PALO ALTO, CA-So, it’s official. Locally based Essex Property Trust Inc. and BRE Properties Inc. are in negotiations. Essex made an official announcement that it has made a “non-binding proposal” to acquire BRE in a “negotiated strategic business combination.”

Under the proposal, each outstanding share of BRE common stock would be exchanged for 0.2971 shares of Essex common stock and $12.33 in cash. The companies are currently engaged in discussions and have agreed to an exclusivity period.

There can be no assurances that any transaction will be entered into or consummated, says Essex. Pursuant to the terms of a confidentiality agreement, Essex cannot discuss or disclose developments with respect to these discussions unless and until both Boards have approved a transaction.

GlobeSt.com will update this story as we learn more, but as we reported recently, the deal is said to be around $5 billion. The offer is higher than the bid of $60 per share made by Land & Buildings and an investor group earlier this year, a source told Bloomberg in early December.

Constance B. Moore, BRE’s CEO, told investors in July that her company would consider “any legitimate proposal.” Her comments came after BRE had issued a statement turning down Land & Buildings’ bid.

BRE, which has more than one-quarter of its apartments in the San Francisco area, where it’s based, has been working with Wells Fargo to evaluate possible options including a sale, sources previously told Bloomberg.