This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
See Cramer's multi-million dollar portfolio for FREE and get his new book Get Rich Carefully! Learn More

Essex Property Trust's CEO Discusses Q1 2012 Results - Earnings Call Transcript

The other housing supply risk relates to for-sale housing production. We continue to believe that affordable for-sale housing is a significant threat to apartment rent growth. Our for-sale supply expectations remain muted in our coastal markets, largely due to high median home prices and restrictive lending practices, which should be beneficial to Essex. Seattle single-family deliveries are estimated to approach 0.9%, or 6,300 units, in 2014. However, both Northern and Southern California have very little for-sale supply, averaging less than 0.2% of stock in 2012, growing to 0.4% in 2014. As a result, even with the growing apartment supply, we expect very tight housing conditions in each of our targeted markets through 2014.

Subsequent to quarter end, we completed the buyout of our partner's interest in Skyline apartments located near Irvine in Orange County. I have commented previously that institutional co-investments provide an important alternative source of capital as compared to financing on Essex's balance sheet. In this case, we estimate that we issued 320,000 fewer common shares by acquiring Skyline initially with a partner and then the subsequent partner buyout as compared to the pro forma acquisition of Skyline on our balance sheet back in March of 2010. Obviously, the stock price performance was a major factor in that result.

In development, we started 5 development projects in 2011 and started the second phase of our Epic community in San Jose during the quarter, all of which are outlined on Page S-9 of the supplement. The average cap rate on these construction projects based on current market rents is approximately 6%.

Aside from these transactions, our Shadow pipeline, which is not included on S-9, consists of 3 potential developments in Northern California that could start in 2012 and have an expected cost of approximately $360 million. Thus, by the end of the year, we expect our construction pipeline to aggregate up to $870 million, of which Essex will own from 50% to 55%.

Stock quotes in this article: ESS 

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
DOW 16,408.54 -16.31 -0.10%
S&P 500 1,864.85 +2.54 0.14%
NASDAQ 4,095.5160 +9.2910 0.23%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs