What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-02-23 compared with 2023-02-23 · 59 added, 79 removed, 291 unchanged (32% of the section changed)

14 unchanged sentences

As of December 31, 2023, the Company’s development pipeline was comprised of one unconsolidated joint venture project under development aggregating 264 apartment homes and various predevelopment projects, with total incurred costs of $114.0 million.

The estimated remaining project costs are approximately $25.0 million, $12.8 million of which represents the Company's estimated remaining costs, for total estimated project costs of $127.0 million.

The estimated remaining project costs are approximately $12.0 million, $6.5 million of which represents the Company's share of the estimated remaining costs, for total estimated project costs of $126.0 million.

As of December 31, 2023, the Company also had an ownership interest in three operating commercial buildings (totaling approximately 283,000 square feet).

By region, the Company's operating results for 2022 and 2021 and projection for 2023 new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing), projection for 2023 job growth, and 2023 estimated Same-Property revenue growth are as follows:

By region, the Company's operating results for 2023 and 2022 and projection for 2024 new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing) and 2024 estimated Same-Property revenue growth are as follows:

Southern California Region :

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In 2024, the Company projects new residential supply of 27,400 apartment homes and single family homes, which represents 0.4% of the total housing stock.

The Company projects an increase of 2,000 jobs or 0.3% in the Southern California region.

Northern California Region :

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In 2024, the Company projects new residential supply of 10,500 apartment homes and single family homes, which represents 0.4% of the total housing stock.

The Company projects an increase of 4,500 jobs or 0.7% in the Northern California region.

Seattle Metro Region :

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In 2024, the Company projects new residential supply of 11,700 apartment homes and single family homes, which represents 0.9% of the total housing stock.

The Company projects an increase of 3,000 jobs or 0.4% in the Seattle Metro region.

In total, the Company projects an increase in 2024 Same-Property revenues of between 0.7% to 2.7%.

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Co-investments, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.

Market Considerations, including the COVID-19 Pandemic

Though diminishing, the COVID-19 pandemic and its related variants continue to impact the U.S.

and world economies.

In an effort to mitigate its impact on affected populations, federal, state and local jurisdictions implemented varying forms of requirements which may continue to negatively affect profitability.

While the California eviction moratorium sunsetted during the third quarter of 2021, other state and local eviction moratoriums and laws that limit rent increases during times of emergency and impair the ability to collect unpaid rent during certain timeframes continue to be in effect in various formats at various regions in which our communities are located, impacting the Company and its properties.

The Company continues to work to comply with the stated intent of local, county, state and federal laws.

While COVID-19’s impact begins to dissipate, geopolitical tensions between Russian and Ukraine increased uncertainty during

Inflation has caused an increase in consumer prices, thereby reducing purchasing power and elevating the risks of a

Market Considerations

The Company is emerging from restrictions resulting from the COVID-19 pandemic and continues to comply with the stated intent of local, county, state and federal laws, some of which limit rent increases during times of emergency and impair the ability to collect unpaid rent during certain timeframes and in various regions in which our communities are located, impacting the Company and its properties.

Concurrently, geopolitical tensions and regional conflicts have increased uncertainty during 2022 and 2023.

Inflation has caused an increase in consumer prices, thereby reducing purchasing power and elevating the risks of a recession.

Due to increased inflation, the U.S.

Federal Reserve raised the federal funds rate a total of seven times during 2022.

Federal Reserve raised the federal funds rate a total of seven times during 2022 and four times in 2023.

In response, market interest rates have increased significantly during this time.

At the same time, the labor market remains historically tight and companies continue to look to add employees, pushing unemployment lower.

The long-term impact of these developments will largely depend on new information which may emerge concerning the

COVID-19 pandemic, future laws that may be enacted, geopolitical tensions, inflation, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.

Primarily as a result of the impact of the COVID-19 pandemic, the Company's cash delinquencies as a percentage of scheduled rental income for the Company’s stabilized apartment communities or "Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2022 and 2021) have generally remained higher than the pre-pandemic period due to on-going eviction moratoria related to the COVID-19 pandemic, and above the typical historical range of 0.3% to 0.4% since the second quarter of 2020.

