UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-Q

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

For the quarterly period ended June 30, 2004

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.



|Maryland                                                       | 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







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [   ]

Indicate by check mark whether the registrant is an accelerated filer (as defined
in Rule 12b-2 of the Securities Exchange Act of 1934). YES [X] NO [   ]







ESSEX PORTFOLIO, L.P.
                                    FORM 10-Q
                                     INDEX

PART I.   FINANCIAL INFORMATION

Page No.Item 1.   Financial Statements
                  (unaudited):

3Consolidated Balance Sheets as of June 30, 2004
         and December 31, 2003

4Consolidated Statements of Operations for the three
          
         and six months ended June 30, 2004 and 2003

5Consolidated Statements of Partners' Capital for the six months
          
         ended June 30, 2004 and the year ended December 31, 2003

6Condensed Consolidated Statements of Cash Flows
          
         for the six months ended June 30, 2004 and 2003

7Notes to Consolidated Financial Statements

8Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations

21Item 3.   Quantitative and Qualitative Disclosures About Market Risk

36



  Item 4.   Controls and Procedures

36PART II.  OTHER INFORMATIONItem 6.   Exhibits and Reports on Form 8-K

37Signature

38Part I -- Financial Information


Item 1. Financial Statements (Unaudited)Essex Portfolio, L.P., a California limited partnership, (the "Operating
Partnership") effectively holds the assets and liabilities and conducts the
operating activities of Essex Property Trust, Inc. ("Essex" or the
"Company").  Essex Property Trust, Inc., a real estate investment
trust incorporated in the State of Maryland, is the sole general partner of the
Operating Partnership.

The information furnished in the accompanying consolidated unaudited balance
sheets, statements of operations, partners' capital and cash flows of the
Operating Partnership reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of the aforementioned consolidated
financial statements for the interim periods.

The accompanying unaudited consolidated financial statements should be read
in conjunction with the notes to such consolidated financial statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations herein. Additionally, these unaudited consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
included in the Operating Partnership's annual report on Form 10-K for the year ended
December 31, 2003.
ESSEX PORTFOLIO L.P.  AND SUBSIDIARIES

                           Consolidated Balance Sheets

                                   (Unaudited)

                            (Dollars in thousands)June 30,    December 31,
                                                                      2004        2003 (1)
                                                                  ------------  ------------
                             Assets
Real estate:
  Rental properties:
     Land and land improvements                                  $    509,286  $    469,347
     Buildings and improvements                                     1,729,549     1,514,775
                                                                  ------------  ------------
                                                                    2,238,835     1,984,122
     Less accumulated depreciation                                   (301,771)     (265,763)
                                                                  ------------  ------------
                                                                    1,937,064     1,718,359
  Real estate investment held for sale, net of accumulated
     depreciation of $0 as of June 30, 2004                             6,645            --
  Investments                                                          72,186        79,567
  Real estate under development                                        66,115        55,183
                                                                  ------------  ------------
                                                                    2,082,010     1,853,109
Cash and cash equivalents-unrestricted                                 11,626        14,768
Cash and cash equivalents-restricted                                   16,184        11,175
Notes and other receivables from related parties                        5,196         5,738
Notes and other receivables                                             4,955         6,021
Prepaid expenses and other assets                                      22,236        17,426
Deferred charges, net                                                  11,097         8,574
                                                                  ------------  ------------
                                                                 $  2,153,304  $  1,916,811
                                                                  ============  ============

               Liabilities and Partners' Capital
Mortgage notes payable                                           $  1,054,167  $    895,945
Lines of credit                                                       199,600        93,100
Accounts payable and accrued liabilities                               20,396        20,834
Dividends payable                                                      23,043        22,379
Other liabilities                                                      11,315        17,153
                                                                  ------------  ------------
          Total liabilities                                         1,308,521     1,049,411
Minority interests                                                     52,542        55,592

Partners' capital:
    General partner:
       Common equity                                                  534,469       556,987
       Preferred equity (liquidation value of $25,000)                 24,412        24,412
                                                                  ------------  ------------
                                                                      558,881       581,399
                                                                  ------------  ------------
    Limited partners:
       Common equity                                                   53,245        50,294
       Preferred equity (liquidation value of of $185,000)            180,115       180,115
                                                                  ------------  ------------
                                                                      233,360       230,409
                                                                  ------------  ------------
          Total partners' capital                                     792,241       811,808
                                                                  ------------  ------------
Commitments and contingencies
    Total liabilities and partners' capital
                                                                 $  2,153,304  $  1,916,811
                                                                  ============  ============






(1) The December 31, 2003 consolidated balance sheet included in the Operating Partnership's Form 10-K filed on March 15, 2004
has been restated for the retroactive adoption of the provisions of FIN 46 Revised and SFAS 123 as discussed in Note 1.See accompanying notes to the unaudited consolidated financial statements.
ESSEX PORTFOLIO L.P. AND SUBSIDIARIES

                      Consolidated Statements of Operations

                                   (Unaudited)

                (Dollars in thousands, except per unit amounts)Three Months Ended        Six Months Ended
                                                                        June 30,                  June 30,
                                                                 ------------------------  ------------------------
                                                                    2004       2003 (1)       2004       2003 (1)
                                                                 -----------  -----------  -----------  -----------

Revenues:                                                       $    67,908  $    60,961  $   132,137  $   121,983
   Rental                                                             2,400        1,984        4,502        4,000
   Other property                                                -----------  -----------  -----------  -----------
                                                                     70,308       62,945      136,639      125,983
      Total property                                                  2,389        2,370        5,708        4,636
   Interest and other                                            -----------  -----------  -----------  -----------
                                                                     72,697       65,315      142,347      130,619
      Total revenues                                             -----------  -----------  -----------  -----------

Expenses:
   Property operating expenses:                                       4,825        4,512        9,208        8,829
      Maintenance and repairs                                         6,196        4,813       11,740        9,622
      Real estate taxes                                               3,501        3,265        6,515        5,991
      Utilities                                                       7,513        5,420       14,429       12,114
      Administrative                                                    966        1,086        1,806        2,000
      Advertising                                                     1,046        1,024        2,190        1,870
      Insurance                                                      17,739       13,225       36,143       26,489
      Depreciation and amortization                              -----------  -----------  -----------  -----------
                                                                     41,786       33,345       82,031       66,915
                                                                     15,081       12,913       29,391       26,121
   Interest                                                             457          362          730          582
   Amortization of deferred financing costs                           3,502        2,362        6,432        4,674
   General and administrative                                    -----------  -----------  -----------  -----------
                                                                     60,826       48,982      118,584       98,292
      Total expenses                                             -----------  -----------  -----------  -----------
   Income from continuing operations before minority interests       11,871       16,333       23,763       32,327
   Minority interests                                                  (881)        (925)      (1,649)      (1,993)
                                                                 -----------  -----------  -----------  -----------
   Income from continuing operations                                 10,990       15,408       22,114       30,334
   Income (loss) from discontinued operations                          (632)          45         (505)         505
                                                                 -----------  -----------  -----------  -----------
   Net income                                                        10,358       15,453       21,609       30,839
   Preferred return to general partner - Series F                      (488)          --         (976)          --
   Distributions on preferred units - limited partners               (4,009)      (4,580)      (8,113)      (9,160)
                                                                 -----------  -----------  -----------  -----------
   Net income available to common units                         $     5,861  $    10,873  $    12,520  $    21,679
                                                                 ===========  ===========  ===========  ===========

Per common unit data:
   Basic:
      Income from continuing operations available to
        common units                                            $      0.26  $      0.47  $      0.52  $      0.91
      Income (loss) from discontinued operations                      (0.03)        0.00        (0.02)        0.02
                                                                 -----------  -----------  -----------  -----------
      Net income available to common units                      $      0.23  $      0.47  $      0.50  $      0.93
                                                                 ===========  ===========  ===========  ===========
      Weighted average number of common units
        outstanding during the period                            25,225,131   23,305,564   25,166,819   23,286,493
                                                                 ===========  ===========  ===========  ===========
   Diluted:
      Income from continuing operations available to
        common units                                            $      0.25  $      0.46  $      0.51  $      0.90
      Income (loss) from discontinued operations                      (0.02)        0.00        (0.02)        0.02
                                                                 -----------  -----------  -----------  -----------
      Net income available to common units                      $      0.23  $      0.46  $      0.49  $      0.92
                                                                 ===========  ===========  ===========  ===========
      Weighted average number of common units
        outstanding during the period                            25,446,751   23,558,314   25,386,274   23,511,387
                                                                 ===========  ===========  ===========  ===========

   Distribution on Operating Partnership common units           $      0.79  $      0.78  $      1.58  $      1.56
                                                                 ===========  ===========  ===========  ===========
(1) The consolidated statement of operations for the three and six months ended June 30, 2003 included in the Operating Partnership's
Form 10-Q filed on August 13, 2003 has been restated for the retroactive adoption of FIN 46 Revised and SFAS 123 as discussed in Note 1.See accompanying notes to the unaudited consolidated financial statements.
ESSEX PORTFOLIO, L.P. AND SUBSIDIARIES

                 Consolidated Statements of Partners' Capital

                For the six months ended June 30, 2004 and the

                       year ended December 31, 2003

                                (Unaudited)

                       (Dollars and units in thousands)General Partner                     Limited Partners
                                           ----------------------------------- -----------------------------------
                                                                   Preferred                           Preferred
                                           Common Equity            Equity     Common Equity            Equity
                                           --------------------  ------------- --------------------  -------------
                                             Units     Amount       Amount       Units     Amount       Amount        Total
                                           ---------  ---------  ------------- ---------  ---------  -------------  ---------
Balances at December 31, 2002 (1)            20,983    485,691             --     2,320     51,253        204,490    741,434

