,184,025 and 2,250,339 as of March 31, 2026 and December 31, 2025, respectively, and the redemption value of the units, based on the closing price of the Company’s common stock totaled approximately $528.5 million and $588.9 million as of March 31, 2026 and December 31, 2025, respectively. The Company has reserved shares of common stock for such conversions.

As of March 31, 2026, the Company owned or had ownership interests in 259 operating apartment home communities, comprising 63,099 apartment homes, excluding the Company’s ownership interests in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of one consolidated project and various predevelopment projects (collectively, the “Portfolio”). The operating apartment home communities are located in Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties), Northern California (the San Francisco Bay Area) and the Seattle metropolitan areas.

Recent Accounting Pronouncements

In September 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2025-06 “Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software.” ASU 2025-06 eliminates project stages and requires capitalizing software costs to begin when (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. When evaluating if a project is probable to be completed, significant development uncertainty must be assessed. In addition, disclosures for property, plant and equipment will be required for all capitalized software costs. ASU 2025-06 will be effective for the Company beginning January 1, 2028 and early adoption is permitted. Upon adoption, the new standard may be applied prospectively, retrospectively or using a modified transition approach. The Company is currently evaluating the impact of ASU 2025-06 on its consolidated results of operations and financial position.

In November 2024, the FASB issued ASU No. 2024-03 “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses”, and in January 2025, the FASB issued ASU No. 2025-01 “Income Statement —Reporting Comprehensive Income —Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date.” ASU 2024-03 requires disaggregated information for specified categories of expenses to be presented in the notes to the financial statements. ASU 2024-03, as clarified by ASU 2025-01, will be effective for the Company for annual periods beginning January 1, 2027 and interim periods beginning January 1, 2028. Early adoption is permitted. The new standards may be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact of these standards on its consolidated results of operations and financial position.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Accounting Pronouncements Adopted in the Current Year

In July 2025, the FASB issued ASU No. 2025-05, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets.” ASU 2025-05 provides for a practical expedient that allows an entity to assume that conditions as of the balance sheet date will remain unchanged over the remaining life of the asset when estimating expected credit losses for current accounts receivable and current contract assets arising from revenue transactions from contracts with customers. ASU 2025-05 is effective for the Company beginning January 1, 2026, with early adoption permitted, and is required to be applied prospectively. The Company adopted ASU 2025-05 as of January 1, 2026. This adoption did not have a material impact on its consolidated results of operations or financial position.

Revenues and Gains on Sale of Real Estate and Land

Revenues from tenants renting or leasing apartment homes are recorded when due from tenants and are recognized monthly as they are earned, which generally approximates a straight-line basis, else, adjustments are made to conform to a straight-line basis. Apartment homes are rented under short-term leases (generally, lease terms of 9 to 12 months). Revenues from tenants leasing commercial space are recorded on a straight-line basis over the life of the respective lease. See Note 3, Revenues, for additional information regarding such revenues.

The Company also generates other property-related revenue associated with the leasing of apartment homes, including storage income, pet rent, and other miscellaneous revenue. Similar to rental income, such revenues are recorded when due from tenants and recognized monthly as they are earned.

Apart from rental and other property-related revenue, revenues from contracts with customers are recognized as control of the promised services is passed to the customer. For customer contracts related to management and other fees from affiliates (which includes asset management and property management), the transaction price and amount of revenue to be recognized are determined each quarter based on the management fee calculated and earned for that month or quarter. The contract will contain a description of the service and the fee percentage for management services. Payments from such services are one month or one quarter in arrears of the service performed.

The Company recognizes any gains on sales of real estate when it transfers control of a property and when it is probable that the Company will collect substantially all of the related consideration.

Marketable Securities

The Company reports its equity securities and available-for-sale debt securities at fair value, based on quoted market prices (Level 1 for the equity securities and Level 2 for the available for sale debt securities, as defined by the FASB standard for fair value measurements). As of both March 31, 2026 and December 31, 2025, less than $0.1 million of equity securities presented within common stock, preferred stock, and stock funds in the tables below represented investments measured at fair value, using net asset value as a practical expedient, and were not categorized in the fair value hierarchy.

Any unrealized gain or loss in debt securities classified as available for sale is recorded as other comprehensive income. Any realized and unrealized gain or loss in equity securities, realized gain in debt securities, and interest income are included in interest and other income in the condensed consolidated statements of income and comprehensive income. There were no other-than-temporary impairment charges for the three months ended March 31, 2026 and 2025.

