ESSEX PORTFOLIO LP

(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 and nine months ended September 30, 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 September 30, 2026 and December 31, 2025, respectively. Total Operating Partnership limited partnership units (“OP Units,” and the holders of such OP Units, “Unitholders”) outstanding were 2,183,943 and 2,250,339 as of September 30, 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 $588.3 million and $588.9 million as of September 30, 2026 and December 31, 2025, respectively. The Company has reserved shares of common stock for such conversions.

As of September 30, 2026, the Company owned or had ownership interests in 255 operating apartment home communities, comprising 62,436 apartment homes, excluding the Company’s ownership interests in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised ofone 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.

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 and land 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 September 30, 2026 and December 31, 2025, none and less than $0.1 million, respectively, 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 and nine months ended September 30, 2026 and 2025.

As of September 30, 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.

As of September 30, 2026 and December 31, 2025, marketable securities consisted of the following ($ in thousands):

Variable Interest Entities

In accordance with accounting standards for consolidation of variable interest entities (“VIEs”), the Company consolidated the Operating Partnership,18 DownREIT entities (comprisingten communities), andthree co-investments as of September 30, 2026. As of December 31, 2025, the Company consolidated the Operating Partnership,18 DownREIT entities (comprisingten communities), andfour co-investments. 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 $933.9 million and $219.0 million, respectively, as of September 30, 2026 and $970.6 million and $242.5 million, respectively, as of December 31, 2025. Noncontrolling interests in these entities were $101.1 million and $101.2 million as of September 30, 2026 and December 31, 2025, respectively. The Company’s financial risk in each VIE is limited to its equity investment in the VIE. As of September 30, 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.

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 restricted stock granted by the Company is being amortized over the vesting period.

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 September 30, 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, including variable rate debt swapped to fixed rate, with a carrying value of $6.1 billion and $6.5 billion as of September 30, 2026 and December 31, 2025, respectively, was approximately $5.7 billion and $6.4 billion, respectively. Management has estimated that the fair value of the Company’s $530.7 million and $257.7 million of variable rate debt at September 30, 2026 and December 31, 2025, respectively, was approximately $529.0 million and $256.2 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 September 30, 2026 and December 31, 2025 due to the short-term maturity of these instruments. Marketable securities are carried at fair value as of September 30, 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 $7.2 million and $6.5 million during the three months ended September 30, 2026 and 2025, respectively, and $20.7 million and $18.8 million for the nine months ended September 30, 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 or is in deficit of 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.

Changes in Accumulated Other Comprehensive Income, Net by Component

($ in thousands):

($ in thousands):

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 $26.1 million and $28.3 million as of September 30, 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 nine months ended September 30, 2026 was as follows ($ in thousands):

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):

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 Nine Months Ended September 30, 2026 and Subsequent Events

Significant Transactions

Disposition of Real Estate Interests

The table below summarizes disposition activity for the nine months ended September 30, 2026 ($ in millions):

(1) The Company recognized a $6.8 million gain on sale of real estate and land in the condensed consolidated statements of income and comprehensive income.

(2) Concurrent with the disposition, the Company recorded a $10.7 million impairment loss in the condensed consolidated statements of income and comprehensive income to write down the property’s carrying value to its fair value.

Notes Receivable

In the second quarter of 2026, the Company received cash of $45.7 million from the repayment of a mezzanine loan for a property located in Northern California.

In February 2026, the Company funded a $59.5 million related party bridge loan to Wesco V, LLC (“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 accrued interest at 5.0% and was scheduled to mature in September 2026. The loan was repaid in conjunction with the disposition of the property in June 2026. See Note 4, Co-investments, for additional information regarding the disposition.

Preferred Equity Investments

In the third quarter of 2026, the Company received cash of $15.6 million, for the full redemption of a preferred equity investment in a joint venture that holds a property located in California. See Note 4, Co-investments, for additional details.

In the third quarter of 2026, Wesco VII, LLC (“Wesco VII”), a joint venture in which the Company owns a 50.0% interest, funded preferred equity investments totaling $36.2 million intwo stabilized apartment home communities located in California. The investments have an initial preferred return of 11.5% and a maturity date in July 2029.

