PROSPECTUS SUPPLEMENT
(To Prospectus Dated September 24, 2021)
ESSEX PROPERTY TRUST, INC.
Up to $900,000,000
Under
Equity Distribution Program
This prospectus supplement and the accompanying prospectus relate to the ongoing offer and sale, from time to time, of shares of our common stock, par value $0.0001 per share (the “common stock”), having an aggregate gross sales price of up to $900,000,000. The shares of common stock offered by this prospectus supplement and the accompanying prospectus are being sold pursuant to an equity distribution agreement (the “equity distribution agreement”) among us and Citigroup Global Markets Inc., BNP Paribas Securities Corp., BTIG, LLC, Capital One Securities, Inc., Jefferies LLC, J.P. Morgan Securities LLC, Mizuho Securities USA LLC, MUFG Securities Americas Inc., Regions Securities LLC, Scotia Capital (USA) Inc. and Truist Securities, Inc. (in such capacity, each, a “Sales Agent” and, collectively, the “Sales Agents”) and the Forward Purchasers (as defined below). In accordance with the terms of the equity distribution agreement, we may offer and sell these shares from time to time through the Sales Agents, acting as our agents or, if applicable, as Forward Sellers (as defined below), or acting as principals.
Sales, if any, of shares of common stock under this prospectus supplement and the accompanying prospectus made through the Sales Agents, as our sales agents or as Forward Sellers pursuant to the equity distribution agreement, may be made in privately negotiated transactions, which may include block trades, or transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), by means of ordinary brokers’ transactions at market prices prevailing at the time of sale, including sales made directly on the New York Stock Exchange (the “NYSE”), sales made to or through a market maker other than on an exchange and sales made through other securities exchanges or electronic communications networks.
The equity distribution agreement contemplates that, in addition to the issuance and sale by us of shares of our common stock to or through the Sales Agents acting as our agents, we may enter into forward sale agreements (each, a “forward sale agreement” and, collectively, the “forward sale agreements”) under separate master forward sale agreements and related supplemental confirmations, each with Citibank, N.A., BNP Paribas, Jefferies LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC, MUFG Securities EMEA plc, The Bank of Nova Scotia or Truist Bank (in such capacity, each, a “Forward Purchaser” and, collectively, the “Forward Purchasers”). If we enter into a forward sale agreement with any Forward Purchaser, we expect that such Forward Purchaser or one of its affiliates will attempt to borrow from third parties and sell, through the relevant Sales Agent, acting as sales agent for such Forward Purchaser, shares of our common stock to hedge such Forward Purchaser’s exposure under such forward sale agreement. We refer to a Sales Agent, when acting as sales agent for the relevant Forward Purchaser, as, individually, a “Forward Seller” and, collectively, the “Forward Sellers.” Each Forward Purchaser will be either one of the Sales Agents named in the first sentence of this paragraph or an affiliate of one of those Sales Agents and, unless otherwise expressly stated or the context otherwise requires, references herein to the “related” or “relevant” Forward Purchaser mean, with respect to any Sales Agent, the affiliate of such Sales Agent that is acting as Forward Purchaser or, if applicable, such Sales Agent acting in its capacity as Forward Purchaser. We will not initially receive any proceeds from any sale of shares of our common stock borrowed by a Forward Purchaser and sold through a Forward Seller.
We currently expect to fully physically settle each forward sale agreement, if any, with the relevant Forward Purchaser on one or more dates specified by us on or prior to the maturity date of such forward sale agreement, in which case we expect to receive aggregate net cash proceeds at settlement equal to the number of shares underlying such forward sale agreement multiplied by the relevant forward sale price per share. However, subject to certain exceptions, we may also elect, in our sole discretion, to cash settle or net share settle all or any portion of our obligations under any forward sale agreement, in which case we may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and we may owe cash (in the case of cash settlement) or shares of our common stock (in the case of net share settlement) to the relevant Forward Purchaser. For additional information, see “Plan of Distribution” in this prospectus supplement.
Each Sales Agent will be entitled to compensation of up to 2.0% of the gross sales price per share for any shares of common stock sold through it as an agent. In connection with each forward sale agreement, we will pay the applicable Sales Agent, acting as Forward Seller in connection with such forward sale agreement, a commission, in the form of a reduction to the initial forward sale price under the related forward sale agreement, at a mutually agreed rate not exceeding 2.0% of the volume-weighted average of the sales prices per share of the borrowed shares of our common stock sold through such Sales Agent, as Forward Seller, during the applicable forward hedge selling period for such shares (subject to certain adjustments to such volume-weighted average of the sales prices on a daily basis based on a floating interest rate factor and for any expected quarterly dividends having an “ex-dividend” date during such forward hedge selling period). In connection with the sale of the shares of common stock on our behalf, the Sales Agents (including acting as Forward Sellers) and Forward Purchasers may be deemed to be “underwriters” within the meaning of the Securities Act, and the compensation of the Sales Agents (including acting as Forward Sellers in the form a reduction to the initial forward sale price under the related forward sale agreement) may be deemed to be underwriting commissions or discounts.
Under the terms of the equity distribution agreement, we may also sell our common stock to the Sales Agents as principals for their own accounts at prices agreed upon at the time of sale. If we sell our common stock to any of the Sales Agents as principals, we will enter into a separate terms agreement with such Sales Agent. In any such sale to a Sales Agent as principal, commissions or underwriting discounts will be agreed upon at the time of sale. The net proceeds we receive from the sale of our common stock to which this prospectus supplement relates will be the gross proceeds received from such sales less the commissions or discounts and any other expenses we may incur in issuing the common stock. For additional information, see “Plan of Distribution” in this prospectus supplement.
Our common stock is listed on the NYSE under the symbol “ESS.” The last reported sale price of our common stock on the NYSE on September 23, 2021 was $330.90 per share.
Shares of our common stock are subject to certain restrictions on ownership and transfer designed, among other purposes, to preserve our qualification as a real estate investment trust for federal income tax purposes. For additional information, see “Description of Common Stock—Restrictions on Ownership and Transfer” in the accompanying prospectus.
Investing in shares of our common stock involves risks. Before buying any shares, you should read the discussion of risk factors beginning on page S-
7 of this prospectus supplement and on page
3 of the accompanying prospectus and under the caption “Risk Factors” beginning on page
3 of our Annual Report on Form 10-K for the year ended December 31, 2020, incorporated by reference into this prospectus supplement and the accompanying prospectus, and in our periodic reports and other information that we file from time to time with the Securities and Exchange Commission.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
Citigroup | | | BNP PARIBAS | | | BTIG | | | Capital One Securities | | | Jefferies |
J.P. Morgan | | | Mizuho
Securities | | | MUFG | | | Regions
Securities
LLC | | | Scotiabank | | | Truist Securities |
The date of this prospectus supplement is September 24, 2021.