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**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

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**FORM      10-Q**

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**      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      ACT      OF 1934**

**For      the quarterly period ended June 30, 2007**

**OR**

**      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      ACT      OF 1934**

**For      the transition period from ________to _________**

**Commission      file number 333-44467-01**

**ESSEX      PORTFOLIO, L.P.**

| **California**                                                                |   | **77-0369575**                                         |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------------|
| (State                or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S.                Employer Identification Number) |

**925      East Meadow Drive**

**Palo      Alto, California    94303**

**(650)      494-3700**

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**ESSEX      PORTFOLIO, L.P.**

**FORM      10-Q**

**INDEX**

|                                             |                                                                                                                                                                     | **                          Page No.** |
|--------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------|
| **PART                I. FINANCIAL INFORMATION** |                                                                                                                                                                     |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                1.                           | Financial                Statements (Unaudited):                                                                                                                         | 3                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
|                                             | Consolidated                Balance Sheets as of June 30, 2007 and December 31, 2006                                                                                     | 4                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
|                                             | Consolidated                Statements of Operations for the three and six months ended June                30, 2007 and 2006                                            | 5                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
|                                             | Consolidated                Statements of Partners' Capital and Comprehensive Income for the                six                months                ended June 30, 2007 | 6                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
|                                             | Condensed                Consolidated Statements of Cash Flows for the six months ended                June 30, 2007 and 2006                                            | 7                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
|                                             | Notes                to Consolidated Financial Statements                                                                                                                | 8                                                                                        |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                2.                           | Management's                Discussion and Analysis of Financial Condition and Results of                Operations                                                      | 17                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                3.                           | Quantitative                and Qualitative Disclosures About Market Risk                                                                                                | 24                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                4.                           | Controls                and Procedures                                                                                                                                   | 25                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| **PART                II. OTHER INFORMATION**    |                                                                                                                                                                     |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                1.                           | Legal                Proceedings                                                                                                                                         | 25                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                1A.                          | Risk                Factors                                                                                                                                              | 26                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| Item                6.                           | Exhibits                                                                                                                                                                 | 26                                                                                       |
|                                             |                                                                                                                                                                     |                                                                                     |
| **Signatures**                                   | 26                                                                                                                                                                       |

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**Part      I -- Financial Information**

**Item      1: Financial Statements (Unaudited)**

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**ESSEX      PORTFOLIO, L.P. AND SUBSIDIARIES**

|                                                                                                                                |                                                                            |   | **June                  30,**                                                                                                                     |                                                                            |    | **December                  31,**                                                                                                                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   | **2007**                                                                                                                                          |                                                                            |    | **2006**                                                                                                                                          |
| **Assets**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Real                  estate:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Rental                  properties:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Land                  and land improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                            | $      |             641,951                                                                   |                                                                            |  $ |             560,880                                                                   |
| Buildings                  and improvements                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                            |   |          2,326,267                                                                                   |                                                                            |    |          2,108,307                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |          2,968,218                                                                                   |                                                                            |    |          2,669,187                                                                                   |
| Less                  accumulated depreciation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |           (508,681)                                                                             |                                                                            |    |           (465,015)                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |          2,459,537                                                                                   |                                                                            |    |          2,204,172                                                                                   |
| Real                  estate - held for sale, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                            |   |                         - |                                                                            |    |               41,221                                                        |
| Real                  estate under development                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |             161,655                                                                   |                                                                            |    |             103,487                                                                   |
| Investments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |                                                                            |   |               69,851                                                        |                                                                            |    |               60,451                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |          2,691,043                                                                                   |                                                                            |    |          2,409,331                                                                                   |
| Cash                  and cash equivalents-unrestricted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                            |   |               12,587                                                        |                                                                            |    |                 9,662                                             |
| Cash                  and cash equivalents-restricted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                            |   |               11,367                                                        |                                                                            |    |               13,948                                                        |
| Marketable                  securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                            |   |                 3,815                                             |                                                                            |    |                         - |
| Notes                  and other receivables from related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                            |   |                 1,019                                             |                                                                            |    |                 1,209                                             |
| Notes                  and other receivables                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                            |   |               26,614                                                        |                                                                            |    |               18,195                                                        |
| Prepaid                  expenses and other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                            |   |               34,063                                                        |                                                                            |    |               20,632                                                        |
| Deferred                  charges, net                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                            |   |               12,967                                                        |                                                                            |    |               12,863                                                        |
| Total                  assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                            | $      |          2,793,475                                                                                   |                                                                            |  $ |          2,485,840                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| **Liabilities                  and Partners' Capital**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Mortgage                  notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                            | $      |          1,202,122                                                                                   |                                                                            |  $ |          1,060,704                                                                                   |
| Mortgage                  notes payable - held for sale                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                            |   |                         - |                                                                            |    |               32,850                                                        |
| Exchangeable                  bonds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                            |   |             225,000                                                                   |                                                                            |    |             225,000                                                                   |
| Lines                  of credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                            |   |               37,000                                                        |                                                                            |    |               93,000                                                        |
| Accounts                  payable and accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                                                                            |   |               38,493                                                        |                                                                            |    |               38,614                                                        |
| Dividends                  payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                            |   |               28,813                                                        |                                                                            |    |               24,910                                                        |
| Other                  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                            |   |               15,503                                                        |                                                                            |    |               14,328                                                        |
| Deferred                  gain                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |                 2,193                                             |                                                                            |    |                 2,193                                             |
| Total                  liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                            |   |          1,549,124                                                                                   |                                                                            |    |          1,491,599                                                                                   |
| Commitments                  and contingencies                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Minority                  interests                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                            |   |               60,992                                                        |                                                                            |    |               44,950                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Redeemable                  convertible limited partnership units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                            |   |                 4,750                                             |                                                                            |    |                 4,750                                             |
| Preferred                  convertible equity (liquidation value of $149,500)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |             145,912 |   |                                                                                                                                              |             145,912 |
| Partners'                  Capital:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| General                  partner:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Common                  equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |             807,966                                                                   |                                                                            |    |             590,070                                                                   |
| Preferred                  equity (liquidation value of $25,000)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                            |   |               24,412                                                        |                                                                            |    |               24,412                                                        |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |             832,378                                                                   |                                                                            |    |             614,482                                                                   |
| Limited                  partners:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Common                  equity                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |               59,533                                                        |                                                                            |    |               59,730                                                        |
| Preferred                  equity (liquidation value of $130,000)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                            |   |             126,690                                                                   |                                                                            |    |             126,690                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |             186,223                                                                   |                                                                            |    |             186,420                                                                   |
| Accumulated                  other comprehensive income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                            |   |               14,096                                                        |                                                                            |    |               (2,273)                                                       |
| Total                  partners' capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                            |   |          1,032,697                                                                                   |                                                                            |    |             798,629                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |
| Total                  liabilities and partners' capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                            | $      |          2,793,475                                                                                   |                                                                            |  $ |          2,485,840                                                                                   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                            |   |                                                                                                                                              |                                                                            |    |                                                                                                                                              |

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**ESSEX      PORTFOLIO, L.P. AND SUBSIDIARES**

|                                                                                        |   |   | **Three                  Months Ended**                                                                             |   |    | **Six                  Months Ended**                                                                                     |
|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------------------------------------------------------------|
|                                                                                        |   |   | **June                  30,**                                                                                       |   |    | **June                  30,**                                                                                             |
|                                                                                        |   |   | **2007**                                                                                                            |   |    | **2006**                                                                                                                  |   |   | **2007** |   |   | **2006** |
| Revenues:                                                                                   |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Rental                  and other property                                                  |   | $      |           96,707                                                  |   |  $ |           83,717                                                        |   |  $ |          188,861 |   |  $ |         165,951 |
| Management                  and other fees from affiliates                                  |   |   |             1,354                                       |   |    |                830                             |   |   |              2,394 |   |   |             1,654 |
|                                                                                        |   |   |           98,061                                                  |   |    |           84,547                                                        |   |   |          191,255 |   |   |         167,605 |
| Expenses:                                                                                   |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Property                  operating, excluding real estate taxes                            |   |   |           23,932                                                  |   |    |           21,246                                                        |   |   |            47,052 |   |   |           42,906 |
| Real                  estate taxes                                                          |   |   |             8,143                                       |   |    |             7,161                                             |   |   |            15,855 |   |   |           14,331 |
| Depreciation                  and amortization                                              |   |   |           25,166                                                  |   |    |           19,907                                                        |   |   |            46,843 |   |   |           39,227 |
| Interest                                                                                    |   |   |           20,491                                                  |   |    |           18,919                                                        |   |   |            38,757 |   |   |           37,330 |
| Amortization                  of deferred financing costs                                   |   |   |                678                       |   |    |                497                             |   |   |              1,355 |   |   |             1,192 |
| General                  and administrative                                                 |   |   |             6,008                                       |   |    |             4,980                                             |   |   |            12,104 |   |   |             9,879 |
| Other                  expenses                                                             |   |   |                    - |   |    |                800                             |   |   |                     - |   |   |             1,770 |
|                                                                                        |   |   |           84,418                                                  |   |    |           73,510                                                        |   |   |          161,966 |   |   |         146,635 |
| Earnings                  from operations                                                   |   |   |           13,643                                                  |   |    |           11,037                                                        |   |   |            29,289 |   |   |           20,970 |
|                                                                                        |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Interest                  and other income                                                  |   |   |             2,865                                       |   |    |                648                             |   |   |              5,047 |   |   |             3,042 |
| Equity                  income (loss) in co-investments                                     |   |   |                463                       |   |    |              (374)                                       |   |   |              2,445 |   |   |               (816) |
| Minority                  interests                                                         |   |   |           (1,189)                                                 |   |    |           (1,204)                                                       |   |   |            (2,359) |   |   |            (2,511) |
| Income                  before discontinued operations and                                  |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|   tax                  provision                                                  |   |   |           15,782                                                  |   |    |           10,107                                                        |   |   |            34,422 |   |   |           20,685 |
| Income                  tax provision                                                       |   |   |                    - |   |    |              (138)                                       |   |   |                     - |   |   |               (175) |
| Income                  before discontinued operations                                      |   |   |           15,782                                                  |   |    |             9,969                                             |   |   |            34,422 |   |   |           20,510 |
| Income                  from discontinued operations (net of                                |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|   minority                  interests)                                            |   |   |                303                       |   |    |           17,481                                                        |   |   |            25,541 |   |   |           21,000 |
| Net                  income                                                                 |   |   |           16,085                                                  |   |    |           27,450                                                        |   |   |            59,963 |   |   |           41,510 |
| Dividends                  to preferred units - Series F                                    |   |   |              (489)                                 |   |    |              (489)                                       |   |   |               (977) |   |   |               (977) |
| Dividends                  to preferred units - Series G                                    |   |   |           (1,821)                                                 |   |    |                     - |   |   |            (3,576) |   |   |                     - |
| Dividends                  to preferred units - limited partners                            |   |   |           (2,559)                                                 |   |    |           (2,559)                                                       |   |   |            (5,118) |   |   |            (5,119) |
| Net                  income available to common units                                       |   | $      |           11,216                                                  |   |  $ |           24,402                                                        |   |  $ |            50,292 |   |  $ |           35,414 |
|                                                                                        |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Per                  common unit data:                                                      |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Basic:                                                                                      |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| Income                  before discontinued operations available to                         |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| common                  units                                                               |   | $      |               0.41                            |   |  $ |               0.28                                  |   |  $ |                0.94 |   |  $ |               0.57 |
| Income                  from discontinued operations                                        |   |   |               0.01                            |   |    |               0.69                                  |   |   |                0.96 |   |   |               0.84 |
| Net                  income available to common units                                       |   | $      |               0.42                            |   |  $ |               0.97                                  |   |  $ |                1.90 |   |  $ |               1.41 |
| Weighted                  average number of common units                                    |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
| outstanding                  during the period                                              |   |   |    26,982,771                                                                                        |   |    |    25,236,463                                                                                              |   |   |     26,470,507 |   |   |    25,201,315 |
|                                                                                        |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|    Diluted:                                                                  |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|     Income                  before discontinued operations available to |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|     common                  units                                       |   | $      |               0.40                            |   |  $ |               0.27                                  |   |  $ |                0.91 |   |  $ |               0.56 |
|     Income                  from discontinued operations                |   |   |               0.01                            |   |    |               0.68                                  |   |   |                0.94 |   |   |               0.82 |
|     Net                  income available to common units               |   | $      |               0.41                            |   |  $ |               0.95                                  |   |  $ |                1.85 |   |  $ |               1.38 |
|     Weighted                  average number of common units            |   |   |                                                                                                                |   |    |                                                                                                                      |   |   |   |   |   |   |
|     outstanding                  during the period                      |   |   |    27,592,976                                                                                        |   |    |    25,697,238                                                                                              |   |   |     27,192,463 |   |   |    25,628,728 |

----

**ESSEX      PORTFOLIO, L.P. AND SUBSIDIARIES**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                      | **General                  Partner**                                      |   | **Limited                  Partners**                                           |                                                                            | **Accumulated**                    |                                                                                        |                                                                                        |                                                                            |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------|---------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|---------------------------------------------------------------------------------|------------------------------------|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------|
|                                                                                     |                                                                      |                                                                      |   |                                                                            |                                                                            |                               |                                                                                        | **Preferred**                                                                               |                                                                            |   |   |   |   |   |   | **Preferred** |   |   | **Other** |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                      | **Common                  Equity**                                        |   | **Equity**                                                                      |                                                                            | **Common                  Equity** |                                                                                        | **Equity**                                                                                  |                                                                            |   | **                   Comprehensive** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                      | **Units**                                                                 |   |                                                                            | **Amount**                                                                      |                               |                                                                                        | **Amount**                                                                                  |                                                                            | **Units** |   |   | **Amount** |   |   | **Amount** |   |   | **                    Income (Loss)** |   |   | **Total** |
| Balances                  at December 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                      |   23,416                                                        |   |  $                                                                         |  590,070                                                                   |                               |  $                                                                                     |      24,412                                                        |                                                                            |      2,495 |   |  $ |       59,730 |   |  $ |    126,690 |   |  $ |                 (2,273) |   |  $ |      798,629 |
| Comprehensive                  income:                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |                                                                      |                                                                      |   |                                                                            |                                                                            |                               |                                                                                        |                                                                                        |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Net                  income                                                                                                                                                                                                                                                                                                                                                                                                                                                                |                                                                      |             - |   |                                                                            |    45,180                                                        |                               |                                                                                        |        4,553                                             |                                                                            |              - |   |   |         5,112 |   |   |        5,118 |   |   |                          - |   |   |        59,963 |
|     Change                  in fair value of cash flow hedges                                                                                                                                                                                                                                                                                                                                                                                                                                  |             - |                                                                      |   |              - |                                                                            |                               |                - |                                                                                        |              - |   |   |                 - |   |   |                - |   |   |                 16,369 |   |   |        16,369 |
| Comprehensive                  income                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |                                                                      |                                                                      |   |                                                                            |                                                                            |                               |                                                                                        |                                                                                        |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |        76,332 |
| Issuance                  of common units under                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |                                                                      |                                                                      |   |                                                                            |                                                                            |                               |                                                                                        |                                                                                        |                                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Stock-based                  compensation plan                                                                                                                                                                                                                                                                                                                                                                                                                                                   |                                                                      |          38                  |   |                                                                            |      2,365                                             |                               |                                                                                        |                - |                                                                            |              - |   |   |                 - |   |   |                - |   |   |                          - |   |   |          2,365 |
| Issuance                  of general partner common units                                                                                                                                                                                                                                                                                                                                                                                                                                                          |     1,698                                             |                                                                      |   |  216,776                                                                   |                                                                            |                               |                - |                                                                                        |              - |   |   |                 - |   |   |                - |   |   |                          - |   |   |      216,776 |
| Redemption                  of limited partner common units                                                                                                                                                                                                                                                                                                                                                                                                                                                        |             - |                                                                      |   |              - |                                                                            |                               |                - |                                                                                        |          (37)                      |   |   |       (2,026) |   |   |                - |   |   |                          - |   |   |        (2,026) |
| Vesting                  of series Z and Z-1 incentive units                                                                                                                                                                                                                                                                                                                                                                                                                                                       |                                                                      |             - |   |                                                                            |              - |                               |                                                                                        |                - |                                                                            |           29 |   |   |            756 |   |   |                - |   |   |                          - |   |   |             756 |
| Reallocation                  of partners' capital                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |                                                                      |             - |   |                                                                            |     (1,202)                                                 |                               |                                                                                        |                - |                                                                            |              - |   |   |            660 |   |   |                - |   |   |                          - |   |   |           (542) |
| Partners'                  distributions                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                                                      |             - |   |                                                                            |   (45,223)                                                            |                               |                                                                                        |      (4,553)                                                       |                                                                            |              - |   |   |       (4,699) |   |   |      (5,118) |   |   |                          - |   |   |      (59,593) |
| Balances                  at June 30, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                      |   25,152                                                        |   |  $                                                                         |  807,966                                                                   |                               |  $                                                                                     |      24,412                                                        |                                                                            |      2,487 |   |  $ |       59,533 |   |  $ |    126,690 |   |  $ |                 14,096 |   |  $ |   1,032,697 |