In the second quarter of 2026, the Company received cash of $42.1 million, including an early redemption fee of $0.2 million, for the full redemption oftwo preferred equity investments, one of which involved a related party, in joint ventures that hold properties located in California. See Note 6, Related Party Transactions, for additional details.

Debt

In September 2026, the Company entered into a $275.0 million unsecured term loan priced at Secured Overnight Financing Rate (“SOFR”) plus 0.800%, which is based on a tiered rate structure tied to the Operating Partnership’s long-term unsecured credit ratings. The loan has a maturity date in September 2029, withtwo one-year extension options, exercisable at the Company’s discretion. The Company may elect to increase this facility by up to an additional $225.0 million, to an aggregate size of $500.0 million, provided that one or more banks (from the lenders or as otherwise permitted) voluntarily agree to provide the additional commitment.

Common Stock

In September 2026, the Company settled all of its forward sale agreements under the 2024 ATM Program by issuing 52,600 shares of common stock at a weighted average forward price of $311.13 per share, after commissions, which was inclusive of adjustments made to reflect the then-current overnight federal funds rate and the amount of dividends paid to holders of the Company’s common stock over the term of the forward sale agreements, for net proceeds of $16.4 million. As of September 30, 2026, $883.5 million of shares remained available to be sold under the 2024 ATM Program.

In May 2026, the Company’s Board of Directors approved a new stock repurchase plan, without an expiration date, to allow the Company to acquire common stock up to an aggregate value of $500.0 million. The plan supersedes the Company’s previous common stock repurchase plan announced in September 2022. During the nine months ended September 30, 2026, the Company repurchased and retired 254,001 shares of the Company’s common stock through the Company’s previous plan, and none through the Company’s current plan, totaling $61.9 million, including commissions, at an average price per share of $243.76. As a result, as of September 30, 2026, the Company had $500.0 million of purchase authority remaining under the Company’s current stock repurchase plan.

Subsequent Events

Subsequent to quarter end, the Company acquired a 378-unit apartment home community built in 2024 and located in Oakland, CA. This transaction follows the liquidation of the Company’s $64.2 million subordinated loan interest and payoff of the associated $92.3 million senior mortgage. The Company has not accrued income on this investment since the third quarter of 2025 and will consolidate the community on its financial statements in the fourth quarter of 2026.

Subsequent to quarter end, the Company acquired Lincoln Landing, a 474-unit apartment home community built in 2022 and located in Hayward, CA for a contract price of $205.3 million.

(3)Revenues

Disaggregated Revenue

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

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

(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):

(1)Same-property includes properties that have comparable stabilized results as of January 1, 2025 and are consolidated by the Company for the nine months ended September 30, 2026 and 2025. A community is considered to have reached stabilized operations once it achieves an initial occupancy of 90%.

(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, 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 $0.1 million and $0.2 million as of September 30, 2026 and December 31, 2025 respectively, and was included in accounts payable and accrued liabilities within the accompanying condensed consolidated balance sheets. The amount of revenue recognized for the nine months ended September 30, 2026 that was included in the December 31, 2025 deferred revenue balance was $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 September 30, 2026, the Company had $0.1 million of remaining performance obligations. The Company expects to recognize approximately 42% of these remaining performance obligations in 2026 and the remaining 58% 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 has provided limited payment guarantees on certain loans of its co-investments, which are secured by joint venture-owned apartment home communities. The aggregate amount guaranteed by the Company is $165.4 million as of September 30, 2026. The Company does not expect to incur any obligations under these guarantees, therefore there is no liability associated with these guarantees in the accompanying condensed consolidated balance sheets. The Company also invests infive unconsolidated technology co-investments with an aggregate commitment of $86.0 million as of both September 30, 2026 and December 31, 2025. The unconsolidated technology co-investment balance of these investments was $94.1 million, and $74.7 million as of September 30, 2026 and December 31, 2025, respectively.

