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04/07/2023 | by Nareit Staff

Barb Pak, EVP and CFO at Essex Property Trust (NYSE: ESS), participated in a video interview in conjunction with Nareit’s REITwise: 2023 Law, Accounting & Finance Conference held March 21-23 in Phoenix, Arizona.

Pak said that in 2022, Essex thought it would be acquiring assets as part of its external growth strategy. However, as the cost of capital increased throughout the year, the REIT shifted gears and began selling assets and buying back its stock in order to create value for shareholders.

“We’ve [also] changed our operating strategy and our operating platform, and how we run our business,” she added. “That’s not necessarily a byproduct of this environment, but it has helped us reduce our expenses in this environment.”

Pak added that with the macroeconomic picture uncertain at the moment, multifamily REITs tend to be priced at a discount compared to private markets.

“[But] if we get some positive news—if the Federal Reserve changes their interest rate stance and they start to cut rates—I think you could see that discount evaporate very quickly,” she said.

Turning to ESG reporting, Pak said that Essex has enhanced its disclosures over the last several years and is moving toward science-based targets at the request of their investors.