Essex Property Development Pipeline Nears $1 Billion

Speaking with REIT.com during last month's REITWeek 2012: NAREIT's Investor Forum, Essex Property Trust (NYSE: ESS) President and CEO Michael Schall said the West Coast multifamily market is still in the early stages of a recovery in rental rates that should continue for the foreseeable future.

Essex Property Trust, Inc. is a fully integrated REIT that acquires, develops, redevelops, and manages multifamily residential properties in select West Coast communities.

"At this point in time, all that we have done is recover the rents that we lost amid the Great Recession," Schall said. "Going forward, we are forecasting from 25 percent to 30 percent apartment rent growth on the West Coast really driven by a recovering tech sector."

Schall said he thinks tech companies are well positioned financially, globally and operationally to drive job growth on the West Coast. He added the combination of this job growth and continued supply constraints will make the region an outperformer in the multifamily space.

The lack of new supply and continued strong demand drivers have encouraged many multifamily companies to ramp up development activities. In 2011 and so far in 2012, Essex has started construction on six apartment communities. Schall said the company plans three more starts in the second half of the year, which would bring the company's development pipeline to around $1 billion going forward.

Schall said there continue to be lingering effects from the Great Recession and that it is important that those issues get resolved in order to create a long and prosperous business cycle.