----

**ESSEX      PORTFOLIO, L.P. AND SUBSIDIARIES**

|                                                                                    |   |   | **Six                  Months Ended**                                                   |
|-----------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------|
|                                                                                    |   |   | **June                  30,**                                                           |
|                                                                                    |   |   | **2007**                                                                                |   |   | **2006** |
| Net                  cash provided by operating activities                              |   | $      | 99,652                                                                                  |   | $ | 70,513 |
|                                                                                    |   |   |                                                                                    |   |   |   |
| Cash                  flows used in investing activities:                               |   |   |                                                                                    |   |   |   |
| Additions                  to real estate:                                              |   |   |                                                                                    |   |   |   |
| Acquisitions                  and improvements to recent acquisitions                   |   |   |      (219,237)                                                 |   |   |        (60,115) |
| Capital                  expenditures and redevelopment                                 |   |   |        (28,245)                                      |   |   |        (20,032) |
| Additions                  to real estate under development                             |   |   |        (75,502)                                      |   |   |        (21,606) |
| Dispositions                  of real estate and investments                            |   |   |        123,029                                       |   |   |            8,349 |
| Changes                  in restricted cash and refundable deposits                     |   |   |            2,270                 |   |   |            6,271 |
| Purchases                  of marketable securities                                     |   |   |          (3,815)                           |   |   |                   - |
| Additions                  to notes and other receivables                               |   |   |          (9,104)                           |   |   |          (8,284) |
| Collections                  of notes and other receivables                             |   |   |               477 |   |   |               456 |
| Contributions                  to limited partnerships                                  |   |   |        (21,215)                                      |   |   |        (17,849) |
| Distributions                  from limited partnerships                                |   |   |          15,131                            |   |   |            9,588 |
| Net                  cash used in investing activities                                  |   |   |      (216,211)                                                 |   |   |      (103,222) |
|                                                                                    |   |   |                                                                                    |   |   |   |
| Cash                  flows from financing activities:                                  |   |   |                                                                                    |   |   |   |
| Proceeds                  from mortgage notes payable and lines of credit               |   |   |        445,595                                       |   |   |        159,429 |
| Repayment                  of mortgage notes payable and lines of credit                |   |   |      (416,038)                                                 |   |   |        (93,030) |
| Payments                  of loans fees and related costs                               |   |   |          (1,463)                           |   |   |             (456) |
| Proceeds                  from settlement of forward-starting swap                      |   |   |            1,311                 |   |   |                   - |
| Net                  proceeds from stock options exercised                              |   |   |            1,765                 |   |   |            2,113 |
| Net                  proceeds from sale of common units to general partner              |   |   |        213,672                                       |   |   |          14,813 |
| Distributions                  to limited partner units and minority interest           |   |   |        (70,891)                                      |   |   |        (11,679) |
| Redemption                  of limited partner units and minority interest              |   |   |          (8,288)                           |   |   |          (5,073) |
| Distributions                  to general partner                                       |   |   |        (46,179)                                      |   |   |        (38,723) |
| Net                  cash provided by financing activities                              |   |   |        119,484                                       |   |   |          27,394 |
| Net                  increase (decrease) in cash and cash equivalents                   |   |   |            2,925                 |   |   |          (5,315) |
| Cash                  and cash equivalents at beginning of period                       |   |   |            9,662                 |   |   |          14,337 |
| Cash                  and cash equivalents at end of period                             |   | $      |          12,587                            |   | $ |            9,022 |
|                                                                                    |   |   |                                                                                    |   |   |   |
| Supplemental                  disclosure of cash flow information:                      |   |   |                                                                                    |   |   |   |
| Cash                  paid for interest, net of $2,317 and $1,260 capitalized           |   |   |                                                                                    |   |   |   |
| in                  2007 and 2006, respectively                                         |   | $      |          36,162                            |   | $ |          36,858 |
|                                                                                    |   |   |                                                                                    |   |   |   |
| Supplemental                  disclosure of noncash investing and financing activities: |   |   |                                                                                    |   |   |   |
| Mortgage                  notes assumed in connection with purchases                    |   |   |                                                                                    |   |   |   |
| of                  real estate                                                         |   | $      |          23,920                            |   |   |                   - |
| Land                  contributed by a partner in a consolidated joint venture          |   | $      |          22,200                            |   |   |                   - |

----

**ESSEX      PORTFOLIO, L.P. AND SUBSIDIARIES**

**Notes      to Consolidated Financial Statements**

**June      30, 2007 and 2006**

**(Unaudited)**

**(1)  Organization        and Basis of Presentation**

***Fund      Activities***

***Variable      Interest Entities***

*Consolidation of Variable Interest Entities, an      Interpretation of ARB No. 51*

----

***Stock-Based      Compensation***

*Share-Based Payment”, *

***Accounting      Estimates and Reclassifications***

***New      Accounting Pronouncements***

*Accounting for      Uncertainty in Income Taxes-an Interpretation of FASB Statement      109.*

*Fair Value      Measurements*

----

*The Fair Value Option for      Financial Assets and Financial Liabilities*

**(2)  Significant        Transactions**

***(a)      Acquisitions***

***(b)      Dispositions***

***(c)      Joint Ventures***

***(d)      Debt and Financing Activities***

*** (e)      Equity***

----

***(f)      Development***

**(3)      Investments**

|                                                                                                       |   |   | **June                  30,** |   |   | **December                  31,** |
|------------------------------------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|-----------------------------------|
|                                                                                                       |   |   | **2007**                      |   |   | **2006**                          |
|                                                                                                       |   |   |                          |   |   |                              |
| Investments                  in joint ventures accounted for under the equity                              |   |   |                          |   |   |                              |
|      method                  of accounting:                                       |   |   |                          |   |   |                              |
|                                                                                                       |   |   |                          |   |   |                              |
|      Limited                  partnership interest of 27.2% and general partner   |   |   |                          |   |   |                              |
|    interest                  of 1% in Essex Apartment Value Fund II, L.P (Fund II)          |   | $      | 59,298                        |   | $      | 45,598                            |
|      Preferred                  limited partnership interests in Mountain Vista   |   |   |                          |   |   |                              |
|  Apartments,                  LLC (A)                                                                 |   |   | 1,182                         |   |   | 6,806                             |
|     Development                  joint ventures                                        |   |   | 8,871                         |   |   | 7,547                             |
|                                                                                                       |   |   | 69,351                        |   |   | 59,951                            |
| Investments                  accounted for under the cost method of accounting:                            |   |   |                          |   |   |                              |
|                                                                                                       |   |   |                          |   |   |                              |
|      Series                  A Preferred Stock interest in Multifamily Technology |   |   |                          |   |   |                              |
|    Solutions,                  Inc.                                                         |   |   | 500                           |   |   | 500                               |
| Total                  investments                                                                         |   | $      | 69,851                        |   | $      | 60,451                            |

| (A)   | The                investment is held in an entity that includes an affiliate of The                Marcus                & Millichap Company (“TMMC”).  TMMC’s Chairman is also the                Chairman of the Company. |
|-----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                                                                             |                                                                                                            |                                                                                                            | **June                  30,**                                                                         |                                                                                                                                  |                                                                                                  | **December                  31,**                                                               |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|                                                                                                             |                                                                                                            |                                                                                                            | **2007**                                                                                              |                                                                                                                                  |                                                                                                  | **2006**                                                                                        |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Balance                  sheets:                                                                                 |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|  Real                  estate and real estate under development                                             |                                                                                                            | $                                                                                                               |            578,075                             |                                                                                                                                  |  $                                                                                               |            576,134                       |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|  Other                  assets                                                                              |                                                                                                            |                                                                                                            |              24,792                  |                                                                                                                                  |                                                                                                  |              20,681            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Total                  assets                                                                                    |                                                                                                            | $                                                                                                               |            602,867                             |                                                                                                                                  |  $                                                                                               |            596,815                       |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Mortgage                  notes payable                                                                          |                                                                                                            | $                                                                                                               |            316,960                             |                                                                                                                                  |  $                                                                                               |            301,665                       |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Other                  liabilities                                                                               |                                                                                                            |                                                                                                            |              15,999                  |                                                                                                                                  |                                                                                                  |              74,793            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Partners'                  capital                                                                               |                                                                                                            |                                                                                                            |            269,908                             |                                                                                                                                  |                                                                                                  |            220,357                       |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Total                  liabilities and partners' capital                                                         |                                                                                                            | $                                                                                                               |            602,867                             |                                                                                                                                  |  $                                                                                               |            596,815                       |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Operating                  Partnership's share of capital                                                        |                                                                                                            | $                                                                                                               |              69,351                  |                                                                                                                                  |  $                                                                                               |              59,951            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
|                                                                                                             |                                                                                                            |                                                                                                            | ** Three                  Months Ended**                                                         |                                                                                                                                  |                                                                                                  | ** Six                  Months Ended**                                           |
|                                                                                                             |                                                                                                            |                                                                                                            | **June                  30,**                                                          |                                                                                                                                  |                                                                                                  | **June                  30,**                                                    |
|                                                                                                             |                                                                                                            |                                                                                                            | **2007**                                                                                              |                                                                                                                                  |                                                                                                  | **2006**                                                                                        |                                                                                                                       |                                                                                            | **2007**                                                                                              |                                                                                                                                  |                                                                                                  | **2006**                                                                              |
| Statements                  of operations:                                                                       |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Property                  revenues                                                                               |                                                                                                            | $                                                                                                               |              10,697                  |                                                                                                                                  |  $                                                                                               |              10,231            |                                                                                                                       |  $                                                                                         |              22,835                  |                                                                                                                                  |  $                                                                                               |              19,741  |
| Property                  operating expenses                                                                     |                                                                                                            |                                                                                                            |              (4,503)                 |                                                                                                                                  |                                                                                                  |              (4,353)           |                                                                                                                       |                                                                                            |              (9,470)                 |                                                                                                                                  |                                                                                                  |              (8,508) |
| Net                  operating income                                                                            |                                                                                                            |                                                                                                            |                6,194       |                                                                                                                                  |                                                                                                  |                5,878 |                                                                                                                       |                                                                                            |              13,365                  |                                                                                                                                  |                                                                                                  |              11,233  |
| Interest                  expense                                                                                |                                                                                                            |                                                                                                            |              (3,236)                 |                                                                                                                                  |                                                                                                  |              (4,407)           |                                                                                                                       |                                                                                            |              (7,254)                 |                                                                                                                                  |                                                                                                  |              (8,562) |
| Depreciation                  and amortization                                                                   |                                                                                                            |                                                                                                            |              (3,473)                 |                                                                                                                                  |                                                                                                  |              (2,937)           |                                                                                                                       |                                                                                            |              (6,945)                 |                                                                                                                                  |                                                                                                  |              (5,822) |
|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Total                  net (loss) income                                                                         |                                                                                                            | $                                                                                                               |                 (515) |                                                                                                                                  |  $                                                                                               |              (1,466)           |                                                                                                                       |  $                                                                                         |                 (834) |                                                                                                                                  |  $                                                                                               |              (3,151) |
|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |
| Operating                  Partnership's share of operating net income                  (loss)                   |                   159 |                                                                                                            |                                                                                                  |                 (374)                                 |                                                                                                  |                                                                                            |                     94 |                                                                                            |                                                                                                  |                 (816)                                 |
| Operating                  Partnership's gain on sale and gain                  on partial sale of it's interest |                   304 |                                                                                                            |                                                                                                  |                       - |                                                                                                  |                                                                                            |                2,351                            |                                                                                            |                                                                                                  |                       - |
| Operating                  Partnership's share of equity income (loss)                  in co-investments        |  $                                                                                                         |                   463 |                                                                                                  |  $                                                                                                                               |                 (374) |                                                                                            |  $                                                                                                                    |                2,445 |                                                                                                  |  $                                                                                                                               |                 (816) |
|                                                                                                             |                                                                                                            |                                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                            |                                                                                                                       |                                                                                            |                                                                                                  |                                                                                                                                  |                                                                                                  |                                                                                  |

----

**(4)  Notes      Receivable and Other Receivables from Related Parties**

|                                                                                                  |   |   | **June                  30,**                                                                                                         |   |   | **December                  31,**                                                                               |   |
|-------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                  |   |   | **2007**                                                                                                                              |   |   | **2006**                                                                                                        |   |
| Related                  party receivables, unsecured:                                                |   |   |                                                                                                                                  |   |   |                                                                                                            |   |
|     Loans                  to officers made prior to July 31, 2002, secured,      |   |   |                                                                                                                                  |   |   |                                                                                                            |   |
|   bearing                  interest at 8% (repaid in March 2007)                            |   | $      |                       - |   | $      |                   375 |   |
|     Other                  related party receivables, substantially due on demand |   |   |                1,019                                       |   |   |                   834 |   |
| Total                  notes and other receivable from related parties                                |   | $      |                1,019                                       |   | $      |                1,209                 |   |
|                                                                                                  |   |   |                                                                                                                                  |   |   |                                                                                                            |   |

**(5)      Notes and Other Receivables**

|                                                                                                             |   |   | **June                  30,**                                                                                   |   |   | **December                  31,**                                                                                                     |
|------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                             |   |   | **2007**                                                                                                        |   |   | **2006**                                                                                                                              |
|                                                                                                             |   |   |                                                                                                            |   |   |                                                                                                                                  |
| Note                  receivable, secured, bearing interest at 12%, due June                  2008               |   | $      |                2,193                 |   | $      |                2,193                                       |
| Note                  receivable, secured, bearing interest at LIBOR + 3.69%, due June                  2009     |   |   |                7,349                 |   |   |                7,309                                       |
| Note                  receivable, secured, bearing interest at LIBOR + 4.65%, due November                  2008 |   |   |                9,183                 |   |   |                7,807                                       |
| Note                  receivable, secured, bearing interest at LIBOR + 4.75%, due March                  2012    |   |   |                7,002                 |   |   |                       - |
| Other                  receivables                                                                               |   |   |                   887 |   |   |                   886                       |
| Total                  notes and other receivables                                                               |   | $      |              26,614                            |   | $      |              18,195                                                  |

