Essex Property Trust (ESS) investor relations material

Company overview and investment highlights

• Operates over 63,000 multifamily units, focused exclusively on the West Coast, with a 32-year record of consecutive dividend increases and strong long-term returns.

• Benefits from historically low housing supply in California, with demand driven by technology sector growth and AI-related job creation.

• Utilizes a unique operating platform, grouping properties for efficiency, resulting in lower expenses per unit compared to peers.

• Currently in a post-COVID recovery phase, especially in Northern California, with rent growth below long-term averages and strong affordability due to income growth outpacing rents.

Market dynamics and regulatory environment

• California's regulatory environment is stable, with no extreme policy changes expected; low supply is partly a result of regulation.

• AI is seen as a near-term job growth catalyst, with unemployment claims at all-time lows and rapid re-employment in the region.

• Long-term impact of AI is uncertain, but historical cycles suggest new job categories will emerge, maintaining demand.

• Diversification away from technology risk is not feasible, as innovation and wealth creation remain concentrated in California.

Real-time performance and demand trends

• Early 2024 performance is slightly ahead of plan, with Northern California showing particular strength and Southern California tracking as expected.

• Renewal rents are being sent out at 4–4.5%, with negotiated settlements typically landing in the high 3% range.

• Demand measurement focuses on closing ratios and negotiation levels, with current market conditions considered normal.

• No elevated lease breakage or unusual tenant behavior observed, even amid tech layoffs.