Issuance of common units under
   stock-based compensation plans (1)           207      7,501             --        --         --             --      7,501
Issuance of general partner
   common units                               1,636     99,202             --        --         --             --     99,202
Contribution of general partner
   preferred equity                              --         --         24,076        --         --             --     24,076
Amortization of discount on general
   partner preferred equity                      --       (302)           336        --        (34)            --         --
Redemption of limited partner
   common units                                  --         --             --       (15)      (769)            --       (769)
Redemption of Series C
   preferred units                               --         --             --        --         --        (25,000)   (25,000)
Write off of Series C preferred units
   offering costs                                --       (562)            --        --        (63)           625         --
Vested series Z incentive units                  --         --             --        16        533             --        533
Reallocation of partners' capital                --     (2,203)            --        --      2,203             --         --
Net income (1)                                   --     34,798            195        --      4,126         17,996     57,115
Partners' distributions                          --    (67,138)          (195)       --     (6,955)       (17,996)   (92,284)
                                           ---------  ---------  ------------- ---------  ---------  -------------  ---------
Balances at December 31, 2003 (1)            22,826    556,987         24,412     2,321     50,294        180,115    811,808

Issuance of common units under
   stock-based compensation plan                110      3,924             --        --         --             --      3,924
Issuance of limited partners'
   common units                                  --         --             --       110      7,205             --      7,205
Redemption of limited partner
   common units                                  --         --             --       (57)    (3,628)            --     (3,628)
Vested series Z and Z-1 incentive units          --         --             --        34        154             --        154
Reallocation of partners' capital                --     (1,400)            --        --      1,400             --         --
Net income                                       --     11,174            976        --      1,346          8,113     21,609
Partners' distributions                          --    (36,216)          (976)       --     (3,526)        (8,113)   (48,831)
                                           ---------  ---------  ------------- ---------  ---------  -------------  ---------
Balances at June 30, 2004                    22,936  $ 534,469  $      24,412     2,408  $  53,245  $     180,115  $ 792,241
                                           =========  =========  ============= =========  =========  =============  =========




(1) The partners' capital balances as of and for the year ended December 31, 2003 and certain balances as of December 31, 2002 included
in the Operating Partnership's Form 10-K filed on March 15, 2004 have been restated for the retroactive adoption of FIN 46 Revised
and SFAS 123 as discussed in Note 1.See accompanying notes to the unaudited consolidated financial statements.
ESSEX PORTFOLIO L.P. AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

                                   (Unaudited)

                             (Dollars in thousands)Six Months Ended
                                                                                                         June 30,
                                                                                                    --------------------
                                                                                                      2004     2003 (1)
                                                                                                    ---------  ---------
Net cash provided by operating activities                                                          $  59,448  $  52,871
                                                                                                    ---------  ---------
Cash flows from investing activities:
   Additions to real estate:
       Acquisitions                                                                                 (118,614)        --
       Improvements to recent acquisitions                                                            (6,032)    (3,240)
       Redevelopment                                                                                  (2,452)      (742)
       Revenue generating capital expenditures                                                           (54)      (133)
       Other capital expenditures                                                                     (4,380)    (4,625)
   Increase/(decrease) in restricted cash                                                             (5,009)     1,155
   Additions to notes receivable from related parties and other receivables                             (171)    (2,832)
   Repayment of notes receivable from related parties and other receivables                            1,496        (15)
   Additions to real estate under development                                                         (8,184)   (13,399)
   Net distributions from (contributions to) investments in limited partnerships                       5,502     (4,400)
                                                                                                    ---------  ---------
       Net cash used in investing activities                                                        (137,898)   (28,231)
                                                                                                    ---------  ---------
Cash flows from financing activities:
   Proceeds from mortgage notes payable and lines of credit                                          224,417     49,140
   Repayment of mortgage notes payable and lines of credit                                           (93,364)   (26,099)
   Additions to deferred charges                                                                      (3,466)      (158)
   Net proceeds from stock options exercised and shares issued through dividend reinvestment plan      3,657      2,004
   Distributions to limited partners and minority interest                                           (14,087)   (12,652)
   Redemption of limited partners units and minority interest                                         (5,455)      (884)
   Distributions to general partner                                                                  (36,394)   (33,001)
                                                                                                    ---------  ---------
      Net cash provided by (used in) financing activities                                             75,308    (21,650)
                                                                                                    ---------  ---------
Net increase in cash and cash equivalents                                                             (3,142)     2,990
Cash and cash equivalents at beginning of period                                                      14,768     12,076
                                                                                                    ---------  ---------
Cash and cash equivalents at end of period                                                         $  11,626  $  15,066
                                                                                                    =========  =========
Supplemental disclosure of cash flow information:
   Cash paid for interest, net of $1,571 and $1,869 capitalized
        in 2004 and 2003, respectively                                                             $  27,224  $  23,935
                                                                                                    =========  =========


   Assumption of mortgage loan payable in conjunction with the purchase of real estate             $ 134,456  $      --
                                                                                                    =========  =========

   Issuance of general partner common units pursuant to phantom stock plan                         $      26  $     458
                                                                                                    =========  =========

   Issuance of limited partnership common units in connection with the purchase of real estate     $   1,729  $   5,768
                                                                                                    =========  =========

   Real estate under development transferred to rental property                                    $      --  $  72,711
                                                                                                    =========  =========

   Real estate investment transferred to rental property                                           $   4,068  $      --
                                                                                                    =========  =========


(1) The statement of cash flows for the six months ended June 30, 2003 included in the Operating Partnership's Form 10-Q filed on
August 13, 2003 has been restated for the retroactive adoption of FIN 46 Revised and SFAS 123 as discussed in Note 1.See accompanying notes to the unaudited consolidated financial statements.ESSEX PORTFOLIO, L.P. AND SUBSIDIARIESNotes to Consolidated Financial Statements 
                                             June 30, 2004 and 2003
                                                   (Unaudited) 
                             (Dollars in thousands, except per share and per unit amounts)


(1)	Organization and Basis of Presentation


The unaudited consolidated financial statements of the Operating
Partnership are prepared in accordance with accounting principles generally
accepted in the United States of America for interim financial information and
in accordance with the instructions to Form 10-Q.  In the opinion of management,
all adjustments necessary for a fair presentation of the financial position,
results of operations and cash flows for the periods presented have been
included and are normal and recurring in nature.  These unaudited consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements included in the Operating Partnership's annual report on
Form 10-K for the year ended December 31, 2003.
All significant intercompany balances and transactions have been eliminated
in the consolidated financial statements.  Certain prior year balances have been
reclassified to conform to the current year presentation.
The Company is the sole general partner in the Operating Partnership, with a
90.9%, 90.8% and 90.1% general partnership interest as of June 30, 2004,
December 31, 2003 and June 30, 2003, respectively. See "Accounting
Changes" section below for a description of entities retroactively
consolidated by the Operating Partnership for all periods presented pursuant to
its adoption of FIN 46 Revised.

As of June 30, 2004, the Operating Partnership has ownership interests in 125
multifamily properties (containing 26,991 units), five recreational vehicle
parks (comprising 1,717 spaces), five office buildings (with approximately
173,540 square feet) and two manufactured housing communities (containing 607
sites), (collectively, the "Properties").  The Properties are located
in Southern California (Los Angeles, Ventura, Orange and San Diego counties),
Northern California (the San Francisco Bay Area), the Pacific Northwest (the
Seattle, Washington and Portland, Oregon metropolitan areas) and other areas
(Houston, Texas, Las Vegas, Nevada and Hemet, California).

Essex Apartment Value Fund, L.P. ("Fund I"), is an investment fund
organized by the Operating Partnership in 2001 to add value through rental
growth and asset appreciation, utilizing the Operating Partnership's
development, redevelopment and asset management capabilities. Currently, Fund I
is considered fully invested based on its acquisitions to date and anticipated
development and redevelopment expenditures. An affiliate of the Operating
Partnership, Essex VFGP, L.P. ("VFGP"), is a 1% general partner and is
a 20.4% limited partner. The Operating Partnership owns a 99% limited
partnership interest in VFGP. Fund I now expects to utilize leverage of
approximately 61% of the estimated costs of the underlying real estate
portfolio, including estimated completion costs of development projects.  The
Operating Partnership is committed to invest 21.4% of the aggregate capital
committed to the Fund.  In addition, Essex will be compensated by Fund I for its
asset management, property management, development and redevelopment services
and may receive incentive payments if Fund I exceeds certain financial return
benchmarks.  The Operating Partnership's remaining unfunded capital commitment
as of June 30, 2004 is $9,614,000.

On July 1, 2004, the Operating Partnership announced the initial closing of
the Essex Apartment Value Fund II, L.P. ("Fund II").  The total equity
capital committed to Fund II at this time by Essex and other investors is $195
million. It is expected that upon the final closing, Fund II's equity
commitments will be approximately $250 million.

As with Fund I, Essex is the general partner of Fund II and will
also acquire a minimum 20 percent limited partner interest. Fund II expects to
utilize leverage of approximately 65 percent of the estimated value of the
underlying real estate portfolio which, assuming that the targeted $250 million
equity commitment is achieved, will allow the Operating Partnership to invest
approximately $700 million in its targeted West Coast markets.  As with Fund I,
Essex will be compensated for its asset management, property management,
development and redevelopment services and may receive incentive payments if
Fund II exceeds certain financial return benchmarks.

The Operating Partnership's equity in income (loss) from investments
accounted for using the equity method was $(124,000) and $432,000 for the three
months ended June 30, 2004 and 2003, respectively, and $786,000 and $1,083,000
for the six months ended June 30, 2004 and 2003 and is classified as a component
of "Revenue-Interest and other income" in the accompanying
consolidated statement of operations.
Accounting Changes


(A) Variable Interest Entities


In January 2003, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51." FIN 46 established new
measurement techniques to evaluate whether entities should be consolidated in
accordance with Accounting Research Bulletin (ARB) No. 51, "Consolidated
Financial Statements."  FIN 46 defined variable interest entities (VIEs),
in which equity investors lack an essential characteristic of a controlling
financial interest or do not have sufficient equity investment at risk to permit
the entity to finance its activities without additional subordinated financial
support from other parties.  In December 2003, the FASB completed deliberations
of proposed modifications to FIN 46 (FIN 46 Revised) resulting in multiple
effective dates based on the nature and the timing of formation of the VIE.  FIN
46 Revised must be applied no later than the Operating Partnership's first
quarter of 2004.  Special Purpose Entities (SPEs) created prior to February 1,
2003 may be accounted for under FIN 46 or FIN 46 Revised but no later than the
Operating Partnership's quarter ended December 31, 2003.  The Operating
Partnership has not formed nor is it a party to any SPEs.  FIN 46 Revised may be
applied prospectively with a cumulative-effect adjustment as of the date on
which it is first applied or by restating previously issued financial statements
for one or more years with a cumulative-effect adjustment as of the beginning of
the first year restated.

As of January 1, 2004, the Operating Partnership adopted the provisions of
FIN 46 Revised using the retroactive restatement approach, and amounts have been
restated for all prior periods presented to reflect the adoption of FIN 46
Revised.  The Operating Partnership applied FIN 46 Revised to all of the
Operating Partnership's arrangements which were entered into prior to January
31, 2003 and evaluated whether such arrangements represent involvement with a
VIE and whether the Operating Partnership qualifies as the primary beneficiary
and should therefore consolidate the VIE.  Subsequent to January 31, 2003, and
through June 30, 2004, the Operating Partnership has not entered into any
arrangements that are deemed VIEs.
Based on our analysis of FIN 46 Revised, the Operating Partnership
consolidated Essex Management Corporation (EMC), Essex Fidelity I Corporation
(EFC), 17 Down REIT limited partnerships (comprising ten properties), an office
building that is subject to loans made by the Operating Partnership, and the
multifamily improvements owned by a third party in which the Operating
Partnership owns the land underlying these improvements and from which the
Operating Partnership receives fees, including land lease, subordination and
property management fees.  The Operating Partnership consolidated these entities
because it is deemed the primary beneficiary under FIN 46 Revised.  The
Operating Partnership's total assets and liabilities related to these VIEs, net
of intercompany eliminations, were approximately $189,000,000 and $155,000,000,
respectively, at June 30, 2004 and $196,000,000 and $156,000,000, respectively,
at December 31, 2003.
The Down REIT entities that collectively own ten multifamily properties
(1,831 units) were investments made under arrangements whereby Essex Management
Corporation (EMC) became the general partner, the Operating Partnership became a
special limited partner, and the other limited partners were granted rights of
redemption for their interests. Such limited partners can request to be redeemed
and the Operating Partnership can elect to redeem their rights for cash or by
issuing shares of the Company's common stock on a one share per unit basis.
Conversion values will be based on the market value of the Company's common
stock at the time of redemption multiplied by the number of units stipulated
under the above arrangements. The other limited partners receive distributions
based on the Company's current dividend rate times the number of units held. At
June 30, 2004, the maximum number of shares that could be issued to meet
redemption of these Down REIT entities is 1,419,576.  As of June 30, 2004 and
December 31, 2003, the carrying value of the other limited partners' interests
is presented at their historical cost and is classified within minority
interests in the accompanying consolidated balance sheets.
Interest holders in VIEs consolidated by the Operating Partnership are
allocated a priority of net income equal to the cash payments made to those
interest holders for services rendered or distributions from cash flow.  The
remaining results of operations are generally allocated to the Operating
Partnership.
Properties consolidated in accordance with FIN 46 Revised were encumbered by
third party, non-recourse loans totaling $152,019,000 and $152,669,000 as of
June 30, 2004 and December 31, 2003, respectively.
There is one VIE in which the Operating Partnership is not deemed to be the
primary beneficiary.  Total assets and liabilities of this entity as of June 30,
2004 were $14,038,000 and $14,427,000, respectively.  The Operating Partnership
is not exposed to a material loss from this entity.

(B) Stock-Based Compensation
As of January 1, 2004, the Operating Partnership adopted the fair value
method of accounting for its stock-based compensation plans using the
retroactive restatement method as provided by Statement of Financial Accounting
Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation."  Under the fair value method, stock-based compensation cost
is measured at the grant date based on the fair value of the award and is
expensed over the vesting period.  Stock-based compensation expense under the
fair value method was $191,000 and $271,000 for the three months ended June 30,
2004 and 2003 and $327,000 and $492,000 for the six months ended June 30, 2004
and 2003, respectively.  The fair value of stock options granted was estimated
on the date of grant using the Black-Scholes option pricing model with the
following weighted average assumptions used for grants:

Three Months Ended      Six Months Ended
                                      June 30,                June 30,
                             ----------------------- -------------------------
                                2004        2003         2004         2003
                             ----------- ----------- ------------ ------------
Risk-free interest rates        3.94%    2.58%-2.78%    3.94%     2.17%-2.78%
Expected lives                 5 years     6 years     5 years      6 years
Volatility                     19.07%      17.89%       19.07%    17.89%-17.91
Dividend yield                  5.07%    5.75%-5.91%    5.07%     5.75%-6.12%





(C) Reconciliation to previously reported amounts
The accounting effect of adopting FIN 46 Revised and SFAS 123 on net
income previously reported for the three and six months ended June 30, 2003 is
as follows (dollars in thousands, except per unit amounts):

For the three    For the six
                                                      months ended     months ended
                                                      June 30, 2003    June 30, 200
                                                      -------------    ----------
Net income previously reported                      $       16,369   $    32,466

Adjustment for effect of adopting FAS 123                      (25)         (135)
Adjustment for effect of adopting FIN 46 Revised              (891)       (1,492)
                                                      -------------    ----------
Net income as reported                              $       15,453   $    30,839
                                                      =============    ==========

Per diluted unit previously reported                $         0.50   $      0.99

Adjustment for effect of adopting FAS 123                       --            --
Adjustment for effect of adopting FIN 46 Revised             (0.04)        (0.07)
                                                      -------------    ----------
Per diluted unit as reported                        $         0.46   $      0.92
                                                      =============    ==========







The accounting effect of adopting FIN 46 Revised and SFAS 123 on partners'
capital at January 1, 2003 for previously reported amounts is as follows
(dollars in thousands):

General Partner   Limited Partner
                                                          Common           Common
                                                          Equity           Equity           Total
                                                       -------------   ---------------  -------------
Statement of Partners' Capital:

Balance at January 1, 2003,
  as previously reported                             $      491,314  $         52,313  $     543,627

Adjustments for cumulative effect on prior years
  of retroactively applying SFAS 123                            910              (335)           575
Adjustments for cumulative effect on prior years
  of retroactively applying FIN 46 Revised                   (6,533)             (725)        (7,258)
                                                       -------------   ---------------  -------------
Balance at January 1, 2003, as adjusted              $      485,691  $         51,253  $     536,944
                                                       =============   ===============  =============






Beginning in 2003, the Operating Partnership implemented an upgrade to its
subsidiary ledger for accounting for fixed assets.  The Operating Partnership
completed this system upgrade in the first quarter of 2004.  In conjunction with
this system upgrade, the Operating Partnership has determined that cumulative
depreciation expense generated by consolidated or equity method rental
properties was understated by approximately $2.1 million through December 31,
2003 and this amount was recorded during the quarter ended March 31, 2004.  Had
the correction been made in 2003, depreciation expense would have increased by
approximately $640,000, $1.3 million, and $1.0 million in the first, second and
third quarters of 2003, respectively.  In the fourth quarter 2003, depreciation
expense would have decreased by approximately $1.4 million.  The Operating
Partnership does not believe that the correction is material to any previously
reported financial statements and is not material to any consolidated earnings
trends.

(D) Discontinued Operations
In the normal course of business, the Operating Partnership will receive
offers for sale of our properties, either solicited or unsolicited. For those
offers that are accepted, the prospective buyer will usually require a due
diligence period before consummation of the transaction.  It is not unusual for
matters to arise that result in the withdrawal or rejection of the offer during
this process.  Essex classifies real estate as "held for sale" when
all criteria under SFAS No. 144, "Accounting for the Impairment or Disposal
of Long-Lived Assets" (SFAS 144) have been met.
At June 30, 2004, Golden Village Recreational Vehicle Park, a property
located in Hemet, California and acquired as part of the John M. Sachs merger in
December 2002, met the "held for sale" criteria under SFAS 144.   In
accordance with SFAS 144, assets and liabilities and the results of operations
of the property are presented as discontinued operations in the consolidated
financial statements for all periods presented.  The property specific real
estate classified as held for sale is stated at the lower of its carrying amount
or estimated fair value less disposal costs.  Depreciation is no longer recorded
on assets upon classification as held for sale. The following is the breakdown
of the property's results of operations, net of minority interests (dollars in
thousands):

Three Months Ended       Six Months Ended
                                             June 30,                 June 30,
                                       --------- -----------    --------- -----------
                                         2004        2003         2004        2003
                                       ---------   ---------    ---------   ---------
Rental revenues                      $       --  $      393   $       --  $    1,373
Interest and other                          158          --          313          --
                                       ---------   ---------    ---------   ---------
  Revenues                                  158         393          313       1,373

Property operating expenses                 (34)       (348)         (62)       (868)
Impairment charge                          (756)         --         (756)         --
                                       ---------   ---------    ---------   ---------
Income (loss) from discontinued
 operations                          $     (632) $       45   $     (505) $      505
                                       =========   =========    =========   =========