**(6)      Related Party Transactions**

----

**(7)  Segment      Information**

|                                                       |   |                                                                                            | **Three                  Months Ended**                                                                                          |
|------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                       |   |                                                                                            | **June                  30,**                                                                                          |
|                                                       |   |                                                                                            | **2007**                                                                                                                              |   |   | **2006** |
| Revenues:                                                  |   |                                                                                            |                                                                                                                                  |   |   |   |
| Southern                  California                       |   | $                                                                                               |              53,781                                                  |   | $ | 48,867 |
| Northern                  California                       |   |                                                                                            |              23,788                                                  |   |   | 18,056 |
| Seattle                  Metro                             |   |                                                                                            |              15,850                                                  |   |   | 13,621 |
| Other                  Regions                             |   |                                                                                            |                3,288                                       |   |   | 3,173 |
| Total                  property revenues                   |   | $                                                                                               |              96,707                                                  |   | $ | 83,717 |
|                                                       |   |                                                                                            |                                                                                                                                  |   |   |   |
| Net                  operating income:                     |   |                                                                                            |                                                                                                                                  |   |   |   |
| Southern                  California                       |   | $                                                                                               |              36,946                                                  |   | $ | 33,244 |
| Northern                  California                       |   |                                                                                            |              15,521                                                  |   |   | 12,233 |
| Seattle                  Metro                             |   |                                                                                            |              10,413                                                  |   |   | 8,634 |
| Other                  Regions                             |   |                                                                                            |                1,752                                       |   |   | 1,199 |
| Total                  net operating income                |   |                                                                                            |              64,632                                                  |   |   | 55,310 |
|                                                       |   |                                                                                            |                                                                                                                                  |   |   |   |
| Depreciation                  and amortization:            |   |                                                                                            |                                                                                                                                  |   |   |   |
| Southern                  California                       |   |                                                                                            |            (12,328)                                                            |   |   |            (10,850) |
| Northern                  California                       |   |                                                                                            |              (6,306)                                                 |   |   |              (4,160) |
| Seattle                  Metro                             |   |                                                                                            |              (3,604)                                                 |   |   |              (3,294) |
| Other                  Regions                             |   |                                                                                            |              (2,928)                                                 |   |   |              (1,603) |
|                                                       |   |                                                                                            |            (25,166)                                                            |   |   |            (19,907) |
| Interest                  expense:                         |   |                                                                                            |                                                                                                                                  |   |   |   |
| Southern                  California                       |   |                                                                                            |              (7,492)                                                 |   |   |              (6,768) |
| Northern                  California                       |   |                                                                                            |              (4,631)                                                 |   |   |              (4,541) |
| Seattle                  Metro                             |   |                                                                                            |              (1,721)                                                 |   |   |              (1,867) |
| Other                  Regions                             |   |                                                                                            |              (6,647)                                                 |   |   |              (5,743) |
|                                                       |   |                                                                                            |            (20,491)                                                            |   |   |            (18,919) |
|                                                       |   |                                                                                            |                                                                                                                                  |   |   |   |
| Amortization                  of deferred financing costs  |   |                                                                                            |                 (678)                                 |   |   |                 (497) |
| General                  and administrative                |   |                                                                                            |              (6,008)                                                 |   |   |              (4,980) |
| Other                  expenses                            |   |                                                                                            |                       - |   |   |                 (800) |
| Management                  and other fees from affiliates |   |                1,354 |                                                                                                                                  |   |                   830 |
| Interest                  and other income                 |   |                                                                                            |                2,865                                       |   |   |                   648 |
| Equity                  income (loss) in co-investments    |   |                                                                                            |                   463                       |   |   |                 (374) |
| Minority                  interests                        |   |                                                                                            |              (1,189)                                                 |   |   |              (1,204) |
| Income                  tax provision                      |   |                                                                                            |                       - |   |   |                 (138) |
|                                                       |   |                                                                                            |                                                                                                                                  |   |   |   |
| Income                  before discontinued operations     |   | $                                                                                               |              15,782                                                  |   | $ |                9,969 |

----

|                                                       |   | **                    Six Months Ended**                                    |
|------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|
|                                                       |   |                                                                                            | ** June                  30,**    |
|                                                       |   |                                                                                            | **2007** |   |   | **2006** |
| Revenues:                                                  |   |                                                                                            |   |   |   |   |
| Southern                  California                       |   | $                                                                                               |            105,744 |   | $ |              97,230 |
| Northern                  California                       |   |                                                                                            |              45,656 |   |   |              35,500 |
| Seattle                  Metro                             |   |                                                                                            |              30,894 |   |   |              26,892 |
| Other                  Regions                             |   |                                                                                            |                6,567 |   |   |                6,329 |
| Total                  property revenues                   |   | $                                                                                               |            188,861 |   | $ |            165,951 |
|                                                       |   |                                                                                            |   |   |   |   |
| Net                  operating income:                     |   |                                                                                            |   |   |   |   |
| Southern                  California                       |   | $                                                                                               |              72,817 |   | $ |              66,089 |
| Northern                  California                       |   |                                                                                            |              30,162 |   |   |              23,760 |
| Seattle                  Metro                             |   |                                                                                            |              20,354 |   |   |              16,891 |
| Other                  Regions                             |   |                                                                                            |                2,621 |   |   |                1,974 |
| Total                  net operating income                |   |                                                                                            |            125,954 |   |   |            108,714 |
|                                                       |   |                                                                                            |   |   |   |   |
| Depreciation                  and amortization:            |   |                                                                                            |   |   |   |   |
| Southern                  California                       |   |                                                                                            |            (23,673) |   |   |            (21,257) |
| Northern                  California                       |   |                                                                                            |            (12,481) |   |   |              (8,236) |
| Seattle                  Metro                             |   |                                                                                            |              (7,073) |   |   |              (6,445) |
| Other                  Regions                             |   |                                                                                            |              (3,616) |   |   |              (3,289) |
|                                                       |   |                                                                                            |            (46,843) |   |   |            (39,227) |
| Interest                  expense:                         |   |                                                                                            |   |   |   |   |
| Southern                  California                       |   |                                                                                            |            (14,081) |   |   |            (13,123) |
| Northern                  California                       |   |                                                                                            |              (9,133) |   |   |              (9,201) |
| Seattle                  Metro                             |   |                                                                                            |              (3,445) |   |   |              (3,421) |
| Other                  Regions                             |   |                                                                                            |            (12,098) |   |   |            (11,585) |
|                                                       |   |                                                                                            |            (38,757) |   |   |            (37,330) |
|                                                       |   |                                                                                            |   |   |   |   |
| Amortization                  of deferred financing costs  |   |                                                                                            |              (1,355) |   |   |              (1,192) |
| General                  and administrative                |   |                                                                                            |            (12,104) |   |   |              (9,879) |
| Other                  expenses                            |   |                                                                                            |                       - |   |   |              (1,770) |
| Management                  and other fees from affiliates |   |                2,394 |   |   |                1,654 |
| Interest                  and other income                 |   |                                                                                            |                5,047 |   |   |                3,042 |
| Equity                  income (loss) in co-investments    |   |                                                                                            |                2,445 |   |   |                 (816) |
| Minority                  interests                        |   |                                                                                            |              (2,359) |   |   |              (2,511) |
| Income                  tax provision                      |   |                                                                                            |                       - |   |   |                 (175) |
| Income                  before discontinued operations     |   | $                                                                                               |              34,422 |   | $ |              20,510 |

|                                                         |   |   | **June                  30,**                                                        |   |   | **December                  31,** |
|--------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|--------|-----------------------------------|
|                                                         |   |   | **2007**                                                                             |   |   | **2006**                          |
| Assets:                                                      |   |   |                                                                                 |   |   |                              |
|     Southern                  California |   | $      |         1,335,370                            |   | $      | 1,244,037                         |
|     Northern                  California |   |   |            698,956            |   |   | 565,405                           |
|     Seattle                  Metro       |   |   |            346,691            |   |   | 317,848                           |
| Other                  Regions                               |   |   |              78,520 |   |   | 76,882                            |
| Net                  real estate assets                      |   |   |         2,459,537                            |   |   | 2,204,172                         |
|     Non-segment                  assets  |   |   |            333,938            |   |   | 281,668                           |
| Total                  assets                                |   | $      |         2,793,475                            |   | $      | 2,485,840                         |

