Essex Property Trust, Inc BofA NY Global Real Estate Conference 2026

Great. Thanks, Jana. It's great to be here. Thank you all for attending. I want to thank Bank of America for putting together such a fantastic venue. It's always very productive, I think, for all of us, so we're happy to support this event. Essex, just a high-level overview. I think most of you, I see a lot of familiar faces, and know us well. We're an S&P 500 company focused in multifamily space in the West Coast of the U.S., just California and Washington. Depending on the day, about $24 billion in total market cap and 63,000 units across this footprint. We focus our markets on areas where there's low supply and catalysts for demand drivers.

As a result of that, we have a disciplined capital allocation program that essentially converts the top-line growth into the bottom-line growth that outperforms the peer, which results in long-term outperformance on a total return basis in the top tier of all the REIT space. More importantly, we're a dividend aristocrat with 32 years of consecutive dividend growth now, so pleased with that. With the fundamental backdrop of low supply and demand catalyst with AI in the technology space, we are operating in a stable environment with a potential upside in terms of rent growth, which is driven by strong fundamentals.

Thanks. Yes, that is a good question. We actually have a presentation published that is available online. On page 12 of our presentation, we present the rent curve of what we are experienced to date relative to long-term averages in 2016 to 2019, and also compare it to last year. In both of those cases, our rent curve is doing better than long-term average and last year. The rent curve also shows that we have an extended peak leasing season, which is fantastic. That peak is 100% driven by Northern California. Seattle has experienced a normal seasonality, and Southern California really did not have a peak. It is pretty much performing on top of last year's performance, and that is understandable with the broad economy.

Where we are seeing that rent curve right now is that it is starting to flatten, which also makes sense as we now enter into the typical slower seasonal part of our business, especially in the fourth quarter when employers do not typically hire and tenants do not typically want to move between, say, Thanksgiving and Christmas. We will wait to see how that deceleration trend occurs. But right now, what we are anticipating based on leases that we have signed today through August, is about 150 basis points of earn in for 2027. Which is good news compared to last year. It is 65 basis points above last year, and so things are doing well on the ground here.

Yeah. That is a good question. I think it is too early for us to predict 2027. I do think, though, that the fundamental backdrop for Northern California, the demand catalyst with AI, what we are seeing with job postings and company formation, office leases that are being taken down, and then the affordability component of Northern California, it does give it legs for several years. What 2027 is going to do, we are still working through our budgets, and we will provide more color later this year. But in terms of it having an extended cycle, I think we are in the early innings of the recovery. In Northern California, if you look back, it really has done nothing since 2019. It was negative and flat for several years, and we are just starting to see rent growth.

I think given the demand catalysts that are out there and the low supply that is in this market and will be in 2027 and into 2028 and even into 2029, because we know it takes so long to get things entitled and developed, I think we have a long runway here.

Yeah. If you look at the rent to income ratio, today we're at 21%, and this is for the market in Northern California. Historically, pre-COVID, we were at 25%. What that means is we could grow rent. If rents go up 20% from here with no increase in wages, we would get back to our pre-COVID rent to income ratio. But what we are seeing is significant wage growth in the Bay Area, rent growth, while it is going up significantly, it is not impacting our rent to income ratio because wage growth is also going up at a pretty significant clip. There is some of the best affordability on the multifamily apartment side.

That we've seen in years, and as you guys all know, it's very expensive to own a home. It's much cheaper to rent than to own a home in the Bay Area. That dynamic hasn't changed. It's actually gotten even cheaper to rent versus own. It's about 2.5 times more expensive to own a home than to rent in the Bay Area.