As of March 31, 2026 and December 31, 2025, equity securities and available for sale debt securities consisted primarily of investment funds-debt securities, common stock, preferred stock and stock funds, U.S. Treasury and agency securities, certificates of deposit, corporate debt securities and municipal debt securities.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

As of March 31, 2026 and December 31, 2025, marketable securities consisted of the following ($ in thousands):


	March 31, 2026
	Amortized Cost		Gross Unrealized Gain (loss)		Carrying Value
Equity securities:

Common stock, preferred stock and stock funds	$	48,158	$	19,704	$	67,862

Available for sale debt securities:
U.S. Treasury and agency securities	12,230		(1)		12,229
Certificates of deposit	5,041		—		5,041
Corporate debt securities	10,933		(25)		10,908
Municipal debt securities	475		6		481
Total - Marketable securities	$	76,837	$	19,684	$	96,521


	December 31, 2025
	Amortized Cost		Gross Unrealized Gain		Carrying Value
Equity securities:
Investment funds - debt securities	$	2,677	$	6	$	2,683
Common stock, preferred stock and stock funds	48,738		21,736		70,474

Available for sale debt securities:
U.S. Treasury and agency securities	10,186		103		10,289
Certificates of deposit	5,000		—		5,000
Corporate debt securities	8,954		105		9,059
Municipal debt securities	556		9		565
Total - Marketable securities	$	76,111	$	21,959	$	98,070

Variable Interest Entities

In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidated the Operating Partnership, 18 DownREIT entities (comprising ten communities), and four co-investments as of March 31, 2026 and December 31, 2025. The Company consolidated these entities because it was the primary beneficiary. Essex has no assets or liabilities other than its investment in the Operating Partnership. The consolidated total assets and liabilities related to the above consolidated co-investments and DownREIT entities, net of intercompany eliminations, were $979.6 million and $243.8 million, respectively, as of March 31, 2026 and $970.6 million and $242.5 million, respectively, as of December 31, 2025. Noncontrolling interests in these entities was $101.2 million as of March 31, 2026 and December 31, 2025. The Company’s financial risk in each VIE is limited to its equity investment in the VIE. As of March 31, 2026 and December 31, 2025, the Company was not deemed to be the primary beneficiary of any other VIEs and did not have any VIEs of which it was not deemed to be the primary beneficiary.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Equity-based Compensation

The cost of share- and unit-based compensation awards is measured at the grant date based on the estimated fair value of the awards. The estimated fair value of stock options and restricted stock granted by the Company are being amortized over the vesting period. The estimated grant date fair values of the long term incentive plan units (discussed in Note 14, Equity Based Compensation Plans, in the Company’s annual report on Form 10-K for the year ended December 31, 2025) are being amortized over the expected service periods.

Fair Value of Financial Instruments

Management estimates that the carrying amounts of the outstanding balances under its lines of credit, commercial paper and notes and other receivables approximate fair value as of March 31, 2026 and December 31, 2025, because interest rates, yields, and other terms for these instruments are consistent with interest rates, yields, and other terms currently available for similar instruments. Management has estimated that the fair value of the Company’s fixed rate debt with a carrying value of $5.9 billion as of both March 31, 2026 and December 31, 2025, was approximately $5.7 billion and $5.8 billion, respectively. Management has estimated that the fair value of the Company’s $859.2 million and $854.4 million of variable rate debt at March 31, 2026 and December 31, 2025, respectively, was approximately $857.6 million and $853.2 million, respectively, based on the terms of existing mortgage notes payable, unsecured debt, and lines of credit compared to those available in the marketplace. Management estimates that the carrying amounts of cash and cash equivalents, restricted cash, accounts payable and accrued liabilities, construction payables, other liabilities and dividends payable approximate fair value as of March 31, 2026 and December 31, 2025 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of March 31, 2026 and December 31, 2025.

Capitalization of Costs

The Company’s capitalized costs related to development and redevelopment projects were comprised primarily of interest and employee compensation and totaled $6.7 million and $6.2 million during the three months ended March 31, 2026 and 2025, respectively. The Company amortizes the capitalized costs over the useful life of the development.

Co-investments

The Company owns investments in joint ventures in which it has significant influence, but its ownership interest does not meet the criteria for consolidation in accordance with U.S. GAAP. Therefore, the Company accounts for co-investments using the equity method of accounting. Under the equity method of accounting, the investment is carried at the cost of assets contributed, plus the Company’s equity in earnings, less distributions received and the Company’s share of losses. The significant accounting policies of the Company’s co-investment entities are consistent with those of the Company in all material respects.