Cash delinquencies remained elevated at 1.9% for 2021 but decreased to 1.2% in 2022, attributable to government payments for Emergency Rental Assistance which was mostly depleted by December 31, 2022.

The long-term impact of these developments will largely depend on future laws that may be enacted, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.

Primarily as a result of the impact of the COVID-19 pandemic, the Company's cash delinquencies as a percentage of scheduled rental income for the Company’s stabilized apartment communities or "Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2023 and 2022) have generally remained higher than the pre-pandemic historical average of 0.35% since the second quarter of 2020.

Cash delinquencies were elevated at 1.3% for 2022 and further increased to 1.9% in 2023.

The lower cash delinquencies in 2022 was due to $34.5 million of Emergency Rental Assistance payments compared to $2.6 million received during 2023, however current tenant delinquencies remained well above pre-pandemic levels.

The Company continues to work with residents to collect such cash delinquencies.

As of December 31, 2023, the delinquencies have not had a material adverse impact to the Company's liquidity position.

The Company's average financial occupancy for the Company's Same-Property portfolio decreased slightly from 96.4% for the year ended December 31, 2021 to 96.1% for the year ended December 31, 2022.

The COVID-19 pandemic and the resulting macroeconomic conditions have not negatively impacted the Company's ability to access traditional funding sources on the same or reasonably similar terms as were available in recent periods prior to the pandemic, as demonstrated by the Company's financing activity during the year ended December 31, 2022 discussed in the “Liquidity and Capital Resources" section below.

The Company's average financial occupancy for the Company's Same-Property portfolio increased slightly from 96.1% for the year ended December 31, 2022 to 96.4% for the year ended December 31, 2023.

The foregoing macroeconomic conditions have not negatively impacted the Company's ability to access traditional funding sources on the same or reasonably similar terms as were available in recent periods prior to the pandemic, as demonstrated by the Company's financing activity during the year ended December 31, 2023 discussed in the “Liquidity and Capital Resources" section below.

The Company is not at material risk of not meeting the covenants in its credit agreements and is able to timely service its debt and other obligations .

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Comparison of Year Ended December 31, 2023 to the Year Ended December 31, 2022

The Company’s average financial occupancy for the Company’s stabilized apartment communities or "2022 Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2022 and 2021) decreased 30

basis points to 96.1% in 2022 from 96.4% in 2021.

The Company’s average financial occupancy for the Company’s stabilized apartment communities or "2023 Same-Property" (stabilized properties consolidated by the Company for the years ended December 31, 2023 and 2022) increased 30 basis points to 96.4% in 2023 from 96.1% in 2022.

Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income.

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2023 Same-Property Revenues increased by $66.4 million or 4.4% to $1.6 billion for 2023 compared to $1.5 billion in 2022.

The increase was primarily attributable to an increase of 7.2% in average rental rates from $2,320 for 2021 to $2,486 for 2022 and 2.3% of the increase was attributable to a decrease in cash concessions in 2022 compared to 2021.

2022 Non-Same Property Revenues increased by $26.0 million or 30.6% to $110.7 million in 2022 compared to $84.7 million in 2021.

The increase was primarily due to the acquisitions of The Village at Toluca Lake and Canvas in 2021, the acquisitions of Regency Palm Court and Windsor Court in 2022, and an increase in average rental rates.

Management and other fees from affiliates increased by $2.0 million or 22.0% to $11.1 million in 2022 from $9.1 million in 2021.

The increase was primarily due to the addition of Martha Lake Apartments, Monterra in Mill Creek, The Rexford, and Silver communities to the Company's joint venture portfolio in 2021 and Vela in 2022, partially offset by the Company's purchases of BEX III, LLC's 50.0% interest in The Village at Toluca Lake in 2021, and its joint venture partner's 49.8% interest in Essex JV LLC co-investment that owned Regency Palm Court and Windsor Court, in 2022.