In August 2026, a single asset joint venture in which the Company owned 58.0% interest, sold its apartment home community named Silver for a total contract price of $122.3 million. Concurrent with the sale of the property, the Company received cash proceeds of $15.6 million from the redemption of a preferred equity investment associated with the property. The Company recorded a $5.8 million gain from the sale as equity income from co-investments within the condensed consolidated statements of income and comprehensive income.

In June 2026, Wesco V, a joint venture in which the Company owns a 50.0% interest, soldone of its apartment home communities named Meridian at Midtown for a total contract price of $105.3 million. In conjunction with the sale of the property, the related bridge loan in the amount of $59.5 million made by the Company to Wesco V was repaid. The Company recorded a $9.2 million gain from the sale as equity income from co-investments within the condensed consolidated statements of income and comprehensive income.

The carrying values of the Company’s co-investments as of September 30, 2026 and December 31, 2025 were as follows ($ in thousands, except in parenthetical):

(1)Weighted average company ownership percentages are as of September 30, 2026.

(2)As of September 30, 2026 and December 31, 2025, the Company’s investments in Wesco I, Wesco III, Wesco IV, and Expo were classified as a liability of $108.9 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 three preferred equity investments held by Wesco VII.

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

(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 $0.7 million and $1.3 million for the three months ended September 30, 2026 and 2025, respectively, and $3.0 million and $3.8 million for the nine months ended September 30, 2026 and 2025, respectively.

(5)Notes and Other Receivables

Notes and other receivables consisted of the following as of September 30, 2026 and December 31, 2025 ($ in thousands):

(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 September 30, 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 activity in the allowance for credit losses for notes receivable, secured, for the periods presented was as follows ($ in thousands):

(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 $2.4 million during the three months ended September 30, 2026 and 2025, respectively, and $7.0 million and $7.2 million during the nine months ended September 30, 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 both the three months ended September 30, 2026 and 2025, and less than $0.1 million and $0.1 million for the nine months ended September 30, 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 and nine months ended September 30, 2026 the Company paid $0.3 million brokerage commissions to MMI and its affiliates. For the three and nine months ended September 30, 2025, the Company didnot pay brokerage commissions related to real estate transactions to MMI and its affiliates.

As described in Note 5, Notes and Other Receivables, the Company has provided short-term loans to affiliates. As of September 30, 2026 and December 31, 2025, $5.1 million and $5.2 million, respectively, of short-term loans remained outstanding due from joint venture affiliates and are classified within notes and other receivables in the accompanying condensed consolidated balance sheets.

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 withone of Wesco V’s properties located in Northern California. The note receivable accrued interest at 5.00% and was scheduled to mature in September 2026. In June 2026, the bridge loan was fully repaid in conjunction with the disposition of the property. See Note 4, Co-investments, for additional information regarding the disposition.

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 toone 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 a partial redemption and in May 2026, the Company received cash of $24.0 million for the full redemption of the remaining 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 September 30, 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.

(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):

(1)The $300.0 million unsecured term loan entered in May 2025 is priced at SOFR plus 0.85% which is based on a tiered rate structure tied to the Company’s long-term unsecured credit rating and was swapped to an all-in rate of 4.1% through April 2030. 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, withtwo 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 was swapped to an all-in fixed rate of 4.0%, which will mature in October 2026. The Company entered into $300.0 million of replacement interest rate swaps, effective upon maturity of the existing swaps, at an average all-in fixed rate of 4.5% through January 2031. In September 2026, the Company entered into a $275.0 million unsecured term loan with a maturity date in September 2029 andtwo one-year extension options, exercisable at the Company's option. This term loan is priced at SOFR plus 0.80%, which is based on a tiered rate structure tied to the Operating Partnership's long-term unsecured credit ratings. The Company may elect to increase this facility by up to an additional $225.0 million, to an aggregate size of $500.0 million, provided that one or more banks (from the lenders or as otherwise permitted) voluntarily agree to provide the additional commitment.

(2)Unsecured debt, net, consists of fixed rate public bond offerings and variable rate term loans which includes unamortized discounts, net of premiums of $2.8 million and $3.6 million, and unamortized debt issuance costs of $27.5 million and $30.4 million, as of September 30, 2026 and December 31, 2025, respectively.