For both the three and six months ended June 30, 2004, the results reflect an
impairment charge of approximately $756,000.  Golden Village was one of seven
non-core recreational vehicle/manufactured housing communities that were
acquired in the 2002 John M. Sachs merger.  In the fourth quarter of 2003, the
Operating Partnership entered into master lease and option agreements with
unrelated entities on these seven non-core assets, for an aggregated option
value in excess of the aggregate carrying value of these non-core assets.
However, Golden Village's carrying value was more than the option value.  Upon
reclassification as held for sale, the Operating Partnership presented Golden
Village at its estimated fair value less disposal costs which resulted in an
impairment charge of approximately $756,000.(2)	Significant Transactions for the Quarter Ended June 30,2004(A) AcquisitionsDuring the second quarter, the Operating Partnership
acquired its partner's 80% interests in Tierra Vista Apartments, a 404-unit
apartment community located in Oxnard, California and The Pointe at Cupertino, a
116-unit apartment community located in Cupertino, California.  The combined
contract price for the interests was approximately $74.6 million.  In
conjunction with the transaction, the Operating Partnership assumed a $37.3
million loan with an interest rate of 5.93 percent that matures on July 1, 2007
for Tierra Vista, and a $14.1 million loan with an interest rate of 4.86
percent, which matures on November 1, 2012 for The Pointe at Cupertino.  The
Operating Partnership now consolidates these properties that was previously
accounted for using the equity method of accounting.  The partner's 80%
interests in both assets and liabilities, including outstanding debt and related
premium, were measured to fair value.  80% of the fair value of the in-place
operating leases was $1.3 million and was recognized as an intangible asset as
part of the purchase accounting.  These amounts were combined with the existing
20% interests that are measured at a historical basis.
(B) Development Communities
The Operating Partnership defines development communities as new
apartment properties that are being constructed or are newly constructed, which
are in a phase of lease-up and have not yet reached stabilized operations. As of
June 30, 2004, the Operating Partnership had ownership interests in two
development communities (excluding development projects
owned by the Essex Apartment Value Fund, L.P. described below), aggregating
444 multifamily units with an estimated total cost of $75.1 million with $9.0
million remaining to be expended.
(C) Redevelopment Communities
The Operating Partnership defines redevelopment communities as existing
properties owned or recently acquired, which have been targeted for investment
by the Operating Partnership with the expectation of increased financial returns
through property improvement.  Redevelopment communities typically have
apartment units that are not available for rent and, as a result, may have less
than stabilized operations.  At June 30, 2004, the Operating Partnership had
ownership interests in two redevelopment communities (including redevelopment
projects owned by the Essex Apartment Value Fund, L.P. described below),
aggregating 1,693 multifamily units with estimated redevelopment costs of $26.2
million, of which approximately $20.4 million remains to be expended.
(D) Debt Transactions
On May 13, 2004, the Operating Partnership obtained a non-recourse
mortgage on a previously unencumbered property in the amount of $30.7 million,
with a 5.19 percent fixed interest rate for a 9-year term, maturing in May 2013,
with an option to extend the maturity for one year thereafter at a floating rate
of 2.5 percent over Freddie Mac's Reference Bill.  During the extension period,
the loan may be paid in full with no prepayment penalty.
(E) Equity
On May 13, 2004, the Operating Partnership declared its regular quarterly cash distribution
of $0.79 per common unit, which was payable on July 15, 2004 to unitholders of
record as of June 30, 2004.  On an annualized basis, the distribution represents a
distribution of $3.16 per common unit.
In addition, the Company declared a quarterly distribution of $0.49 per share
on its 7.8125% Series F Cumulative Redeemable Preferred Shares ("Series
F"), which was payable on July 1, 2004 to the shareholders of record as of
May 17, 2004.  On an annualized basis, the dividend represents a distribution of
$1.95 per Series F share.

(F) The Essex Apartment Value Fund ("Fund I")
Fund I has acquired and committed to develop multifamily properties
initially purchased for approximately $640 million (including the estimated cost
of completing development and redevelopment projects) and is now considered
fully invested.  The portfolio is concentrated in Southern California, and is
comprised of 15 multifamily communities aggregating 4,396 apartment homes and
three development communities totaling 612 apartment homes.
Dispositions
On June 1, 2004, the Operating Partnership, acting in its capacity as
general partner of Fund I, announced that it had retained Credit Suisse First
Boston (CSFB) to evaluate strategic alternatives for Fund I, which could involve
the sale of the Fund I portfolio.  Subsequent to retaining CSFB, over 100
marketing packages were distributed to potential investors, which resulted in
the execution of more than 50 confidentiality agreements.  The Operating
Partnership received preliminary first round bids on July 9, 2004, and is
expecting final bids in the near future.  Following the receipt of final bids,
the Operating Partnership is expected to select a prospective purchaser and
potentially enter into a purchase and sale agreement, at which time the
prospective purchaser will commence due diligence activities. This could result
in the sale of Fund I as early as December 2004.  The Operating Partnership
projects that its incentive or promoted interest related to the Fund I sale
could exceed $18 million and would be recognized over a two-year period in
conjunction with the sale of Fund I properties beginning as early as December
2004.  There can be no assurance that the sale of Fund I will occur.
Development Communities
As of June 30, 2004 Fund I has two development communities currently
under construction, totaling 480 multifamily units for an estimated total cost
of $101.7 million.  For the communities under construction, approximately $17.1
million remains to be expended.
Redevelopment Communities
During the second quarter, Fund I continued redevelopment on
Rosebeach Apartments, a 174-unit apartment community located in La Mirada,
California. During the quarter, the Operating Partnership constructed garage
upgrades, which should be completed in the third quarter.
Debt Transactions
On May 27, 2004, the Fund obtained a non-recourse mortgage in a
refinance of the mortgage on The Crest Apartments, obtaining a new mortgage in
the amount of $62.0 million, with a 5.24 percent fixed interest rate for a 9-
year term, which matures in May 2013, with an option to extend the maturity for
one year thereafter at a floating rate of 2.5 percent over Freddie Mac's
Reference Bill.  During the extension period, the loan may be paid in full with
no prepayment penalty.  The property was previously encumbered in the amount of
$35.3 million with a 7.99 percent fixed interest rate, which was due to mature
in July 2005.  The Fund incurred a $1.3 million pre-payment fee in conjunction
with the early repayment.

(G) The Essex Apartment Value Fund II ("Fund
II")
On July 1, 2004, the Operating Partnership announced the initial closing
of the Essex Apartment Value Fund II, L.P. ("Fund II").  The total
equity capital committed to Fund II at this time by Essex and other investors is
$195 million. It is expected that upon the final closing, Fund II's equity
commitments will be approximately $250 million.
As with Fund I, Essex is the general partner of Fund II and will also acquire
a minimum 20 percent limited partner interest. Fund II expects to utilize
leverage of approximately 65 percent of the estimated value of the underlying
real estate portfolio which, assuming that the targeted $250 million equity
commitment is achieved, will allow the Operating Partnership to invest
approximately $700 million in its targeted West Coast markets.  As with Fund I,
Essex will be compensated for its asset management, property management,
development and redevelopment services and may receive incentive payments if
Fund II exceeds certain financial return benchmarks.(3) InvestmentsAs of January 1, 2004, the Operating Partnership adopted the
provisions of FIN 46 Revised using the retroactive restatement approach.
Amounts have been restated for all prior periods presented. (See Note 1).
Certain investments that were previously accounted for using the equity method
are now consolidated.
The following table details the Operating Partnership's investments accounted
for under the equity method of accounting (dollars in thousands):

June 30,    December 31
                                                                      2004         2003
                                                                    ---------    ---------
Investments in joint ventures:
   Direct and indirect LLC member interests of approximately
     49.9% in Newport Beach North, LLC and Newport Beach South,
     LLC                                                          $   15,583   $   13,020
   Limited partnership interest of 20.4% and general partner
     interest of 1% in Essex Apartment Value Fund, L.P                44,179       51,110
   Limited partnership interest of 20% in AEW joint venture (1)           --        4,406
   Class A member interest of 45% in Park Hill LLC                     5,618        5,731
   Preferred limited partnership interests in Mountain Vista
     Apartments                                                        6,806        5,276
   Other investments                                                      --           24
                                                                    ---------    ---------
       Total investments                                          $   72,186   $   79,567
                                                                    =========    =========(1) The Operating Partnership acquired the 80% interest
in this joint venture during the quarter ended June 30, 2004 (see Note 2 (A))
and now consolidates this joint venture.The combined summarized financial information of
investments, which are accounted for under the equity method, are as follows
(dollars in thousands):



June 30,   December 31,
                                                         2004        2003
 Balance sheets:                                       ---------   ---------
    Real estate and real estate under development     $ 640,964   $ 667,538
    Other assets                                         12,088      11,277
                                                       ---------   ---------
        Total assets                                  $ 653,052   $ 678,815
                                                       =========   =========

    Mortgage notes payable                            $ 430,899   $ 442,419
    Other liabilities                                    21,511      13,943
    Partners' equity                                    200,642     222,453
                                                       ---------   ---------
        Total liabilities and partners' equity        $ 653,052   $ 678,815
                                                       =========   =========

 Operating Partnership's share of equity              $  72,186   $  79,567
                                                       =========   =========



                                                            Three Months Ended         Six Months Ended
                                                                June 30,                   June 30,
                                                       ---------------------      ----------------------
                                                         2004        2003           2004         2003
                                                       ---------   ---------      ---------    ---------
  Statements of operations:
     Total revenue                                    $  15,997   $  14,771     $   33,354   $   27,583
     Total expenses                                      17,498      14,120         32,913       25,788
                                                       ---------   ---------      ---------    ---------
         Total net income (loss)                      $  (1,501)  $     651     $      441   $    1,795
                                                       =========   =========      =========    =========

  Operating Partnership's share of net income (loss)  $    (124)  $     432     $      786   $    1,083
                                                       =========   =========      =========    =========








For a further discussion regarding these investments, see the Operating
Partnership's annual report on Form 10-K for the year ended December 31, 2003,
Notes to Consolidated Financial Statements, Note 3, "Real
Estate."

(4) Related Party TransactionsAs of January 1, 2004, the Operating Partnership adopted the
provisions of FIN 46 Revised using the retroactive restatement approach.
Amounts have been restated for all prior periods presented. (see Note 1).
Other income includes management fee income and investment income from the
Operating Partnership's investees of $812,000 and $1,383,000 for the three
months ended June 30, 2004 and 2003 and $2,617,000 and $2,955,000 for the six
months ended June 30, 2004 and 2003, respectively.