Property operating expenses, excluding real estate taxes increased by $18.5 million or 7.0% to $283.4 million in 2022 compared to $264.9 million in 2021, primarily due to increases of $9.2 million in utilities expenses, $7.4 million in maintenance and repairs expenses, and $1.9 million in administrative expenses.

2022 Same-Property operating expenses, excluding real estate taxes, increased by $15.5 million or 6.1% to $268.6 million in 2022 compared to $253.1 million in 2021, primarily due to increases of $8.0 million in utilities expenses, $6.2 million in maintenance and repairs expenses, $0.8 million in insurance and other expenses, and $0.5 million in administrative expenses.

Real estate taxes increased by $3.5 million or 1.9% to $183.9 million in 2022 compared to $180.4 million in 2021, primarily due to real estate taxes from the completion of development properties Wallace on Sunset in 2021 and Station Park Green (Phase IV) in 2022, as well as the acquisitions of The Village at Toluca Lake, Canvas, and 7 S Linden Commercial properties during 2021.

2022 Same-Property real estate taxes increased by $0.3 million or 0.2% to $164.0 million in 2022 compared to $163.7 million in 2021 primarily due to increased valuations and tax rates.

Corporate-level property management expenses increased by $4.5 million or 12.4% to $40.7 million in 2022 compared to $36.2 million in 2021 due to costs pertaining to the centralization of certain property level functions.

Depreciation and amortization expense increased by $19.2 million or 3.7% to $539.3 million in 2022 compared to $520.1 million in 2021, primarily due to an increase in depreciation expense from the completion of development properties Mylo and Wallace on Sunset in 2021, Station Park Green (Phase IV) in 2022, as well as the acquisitions of The Village at Toluca Lake and Canvas in 2021, and Regency Palm Court and Windsor Court in 2022.

Gain on sale of real estate and land of $94.4 million in 2022 was attributable to the sale of Anavia in the fourth quarter of 2022.

The Company's $143.0 million gain on sale of real estate and land in 2021 was attributable to the sale of Hidden Valley, Axis 2300, Park 20, and Devonshire Apartments during 2021.

Interest expense increased by $1.7 million or 0.8% to $204.8 million in 2022 compared to $203.1 million in 2021 , primarily due to the issuance of new senior unsecured notes in 2021 which resulted in an increase in interest expense of $4.8 million and increased borrowing on the Company's unsecured lines of credit, and higher average interest rates, which resulted in an increase in interest expense of $3.0 million.

The increase was primarily attributable to an increase of 4.5% in average rental rates from $2,493 for 2022 to $2,604 for 2023.

2023 Non-Same Property Revenues decreased by $3.8 million or 4.7% to $76.4 million in 2023 compared to $80.2 million in 2022.

The decrease was primarily due to the sales of Anavia in 2022 and of CBC and The Sweeps in 2023, partially offset by the acquisitions of Regency Palm Court and Windsor Court in 2022, the acquisition of Hacienda at Camarillo Oaks in 2023, and an increase in average rental rates.

Management and other fees from affiliates stayed consistent at $11.1 million in 2023 and 2022.

Property operating expenses, excluding real estate taxes increased by $16.3 million or 5.8% to $299.7 million in 2023 compared to $283.4 million in 2022, primarily due to increases of $5.1 million in utilities expenses, $4.7 million in maintenance and repairs expenses, $4.1 million in administrative expenses, and $2.4 million in personnel costs.

2023 Same-Property operating expenses, excluding real estate taxes, increased by $18.0 million or 6.6% to $292.0 million in 2023 compared to $274.0 million in 2022, primarily due to increases of $5.7 million in utilities expenses, $5.1 million in maintenance

and repairs expenses, $4.1 million in insurance and other expenses, $2.7 million in personnel costs, and $0.5 million in administrative expenses.

Real estate taxes increased by $1.9 million or 1.0% to $185.8 million in 2023 compared to $183.9 million in 2022, primarily due to an increase of approximately 2% in California real estate taxes, partially offset by a decrease from 2022 in real estate taxes in the Seattle metro region.

2023 Same-Property real estate taxes increased by $2.1 million or 1.3% to $171.3 million in 2023 compared to $169.2 million in 2022 primarily due to an increase of approximately 2% in California real estate taxes, partially offset by a decrease from 2022 in real estate taxes in the Seattle metro region.

Depreciation and amortization expense increased by $9.1 million or 1.7% to $548.4 million in 2023 compared to $539.3 million in 2022, primarily due to an increase in depreciation expense from the completion of Station Park Green (Phase IV) development property in 2022, the acquisition of the Company's joint venture partner's 49.8% interest in Essex JV LLC co-investment that owned Regency Palm Court and Windsor Court, in 2022, and the acquisition of Hacienda at Camarillo Oaks in 2023.

The increase was partially offset by the sale of Anavia in 2022 and CBC and The Sweeps in 2023.

Gain on sale of real estate and land of $59.2 million in 2023 was attributable to the sale of CBC and The Sweeps apartment home community and the sale of a land parcel.

Interest expense increased by $8.1 million or 4.0% to $212.9 million in 2023 compared to $204.8 million in 2022 , primarily due to borrowing on the $300.0 million unsecured term loan in April 2023, the $298.0 million of 10-year secured loans closed in July 2023, and higher average interest rates resulting in an increase in interest expense of $16.3 million.

Additionally, there was a $1.4 million decrease in capitalized interest in 2023, due to a decrease in development activity as compared to the same period in 2022.

These increases in interest expense were partially offset by various debts that were paid off, matured, or regular principal payments during and after 2021 which resulted in a decrease in interest expense of $10.0 million for 2022.

Total return swap income of $7.9 million in 2022 consists of monthly settlements related to the Company's four total return swap contracts with an aggregate notional amount of $223.6 million.

Interest and other (loss) income decreased by $117.7 million or 119.3% to a loss of $19.0 million in 2022 compared to an income of $98.7 million in 2021, primarily due to unrealized losses resulting from a decrease in the fair value of marketable securities.

Equity income from co-investments decreased by $85.7 million or 76.7% to $26.0 million in 2022 compared to $111.7 million in 2021, primarily due to decreases of $93.6 million in equity income from non-core co-investments, $5.3 million in income from preferred equity investments including income from early redemptions, and a $2.1 million impairment loss from an unconsolidated co-investment.

These decreases were offset by $17.1 million in co-investment promote income during 2022 and an increase of $1.0 million in loss on early retirement of debt from unconsolidated co-investments.

Deferred tax benefit on unconsolidated co-investments of $10.2 million in 2022 is primarily due to net unrealized losses from non-core unconsolidated co-investments.

Gain on remeasurement of co-investment of $17.4 million in 2022 resulted from the Company's purchase of its joint venture partner's 49.8% membership interest in Essex JV, LLC co-investment that owned Regency Palm Court and Windsor Court.

Gain on remeasurement of $2.3 million in 2021 resulted from the Company's purchase of BEX III's 50.0% interest in The Village at Toluca Lake community in the second quarter of 2021.

These increases in interest expense were partially offset by regular principal payments and various debts that matured or were paid off, primarily due to the pay down of the $300.0 million of senior unsecured notes due May 1, 2023 and decreased borrowing on the Company's unsecured lines of credit during and after 2022, which resulted in a decrease in interest expense of $9.6 million for 2023.

Interest and other (loss) income increased by $65.3 million or 343.7% to income of $46.3 million in 2023 compared to a loss of $19.0 million in 2022, primarily due to increases of $55.6 million in realized and unrealized gains on marketable securities, $7.3 million in marketable securities and other income, and $3.7 million in insurance reimbursements, legal settlements, and other, driven by a legal settlement claim.

Equity income from co-investments decreased by $15.4 million or 59.2% to $10.6 million in 2023 compared to $26.0 million in 2022, primarily due to a decrease of $17.1 million in co-investment promote income, an increase of $31.6 million in impairment losses from unconsolidated co-investments offset by an increase of $39.7 million in equity income from non-core co-investments.

