Essex Property Trust Inc. (ESS), a real estate investment trust (REIT), has recently amended its existing unsecured revolving credit facility worth $425 million to increase the borrowing capacity to $500 million.
The amended credit facility bears an interest rate of LIBOR plus 120 basis points and a facility fee of 20 basis points. Scheduled to mature in December 2015, the amended credit facility has two one-year extension options and an accordion feature that enables Essex Property to further increase the borrowing capacity to $600 million.
Essex Property reported first quarter 2012 FFO (funds from operations) of $59.3 million or $1.63 per share, compared with $48.5 million or $1.44 per share in the year-earlier quarter. Funds from operations, a widely used metric to gauge the performance of REITs, are obtained after adding depreciation and amortization and other non-cash expenses to net income.
During the first quarter of 2012, the company entered into an agreement to obtain private placement unsecured notes worth $200 million for a term of 9 years at a rate of 4.3%. The net proceeds from the note offering were intended to repay secured mortgage debt due in late 2012 and 2013.
Based in Palo Alto, California, Essex Property acquires, develops, redevelops, and manages apartment communities primarily in highly desirable, supply-constrained markets. Essex Property currently owns 158 multifamily properties with an additional 5 properties in various stages of development.
Essex Property currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. We presently have a long-term Neutral recommendation on the stock. One of its competitors, BRE Properties Inc. (BRE) has a Zacks #4 Rank, which translates into a short-term Sell rating.
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