Upon the acquisition of a controlling interest of a co-investment, the co-investment entity is consolidated and a gain or loss is recognized upon the remeasurement of the co-investment in the condensed consolidated statements of income and comprehensive income equal to the amount by which the fair value of the co-investment interest, using Level 2 inputs, exceeds the Company’s carrying value of the co-investment. A majority of the co-investments, excluding most preferred equity investments, compensate the Company for its asset management services and some of these investments may provide promote income if certain financial return benchmarks are achieved. Management fees are recognized when earned, and promote fees are recognized when the earnings events have occurred and the amount is determinable and collectible. Any promote fees are reflected in equity income from co-investments.

The Company evaluates its co-investments for impairment and records a loss if the carrying value is greater than the fair value of the investment and the impairment is other-than-temporary.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Changes in Accumulated Other Comprehensive Income, Net by Component

Essex Property Trust, Inc.

($ in thousands):


	Change in fair value of derivatives and amortization of swap settlements		Unrealized gain (loss) on available for sale debt securities		Total
Balance at December 31, 2025	$	5,837	$	210	$	6,047

Other comprehensive loss before reclassification	(566)		(216)		(782)
Amounts reclassified from accumulated other comprehensive income	912		(13)		899
Other comprehensive income (loss)	346		(229)		117
Balance at March 31, 2026	$	6,183	$	(19)	$	6,164

Essex Portfolio, L.P.

($ in thousands):


	Change in fair value of derivatives and amortization of swap settlements		Unrealized gain (loss) on available for sale debt securities		Total
Balance at December 31, 2025	$	9,921	$	217	$	10,138

Other comprehensive loss before reclassification	(586)		(224)		(810)
Amounts reclassified from accumulated other comprehensive income	944		(13)		931
Other comprehensive income (loss)	358		(237)		121
Balance at March 31, 2026	$	10,279	$	(20)	$	10,259

Amounts reclassified from accumulated other comprehensive income, net in connection with derivatives are recorded in interest expense in the condensed consolidated statements of income and comprehensive income. Realized gains and losses on available for sale debt securities are included in interest and other income on the condensed consolidated statements of income and comprehensive income.

Redeemable Noncontrolling Interest

The carrying value of redeemable noncontrolling interests in the accompanying condensed consolidated balance sheets was $25.8 million and $28.3 million as of March 31, 2026 and December 31, 2025, respectively. The limited partners may redeem their noncontrolling interests for cash in certain circumstances.

The changes in the redemption value of redeemable noncontrolling interests for the three months ended March 31, 2026 was as follows ($ in thousands):


Balance at December 31, 2025	$	28,263
Reclassification due to change in redemption value and other	1,898
Redemptions	(4,373)

Balance at March 31, 2026	$	25,788

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Cash, Cash Equivalents and Restricted Cash

Highly liquid investments generally with original maturities of three months or less when purchased are classified as cash equivalents. Restricted cash balances relate primarily to reserve requirements for capital replacement at certain communities in connection with the Company’s mortgage debt.

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same such amounts shown in the condensed consolidated statements of cash flows ($ in thousands):


	March 31, 2026		December 31, 2025		March 31, 2025		December 31, 2024
Cash and cash equivalents - unrestricted	$	38,005	$	76,241	$	98,735	$	66,795
Cash and cash equivalents - restricted	9,405		9,345		9,127		9,051
Total unrestricted and restricted cash and cash equivalents shown in the condensed consolidated statements of cash flows	$	47,410	$	85,586	$	107,862	$	75,846

Accounting Estimates

The preparation of condensed consolidated financial statements, in accordance with U.S. GAAP, requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing basis, the Company evaluates its estimates, including those related to acquiring, developing and assessing the carrying values of its Portfolio, its investments in and advances to joint ventures and affiliates, its notes receivable, and its qualification as a real estate investment trust (“REIT”). The Company bases its estimates on historical experience, current market conditions, and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may vary from those estimates and those estimates could be different under different assumptions or conditions.

(2) Significant Transactions During the Three Months Ended March 31, 2026 and Subsequent Events

Significant Transactions

Notes Receivable

In February 2026, the Company funded a $59.5 million related party bridge loan to Wesco V, a co-investment, in connection with the payoff of a mortgage associated with one of Wesco V’s properties located in Northern California. The note receivable accrues interest at 5.00% and is scheduled to mature in September 2026.

Common Stock

During the three months ended March 31, 2026, the Company repurchased and retired 205,740 shares of the Company's common stock through the Company's stock repurchase plan, totaling $50.2 million, including commissions, at an average price per share of $244.06. As a result, as of March 31, 2026, the Company had $252.5 million of purchase authority remaining under the Company's $500.0 million stock repurchase plan.