Comparison of Year Ended December 31, 2022 to the Year Ended December 31, 2021

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As of December 31, 2023, the Company had two unsecured lines of credit aggregating $1.24 billion, including a $1.2 billion unsecured line of credit and a $35.0 million working capital unsecured line of credit.

As of December 31, 2022, there was $40.0 million outstanding on the $1.2 billion unsecured line of credit.

As of December 31, 2023, there was no amount outstanding on the $1.2 billion unsecured line of credit.

The underlying interest rate is based on a tiered rate structure tied to the Company's credit ratings, adjusted for the Company's sustainability metric grid, and was at Adjusted SOFR plus 0.75% as of December 31, 2023.

This facility is scheduled to mature in January 2027, with two six-month extensions, exercisable at the Company's option.

As of December 31, 2022, there was $12.1 million outstanding on the Company's $35.0 million working capital unsecured line of credit.

As of December 31, 2023, there was no amount outstanding on the Company's $35.0 million working capital unsecured line of credit.

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These derivatives do not qualify for hedge accounting.

As of December 31, 2022 and 2021, the aggregate carrying value of the interest rate swap contracts were an asset of $5.6 million and zero, respectively.

As of December 31, 2022 and 2021, the swap contracts were presented in the consolidated balance sheets as an asset of $5.6 million and zero, respectively, and were included in prepaid expenses and other assets on the consolidated balance sheets.

As of December 31, 2023 and 2022, the aggregate carrying value of the interest rate swap contracts were an asset of $4.3 million and $5.6 million, respectively.

As of December 31, 2023 and 2022, the swap contracts were presented in the consolidated balance sheets as an asset of $4.3 million and $5.6 million, respectively, and were included in prepaid expenses and other assets on the consolidated balance sheets.

The aggregate carrying and fair value of the total return swaps was zero at both December 31, 2023 and 2022.

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In connection with the 2021 ATM Program, the Company may also enter into related forward sale agreements, and may sell shares of its common stock pursuant to these agreements.

The use of a forward sale agreement would allow the Company to

lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date should the Company elect to settle such forward sale agreement, in whole or in part, in shares of common stock.

The use of a forward sale agreement would allow the Company to lock in a share price on the sale of shares of its common stock at the time the agreement is executed, but defer receipt of the proceeds from the sale of shares until a later date should the Company elect to settle such forward sale agreement, in whole or in part, in shares of common stock.

The 2021 ATM Program replaced the prior equity distribution agreement entered into in September 2018 (the "2018 ATM Program"), which was terminated upon the establishment of the 2021 ATM Program.

For the year ended December 31, 2022, the Company did not sell any shares of its common stock through the 2021 ATM Program.

For the years ended December 31, 2023 and 2022, the Company did not sell any shares of its common stock through the 2021 ATM Program.

As of December 31, 2023, there were no outstanding forward purchase agreements, and $900.0 million of shares of common stock remain available to be sold under the 2021 ATM Program.

For the years ended December 31, 2021 and 2020, the Company did not issue any shares of its common stock through the 2021 ATM Program or through the 2018 ATM Program.

For the year ended December 31, 2021, the Company did not issue any shares of its common stock through the 2021 ATM Program or through the 2018 ATM Program.

Capital Expenditures

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For the year ended December 31, 2023, non-revenue generating capital expenditures totaled approximately $2,531 per apartment home.

These expenditures do not include expenditures for deferred maintenance on acquisition properties, expenditures for property renovations and improvements which are expected to generate additional revenue or cost savings, and do not include expenditures incurred due to changes in government regulations that the Company would not have incurred otherwise, retail, furniture and fixtures, or expenditures for which the Company expects to be reimbursed.

The Company expects that cash from operations and/or its lines of credit will fund such expenditures.

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As of December 31, 2023, the Company's development pipeline was comprised of one unconsolidated joint venture project under development aggregating 264 apartment homes and various predevelopment projects, with total incurred costs of $114.0 million.