Notes and other receivables from related parties as of June 30, 2004 and
December 31, 2003 consist of the following (dollars in thousands):

June 30,    December 31,
                                                                                              2004          2003
                                                                                          ------------  ------------


      Note receivable to Highridge Apartments (Down REIT) from
        The Marcus & Millichap Company, secured, bearing interest at 12.75%,
        due October 1, 2004                                                              $      3,000  $      3,000

      Receivable from Newport Beach North, LLC and Newport Beach South, LLC,
        unsecured, non interest bearing, due on demand                                             --           200

      Loans to officers made prior to July 31, 2002, secured, bearing interest at 8%,
        due beginning April 2006                                                                  625           633

      Other related party receivables, substantially due on demand                              1,571         1,905
                                                                                          ------------  ------------
                                                                                         $      5,196  $      5,738
                                                                                          ============  ============



Other related party receivables consist primarily of accrued interest income
on notes receivable from joint venture investees and loans to officers, and
advances and accrued management fees from joint venture investees.(5) Segment InformationThe Operating Partnership defines its reportable operating segments as the
three geographical regions in which its properties are located: Southern
California, Northern California and the Pacific Northwest. Excluded from segment
revenues are properties outside of these regions and interest and other income.
Non-segment revenues and net operating income included in the following schedule
also consists of revenue generated from commercial properties, recreational
vehicle parks, and manufactured housing communities. Other non-segment assets
include investments, real estate under development, cash, notes receivable,
other assets and deferred charges. The revenues, net operating income, and
assets for each of the reportable operating segments are summarized as follows
for the periods presented (dollars in thousands).Three Months Ended
                                                               June 30,
                                                        ------------------------
                                                           2004       2003 (1)
                                                        -----------  -----------
Revenues:
    Southern California                                $    40,682  $    33,320
    Northern California                                     16,162       16,078
    Pacific Northwest                                       12,186       11,043
    Other non-segment areas                                  1,278        2,504
                                                        -----------  -----------
                                                            70,308       62,945
Interest and other income                                    2,389        2,370
                                                        -----------  -----------
        Total revenues                                 $    72,697  $    65,315
                                                        ===========  ===========
Net operating income:
    Southern California                                $    27,024  $    23,389
    Northern California                                     10,964       11,242
    Pacific Northwest                                        7,725        7,076
    Other non-segment areas                                    548        1,118
                                                        -----------  -----------
        Total net operating income                          46,261       42,825
Interest and other income                                    2,389        2,370
Depreciation and amortization:
    Southern California                                     (9,337)      (6,394)
    Northern California                                     (3,482)      (3,187)
    Pacific Northwest                                       (3,182)      (2,893)
    Other non-segment areas                                 (1,738)        (751)
                                                        -----------  -----------
                                                           (17,739)     (13,225)
Interest:
    Southern California                                     (6,437)      (5,459)
    Northern California                                     (3,343)      (3,099)
    Pacific Northwest                                       (1,565)      (1,086)
    Other non-segment areas                                 (3,736)      (3,269)
                                                        -----------  -----------
                                                           (15,081)     (12,913)
Amortization of deferred financing costs                      (457)        (362)
General and administrative                                  (3,502)      (2,362)
                                                        -----------  -----------
Income from continuing operations
    before minority interests                          $    11,871  $    16,333
                                                        ===========  ===========
(5) Segment Information  (continued)

Six Months Ended
                                                               June 30,
                                                        ------------ -----------
                                                           2004       2003 (1)
                                                        -----------  -----------
Revenues:
    Southern California                                $    77,734  $    66,399
    Northern California                                     31,980       32,294
    Pacific Northwest                                       24,385       22,199
    Other non-segment areas                                  2,540        5,091
                                                        -----------  -----------
        Total segment revenues                             136,639      125,983
Interest and other income                                    5,708        4,636
                                                        -----------  -----------
        Total revenues                                 $   142,347  $   130,619
                                                        ===========  ===========
Net operating income:
    Southern California                                $    52,286  $    46,244
    Northern California                                     21,705       22,604
    Pacific Northwest                                       15,680       14,383
    Other non-segment areas                                  1,080        2,326
                                                        -----------  -----------
        Total segment net operating income                  90,751       85,557
Interest and other income                                    5,708        4,636
Depreciation and amortization:
    Southern California                                    (19,663)     (12,931)
    Northern California                                     (8,983)      (6,502)
    Pacific Northwest                                       (4,367)      (5,858)
    Other non-segment areas                                 (3,130)      (1,198)
                                                        -----------  -----------
                                                           (36,143)     (26,489)
Interest:
    Southern California                                    (12,665)     (10,935)
    Northern California                                     (6,394)      (6,180)
    Pacific Northwest                                       (3,270)      (2,261)
    Other non-segment areas                                 (7,062)      (6,745)
                                                        -----------  -----------
                                                           (29,391)     (26,121)
Amortization of deferred financing costs                      (730)        (582)
General and administrative                                  (6,432)      (4,674)
                                                        -----------  -----------
Income from continuing operations
    before minority interests                          $    23,763  $    32,327
                                                        ===========  ===========



(5) Segment Information (continued)


June 30,    December 31,
                                                           2004       2003 (1)
                                                        -----------  -----------
Assets:
  Net real estate assets:
    Southern California                                $ 1,096,274  $   886,980
    Northern California                                    455,121      435,041
    Pacific Northwest                                      311,130      312,628
    Other non-segment areas                                 74,539       83,710
                                                        -----------  -----------
        Total net real estate assets                     1,937,064    1,718,359
  Other non-segment assets                                 216,240      198,452
                                                        -----------  -----------
        Total assets                                   $ 2,153,304  $ 1,916,811
                                                        ===========  ===========(1) Amounts have been restated for the retroactive
adoption of FIN 46 Revised and SFAS 123 as discussed in Note 1.(6) Net Income Per Common Unit(Amounts in thousands, except per unit data)

Three Months Ended                Three Months Ended
                                                              June 30, 2004                     June 30, 2003
                                                    --------------------------------  --------------------------------
                                                                Weighted      Per                 Weighted      Per
                                                                 Average     Common                Average     Common
                                                                 Common      Units                 Common      Units
                                                     Income       Units      Amount   Income (1)    Units      Amount
                                                    ---------  -----------  --------  ---------  -----------  --------
Basic:
  Income from continuing operations available
    to common units                                $   6,493       25,225  $   0.26  $  10,828       23,305  $   0.47
  Income (loss) from discontinued operations            (632)      25,225     (0.03)        45       23,305        --
                                                    ---------               --------  ---------               --------
                                                       5,861               $   0.23     10,873               $   0.47
                                                                            ========                          ========
  Effect of Dilutive Securities:
    Stock options (2)                                     --          151                   --          197
    Vested series Z incentive units                       --           71                   --           56
                                                    ---------  -----------            ---------  -----------
                                                          --          222                   --          253
                                                    ---------  -----------            ---------  -----------
Diluted:
  Income from continuing operations available
    to common units                                    6,493       25,447  $   0.25     10,828       23,558  $   0.46
  Income (loss) from discontinued operations            (632)      25,447     (0.02)        45       23,558        --
                                                    ---------               --------  ---------               --------
                                                   $   5,861               $   0.23  $  10,873               $   0.46
                                                    =========               ========  =========               ========


                                                           Six Months Ended                  Six Months Ended
                                                            June 30, 2004                     June 30, 2003
                                                    --------------------------------  --------------------------------
                                                                Weighted      Per                 Weighted      Per
                                                                 Average     Common                Average     Common
                                                                 Common      Units                 Common      Units
                                                     Income       Units      Amount   Income (1)    Units      Amount
                                                    ---------  -----------  --------  ---------  -----------  --------
Basic:
  Income from continuing operations available
    to common units                                $  13,025       25,166  $   0.52  $  21,174       23,286  $   0.91
  Income (loss) from discontinued operations            (505)      25,166     (0.02)       505       23,286      0.02
                                                    ---------               --------  ---------               --------
                                                      12,520               $   0.50     21,679               $   0.93
                                                                            ========                          ========

  Effect of Dilutive Securities:
    Stock options (2)                                     --          149                   --          169
    Vested series Z incentive units                       --           71                   --           56
                                                    ---------  -----------            ---------  -----------
                                                          --          220                   --          225
                                                    ---------  -----------            ---------  -----------
 Diluted:
  Income from continuing operations available
    to common units                                   13,025       25,386  $   0.51     21,174       23,511  $   0.90
  Income (loss) from discontinued operations            (505)      25,386     (0.02)       505       23,511      0.02
                                                    ---------               --------  ---------               --------
                                                   $  12,520               $   0.49  $  21,679               $   0.92
                                                    =========               ========  =========               ========





(1) Three and six months ended June 30, 2003 amounts have
been restated for the retroactive adoption of FIN 46 Revised and SFAS 123 as
discussed in Note 1.
(2) The following stock options are not included in the
diluted earnings per unit calculation because the exercise price of the option
was greater than the average market price of the common unit for the quarter
and, therefore, would be anti-dilutive:Three Months Ended       Six Months Ended
                                 June 30,                 June 30,
                        ------------------------ -----------------------
                           2004          2003       2004         2003
                        -----------  ----------- ----------- -----------
Number of options           --         20,000        --        23,500
Range of exercise prices    n/a        $57.57        n/a     $54.02-57.5














(7) Subsequent EventsOn July 18, 2004, the Operating Partnership sold Golden Village
Recreational Vehicle Park for approximately $6.66 million.  Proceeds from the
sale of this unencumbered property will be used for general corporate
purposes.
On August 3, 2004, the Operating Partnership sold The Essex at Lake Merritt,
a 270-unit luxury high-rise apartment community located in Oakland, California
for a contract price of approximately $88 million.  The Operating Partnership
developed the property at a cost of $73.3 million.  In conjunction with the
sale, an affiliate of Essex has originated a participating loan in the amount of
$5 million, which allows the Operating Partnership to participate in the
potential profits related to the condominium conversion.  In addition, the
Operating Partnership will continue to receive property management fees on the
rental income generated under current lease agreements. The Operating
Partnership is evaluating the impact of two accounting pronouncements, FIN 46
Revised and FAS 66, pertaining to the recognition of the gain on the sale and
its continuing interest in the property.
On July 12, 2004, the Operating Partnership submitted a notice of redemption
to the holders of its $55.0 million principal value of its 9.25% Series E
Cumulative Redeemable Preferred Units.  The notice specifies September 3, 2004
as the redemption date.Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations
The unaudited consolidated financial statements of the Operating Partnership
are prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and in accordance
with the instructions to Form 10-Q.  In the opinion of management, all
adjustments necessary for a fair presentation of the financial position, results
of operations and cash flows for the periods presented have been included and
are normal and recurring in nature.  These unaudited consolidated financial
statements should be read in conjunction with the audited consolidated financial
statements included in the Operating Partnership's annual report on Form 10-K
for the year ended December 31, 2003.
The Company is the sole general partner of the Operating Partnership and, as
of June 30, 2004, December 31, 2003 and June 30, 2003, held a 90.9%, 90.8% and
90.1% general partnership interest in the Operating Partnership, respectively.
 See "Accounting Changes" section below for a description of
entities retroactively consolidated by the Operating Partnership for all periods
presented pursuant to its adoption of FIN 46 Revised.
Accounting Changes
Variable Interest Entities
In January 2003, the Financial Accounting Standards Board (FASB) issued
FASB Interpretation No. 46 (FIN 46), "Consolidation of Variable Interest
Entities, an Interpretation of ARB No. 51." FIN 46 established new
measurement techniques to evaluate whether entities should be consolidated in
accordance with Accounting Research Bulletin (ARB) No. 51, "Consolidated
Financial Statements."  FIN 46 defined variable interest entities (VIEs),
in which equity investors lack an essential characteristic of a controlling
financial interest or do not have sufficient equity investment at risk to permit
the entity to finance its activities without additional subordinated financial
support from other parties.  In December 2003, the FASB completed deliberations
of proposed modifications to FIN 46 (FIN 46 Revised) resulting in multiple
effective dates based on the nature and the timing of formation of the VIE.  FIN
46 Revised must be applied no later than the Operating Partnership's first
quarter of 2004.  Special Purpose Entities (SPEs) created prior to February 1,
2003 may be accounted for under FIN 46 or FIN 46 Revised but no later than the
Operating Partnership's quarter ended December 31, 2003.  The Operating
Partnership has not formed nor is it a party to any SPEs.  FIN 46 Revised may be
applied prospectively with a cumulative-effect adjustment as of the date on
which it is first applied or by restating previously issued financial statements
for one or more years with a cumulative-effect adjustment as of the beginning of
the first year restated.

