SAN DIEGO, CA-Essex Property Trust has increased its San Diego County apartment portfolio by 2,683 units, thanks to a recent merger with locally based multifamily owner and operator John M. Sachs Inc. Structured as a tax-free reorganization with real estate assets valued at $301 million, the acquisition has significantly fattened up Essex’s San Diego County portfolio, which has increased from 326 units to 3,009 units – a figure that represents 13% of Essex’s 23,699 total apartment homes.

Essex has paid for the acquisition with common stock issuance, assumption of liabilities and cash. The company has issued 2,719,875 shares of its common stock at a price of $49.25 and also assumed mortgages on four of the newly acquired properties for $64.5 million with a fixed interest rate of 5.51%, maturing in December 2012. In addition, Essex has repaid liabilities in the amount of approximately $33 million. The remaining balance was paid for in cash.

In connection with the merger, Essex placed new mortgages on four previously unencumbered properties. The mortgages are in the amount of $62 million with a weighted average fixed interest rate of 5.64%, maturing in December 2012. In addition, Essex borrowed $30 million on a new unsecured line of credit that matures in December 2003.

The newly acquired apartment properties are mainly located in San Diego County, ranging from the 40-unit Casa Tierra complex in El Cajon to the 355-unit Mira Woods Villas in Mira Mesa. “We believe that the addition of these properties enhances Essex’s strong West Coast presence and creates value for its shareholders,” says Keith R. Guericke, the company’s president and CEO. In addition to multifamily product, the merger has also resulted in the acquisition of several manufactured housing communities, office properties and recreational vehicle parks.

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