Estimated remaining project costs are approximately $25.0 million, $12.8 million of which represents the Company's estimated remaining costs, for total estimated project costs of $127.0 million.

Estimated remaining project costs are approximately $12.0 million, $6.5 million of which represents the Company's share of the estimated remaining costs, for total estimated project costs of $126.0 million.

The Company defines predevelopment projects as proposed communities in negotiation or in the entitlement process with an expected high likelihood of becoming entitled development projects.

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$ 234,000 $ 80,020

(1) Excludes approximately $12.8 million of the Company's share of estimated project costs for LIVIA (fka Scripps Mesa Apartments) which have been fully funded.

(1) Excludes approximately $6.5 million of the Company's share of estimated project costs for LIVIA at Scripps Ranch which have been fully funded.

At December 31, 2023, the Company had operating lease commitments of $155.1 million for ground, building and garage leases with maturity dates ranging from 2025 to 2083.

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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.

The Company defines critical accounting estimates as those estimates that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company.

The Company defines critical accounting estimates as those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on the financial condition or results of operations of the Company.

The Company’s critical accounting estimates relate principally to the following key areas:

(i) accounting for the acquisition of investments in real estate (specifically, the allocation between land and buildings during the year ended December 31, 2020);

(i) accounting for the acquisition of investments in real estate;

and (ii) evaluation of events and changes in circumstances indicating whether the Company’s rental properties may be impaired.

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.

The Company bases its estimates on historical experience, current market conditions, and various other assumptions that are believed to be reasonable under the circumstances.

Actual results may differ from those estimates made by management.

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The reasonable likelihood that the estimate could have a material impact on the financial condition of the Company is based on the total consideration exchanged for real estate during any given year.

The allocation of the value between land and

building was a critical accounting estimate during the year ended December 31, 2020 as result of the potential material impact of the Company's acquisition of a land parcel and six communities for a total purchase price of $463.4 million.

The Company periodically assesses the carrying value of its real estate investments for indicators of impairment.

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The Company considers FFO and Core FFO to be useful financial performance measurements of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends.

By excluding gains or losses related to sales of depreciated operating properties and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies.

By excluding gains or losses related to sales of depreciated operating properties and land, excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates) and excluding impairment write-downs from operating real estate and unconsolidated co-investments driven by a measurable decrease in the fair value of real estate held by the co-investment, FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies.

By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results.

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GAAP assumes, through depreciation charges, that the value of real estate assets diminishes predictably over time.

NAREIT stated in its White Paper on Funds from Operations “since real estate asset values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves." Consequently, NAREIT’s definition of FFO reflects the fact that real

estate, as an asset class, generally appreciates over time and depreciation charges required by U.S.

GAAP do not reflect the underlying economic realities.

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Depreciation and amortization 548,438 539,319 520,066

Gains not included in FFO attributable to common stockholders and unitholders (111,839) (145,253) (301,886)

Gains not included in FFO (59,238) (111,839) (145,253)

Casualty loss 433 — —

Impairment loss from unconsolidated co-investments 33,700 2,105 —

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Expensed acquisition and investment related costs 595 2,132 203

Deferred tax (benefit) expense on unconsolidated co-investments (2)

Tax expense (benefit) on unconsolidated co-investments (2)

697 (10,236) 15,668

Gain on sale of marketable securities (12,436) (3,400) (2,131)

Change in unrealized losses (gains) on marketable securities, net 57,983 (33,104) (12,515)

Realized and unrealized (gains) losses on marketable securities, net (10,006) 45,547 (36,504)

Provision for credit losses 70 (381) 141

Equity loss (income) from non-core co-investments (3)

Equity (income) loss from non-core co-investments (3)

(1,685) 38,045 (55,602)

Loss on early retirement of debt, net — 2 19,010

Loss (gain) on early retirement of debt from unconsolidated co-investment 988 25 (38)

Loss on early retirement of debt from unconsolidated co-investment — 988 25

Co-investment promote income — (17,076) —

Income from early redemption of preferred equity investments and notes receivable (285) (1,669) (8,469)

Accelerated interest income from maturity of investment in mortgage backed security — — (11,753)

General and administrative and other, net 6,629 2,536 1,026

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The noncontrolling interest's share of net operating income in these investments for the twelve months ended December 31, 2023 was $3.3 million.

