Essex Property Trust (ESS) investor relations material

Company overview and market fundamentals

• Operates exclusively on the West Coast with a $25 billion market cap and over 63,000 units.

• Achieved 32 years of consecutive dividend growth, earning Dividend Aristocrat status.

• West Coast markets benefit from historically low housing supply, currently at 40 basis points versus a typical 70.

• Low supply means stable rent growth even with modest job growth.

• AI and tech innovation are driving strong job growth and demand, especially in Northern California.

Market performance and demand drivers

• Northern California is still in recovery, with rent growth at 10% above pre-COVID, below the 20% potential.

• AI job postings and tech hiring are robust, supporting above-average rent growth.

• Layoffs are less impactful locally than headlines suggest, with laid-off workers quickly re-employed.

• Net domestic in-migration has turned positive in the Bay Area for the first time in decades.

• AI growth is not limited to San Francisco but extends throughout the peninsula, with 250+ AI startups.

Rent growth, pricing strategy, and guidance

• Blended lease rate growth increased from 1.4% in Q1 to 3.7% in May, reflecting strong seasonal demand.

• Focus shifts from occupancy to rent growth in peak leasing seasons.

• Current market rents are above last year but still below long-term averages, indicating more upside.

• Guidance assumes flat blended rents in the second half due to economic uncertainty and upcoming elections.

• Performance is trending ahead of guidance, with potential for upward revision after Q2.