----

**(8)  Net      Income Per Common **
**Unit**

|   |                   (Amounts in thousands, except per unit                data) |
|--------|-----------------------------------------------------------------------------------------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | **Three                  Months Ended**                                                        |   |                                                                                    | **Three                  Months Ended**                 |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|------------------------------------------------------------------------|
|                                                                                  |   |   | **June                  30, 2007**                                                   |   |                                                                                    | **June                  30, 2006**       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | **Weighted-**                                                                           |                                                                   |   | **Per** |   |   |   |   |   | **Weighted-** |   |   | **Per** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | **average**                                                                             |                                                                   |   | **Common** |   |   |   |   |   | **average** |   |   | **Common** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | **Common**                                                                              |                                                                   |   | **Unit** |   |   |   |   |   | **Common** |   |   | **Unit** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | **Income**                                                                                                    |   | **Units**                                                                               |                                                                   |   | **Amount** |   |   | **Income** |   |   | **Units** |   |   | **Amount** |
| Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|   Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| available                  to common units                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $      |          10,913                                                  |   |          26,983                            |                                                                   |  $ |              0.41 |   |  $ |            6,921 |   |   |          25,236 |   |  $ |              0.28 |
|   Income                  from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |               303                       |   |          26,983                            |                                                                   |   |              0.01 |   |   |          17,481 |   |   |          25,236 |   |   |              0.69 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |          11,216                                                  |   |                                                                                    |                                                                   |  $ |              0.42 |   |   |          24,402 |   |   |   |   |  $ |              0.97 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                  of Dilutive Securities (1)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |  -                                                                                                       |   |               610 |                                                                   |   |   |   |   |  - |   |   |               461 |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|   Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| available                  to common units                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |          10,913                                                  |   |          27,593                            |                                                                   |  $ |              0.40 |   |   |            6,921 |   |   |          25,697 |   |  $ |              0.27 |
|   Income                  from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |               303                       |   |          27,593                            |                                                                   |   |              0.01 |   |   |          17,481 |   |   |          25,697 |   |   |              0.68 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      |          11,216                                                  |   |                                                                                    |                                                                   |  $ |              0.41 |   |  $ |          24,402 |   |   |   |   |  $ |              0.95 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | ** Six                  Months Ended**                                                    |   |                                                                                    | ** Six                  Months Ended**             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | **June                  30, 2007**                                                   |   |                                                                                    | **June                  30, 2006**       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | ** Weighted**                                                                      |                                                                   |   | ** Per** |   |   |   |   |   | ** Weighted** |   |   | ** Per** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | ** Average**                                                                       |                                                                   |   | ** Common** |   |   |   |   |   | ** Average** |   |   | ** Common** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   | ** Common**                                                                        |                                                                   |   | **Unit** |   |   |   |   |   | ** Common** |   |   | **Unit** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   | ** Income**                                                                                              |   | **Units**                                                                               |                                                                   |   | ** Amount** |   |   | ** Income** |   |   | **Units** |   |   | ** Amount** |
| Basic:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|   Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| available                  to common units                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | $      |          24,751                                                  |   |          26,471                            |                                                                   |  $ |              0.94 |   |  $ |          14,414 |   |   |          25,201 |   |  $ |              0.57 |
|   Income                  from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |          25,541                                                  |   |          26,471                            |                                                                   |   |              0.96 |   |   |          21,000 |   |   |          25,201 |   |   |              0.84 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |          50,292                                                  |   |                                                                                    |                                                                   |  $ |              1.90 |   |   |          35,414 |   |   |   |   |  $ |              1.41 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Effect                  of Dilutive Securities (1)                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   |                   - |   |               722 |                                                                   |   |   |   |   |                   - |   |   |               428 |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
|   Income                  from continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |                                                                                                          |   |                                                                                    |                                                                   |   |   |   |   |   |   |   |   |   |   |   |
| available                  to common units                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   |          24,751                                                  |   |          27,192                            |                                                                   |  $ |              0.91 |   |   |          14,414 |   |   |          25,629 |   |  $ |              0.56 |
|   Income                  from discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |   |          25,541                                                  |   |          27,192                            |                                                                   |   |              0.94 |   |   |          21,000 |   |   |          25,629 |   |   |              0.82 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $      |          50,292                                                  |   |                                                                                    |                                                                   |  $ |              1.85 |   |  $ |          35,414 |   |   |   |   |  $ |              1.38 |

| (1)   | On                or after November 1, 2020, the holders of the $225 million exchangeable                notes may exchange, at the then applicable exchange rate, the notes                for                cash and, at Essex’s option, a portion of the notes may be exchanged for                Essex common stock; the original exchange rate was $103.25 per share                of                Essex common stock.  The exchangeable notes will also be                exchangeable prior to November 1, 2020, but only upon the occurrence                of                certain specified events.  During the six months ended June 30,                2007 the weighted average common stock price exceeded the current                strike                price and therefore common stock issuable upon exchange of the                exchangeable notes was included in the diluted share count.  The                treasury method was used to determine the shares to be added to the                denominator for the calculation of earnings per diluted                share. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **(9)  ** | **Derivative                Instruments and Hedging                Activities** |
|---------------------|---------------------------------------------------------------------------------|

----

| **(10)  ** | ** Discontinued                Operations** |
|----------------------|--------------------------------------------------|

*Accounting for the Impairment or Disposal of      Long-Lived Assets*

|                                                                                 |   |    | **Three                  Months Ended**                                                                                          |   |    | **Six                  Months Ended**                                                                                            |
|--------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                 |   |    | **June                  30,**                                                                                          |   |    | **June                  30,**                                                                                          |
|                                                                                 |   |    | **2007**                                                                                                                              |   |    | **2006**                                                                                                                              |   |   | **2007** |   |   | **2006** |
|                                                                                 |   |    |                                                                                                                                  |   |    |                                                                                                                                  |   |   |   |   |   |   |
| Rental                  revenues                                                     |   |  $ |                       - |   |  $ |                2,939                                       |   |  $ |                1,355 |   |  $ |                5,968 |
| Interest                  and other income                                           |   |    |                       - |   |    |                       6 |   |   |                   290 |   |   |                       6 |
|      Revenues                                               |   |    |                       - |   |    |                2,945                                       |   |   |                1,645 |   |   |                5,974 |
| Property                  operating expenses                                         |   |    |                       - |   |    |              (1,083)                                                 |   |   |                 (535) |   |   |              (2,282) |
| Interest                  expense                                                    |   |    |                       - |   |    |                 (579)                                 |   |   |                 (416) |   |   |              (1,158) |
| Depreciation                  and amortization                                       |   |    |                       - |   |    |                 (768)                                 |   |   |                   (41) |   |   |              (1,539) |
| Minority                  interests                                                  |   |    |                       - |   |    |                 (174)                                 |   |   |                       - |   |   |                 (316) |
|      Expenses                                               |   |    |                       - |   |    |              (2,604)                                                 |   |   |                 (992) |   |   |              (5,295) |
| Gain                  on sale of real estate                                         |   |    |                   303                       |   |    |                8,800                                       |   |   |              79,222 |   |   |              11,862 |
| Equity                  income co-investments                                        |   |    |                       - |   |    |                   119                       |   |   |                       - |   |   |                   238 |
| Promote                  interest and fees                                           |   |    |                       - |   |    |                8,221                                       |   |   |              10,290 |   |   |                8,221 |
| Minority                  interests - City Heights                                   |   |    |                       - |   |    |                       - |   |   |            (64,624) |   |   |                       - |
|       Net                  gain on sale of real estate |   |    |                   303                       |   |    |              17,140                                                  |   |   |              24,888 |   |   |              20,321 |
|                                                                                 |   |    |                                                                                                                                  |   |    |                                                                                                                                  |   |   |   |   |   |   |
| Income                  from discontinued operations                                 |   |  $ |                   303                       |   |  $ |              17,481                                                  |   |  $ |              25,541 |   |  $ |              21,000 |
|                                                                                 |   |    |                                                                                                                                  |   |    |                                                                                                                                  |   |   |   |   |   |   |
|                                                                                 |   |    |                                                                                                                                  |   |    |                                                                                                                                  |   |   |   |   |   |   |

----

**(11)  Commitments      and Contingencies**

The      Operating Partnership is subject to various lawsuits in the      normal course of its business operations.  Such lawsuits are not      expected to have a material adverse effect on the Operating Partnership’s      financial condition, results of operations or cash flows.