As of January 1, 2004, the Operating Partnership adopted the provisions of
FIN 46 Revised using the retroactive restatement approach, and amounts have been
restated for all prior periods presented to reflect the adoption of FIN 46
Revised.  The Operating Partnership applied FIN 46 Revised to all of the
Operating Partnership's arrangements which were entered into prior to January
31, 2003, and evaluated whether such arrangements represent involvement with a
VIE and whether the Operating Partnership qualifies as the primary beneficiary
and should therefore consolidate the VIE.  Subsequent to January 31, 2003, and
through June 30, 2004, the Operating Partnership has not entered into any
arrangements that are deemed VIEs.Based on our analysis of FIN 46 Revised, the Operating
Partnership consolidated Essex Management Corporation (EMC), Essex Fidelity I
Corporation (EFC), 17 Down REIT limited partnerships (comprising ten
properties), an office building that is subject to loans made by the Operating
Partnership, and the multifamily improvements owned by a third party in which
the Operating Partnership owns the land underlying these improvements and from
which the Operating Partnership receives fees, including land lease,
subordination and property management fees.  The Operating Partnership
consolidated these entities because it is deemed the primary beneficiary under
FIN 46 Revised.  The Operating Partnership's total assets and liabilities
related to these VIEs, net of intercompany eliminations, were approximately
$189,000,000 and $155,000,000, respectively, at June 30, 2004 and $196,000,000
and $156,000,000, respectively at December 31,2003.
The Down REIT entities that collectively own ten multifamily properties
(1,831 units) were investments made under arrangements whereby Essex Management
Corporation (EMC) became the general partner, the Operating Partnership became a
special limited partner, and the other limited partners were granted rights of
redemption for their interests. Such limited partners can request to be redeemed
and the Operating Partnership can elect to redeem their rights for cash or by
issuing shares of the Company's common stock on a one share per unit basis.
Conversion values will be based on the market value of the Company's common
stock at the time of redemption multiplied by the number of units stipulated
under the above arrangements. The other limited partners receive distributions
based on the Company's current dividend rate times the number of units held. At
June 30, 2004, the maximum number of shares that could be issued to meet
redemption of these Down REIT entities is 1,419,576.  As of June 30, 2004 and
December 31, 2003, the carrying value of the other limited partners' interests
is presented at their historical cost and is classified within minority
interests in the accompanying consolidated balance sheets.

Interest holders in VIEs consolidated by the Operating Partnership are
allocated a priority of net income equal to the cash payments made to those
interest holders for services rendered or distributions from cash flow.  The
remaining results of operations are generally allocated to the Operating
Partnership.
Properties consolidated in accordance with FIN 46 Revised were encumbered by
third party, non-recourse loans totaling $152,019,000 and $152,669,000 as of
June 30, 2004 and December 31, 2003, respectively.
There is one VIE in which the Operating Partnership is not deemed to be the
primary beneficiary.  Total assets and liabilities of this entity as of June 30,
2004 were $14,038,000 and $14,427,000, respectively.  The Operating Partnership
is not exposed to a material loss from this entity.
Stock-Based Compensation

As of January 1, 2004, the Operating Partnership adopted the fair value
method of accounting for its stock-based compensation plans using the
retroactive restatement method as provided by Statement of Financial Accounting
Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation."  Under the fair value method, stock-based compensation cost
is measured at the grant date based on the fair value of the award and is
expensed over the vesting period.  Stock-based compensation expense under the
fair value method was $191,000 and $271,000 for the three months ended June 30,
2004 and 2003 and $327,000 and $492,000 for the six months ended June 30, 2004
and 2003, respectively.

The fair value of stock options granted was estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions used for grants:

Three Months Ended      Six Months Ended
                                      June 30,                June 30,
                             ----------------------- -------------------------
                                2004        2003         2004         2003
                             ----------- ----------- ------------ ------------
Risk-free interest rates        3.94%    2.58%-2.78%    3.94%     2.17%-2.78%
Expected lives                 5 years     6 years     5 years      6 years
Volatility                     19.07%      17.89%       19.07%    17.89%-17.91
Dividend yield                  5.07%    5.75%-5.91%    5.07%     5.75%-6.12%







Reconciliation to previously reported amounts
The accounting effect of adopting FIN 46 Revised and SFAS 123 on net
income previously reported for the three and six months ended June 30, 2003 is
as follows (dollars in thousands, except per unit amounts):

For the three    For the six
                                                      months ended     months ended
                                                      June 30, 2003    June 30, 200
                                                      -------------    ----------
Net income previously reported                      $       16,369   $    32,466

Adjustment for effect of adopting FAS 123                      (25)         (135)
Adjustment for effect of adopting FIN 46 Revised              (891)       (1,492)
                                                      -------------    ----------
Net income as reported                              $       15,453   $    30,839
                                                      =============    ==========

Per diluted unit previously reported                $         0.50   $      0.99

Adjustment for effect of adopting FAS 123                       --            --
Adjustment for effect of adopting FIN 46 Revised             (0.04)        (0.07)
                                                      -------------    ----------
Per diluted unit as reported                        $         0.46   $      0.92
                                                      =============    ==========





The accounting effect of adopting FIN 46 Revised and SFAS 123 on
stockholders' equity at January 1, 2003 for previously reported amounts is as
follows (dollars in thousands):General Partner    Limited Partner
                                                          Common           Common
                                                          Equity           Equity           Total
                                                       -------------   ---------------  -------------
Statement of Partners' Capital:

Balance at January 1, 2003,
  as previously reported                             $      491,314  $         52,313  $     543,627

Adjustments for cumulative effect on prior years
  of retroactively applying SFAS 123                            910              (335)           575
Adjustments for cumulative effect on prior years
  of retroactively applying FIN 46 Revised                   (6,533)             (725)        (7,258)
                                                       -------------   ---------------  -------------
Balance at January 1, 2003, as adjusted              $      485,691  $         51,253  $     536,944
                                                       =============   ===============  =============





Beginning in 2003, the Operating Partnership implemented an upgrade to its subsidiary ledger for accounting for fixed assets.
The Operating Partnership completed this system upgrade in the first quarter of
2004.  In conjunction with this system upgrade, the Operating Partnership has
determined that cumulative depreciation expense generated by consolidated or
equity method rental properties was understated by approximately $2.1 million
through December 31, 2003 and this amount was recorded during the quarter ended
March 31, 2004.  Had the correction been made in 2003, depreciation expense
would have increased by approximately $640,000, $1.3 million, and $1.0 million
in the first, second and third quarters of 2003, respectively.  In the fourth
quarter 2003, depreciation expense would have decreased by approximately $1.4
million.  The Operating Partnership does not believe that the correction is
material to any previously reported financial statements and is not material to
any consolidated earnings trends.
Overview
The Operating Partnership believes that its operating results have
largely been a result of its business strategy of investing in submarkets that
provide the greatest potential for rental growth at the lowest relative risk.
Essex believes that its market research process, which includes an analysis of
both metropolitan statistical areas (MSA's) and submarkets, provides it with a
distinct competitive advantage.  Essex researches markets by reviewing data from
private and government sources as well as information developed or verified by
its field personnel.  Essex then utilizes its proprietary research model to
project market rent trends, allowing the Operating Partnership to allocate
capital to the markets with the best risk-adjusted return potential.
Essex's research process begins with a macro-economic analysis of various
MSA's, followed by an evaluation of the submarkets within that MSA.  The
objective of the economic research department is to estimate the amount of new
demand for housing, comparing it to the number of single family and multifamily
homes being constructed within a submarket.  Historically, markets with demand
for multifamily housing that is greater than supply generate increasing
occupancy levels and growth in rents.
Key components of Essex's analysis are as follows:

Job Growth:  The Company believes that quality job growth will lead to
demand for multifamily and for-sale housing.  Based on a variety of
considerations, the Company estimates how the total demand for housing will be
allocated between rental and for-sale housing.

Housing Supply:  Limited housing supply, both rental and for-sale, is a
very important factor in maintaining high occupancy levels, particularly in
periods of recession or slow economic growth.  The Company seeks to identify
markets in which there is a low level of housing construction, measured as a
percentage of existing housing stock.

Cost of for-sale housing:  The Company prefers areas with relatively
expensive for-sale housing, which is usually caused by an insufficient amount of
single-family housing construction.  The Company seeks to identify areas where
the cost of rent is low relative to both median income levels and the cost of
homeownership.

Demographic trends:  The Company evaluates areas with long-term positive
immigration and demographic trends, and areas that provide an attractive quality
of life.

Based on its evaluation of multifamily housing supply and demand factors, the
Operating Partnership forecasts the occupancy and rent trends for its targeted
submarkets, and actively seeks to expand its multifamily portfolio in the
submarkets with the greatest risk-adjusted return.

By region, the Operating Partnership's operating results and investment
strategy are as follows:

Southern California Region:  At the time of the Company's 1994 initial public
offering (IPO), the Operating Partnership had ownership interests in this region
representing 17% of its multifamily units.  Following the IPO, the Operating
Partnership, using its research process, determined that various markets in the
Southern California region were attractive for multifamily property investment
and, the Operating Partnership accordingly increased its ownership in such
markets. As of June 30, 2004, we have ownership interests in this region
representing 59% of our multifamily units.  During the three months ended June
30, 2004, the region continued to perform well, with same store property
revenues increasing by 3.4% versus the comparable period in 2003.  Same store
property revenues decreased slightly by 0.1% versus the immediately preceding
quarter.  The Operating Partnership expects this region to continue generating
positive operating results in the near term.