Subsequent Events

In April 2026, the Company repaid $450.0 million of senior unsecured notes due on April 15, 2026, at maturity.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(3) Revenues

Disaggregated Revenue

The following table presents the Company’s revenues disaggregated by revenue source for the periods presented ($ in thousands):


	Three Months Ended March 31,
	2026		2025
Rental income	$	475,812	$	455,860
Other property	6,631		6,229
Management and other fees from affiliates	2,313		2,494
Total revenues	$	484,756	$	464,583

The following table presents the Company’s rental and other property revenues disaggregated by geographic operating segment for the periods presented ($ in thousands):


	Three Months Ended March 31,
	2026		2025
Southern California	$	195,305	$	188,622
Northern California	201,618		180,916
Seattle Metro	79,021		77,214
Other real estate assets (1)	6,499		15,337
Total rental and other property revenues	$	482,443	$	462,089

(1) Other real estate assets consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line rent adjustments for concessions. Executive management does not evaluate such operating performance geographically.

The following table presents the Company’s rental and other property revenues disaggregated by current property category status for the periods presented ($ in thousands):


	Three Months Ended March 31,
	2026		2025
Same-property (1)	$	442,572	$	430,009
Acquisitions (2)	20,761		4,570


Non-residential/other, net (3)	19,225		27,898
Straight-line rent concessions (4)	(115)		(388)
Total rental and other property revenues	$	482,443	$	462,089

(1)Same-property includes properties that have comparable stabilized results as of January 1, 2025 and are consolidated by the Company for the three months ended March 31, 2026 and 2025. A community is considered to have reached stabilized operations once it achieves an initial occupancy of 90%.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(2)Acquisitions include properties acquired which did not have comparable stabilized results as of January 1, 2025.

(3)Non-residential/other, net consists of revenues generated from retail space, commercial properties, held for sale properties, disposition properties, student housing, properties undergoing significant construction activities that do not meet our redevelopment criteria, properties subject to upcoming ground lease expirations, two communities located in the California counties of Santa Barbara and Santa Cruz, which the Company does not consider its core markets, and properties without comparable operating results in the reported periods.

(4)Represents straight-line concessions for residential operating communities. Same-property revenues reflect concessions on a cash basis. Total rental and other property revenues reflect concessions on a straight-line basis in accordance with U.S. GAAP.

Deferred Revenues and Remaining Performance Obligations

When cash payments are received or due in advance of the Company’s performance of contracts with customers, deferred revenue is recorded. The total deferred revenue balance related to such contracts was $0.2 million as of both March 31, 2026 and December 31, 2025, and was included in accounts payable and accrued liabilities within the accompanying condensed consolidated balance sheets. The amount of revenue recognized for the three months ended March 31, 2026 that was included in the December 31, 2025 deferred revenue balance was less than $0.1 million, which was included in rental and other property revenue within the condensed consolidated statements of income and comprehensive income.

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in the revenue recognition accounting standard. As of March 31, 2026, the Company had $0.2 million of remaining performance obligations. The Company expects to recognize approximately 69% of these remaining performance obligations in 2026 and the remaining 31% through 2027.

(4) Co-investments

The Company has joint ventures which are accounted for under the equity method. The co-investments’ accounting policies are similar to the Company’s accounting policies. The co-investments typically own, operate, and develop apartment home communities. The Company also invests in five unconsolidated technology co-investments with an aggregate commitment of $86.0 million as of both March 31, 2026 and December 31, 2025. The unconsolidated technology co-investment balance of these investments was $92.5 million, and $74.7 million as of March 31, 2026 and December 31, 2025, respectively.

The carrying values of the Company’s co-investments as of March 31, 2026 and December 31, 2025 were as follows ($ in thousands, except in parenthetical):


	Weighted Average Company Ownership Percentage (1)	March 31, 2026		December 31, 2025
Ownership interest in:
Wesco I, Wesco III, Wesco IV, Wesco V and Wesco VI (2)	54%	$	71,147	$	73,002
BEX IV and 500 Folsom	50%	134,147		135,518
Other (2)	53%	112,610		95,851
Total operating and other co-investments, net		317,904		304,371

Total preferred equity co-investments (3) (includes related party investments of $53.7 million and $52.8 million as of March 31, 2026 and December 31, 2025, respectively. See Note 6, Related Party Transactions, for further discussion)		232,093		227,342
Total co-investments, net		$	549,997	$	531,713

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(1)Weighted average company ownership percentages are as of March 31, 2026.