(3)Lines of credit, related to the Company’stwo lines of unsecured credit aggregating $1.58 billion as of September 30, 2026 and December 31, 2025, excluded unamortized debt issuance costs of $6.2 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 September 30, 2026, the Company’s $1.5 billion credit facility had an interest rate at SOFR plus 0.775%, which is based on a tiered rate structure tied to the Company’s long-term unsecured credit ratings. As of September 30, 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.

(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 costs of $0.4 million and $0.4 million as of September 30, 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 zero and $0.2 million, and unamortized debt issuance costs of $2.6 million and $2.5 million, as of September 30, 2026 and December 31, 2025, respectively.

The aggregate scheduled principal payments of the Company’s outstanding debt, excluding lines of credit and commercial paper, as of September 30, 2026 were as follows ($ in thousands):

(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 thethree 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.

The revenues and NOI for each of the reportable operating segments are summarized as follows for the three and nine months ended September 30, 2026 and 2025 ($ in thousands):

Total assets for each of the reportable operating segments are summarized as follows as of September 30, 2026 and December 31, 2025 ($ in thousands):

(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

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

Excluded from the calculations of diluted earnings per share above were weighted average convertible OP Units of 2,183,944 and 2,256,415, which include vested 2014 Long-Term Incentive Plan Units and 2015 Long-Term Incentive Plan Units, for the three months ended September 30, 2026 and 2025, respectively, and 2,198,142 and 2,275,327 for the nine months ended September 30, 2026 and 2025, respectively, because they were anti-dilutive. The related income allocated to these convertible OP Units aggregated $3.3 million and $5.8 million for the three months ended September 30, 2026 and 2025, respectively, and $9.1 million and $20.8 million for the nine months ended September 30, 2026 and 2025, respectively.

Stock options of 202,881 and 250,512 for the three months ended September 30, 2026 and 2025, respectively, and 232,135 and 253,903 for the nine months ended September 30, 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.

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

Stock options of 202,881 and 250,512 for the three months ended September 30, 2026 and 2025, respectively, and 232,135 and 253,903 for the nine months ended September 30, 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 September 30, 2026, the Company hadseven interest rate swap contracts andthree forward starting interest rate swap contracts with an aggregate notional amount of $930.0 million. The Company has $600.0 million in notional amount that effectively fixed the interest rate on the Company’s $600.0 million unsecured term loan at 4.1%. The Company entered into three forward starting interest rate swaps with an aggregate notional amount of $300.0 million which will become effective in October 2026 upon maturity of interest swaps on the unsecured term loan. In August 2026, the Company entered into an interest rate swap with an aggregate notional amount of $30.0 million that effectively converts $30.0 million of variable rate mortgage notes payable to an all-in fixed rate of 5.3%. These derivatives qualify for hedge accounting.

As of September 30, 2026 and December 31, 2025, the aggregate carrying value of the interest rate swap contracts was an asset of $15.0 million and $1.3 million, respectively, within prepaid expenses and other assets in the condensed consolidated balance sheets.

As of September 30, 2026 and December 31, 2025, the aggregate carrying value of the forward starting interest rate swap contracts was $11.5 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.

A number of purported class actions were filed against RealPage, Inc. (“RealPage”), 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. During the three months ended June 30, 2026, the Company reached a settlement to fully resolve its case related to RealPage, for a settlement amount totaling $36.5 million. The settlement remains subject to court approval and, if the settlement is not approved, we intend to continue to vigorously defend ourselves. In addition to the RealPage matter, the Company fully resolved another litigation matter for a settlement amount totaling $19.3 million. That settlement is also subject to court approval and, if the settlement is not approved, we intend to continue to vigorously defend ourselves. The accrual for the loss contingencies related to these matters is presented in the accounts payable and accrued liabilities balance in the accompanying condensed consolidated balance sheets and in general and administrative expense in the accompanying condensed consolidated statements of income and comprehensive income. Legal costs associated with the defense of these claims are recorded when incurred. The Company is 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.