Northern California Region:  As of June 30, 2004, the Operating Partnership
had ownership interests in this region representing 17% of its multifamily
units.  Several years of job losses have resulted in declining rents.  In the
three months ended June 30, 2004, same store property revenues decreased 5.3%
versus the comparable period in 2003 and increased by 0.6% versus the
immediately preceding quarter.  The Operating Partnership expects market rents
to remain flat in fiscal year 2004, which would result in same store property
revenues to decline. The Operating Partnership expects positive multifamily
fundamentals in this region after 2004.  As a result, the Operating Partnership
will begin to increase its investment focus in this region.

Pacific Northwest Region: As of June 30, 2004, the Operating Partnership had
ownership interests in this region representing 22% of its multifamily units.
This region also lost jobs in 2003, but at a lower rate compared to the
Operating Partnership's Northern California region.  In the three months ended
June 30, 2004, same store property revenues increased by 0.5% versus the
comparable period in 2003 and decreased by 0.5% versus the immediately preceding
quarter.  The Operating Partnership expects job growth in this region in fiscal
year 2004.  The Operating Partnership expects positive multifamily fundamentals
in this region after 2004.  As result, the Operating Partnership will begin to
increase it investment focus in this region.

Critical Accounting Policies

See Item 7 of the Operating Partnership's Annual Report on Form 10-K for
the year ended December 31, 2003 for a discussion of the Operating Partnership's
critical accounting policies.  As a result of the implementation of FIN 46
Revised, discussed in Note 1 to the condensed consolidated financial statements,
the Operating Partnership has identified an additional critical accounting
policy regarding consolidation of VIEs.

The Operating Partnership assesses each entity in which it has an investment
or contractual relationship to determine if it may be deemed to be a VIE.  If
such an entity is a VIE, then the Operating Partnership analyzes the expected
losses and expected residual returns to determine who is the primary
beneficiary.  If the Operating Partnership is the primary beneficiary, then the
entity is consolidated.  The analysis required to identify VIEs and primary
beneficiaries is complex and judgmental and must be applied to various types of
entities and structures.

General Background

The Operating Partnership's property revenues are generated primarily
from multifamily property operations, which accounted for 96% or more of its
property revenues for each of the three and six months ended June 30, 2004 and
2003.  The Operating Partnership's properties ("the Properties") are
located in Southern California (Los Angeles, Ventura, Orange and San Diego
counties), Northern California (the San Francisco Bay Area), the Pacific
Northwest (The Seattle, Washington and Portland, Oregon metropolitan areas), and
other areas (Hemet, California, Las Vegas, Nevada, and Houston, Texas).

Essex Apartment Value Fund, L.P. ("Fund I"), is an investment fund
organized by the Operating Partnership in 2001 to add value through rental
growth and asset appreciation, utilizing the Operating Partnership's
development, redevelopment and asset management capabilities. Currently, Fund I
is considered fully invested based on its acquisitions to date and anticipated
development and redevelopment expenditures. An affiliate of the Operating
Partnership, Essex VFGP, L.P. ("VFGP"), is a 1% general partner and is
a 20.4% limited partner. The Operating Partnership owns a 99% limited
partnership interest in VFGP. Fund I now expects to utilize leverage of
approximately 61% of the estimated costs of the underlying real estate
portfolio, including estimated completion costs of development projects.  The
Operating Partnership is committed to invest 21.4% of the aggregate capital
committed to the Fund.  In addition, Essex will be compensated by Fund I for its
asset management, property management, development and redevelopment services
and may receive incentive payments if Fund I exceeds certain financial return
benchmarks.  The Operating Partnership's remaining unfunded capital commitment
as of June 30, 2004 is $9,614,000.

Since its formation, Fund I has acquired ownership interests in 17
multifamily residential properties, representing 4,926 apartment units with an
aggregate cost of approximately $640 million (including the estimated total cost
of development and redevelopment projects), and disposed of two multifamily
residential properties, consisting of 530 apartment units at a gross sales price
of approximately $73.2 million resulting in a net realized gain of approximately
$5.7 million. In addition, two development land parcels, where approximately 480
apartment units are planned for construction, have been purchased by Fund I with
a total estimated cost for the projects of approximately $101.7 million. As of
June 30, 2004, the remaining commitments to fund these development projects is
approximately $17.1 million of which approximately $3.7 million is the Operating
Partnership's commitment.  Fund I also owns a land parcel in Irvine,
California.

On June 1, 2004, the Operating Partnership, acting in its capacity as
general partner of Fund I, announced that it had retained Credit Suisse First
Boston (CSFB) to evaluate strategic alternatives for Fund I, which could involve
the sale of the Fund I portfolio.  Subsequent to retaining CSFB, over 100
marketing packages were distributed to potential investors, which resulted in
the execution of more than 50 confidentiality agreements.  The Operating
Partnership received preliminary first round bids on July 9, 2004, and is
expecting final bids in the near future.  Following the receipt of final bids,
the Operating Partnership is expected to select a prospective purchaser and
potentially enter into a purchase and sale agreement, at which time the
prospective purchaser will commence due diligence activities. This could result
in the sale of Fund I's real estate investments as early as December 2004.  The
Operating Partnership projects that its incentive or promoted interest related
to the Fund I sale could exceed $18 million and would be recognized over a two-
year period in conjunction with the sale of Fund I properties beginning as early
as December 2004.  There can be no assurance that the sale of Fund I will
occur.

On July 1, 2004, the Operating Partnership announced the initial
closing of the Essex Apartment Value Fund II, L.P. ("Fund II").  The
total equity capital committed to Fund II at this time by Essex and other
investors is $195 million. It is expected that upon the final closing, Fund II's
equity commitments will be approximately $250 million.

As with Fund I, Essex is the general partner of Fund II and will also acquire
a minimum 20 percent limited partner interest. Fund II expects to utilize
leverage of approximately 65 percent of the estimated value of the underlying
real estate portfolio which, assuming that the targeted $250 million equity
commitment is achieved, will allow the Operating Partnership to invest
approximately $700 million in its targeted West Coast markets.  As with Fund I,
Essex will be compensated for its asset management, property management,
development and redevelopment services and may receive incentive payments if
Fund II exceeds certain financial return benchmarks.

The Operating Partnership has elected to be treated as a real estate
investment trust ("REIT") for federal income tax purposes since 1994.
The Operating Partnership provides some of its fee based asset management and
disposition services as well as third-party property management and leasing
services through Essex Management Corporation ("EMC"), in order to
maintain compliance with REIT tax rules. EMC was retroactively consolidated by
the Operating Partnership as of January 1, 2004 for all periods presented in
accordance with the Operating Partnership's adoption of FIN 46 Revised.

The Operating Partnership (excluding Fund I's development communities) has
ownership interests in and is developing two multifamily residential
communities, with an aggregate of 444 multifamily units. In connection with
these development projects, the Operating Partnership has directly, or in some
cases through its joint venture partners, entered into contractual construction
related commitments with unrelated third parties and the total projected
estimated cost for these projects is approximately $75.1 million.  As of June
30, 2004, the remaining commitment to fund these projects is approximately $9.0
million.

Results of Operations

Comparison of the Three Months Ended June 30, 2004 to the Three Months
Ended June 30, 2003

Average financial occupancy rates of the Operating Partnership's multifamily
Quarterly Same Store Properties (stabilized properties consolidated (excludes
properties consolidated pursuant to FIN 46 Revised) by the Operating Partnership
for each of the three months ended June 30, 2004 and 2003) was 95.7% and 95.2%,
for the three months ended June 30, 2004 and 2003, respectively. "Financial
occupancy" is defined as the percentage resulting from dividing actual
rental revenue by total possible rental revenue. Actual rental revenue
represents contractual rental revenue pursuant to leases without considering
delinquency and concessions. Total possible rental revenue represents the value
of all apartment units, with occupied units valued at contractual rental rates
pursuant to leases and vacant units valued at estimated market rents. We believe
that financial occupancy is a meaningful measure of occupancy because it
considers the value of each vacant unit at its estimated market rate. Financial
occupancy rates disclosed by other REITs may not be comparable to our
calculation of financial occupancy.

The regional breakdown of average financial occupancy for the multifamily
Quarterly Same Store Properties for the three months ended June 30, 2004 and
2003 are as follows:

`Three months ended
                                                         June 30,
                                                    ----------------------
                                                      2004        2003
                                                    ---------  -----------
Southern California                                     95.2%        95.2%
Northern California                                     96.9%        95.4%
Pacific Northwest                                       95.6%        95.2%`



Total Revenues increased by $7,382,000 or 11.3% to $72,697,000 in the
second quarter of 2004 from $65,315,000 in the second quarter of 2003. The
following table sets forth a breakdown of these revenue amounts, including the
revenues attributable to the Quarterly Same Store Properties.

`Three Months Ended
                                                                  June 30,
                                                 Number of   --------------------   Dollar   Percentage
                                                Properties     2004       2003      Change     Change
                                                -----------  ---------  ---------  --------- -----------
Revenues:                                                    (Dollars in thousands)
  Property revenues - quarterly
    Quarterly Same Store Properties
      Southern California                               42  $  24,583  $  23,766  $     817         3.4 %
      Northern California                               17     12,670     13,383       (713)       (5.3)
      Pacific Northwest                                 23     10,264     10,214         50         0.5
        Total property revenues                 -----------  ---------  ---------  --------- -----------
          Same Store Properties                         82     47,517     47,363        154         0.3
  Property revenues - properties
    acquired or consolidated subsequent to
    March 31, 2003 (1)                                         22,791     15,582      7,209        46.3
                                                             ---------  ---------  --------- -----------
      Total property revenues                                  70,308     62,945      7,363        11.7
Interest and other income                                       2,389      2,370         19         0.8
                                                             ---------  ---------  --------- -----------
      Total revenues                                        $  72,697  $  65,315  $   7,382        11.3 %
                                                             =========  =========  ========= ===========`

(1) Also includes five office buildings
(one consolidated in accordance with FIN 46R), five recreational vehicle parks,
two manufactured housing communities, redevelopment communities, development
communities, and 12 multifamily properties consolidated as of January 1, 2004 in
accordance with FIN 46 Revised.