(2)As of March 31, 2026 and December 31, 2025, the Company’s investments in Wesco I, Wesco III, Wesco IV, and Expo were classified as a liability of $99.3 million and $98.8 million, respectively, due to distributions received in excess of the Company’s investment. The weighted average company ownership percentage excludes the Company’s investments in unconsolidated technology co-investments.

(3)Includes one preferred equity investment held with Wesco VII, LLC.

The combined summarized financial information of co-investments was as follows ($ in thousands):


	March 31, 2026		December 31, 2025
Combined balance sheets: (1)
Rental properties and real estate under development	$	3,223,302	$	3,220,390
Other assets	229,504		194,413
Total assets	$	3,452,806	$	3,414,803
Debt	$	2,413,491	$	2,412,106
Other liabilities	181,018		163,358
Equity	858,297		839,339
Total liabilities and equity	$	3,452,806	$	3,414,803


	Three Months Ended March 31,
	2026		2025
Combined statements of income: (1)
Property revenues	$	75,055	$	86,306
Property operating expenses	(28,884)		(32,702)
Net operating income	46,171		53,604

Interest expense	(19,960)		(27,301)
General and administrative	(3,920)		(4,206)
Depreciation and amortization	(28,028)		(36,587)
Net loss	$	(5,737)	$	(14,490)
Company’s share of net income (2)	$	23,615	$	13,209

(1)Includes preferred equity investments held by the Company and excludes investments in technology co-investments.

(2)Includes the Company’s share of equity income from joint ventures and preferred equity investments, gain on sales of co-investments, co-investment promote income, and income from early redemption of preferred equity investments. Includes related party income of $1.3 million and $1.2 million for the three months ended March 31, 2026 and 2025, respectively.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(5) Notes and Other Receivables

Notes and other receivables consisted of the following as of March 31, 2026 and December 31, 2025 ($ in thousands):


	March 31, 2026		December 31, 2025
Note receivable, secured, bearing interest at 9.00%, due October 2026 (Originated October 2021)	$	64,193	$	64,193
Note receivable, secured, bearing interest at 11.25%, due October 2027 (Originated October 2022)	45,198		43,941
Related party note receivable, secured, bearing interest at 5.00%, due September 2026 (Originated February 2026) (1)	59,747		—
Other receivables from affiliates (1) (2)	5,223		5,215
Straight-line rent receivables (3)	10,084		10,259
Other receivables	18,126		18,538
Allowance for credit losses	(589)		(555)
Total notes and other receivables	$	201,982	$	141,591

(1)See Note 6, Related Party Transactions, for additional details.

(2)These amounts consist of short-term loans outstanding and due from various joint ventures as of March 31, 2026 and December 31, 2025, respectively.

(3)These amounts are receivables from lease concessions recorded on a straight-line basis for the Company’s operating properties.

The following table presents the activity in the allowance for credit losses for notes receivable, secured, for the periods presented ($ in thousands):


	Three Months Ended March 31,
	2026						2025
	Mezzanine Loans		Bridge Loans		Total		Mezzanine Loans		Bridge Loans		Total
Balance at beginning of period	$	555	$	—	$	555	$	529	$	—	$	529
Provision for credit losses	4		30		34		(3)		—		(3)
Balance at end of period	$	559	$	30	$	589	$	526	$	—	$	526

(6) Related Party Transactions

The Company charges certain fees relating to its co-investments for asset management, property management, development and redevelopment services. These fees from affiliates totaled $2.3 million and $2.5 million during the three months ended March 31, 2026 and 2025, respectively. All of these fees are net of intercompany amounts eliminated by the Company. The Company netted development and redevelopment fees of less than $0.1 million for the three months ended March 31, 2026 and 2025, respectively against general and administrative expenses.

The Company’s Chairman and founder, Mr. George M. Marcus, is the Chairman of the Marcus & Millichap Company (“MMC”), which is a parent company of a diversified group of real estate service, investment, and development firms. Mr. Marcus is also the Chairman of and owns a controlling interest in Marcus & Millichap, Inc. (“MMI”), a national brokerage firm listed on the New York Stock Exchange. For the three months ended March 31, 2026 and 2025, the Company did not pay brokerage commissions related to real estate transactions to MMI and its affiliates.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of March 31, 2026 and December 31, 2025, $65.0 million and $5.2 million, respectively, of short-term loans remained outstanding due from joint venture affiliates, inclusive of the Wesco V bridge loan noted below, and are classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

In August 2025, the Company funded an $81.2 million related party bridge loan to Wesco I in connection with the payoff of a mortgage related to one of Wesco I’s properties located in Southern California. The note receivable accrued interest at 5.50% and was paid off at maturity in December 2025.