(2) Represents deferred tax (benefit) expense related to net unrealized gains or losses on technology co-investments.

(3) Represents the Company's share of co-investment loss (income) from technology co-investments.

(2) Represents tax related to net unrealized gains or losses on technology co-investments.

(3) Represents the Company's share of co-investment or loss from technology co-investments.

(4) Assumes conversion of all outstanding OP Units into shares of the Company's common stock and excludes DownREIT limited partnership units.

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Expensed acquisition and investment related costs 595 2,132 203

Impairment loss — — 1,825

Casualty Loss 433 — —

Gain on sale of real estate and land (59,238) (94,416) (142,993)

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Forward-Looking Statements

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Annual Report on Form 10-K which are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act") and Section 21E of the Exchange Act, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future.

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and elsewhere in this Annual Report on Form 10-K which are not historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future.

Words such as "expects," "assumes," "anticipates," "may," "will," "intends," "plans," "projects," "believes," "seeks," "future," "estimates," and variations of such words and similar expressions are intended to identify such forward-looking statements.

Such forward-looking statements include, among other things, statements regarding the Company's expectations related to the continued evolution of the work-from-home trend in light of the COVID-19 pandemic, the Company's intent, beliefs or expectations with respect to the timing of completion of current development and redevelopment projects and the stabilization of such projects, the timing of lease-up and occupancy of its apartment communities, the anticipated operating performance of its apartment communities, the total projected costs of development and redevelopment projects, co-investment activities, qualification as a REIT under the Internal Revenue Code of 1986, as amended, 2022 Same-Property revenue and operating expenses generally and in specific regions, the real estate markets in the geographies in which the Company's properties are located and in the United States in general, the adequacy of future cash flows to meet anticipated cash needs, its financing activities and the use of proceeds from such activities, the availability of debt and equity financing, general economic conditions including the potential impacts from such economic conditions, inflation, the labor market, supply chain impacts and ongoing hostilities between Russia and Ukraine, trends affecting the Company's financial condition or results of operations, changes to U.S.

Such forward-looking statements include, among other things, statements regarding the Company's expectations related to the continued evolution of the work-from-home trend, the Company's intent, beliefs or expectations with respect to the timing of completion of current development and redevelopment projects and the stabilization of such projects, the timing of lease-up and occupancy of its apartment communities, the anticipated operating performance of its apartment communities, the total projected costs of development and redevelopment projects, co-investment activities, qualification as a REIT under the Internal Revenue Code of 1986, as amended, the Company’s first quarter and full-year 2024 guidance (including net income, Total FFO and Core FFO and related assumptions, including with respect to GDP growth, job growth and market rent growth), 2024 same-property revenue, new housing growth, operating expenses and net operating income generally and in specific regions, the real estate markets in the geographies in which the Company's properties are located and in the United States in general, the adequacy of future cash flows to meet anticipated cash needs, its financing activities and the use of proceeds from such activities, the availability of debt and equity financing, general economic conditions including the potential impacts from such economic conditions, inflation, the labor market, supply chain impacts, geopolitical tensions and regional conflicts, trends affecting the Company's financial condition or results of operations, changes to U.S.

tax laws and regulations in general or specifically related to REITs or real estate, changes to laws and regulations in jurisdictions in which communities the Company owns are located, and other information that is not historical information.

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rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed.

Factors that might

cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following:

Factors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following:

potential future outbreaks of infectious diseases or other health concerns, which could adversely affect the Company's business and its tenants, and cause a significant downturn in general economic conditions, the real estate industry, and the markets in which the Company's communities are located;

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occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions;

uncertainties regarding ongoing hostilities between Russia and Ukraine and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation;

there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts;

geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation;

the Company may be unsuccessful in the management of its relationships with its co-investment partners;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis