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Reportable Segments | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Reportable Segments | 12. Reportable Segments Operating segments are defined as components of an enterprise that engage in business activities from which they may earn revenues and incur expenses and about which discrete financial information is available that is evaluated regularly by the chief operating decision maker. The chief operating decision maker decides how resources are allocated and assesses performance on a recurring basis at least quarterly. The Company’s primary business is the acquisition, development and management of multifamily residential properties, which includes the generation of rental and other related income through the leasing of apartment units to residents. The chief operating decision maker evaluates the Company’s operating performance geographically by market for same store properties and on a portfolio basis for non-same store properties. While the Company does maintain a non-residential presence, it accounts for less than 4.0% of total revenues for the nine months ended September 30, 2024 and is designed as an amenity for our residential residents. The chief operating decision maker evaluates the performance of each property on a consolidated residential and non-residential basis. The Company’s geographic consolidated same store operating segments represent its reportable segments. The Company’s development activities are other business activities that do not constitute an operating segment and as such, have been aggregated in the “Other” category in the tables presented below. All revenues are from external customers and there is no customer who contributed 10% or more of the Company’s total revenues during the nine months and quarters ended September 30, 2024 and 2023, respectively. The primary financial measure for the Company’s rental real estate segment is net operating income (“NOI”), which represents rental income less: 1) property and maintenance expense and 2) real estate taxes and insurance expense (all as reflected in the accompanying consolidated statements of operations and comprehensive income). The Company believes that NOI is helpful to investors as a supplemental measure of its operating performance because it is a direct measure of the actual operating results of the Company’s apartment properties. Revenues for all leases are reflected on a straight-line basis in accordance with GAAP for the current and comparable periods. The following table presents a reconciliation of net income per the consolidated statements of operations to NOI for the nine months and quarters ended September 30, 2024 and 2023, respectively (amounts in thousands):
|  | Nine Months Ended September 30, |  |  | Quarter Ended September 30, |
|  | 2024 |  |  | 2023 |  |  | 2024 |  |  | 2023 |
Net income |  | $ | 637,104 |  |  | $ | 546,219 |  |  | $ | 148,517 |  |  | $ | 181,286 |
Adjustments: |  |  |  |  |  |  |  |  |  |  |  |
Property management |  |  | 100,381 |  |  |  | 90,314 |  |  |  | 31,412 |  |  |  | 28,169 |
General and administrative |  |  | 48,902 |  |  |  | 49,135 |  |  |  | 14,551 |  |  |  | 14,094 |
Depreciation |  |  | 688,041 |  |  |  | 661,921 |  |  |  | 237,948 |  |  |  | 224,736 |
Net (gain) loss on sales of real estate properties |  |  | (227,829 | ) |  |  | (127,034 | ) |  |  | 165 |  |  |  | (26,912 | )
Interest and other income |  |  | (26,501 | ) |  |  | (11,296 | ) |  |  | (15,844 | ) |  |  | (7,627 | )
Other expenses |  |  | 59,094 |  |  |  | 20,517 |  |  |  | 13,971 |  |  |  | 4,958 |
Interest: |  |  |  |  |  |  |  |  |  |  |  |
Expense incurred, net |  |  | 205,762 |  |  |  | 200,882 |  |  |  | 72,722 |  |  |  | 68,891 |
Amortization of deferred financing costs |  |  | 5,784 |  |  |  | 7,023 |  |  |  | 1,948 |  |  |  | 3,027 |
Income and other tax expense (benefit) |  |  | 925 |  |  |  | 892 |  |  |  | 290 |  |  |  | 258 |
(Income) loss from investments in unconsolidated entities |  |  | 4,865 |  |  |  | 3,847 |  |  |  | 1,493 |  |  |  | 1,242 |
Total NOI |  | $ | 1,496,528 |  |  | $ | 1,442,420 |  |  | $ | 507,173 |  |  | $ | 492,122 |
The following tables present NOI from our rental real estate for each segment for the nine months and quarters ended September 30, 2024 and 2023, respectively, as well as total assets and capital expenditures at September 30, 2024 (amounts in thousands):
|  | Nine Months Ended September 30, 2024 |  |  | Nine Months Ended September 30, 2023 |
|  | Rental Income |  |  | Operating Expenses |  |  | NOI |  |  | Rental Income |  |  | Operating Expenses |  |  | NOI |
Same store (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Los Angeles |  | $ | 359,597 |  |  | $ | 111,273 |  |  | $ | 248,324 |  |  | $ | 348,595 |  |  | $ | 108,917 |  |  | $ | 239,678 |
Orange County |  |  | 93,760 |  |  |  | 21,113 |  |  |  | 72,647 |  |  |  | 90,080 |  |  |  | 20,188 |  |  |  | 69,892 |
San Diego |  |  | 77,784 |  |  |  | 17,731 |  |  |  | 60,053 |  |  |  | 74,183 |  |  |  | 17,371 |  |  |  | 56,812 |
Subtotal - Southern California |  |  | 531,141 |  |  |  | 150,117 |  |  |  | 381,024 |  |  |  | 512,858 |  |  |  | 146,476 |  |  |  | 366,382 |
Washington, D.C. |  |  | 347,229 |  |  |  | 110,104 |  |  |  | 237,125 |  |  |  | 331,425 |  |  |  | 107,050 |  |  |  | 224,375 |
San Francisco |  |  | 325,999 |  |  |  | 99,012 |  |  |  | 226,987 |  |  |  | 321,310 |  |  |  | 98,504 |  |  |  | 222,806 |
New York |  |  | 369,642 |  |  |  | 151,331 |  |  |  | 218,311 |  |  |  | 356,157 |  |  |  | 145,192 |  |  |  | 210,965 |
Boston |  |  | 244,474 |  |  |  | 69,882 |  |  |  | 174,592 |  |  |  | 234,291 |  |  |  | 69,072 |  |  |  | 165,219 |
Seattle |  |  | 223,656 |  |  |  | 65,197 |  |  |  | 158,459 |  |  |  | 218,574 |  |  |  | 62,055 |  |  |  | 156,519 |
Denver |  |  | 53,522 |  |  |  | 16,190 |  |  |  | 37,332 |  |  |  | 53,324 |  |  |  | 16,161 |  |  |  | 37,163 |
Other Expansion Markets |  |  | 55,612 |  |  |  | 22,509 |  |  |  | 33,103 |  |  |  | 55,768 |  |  |  | 24,123 |  |  |  | 31,645 |
Total same store |  |  | 2,151,275 |  |  |  | 684,342 |  |  |  | 1,466,933 |  |  |  | 2,083,707 |  |  |  | 668,633 |  |  |  | 1,415,074 |
Non-same store/other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-same store (2) |  |  | 54,874 |  |  |  | 22,230 |  |  |  | 32,644 |  |  |  | 22,406 |  |  |  | 10,893 |  |  |  | 11,513 |
Other (3) |  |  | 7,180 |  |  |  | 10,229 |  |  |  | (3,049 | ) |  |  | 40,351 |  |  |  | 24,518 |  |  |  | 15,833 |
Total non-same store/other |  |  | 62,054 |  |  |  | 32,459 |  |  |  | 29,595 |  |  |  | 62,757 |  |  |  | 35,411 |  |  |  | 27,346 |
Totals |  | $ | 2,213,329 |  |  | $ | 716,801 |  |  | $ | 1,496,528 |  |  | $ | 2,146,464 |  |  | $ | 704,044 |  |  | $ | 1,442,420 |
(1) For the nine months ended September 30, 2024 and 2023, same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2023, less properties subsequently sold, which represented 76,916 apartment units. (2) For the nine months ended September 30, 2024 and 2023, non-same store primarily includes properties acquired after January 1, 2023, plus any properties in lease-up and not stabilized as of January 1, 2023, and any properties undergoing major renovations. (3) Other includes development, other corporate operations and operations prior to disposition for properties sold.
|  | Quarter Ended September 30, 2024 |  |  | Quarter Ended September 30, 2023 |
|  | Rental Income |  |  | Operating Expenses |  |  | NOI |  |  | Rental Income |  |  | Operating Expenses |  |  | NOI |
Same store (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Los Angeles |  | $ | 120,211 |  |  | $ | 37,670 |  |  | $ | 82,541 |  |  | $ | 118,812 |  |  | $ | 36,343 |  |  | $ | 82,469 |
Orange County |  |  | 31,488 |  |  |  | 7,248 |  |  |  | 24,240 |  |  |  | 30,663 |  |  |  | 6,792 |  |  |  | 23,871 |
San Diego |  |  | 25,969 |  |  |  | 6,071 |  |  |  | 19,898 |  |  |  | 25,258 |  |  |  | 5,820 |  |  |  | 19,438 |
Subtotal - Southern California |  |  | 177,668 |  |  |  | 50,989 |  |  |  | 126,679 |  |  |  | 174,733 |  |  |  | 48,955 |  |  |  | 125,778 |
Washington, D.C. |  |  | 117,306 |  |  |  | 38,351 |  |  |  | 78,955 |  |  |  | 112,681 |  |  |  | 35,616 |  |  |  | 77,065 |
San Francisco |  |  | 108,957 |  |  |  | 33,313 |  |  |  | 75,644 |  |  |  | 107,808 |  |  |  | 32,769 |  |  |  | 75,039 |
New York |  |  | 123,506 |  |  |  | 50,011 |  |  |  | 73,495 |  |  |  | 118,327 |  |  |  | 48,055 |  |  |  | 70,272 |
Boston |  |  | 81,941 |  |  |  | 23,156 |  |  |  | 58,785 |  |  |  | 78,562 |  |  |  | 22,875 |  |  |  | 55,687 |
Seattle |  |  | 75,032 |  |  |  | 21,907 |  |  |  | 53,125 |  |  |  | 72,778 |  |  |  | 20,883 |  |  |  | 51,895 |
Denver |  |  | 19,649 |  |  |  | 6,062 |  |  |  | 13,587 |  |  |  | 19,802 |  |  |  | 5,937 |  |  |  | 13,865 |
Other Expansion Markets |  |  | 18,249 |  |  |  | 6,309 |  |  |  | 11,940 |  |  |  | 18,679 |  |  |  | 7,957 |  |  |  | 10,722 |
Total same store |  |  | 722,308 |  |  |  | 230,098 |  |  |  | 492,210 |  |  |  | 703,370 |  |  |  | 223,047 |  |  |  | 480,323 |
Non-same store/other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Non-same store (2) |  |  | 25,391 |  |  |  | 9,371 |  |  |  | 16,020 |  |  |  | 8,059 |  |  |  | 4,099 |  |  |  | 3,960 |
Other (3) |  |  | 649 |  |  |  | 1,706 |  |  |  | (1,057 | ) |  |  | 12,638 |  |  |  | 4,799 |  |  |  | 7,839 |
Total non-same store/other |  |  | 26,040 |  |  |  | 11,077 |  |  |  | 14,963 |  |  |  | 20,697 |  |  |  | 8,898 |  |  |  | 11,799 |
Totals |  | $ | 748,348 |  |  | $ | 241,175 |  |  | $ | 507,173 |  |  | $ | 724,067 |  |  | $ | 231,945 |  |  | $ | 492,122 |
(1) For the quarters ended September 30, 2024 and 2023, same store primarily includes all properties acquired or completed that were stabilized prior to July 1, 2023, less properties subsequently sold, which represented 77,203 apartment units. (2) For the quarters ended September 30, 2024 and 2023, non-same store primarily includes properties acquired after July 1, 2023, plus any properties in lease-up and not stabilized as of July 1, 2023, and any properties undergoing major renovations. (3) Other includes development, other corporate operations and operations prior to disposition for properties sold.
|  | Nine Months Ended September 30, 2024 |
|  | Total Assets |  |  | Capital Expenditures |
Same store (1) |  |  |  |  |  |
Los Angeles |  | $ | 2,441,079 |  |  | $ | 39,778 |
Orange County |  |  | 334,057 |  |  |  | 12,059 |
San Diego |  |  | 335,471 |  |  |  | 12,061 |
Subtotal - Southern California |  |  | 3,110,607 |  |  |  | 63,898 |
Washington, D.C. |  |  | 2,980,055 |  |  |  | 35,160 |
San Francisco |  |  | 2,996,799 |  |  |  | 42,555 |
New York |  |  | 3,241,250 |  |  |  | 19,683 |
Boston |  |  | 2,028,747 |  |  |  | 21,954 |
Seattle |  |  | 2,023,139 |  |  |  | 22,405 |
Denver |  |  | 799,928 |  |  |  | 3,036 |
Other Expansion Markets |  |  | 872,501 |  |  |  | 5,154 |
Total same store |  |  | 18,053,026 |  |  |  | 213,845 |
Non-same store/other |  |  |  |  |  |
Non-same store (2) |  |  | 1,998,651 |  |  |  | 15,724 |
Other (3) |  |  | 874,144 |  |  |  | 538 |
Total non-same store/other |  |  | 2,872,795 |  |  |  | 16,262 |
Totals |  | $ | 20,925,821 |  |  | $ | 230,107 |
(1) Same store primarily includes all properties acquired or completed that were stabilized prior to January 1, 2023, less properties subsequently sold, which represente d 76,916 ap artment units. (2) Non-same store primarily includes properties acquired after January 1, 2023, plus any properties in lease-up and not stabilized as of January 1, 2023, and any properties undergoing major renovations. (3) Other includes development, other corporate operations and capital expenditures for properties sold.

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