In August 2022, the Company funded an $11.2 million preferred equity investment in an entity whose sponsor includes an affiliate of MMC. The entity owns three multifamily communities located in Azusa, CA. The investment accrues interest based on a 9.5% preferred return and is scheduled to mature in August 2027.

In October 2018, the Company funded an $18.6 million preferred equity investment in an entity whose sponsor is an affiliate of MMC. The entity wholly owns a 268-unit apartment home community development located in Burlingame, CA. The investment initially accrued interest based on a 12.0% preferred return which was reduced to 9.0% upon completion and lease-up of the project. In April 2023, the investment’s maturity date was extended from April 2024 to May 2026 with the investment accruing interest based on an 11.0% preferred return. In April 2023, the Company received cash of $11.2 million for the partial redemption of this preferred equity investment.

In May 2018, the Company made a commitment to fund a $26.5 million preferred equity investment in an entity whose sponsors include an affiliate of MMC. The entity wholly owns a 400-unit apartment home community located in Ventura, CA. The investment accrued interest based on a 10.25% initial preferred return. The investment was scheduled to mature in May 2023. In November 2021, the Company received cash of $18.3 million for the partial redemption of this preferred equity investment resulting in a remaining total commitment of $13.0 million, and the maturity was extended to December 2028. As of March 31, 2026, $11.0 million of this commitment was funded and the Company accrues interest based on a 9.0% preferred return. The remaining unfunded commitment of $2.0 million expired in November 2024.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

(7) Debt

Essex does not have indebtedness as debt is incurred by the Operating Partnership. Essex guarantees the Operating Partnership’s unsecured debt including the revolving credit facilities for the full term of the facilities.

Debt consisted of the following for the periods presented ($ in thousands):


	March 31, 2026			December 31, 2025			Weighted Average Maturity In Years as of March 31, 2026

Term loan - variable rate, net (1)	$	597,098		$	596,668		4.5
Bonds public offering - fixed rate, net	5,420,452			5,419,253			6.8
Unsecured debt, net (2)	6,017,550			6,015,921
Lines of credit (3)	4,660			—
Commercial paper (4)	—			—
Mortgage notes payable, net (5)	784,286			784,348			7.7
Total debt, net	$	6,806,496		$	6,800,269
Weighted average interest rate on fixed rate unsecured bonds public offering	3.7		%	3.7		%
Weighted average interest rate on variable rate term loan	4.0		%	4.1		%
Weighted average interest rate on lines of credit	4.6		%	4.8		%
Weighted average interest rate on commercial paper	—		%	—		%
Weighted average interest rate on mortgage notes payable	4.1		%	4.4		%

(1)The $300.0 million unsecured term loan entered in May 2025 is priced at SOFR plus 0.850% which is based on a tiered rate structure tied to the Company’s long-term unsecured credit rating and is swapped to an all-in rate of 4.0%. The Company may elect to increase this facility by up to an additional $300.0 million, to an aggregate size of $600.0 million, if the lenders permit. This term loan is scheduled to mature in May 2028, with two one-year extension options, exercisable at the option of the Company. The $300.0 million unsecured term loan entered in October 2022 is priced at SOFR plus 0.85% with a maturity date of January 2031, inclusive of extension options exercisable at the Company’s option. The interest rate is swapped to an all-in fixed rate of 4.0% through October 2026.

(2)Unsecured debt, net, consists of fixed rate public bond offerings and a variable rate term loan which includes unamortized discounts, net of premiums of $3.3 million and $3.6 million, and unamortized debt issuance costs of $29.1 million and $30.4 million, as of March 31, 2026 and December 31, 2025, respectively.

(3)Lines of credit, related to the Company’s two lines of unsecured credit aggregating $1.58 billion as of March 31, 2026 and December 31, 2025, respectively, excluded unamortized debt issuance costs of $7.0 million and $7.3 million, respectively. These debt issuance costs are included in prepaid expenses and other assets in the condensed consolidated balance sheets. As of March 31, 2026, the Company’s $1.5 billion credit facility had an interest rate at Secured Overnight Financing Rate (“SOFR”) plus 0.775%, which is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings. As of March 31, 2026, the Company’s $75.0 million working capital unsecured line of credit had an interest rate of SOFR plus 0.775%, which is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings. In February 2026, the Company extended the scheduled maturity date from July 2026 to July 2028.