**Item      2: Management's Discussion and Analysis of Financial Condition and Results      of      Operations**

*The      following discussion should be read in conjunction with our Consolidated      Condensed Financial Statements and accompanying Notes thereto included elsewhere      herein and with our 2006 Annual Report on Form 10-K for the year ended      December 31, 2006 and our Current Report on Form 10-Q for the quarter ended      June 30, 2007.*

**Southern      California**

**Northern      California**

**Seattle**
**Metro**

**Other      Regions**

|                                 | As                  of June 30, 2007 |   | As                  of June 30, 2006 |   |
|--------------------------------------|--------------------------------------|--------|--------------------------------------|--------|
|                                 | Apartment                  Homes     | %      | Apartment                  Homes     | *%*    |
| Southern                  California | 12,725                               | 52%    | 12,270                               | 54%    |
| Northern                  California | 5,805                                | 23%    | 4,621                                | 20%    |
| Seattle                  Metro       | 5,005                                | 20%    | 4,905                                | 21%    |
| Other                  Regions       | 1,177                                | 5%     | 1,177                                | 5%     |
| **Total**                            | 24,712                               | 100%   | 22,973                               | 100%   |

**Comparison      of the Three Months Ended June 30, 2007 to the Three Months Ended June 30,      2006**

----

|                                 |   | **Three                  months ended**   |
|--------------------------------------|--------|-------------------------------------------|
|                                 |   | **June                  30,**   |
|                                 |   | **2007**                                  |   | **2006** |
| Southern                  California |   | 95.4%                                     |   | 96.1% |
| Northern                  California |   | 97.0%                                     |   | 98.2% |
| Seattle                  Metro       |   | 96.6%                                     |   | 97.6% |
| Other                  Regions       |   | 95.4%                                     |   | 96.6% |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                           |   |   | **Three                  Months Ended**         |   |   |       |        |           |       |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------|--------|-------------------------------------------------|--------|--------|------------|--------------------------------------|----------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         | **Number                  of** |   |   | **June                  30,**    |   |   | **Dollar** |                                 | **Percentage** |       |
|                                                                                            | **Properties**                 |   |   | **2007**                                        |   |   | **2006**   |                                 |           | **Change** |   | **Change** |   |
| Property                  Revenues** **(dollars in thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                           |   |   |                                            |   |   |       |                                 |           |       |   |   |   |
|    Same-Properties:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                           |   |   |                                            |   |   |       |                                 |           |       |   |   |   |
|        Southern                  California                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 56                             |   | $      | 46,027                                          |   | $      | 43,592     |                                 | $              | 2,435      |   | 5.6 | % |
|        Northern                  California                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | 16                             |   |   | 14,862                                          |   |   | 13,660     |                                 |           | 1,202      |   | 8.8 |   |
|        Seattle                  Metro                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 22                             |   |   | 13,944                                          |   |   | 12,471     |                                 |           | 1,473      |   | 11.8 |   |
|        Other                  Regions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | 5                              |   |   | 2,686                                           |   |   | 2,550      |                                 |           | 136        |   | 5.3 |   |
|             Total                  Same-Property revenues                                                                                                                                                                                                                                                                                                                                                                                                                                        | 99                             |   |   | 77,519                                          |   |   | 72,273     |                                 |           | 5,246      |   | 7.3 |   |
|    Non-Same                  Property Revenues (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |                           |   |   | 19,188                                          |   |   | 11,444     |                                 |           | 7,744      |   | 67.7 |   |
|           Total                  property revenues                                                                                                                                                                                                                                                                                                                                                                                                                                                         |                           |   | $      | 96,707                                          |   | $      | 83,717     |                                 | $              | 12,990     |   | 15.5 | % |

*Quarterly      Same-Property Revenues*

*Quarterly      Non-Same Property Revenues*

*Total      Expenses*

*Other      expenses *

*Interest      and other income*

----

*Equity        income (loss) in co-investments *

*Income      from discontinued operations*

**Comparison      of the Six Months Ended June 30, 2007 to the Six Months Ended June 30,      2006**

|                                 |   |   | **Six                  Months Ended**   |
|--------------------------------------|--------|--------|---------------------------------------------------|
|                                 |   |   | **June                  30,**      |
|                                 |   |   | **2007**                                          |   |   | **2006** |
| Southern                  California |   |   | 95.6%                                             |   |   | 96.2% |
| Northern                  California |   |   | 96.2%                                             |   |   | 97.4% |
| Seattle                  Metro       |   |   | 96.2%                                             |   |   | 97.1% |
| Other                  Regions       |   |   | 95.2%                                             |   |   | 96.1% |

|                                                                                                                            |                           |   |   | **Six                  Months Ended**           |   |   |       |         |           |       |
|---------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------|--------|-------------------------------------------------|--------|--------|------------|--------------------------------------------|----------------|------------|
|                                                                                                                            | **Number                  of** |   |   | **June                  30,**    |   |   | **Dollar** |                                       | **Percentage** |       |
|                                                                                                                            | **Properties**                 |   |   | **2007**                                        |   |   | **2006**   |                                       |           | **Change** |   | **Change** |   |
| Property                  Revenues** **(dollars in thousands)                                                              |                           |   |   |                                            |   |   |       |                                       |           |       |   |   |   |
|    2007/2006                  Same-Properties:                                                                   |                           |   |   |                                            |   |   |       |                                       |           |       |   |   |   |
|        Southern                  California                                                  | 56                             |   | $      | 91,828                                          |   | $      | 86,770     |                                       | $              | 5,058      |   | 5.8 | % |
|        Northern                  California                                                  | 16                             |   |   | 29,233                                          |   |   | 26,851     |                                       |           | 2,382      |   | 8.9 |   |
|        Seattle                  Metro                                                        | 22                             |   |   | 27,449                                          |   |   | 24,589     |                                       |           | 2,860      |   | 11.6 |   |
|        Other                  Regions                                                        | 5                              |   |   | 5,325                                           |   |   | 5,022      |                                       |           | 303        |   | 6.0 |   |
|             Total                  2007/2006 Same-Property revenues | 99                             |   |   | 153,835                                         |   |   | 143,232    |                                       |           | 10,603     |   | 7.4 |   |
|      2007/2006                  Non-Same Property Revenues (1)                                         |                           |   |   | 35,026                                          |   |   | 22,719     |                                       |           | 12,307     |   | 54.2 |   |
|           Total                  property revenues                            |                           |   | $      | 188,861                                         |   | $      | 165,951    |                                       | $              | 22,910     |   | 13.8 | % |

