Essex Property Trust, Inc. (ESS), a real estate investment trust (:REIT), recently acquired two adjacent land parcels for the development of two apartment communities in San Francisco, California. The two buildings scheduled to come up would have nine stories each and consist of 463 apartment homes and 9,300 square feet of retail space.
The two development communities will include various amenities like an urban park, rooftop decks, clubhouse, fitness center and spa. Essex Propertyexpects the properties to open in spring 2014 for a total cost of approximately $250 million.The company has entered into a joint venture with an institutional investor for the project where it will hold a 55% stake and will also earn development and management fees for the two communities.
The project is located in the vibrant SOMA district of San Francisco and is in close proximity to shopping and entertainment centers with access to various modes of public transport.
The company will also benefit from the fact that San Francisco is one of the leading metropolitan areas in the U.S. in terms of rent growth owing to the limited supply of housing and high paying job opportunities.
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 multi-family properties with an additional 8 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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