(4)The Company has a commercial paper program under which it can issue unsecured short-term notes, which are backstopped by, and reduce the borrowing capacity of, the Company’s $1.5 billion unsecured line of credit facility. The Company can issue up to $750.0 million of commercial paper for up to 397 days from the date of issue. The commercial paper balance excludes unamortized debt issuance of $0.4 million as of March 31, 2026 and December 31, 2025, respectively, and are included in prepaid expenses and other assets in the condensed consolidated balance sheets.

(5)Includes total unamortized discounts, net of premiums of approximately $0.1 million and $0.2 million, reduced by unamortized debt issuance costs of $2.4 million and $2.5 million, as of March 31, 2026 and December 31, 2025, respectively.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit and commercial paper, as of March 31, 2026 were as follows ($ in thousands):


2026	$	549,136
2027	434,397
2028	518,332
2029	501,456
2030	916,592
Thereafter	3,916,889
Total	$	6,836,802

(8) Segment Information

The Company’s segment disclosures present the measure used by the chief operating decision maker (“CODM”) for purposes of assessing each segment’s performance. The Company’s CODM is a group comprised of its Chief Executive Officer, Chief Financial Officer, Chief Administrative Officer, and Chief Investment Officer, who use net operating income (“NOI”) to assess the performance of the business for the Company’s reportable operating segments. NOI represents total property revenues less direct property operating expenses.

The CODM evaluates the Company’s operating performance geographically. The Company defines its reportable operating segments as the three geographical regions in which its communities are located: Southern California, Northern California and Seattle Metro.

Excluded from segment revenues and NOI are management and other fees from affiliates and interest and other income. Other real estate assets revenues, property operating expenses, including real estate taxes, and NOI included in the following schedule consist of revenues generated from retail space, commercial properties, held for sale properties, disposition properties and straight-line adjustments for concessions. Executive management does not evaluate such operating performance geographically. Other non-segment assets include items such as real estate under development, co-investments, real estate held for sale, cash and cash equivalents, marketable securities, notes and other receivables, and prepaid expenses and other assets.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three months ended March 31, 2026 and 2025 ($ in thousands):


	Three Months Ended March 31,
	2026						2025
	Rental and other property revenue		Property operating expenses, including real estate taxes		Net operating income		Rental and other property revenue		Property operating expenses, including real estate taxes		Net operating income
Southern California	$	195,305	$	57,622	$	137,683	$	188,622	$	54,630	$	133,992
Northern California	201,618		60,347		141,271		180,916		56,146		124,770
Seattle Metro	79,021		23,080		55,941		77,214		23,902		53,312
Other real estate assets	6,499		207		6,292		15,337		3,943		11,394
Total	$	482,443	$	141,256	$	341,187	$	462,089	$	138,621	$	323,468

Total net operating income					341,187						323,468
Management and other fees from affiliates					2,313						2,494
Corporate-level property management expenses					(13,398)						(12,332)
Depreciation and amortization					(154,895)						(151,287)
General and administrative					(20,014)						(16,292)


Gain on sale of real estate and land					—						111,030
Interest expense					(65,564)						(62,732)
Total return swap income					1,542						1,200
Interest and other income					1,036						4,289
Equity income from co-investments					23,615						13,209
Tax (expense) benefit on unconsolidated technology co-investments					(3,614)						163
Loss on early retirement of debt					—						(762)
Gain on remeasurement of co-investment					—						330
Net income					$	112,208					$	212,778

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Total assets for each of the reportable operating segments are summarized as follows as of March 31, 2026 and December 31, 2025 ($ in thousands):


	March 31, 2026		December 31, 2025
Assets:
Southern California	$	4,146,139	$	4,194,554
Northern California	6,081,653		6,136,977
Seattle Metro	1,397,771		1,412,405
Other real estate assets (1)	174,738		160,646
Net reportable operating segments - real estate assets	11,800,301		11,904,582
Real estate under development	159,515		157,122
Co-investments	649,313		630,550

Cash and cash equivalents, including restricted cash	47,410		85,586
Marketable securities	96,521		98,070
Notes and other receivables	201,982		141,591
Operating lease right-of-use assets	49,957		50,833
Prepaid expenses and other assets	90,488		90,675
Total assets	$	13,095,487	$	13,159,009

(1)Includes retail space, commercial properties, held for sale properties and disposition properties.

(9) Net Income Per Common Share and Net Income Per Common Unit

Essex Property Trust, Inc.