*2007/2006      Same-Property Revenues*

*2007/2006      Non-Same Property Revenues*

*Total      Expenses*

----

*Other      expenses *

*Interest      and other income*

*Equity      income (loss) in co-investments *

*Income      from discontinued operations*

**Liquidity      and Capital Resources**

----

*Derivative      Activity*

*Development      and Predevelopment Pipeline*

----

*Redevelopment*

**Alternative      Capital Sources**

**Contractual      Obligations and Commercial Commitments**

|                                                 |   |                                                                                        |   |   | **2008                  and**                                                               |   |   | **2010                  and**                                                               |   |   |                                                                                              |   |   |      |
|------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|--------|-----------|
| **(In                  thousands)**                  |   | **2007**                                                                                    |   |   | **2009**                                                                                    |   |   | **2011**                                                                                    |   |   | **Thereafter**                                                                                    |   |   | **Total** |
| Mortgage                  notes payable              | $      |       14,177                                                  |   | $      | 136,875                                                                                     |   | $      | 310,192                                                                                     |   | $      | 740,878                                                                                           |   | $      | 1,202,122 |
| Exchangeable                  bonds                  |   |                - |   |   |                - |   |   |                - |   |   |      225,000                                                             |   |   | 225,000   |
| Lines                  of credit                     |   |                - |   |   | 37,000                                                                                      |   |   |                - |   |   |                 - |   |   | 37,000    |
| Interest                  on indebtedness            |   |       41,055                                                  |   |   |     110,704                                                             |   |   |       64,357                                                  |   |   |      208,158                                                             |   |   | 424,274   |
| Development                  commitments             |   | 61,300                                                                                      |   |   | 90,400                                                                                      |   |   |                - |   |   |                 - |   |   | 151,700   |
| Redevelopment                  commitments           |   | 38,560                                                                                      |   |   |       53,443                                                  |   |   |                - |   |   |                 - |   |   | 92,003    |
| Essex                  Apartment Value Fund II, L.P. |   |                                                                                        |   |   |                                                                                        |   |   |                                                                                        |   |   |                                                                                              |   |   |      |
|   capital                  commitment      |   |                - |   |   |       13,383                                                  |   |   |                - |   |   |                 - |   |   | 13,383    |
|                                                 | $      | 155,092                                                                                     |   | $      | 441,805                                                                                     |   | $      | 374,549                                                                                     |   | $      | 1,174,036                                                                                         |   | $      | 2,145,482 |

**Critical      Accounting Policies and Estimates**

----

**Forward      Looking Statements**

**Potential      Factors Affecting Future Operating Results**

*Development      and Redevelopment Activities*

| ·  funds                may be expended and management's time devoted to projects that may                not be                completed;                         |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·  construction                costs of a project may exceed original estimates possibly making                the                project economically unfeasible; |
| ·  projects                may be delayed due to, among other things, adverse weather conditions,                entitlement and  government regulation; |
| ·  occupancy                rates and rents at a completed project may be less than anticipated;                and                                                |
| ·  expenses                at a completed development project may be higher than                anticipated.                                                       |

----

*Interest      Rate Fluctuations*

**Item      3: Quantitative and Qualitative Disclosures About Market      Risk**

***Interest      Rate Hedging Activities***

|                                                              |   |       |         |                            |         |   |                                                                             | **                   Carrying and**        |                                                                                   |      |                                                                                                                      |
|-------------------------------------------------------------------|--------|------------|--------------|---------------------------------|--------------|--------|----------------------------------------------------------------------------------|-------------------------------------------------|----------------------------------------------------------------------------------------|--------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                                                              |   |       | **Notional** |                            | **Maturity** |   |                                                                             | **                    Estimate Fair** | **+                  50**                                                              |                     | **-                  50**                                                                                                 |
| **(Dollars                  in thousands)**                       |   | **Amount** |         | **Date                  Range** |         |   | **Value**                                                                        |                                            | **Basis                  Points**                                                      |                     | **Basis                  Points**                                                                                         |
| Cash                  flow hedges:                                |   |       |         |                            |         |   |                                                                             |                                            |                                                                                   |                     |                                                                                                                      |
|   Interest                  rate forward-starting swaps | $      | 450,000    |         | 2008-2011                       |         | $      |       12,789                                       | $                                               |        26,308                                       | $                        |            (1,809)                                                 |
|   Interest                  rate caps                   |   | 182,849    |         | 2008-2011                       |         |   |              14 |                                            |               57 |                     |                     2 |
|     Total                  cash flow hedges   | $      | 632,849    |         | 2008-2011                       |         | $      |       12,803                                       | $                                               |        26,365                                       | $                        |            (1,807)                                                 |

***Interest      Rate Sensitive Liabilities***

----

|                                     |   |   |                                                                |   |                                                                                  |   |                           |   |                                                                                  |   |                                                                                  |   |                            |      |      |                                        |   |                            |                                        |
|------------------------------------------|--------|--------|---------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|--------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------|-----------|-----------|---------------------------------------------|--------|---------------------------------|---------------------------------------------|
| **For                  the Years Ended** |   |   | **2007**                                                            |   | **2008(1)**                                                                           |   | **2009**                       |   | **2010(2)**                                                                           |   | **2011(3)**                                                                           |   | **Thereafter**                  |      | **Total** |                                        |   | **Fair                  value** |
|                                     |   |   |                                                                |   |                                                                                  |   |                           |   |                                                                                  |   |                                                                                  |   |                            |      |      |                                        |   |                            |                                        |
| (In                  thousands)          |   |   |                                                                |   |                                                                                  |   |                           |   |                                                                                  |   |                                                                                  |   |                            |      |      |                                        |   |                            |                                        |
| Fixed                  rate debt         |   | $      |   14,177                                                  |   |   112,653                                                                   |   |     24,222 |   |   155,820                                                                   |   |   154,372                                                                   |   |     770,357 |      |  $   |    1,231,601                 |   |  $                         |    1,278,185                 |
| Average                  interest rate   |   |   | 6.0%                                                                |   | 6.8%                                                                                  |   | 6.9%                           |   | 8.0%                                                                                  |   | 6.4%                                                                                  |   | 5.0%                            |      |      |                                        |   |                            |                                        |
| Variable                  rate debt      |   | $      |            - |   |               - |   |     37,000 |   |               - |   |               - |   | 195,521                         |  (4) |  $   |       232,521 |   |  $                         |       232,521 |
| Average                  interest        |   |   |            - |   |               - |   | 5.8%                           |   |               - |   |               - |   | 4.9%                            |      |      |                                        |   |                            |                                        |

The      table incorporates only those exposures that exist as of June 30,      2007; it does not consider those exposures or positions that could arise after      that date. As a result, our ultimate realized gain or loss, with respect to      interest rate fluctuations, would depend on the exposures that arise during      the      period, our hedging strategies at the time, and interest rates.

**Item      4: Controls and Procedures**

**Part      II -- Other Information**

**Item      1: Legal Proceedings**

----

**Item        IA: Risk Factors**

**Item      6: Exhibits**

|   | *A.* | *Exhibits* |
|--------|------|------------|

|   | 12.1 | Ratio                of Earnings to Fixed Charges |
|--------|------|---------------------------------------------------|

|   | 31.1 | Certification                of Keith R. Guericke, Chief Executive Officer, pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification                of Michael T. Dance, Chief Financial Officer, pursuant to Section                302 of                the Sarbanes-Oxley Act of 2002. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.1 | Certification                of Keith R. Guericke, Chief Executive Officer, pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002. |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32.2 | Certification                of Michael T. Dance, Chief Financial Officer, pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002. |
|--------|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | __________ |   |
|--|------------|--------|

**SIGNATURE**

|   | ESSEX                PORTFOLIO, L.P.                                                                                                 |
|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|   | *(Registrant)*                                                                                                                       |
|   |                                                                                                                                 |
|   |                                                                                                                                 |
|   | Date:                August 8, 2007                                                                                                  |
|   |                                                                                                                                 |
|   |  By:                                                                                                                            |  /S/                MICHAEL T. DANCE |
|   | Michael                T. Dance                                                                                                      |
|   | *Executive                Vice President, Chief Financial Officer**(Authorized                Officer, Principal Financial Officer)* |
|   |                                                                                                                                 |
|   |                                                                                                                                 |
|   | By:  /S/                BRYAN HUNT                                                                                         |
|   | Bryan                Hunt                                                                                                            |
|   | *Vice                President, Chief Accounting                Officer*                                                             |