Basic and diluted income per share was calculated as follows ($ in thousands, except per share amounts):


	Three Months Ended March 31,
	2026					2025
	Income		Weighted- average Common Shares	Per Common Share Amount		Income		Weighted- average Common Shares	Per Common Share Amount
Basic:
Net income available to common stockholders	$	106,186	64,454,912	$	1.65	$	203,110	64,314,899	$	3.16
Effect of Dilutive Securities:
Stock options	—		6,709			—		35,000


Diluted:
Net income available to common stockholders	$	106,186	64,461,621	$	1.65	$	203,110	64,349,899	$	3.16

The table above excludes from the calculations of diluted earnings per share weighted average convertible OP Units of 2,226,996 and 2,306,953, which include vested 2014 Long-Term Incentive Plan Units and 2015 Long-Term Incentive Plan Units, for the three months ended March 31, 2026 and 2025, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $3.7 million and $7.3 million for the three months ended March 31, 2026 and 2025, respectively.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

Stock options of 321,707 and 177,196 for the three months ended March 31, 2026 and 2025, respectively were excluded from the calculation of diluted earnings per share because the assumed proceeds per share of such options plus the average unearned compensation were greater than the average market price of the common stock for the periods ended and, therefore, were anti-dilutive.

Essex Portfolio, L.P.

Basic and diluted income per unit was calculated as follows ($ in thousands, except per unit amounts):


	Three Months Ended March 31,
	2026					2025
	Income		Weighted- average Common Units	Per Common Unit Amount		Income		Weighted- average Common Units	Per Common Unit Amount
Basic:
Net income available to common unitholders	$	109,855	66,681,908	$	1.65	$	210,389	66,621,852	$	3.16
Effect of Dilutive Securities:
Stock options	—		6,709			—		35,000


Diluted:
Net income available to common unitholders	$	109,855	66,688,617	$	1.65	$	210,389	66,656,852	$	3.16

Stock options of 321,707 and 177,196 for the three months ended March 31, 2026 and 2025, respectively, were excluded from the calculation of diluted earnings per unit because the assumed proceeds per unit of these options plus the average unearned compensation were greater than the average market price of the common unit for the periods ended and, therefore, were anti-dilutive.

(10) Derivative Instruments and Hedging Activities

As of March 31, 2026, the Company had five interest rate swap contracts and one forward starting interest rate swap contract with an aggregate notional amount of $600.0 million. The Company has $500.0 million in notional amount that effectively fixed the interest rate on the Company’s $600.0 million unsecured term loan at 4.0%. In December 2025, the Company entered into a $100.0 million forward starting interest rate swap which will be effective at a future date. These derivatives qualify for hedge accounting.

As of March 31, 2026 and December 31, 2025, the aggregate carrying value of the interest rate swap contracts was an asset of $2.5 million and $1.3 million, respectively, within prepaid expenses and other assets in the condensed consolidated balance sheets.

As of March 31, 2026 and December 31, 2025, the aggregate carrying value of the forward starting interest rate swap contract was $1.2 million and $0.7 million, respectively, within prepaid expenses and other assets in the condensed consolidated balance sheets.

(11) Commitments and Contingencies

The Company is subject to various lawsuits in the normal course of its business operations. Such lawsuits have not had a material adverse effect on the Company’s financial condition, results of operations or cash flows. While no assurances can be given, the Company does not believe there is any pending or threatened litigation against the Company that, individually or in the aggregate, would reasonably be expected to have a material adverse effect on the Company.

ESSEX PROPERTY TRUST, INC. AND SUBSIDIARIES

ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

March 31, 2026 and 2025

(Unaudited)

A number of purported class actions were filed against RealPage, Inc., a seller of revenue management software, and various lessors of multifamily housing which utilize this software, including the Company. The complaints allege collusion among defendants to artificially increase rents of multifamily residential real estate above competitive levels. The Company is vigorously defending against these lawsuits. The Company is unable to predict the outcome or estimate the amount of loss, if any, that may result from such matters. The Company is also subject to various other legal and/or regulatory proceedings arising in the normal course of its business operations. The Company believes that, with respect to such matters that it is currently a party to, the ultimate disposition of any such matter will not result in a material adverse effect on the Company’s financial condition, results of operations or cash flows. To the extent that such a matter arises or is identified in the future and the Company believes it will have a material impact on the condensed consolidated financial statements, the Company will disclose the estimated range of possible outcomes associated with it, and, if an outcome is probable, accrue an appropriate liability for that matter. The Company will consider whether any such matter results in an impairment of value on the affected property and, if so, impairment will be recognized.

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