As set forth in the above table, the $7,382,000 net
increase in total revenues was primarily attributable to an increase of
$7,209,000 primarily due to acquisition of seven multifamily properties and
achieved stabilized operations in two redevelopment communities and two
development communities (the "Quarterly Acquisition Properties")
subsequent to March 31, 2003 and the increase in Quarterly Same Store Properties
revenue of $154,000.

Interest and other income increased by $19,000 or 0.8% to $2,389,000 in the
second quarter of 2004 from $2,370,000 in the second quarter of 2003. The
increase primarily relates to an increase in equity income in co-investments and
leasing income and fee income offset by the reduction in miscellaneous
income.

Property revenues from the Quarterly Same Store Properties increased by
$154,000 or 0.3% to $47,517,000 in the second quarter of 2004 from $47,363,000
in the second quarter of 2003. The relatively minor increase was primarily
attributable to the results of the 42 Quarterly Same Store Properties located in
Southern California offset by the 17 Quarterly Same Store Properties located in
Northern California. The 42

Total Expenses increased by $11,844,000 or approximately 24.2% to
$60,826,000 in the second quarter of 2004 from $48,982,000 in the second quarter
of 2003. This increase was mainly due to an increase in property operating
expenses of $8,441,000 or 25.3% to $41,786,000 in the second quarter of 2004
from $33,345,000 in the second quarter of 2003.  Such operating expense increase
was attributable to an increase in depreciation and amortization of $4,514,000,
which was attributable to the Quarterly Acquisition Properties and a correction
of depreciation expense, an increase of administrative costs of $2,093,000, and
an increase of real estate taxes of $1,383,000, both primarily attributable to
the Quarterly Acquisition Properties.

Discontinued operations decreased $587,000 to a loss of $632,000
in the second quarter of 2004 from income of $45,000 in the second quarter of
2003.  The decrease in discontinued operations was mainly due to an impairment
charge of $756,000.

Net income

Comparison of the Six Months Ended June 30, 2004 to the Six Months Ended
June 30, 2003

Average financial occupancy rates of the Operating Partnership's multifamily
Same Store Properties (stabilized properties consolidated (excludes properties
consolidated pursuant to FIN 46 Revised) by the Operating Partnership for each
of the six months ended June 30, 2004 and 2003) was 95.9% and 95.2%, for the six
months ended June 30, 2004 and 2003, respectively.

The regional breakdown of average financial occupancy for the multifamily
Same Store Properties for the six months ended June 30, 2004 and 2003 are as
follows:

`Six Months Ended
                                                          June 30,
                                                    ----------------------
                                                      2004        2003
                                                    ---------  -----------
Southern California                                     95.7%        95.2%
Northern California                                     96.4%        95.6%
Pacific Northwest                                       95.7%        94.8%`



Total Revenues increased by $11,728,000 or 9.0% to $142,347,000 in the
six months ended June 30, 2004 from $130,619,000 in the six months ended June
30, 2003.  The following table sets forth a breakdown of these revenue amounts,
including the revenues attributable to the Same Store Properties.

`Six Months Ended
                                                                   June 30,
                                                 Number of   --------------------   Dollar   Percentage
                                                Properties     2004     2003 (1)    Change     Change
                                                -----------  ---------  ---------  --------- -----------
Revenues:                                                    (Dollars in thousands)
  Property revenues
  Same Store Properties
    Southern California                                 42  $  49,187  $  47,333  $   1,854         3.9 %
    Northern California                                 17     25,263     27,108     (1,845)       (6.8)
    Pacific Northwest                                   23     20,575     20,535         40         0.2
        Total property revenues                 -----------  ---------  ---------  --------- -----------
          Same Store Properties                         82     95,025     94,976         49         0.1
  Property revenues - properties
    acquired or consolidated subsequent to
    December 31, 2002 (1)                                      41,614     31,007     10,607        34.2
                                                             ---------  ---------  --------- -----------
      Total property revenues                                 136,639    125,983     10,656         8.5
Interest and other income                                       5,708      4,636      1,072        23.1
                                                             ---------  ---------  --------- -----------
      Total revenues                                        $ 142,347  $ 130,619  $  11,728         9.0 %
                                                             =========  =========  ========= ===========`



(1) Also includes five office buildings
(one consolidated in accordance with FIN 46R), five recreational vehicle parks,
two manufactured housing communities, redevelopment communities, development
communities, and 12 multifamily properties consolidated as of January 1, 2004 in
accordance with FIN 46 Revised.

As set forth in the above table, the $11,728,000 net
increase in total revenues was primarily due to an increase of $10,607,000
primarily attributable to multifamily properties acquired subsequent to December
31, 2002 and an increase in interest and other income of $1,072,000.  Subsequent
to December 31, 2002, the Operating Partnership acquired interests in seven
multifamily properties and achieved stabilized operations in two redevelopment
communities and two development communities (the "Acquisitions
Properties").

Interest and other income increased by $1,072,000 or 23.1% to $5,708,000 in
the six months ended June 30, 2004 from $4,636,000 in the six months ended June
30, 2003.  The increase primarily relates to an increase in equity income in co-
investments and leasing income and fee income offset by the reduction in
miscellaneous income.

Property revenues from the Same Store Properties increased by $49,000 or 0.1%
to $95,025,000 in the six months ended June 30, 2004 from $94,976,000 in the six
months ended June 30, 2003.  The minor increase was attributable to the 42 Same
Store Properties located in Southern California offset by the 17 Same Store
Properties located in the Northern California.  The 42 multifamily residential
properties located in Southern California increased by $1,854,000 or 3.9% to
$49,187,000 in the six months ended June 30, 2004 from $47,333,000 in the six
months ended June 30, 2003.  The $1,854,000 increase is primarily attributable
to rental rate increases and an increase in financial occupancy to 95.7% in the
six months ended June 30, 2004 from 95.2% in the six months ended June 30, 2003.
 The property revenues of the Same Store Properties in Northern California
decreased by $1,845,000 or 6.8% to $25,263,000 in the six months ended June 30,
2004 from $27,108,000 in the six months ended June 30, 2003.  The decrease in
Northern California is primarily attributable to rental rate decreases offset by
an increase in financial occupancy to 96.4% in the six months ended June 30,
2004 from 95.6% in the six months ended June 30, 2003.

Total Expenses increased by $20,292,000 or approximately 20.6% to
$118,584,000 in the six months ended June 30, 2004 from $98,292,000 in the six
months ended June 30, 2003.  This increase was mainly due to an increase in
property operating expenses of $15,116,000 or 22.6% to $82,031,000 in the six
months ended June 30, 2004 from $66,915,000 in the six months ended June 30,
2003.  Such operating expense increase was attributable to an increase in
depreciation and amortization of $9,654,000, related to the Acquisition
Properties, and corrections to depreciation expense, an increase of
administrative costs of $2,315,000, and an increase of real estate taxes of
$2,118,000, both primarily attributable to the Acquisition
Properties.

Discontinued operations decreased $1,010,000 to a loss of $505,000 in
the six months ended June 30, 2004 from income of $505,000 in the six months
ended June 30, 2003.  The decrease in discontinued operations was mainly due to
an impairment charge of $756,000.

Net income decreased by $9,230,000 or 29.9% to $21,609,000 in the six
months ended June 30, 2004 from $30,839,000 in six months ended June 30, 2003.
The decrease in net income was mainly attributable to the factors noted
above.

Subsequent Events

On July 18, 2004, the Operating Partnership sold Golden Village
Recreational Vehicle Park for approximately $6.66 million.  Proceeds from the
sale of this unencumbered property will be used to reduced debt and other
general corporate purposes.

On August 3, 2004, the Operating Partnership sold The Essex at Lake Merritt,
a 270-unit luxury high-rise apartment community located in Oakland, California
for a contract price of approximately $88 million.  The Operating Partnership
developed the property at a cost of $73.3 million.  In conjunction with the
sale, an of affiliate of Essex has originated a participating loan in the amount of
$5 million, which allows the Operating Partnership to participate in the
potential profits related to the condominium conversion.  In addition, the
Operating Partnership will continue to receive property management fees on the
rental income generated under current lease agreements. The Operating
Partnership is evaluating the impact of two accounting pronouncements, FIN 46
Revised and FAS 66, pertaining to the recognition of the gain on the sale and
its continuing interest in the property.

Liquidity and Capital Resources

On July 26, 2004, Standard and Poor's publicly announced its existing
issuer credit ratings of BBB/Stable/-- for Essex Property Trust, Inc. and Essex
Portfolio L.P., and issued a new rating of BBB- on its Senior Unsecured Debt for
Essex Portfolio L.P.

At June 30, 2004, the Operating Partnership had $11,626,000 of unrestricted
cash and cash equivalents. The Operating Partnership expects to meet its short-
term liquidity requirements by using its working capital, cash generated from
operations, and amounts available under lines of credit or other financings. The
Operating Partnership believes that its current net cash flows will be adequate
to meet operating requirements and to provide for payment of dividends by the
Operating Partnership in accordance with REIT qualification requirements. The
Operating Partnership expects to meet its long-term liquidity requirements
relating to property acquisitions and development (beyond the next 12 months)
and balloon debt maturities by using a combination of some or all of the
following sources: working capital, amounts available on lines of credit, net
proceeds from public and private debt and equity issuances, refinancing of
maturing loans, and proceeds from the disposition of properties that may be sold
from time to time. There can, however, be no assurance that the Operating
Partnership will have access to the debt and equity markets in a timely fashion
to meet such future funding requirements or that future working capital and
borrowings under the lines of credit will be available, or if available, will be
sufficient to meet the Operating Partnership's requirements or that the
Operating Partnership will be able to dispose of properties in a timely manner
and under terms and conditions that the Operating Partnership deems
acceptable.

Cash flow from operations increased by $6,577,000 to $59,448,000 in the six months
ended June 30, 2004 from $52,871,000 in the six months ended June 30, 2003. The increase was primarily
a result of the timing in the reduction of accounts payable, and the decrease in prepaid expenses accounts.

Non-revenue generating capital expenditures are improvements and upgrades
that extend the useful life of the property and are not related to preparing a
multifamily property unit to be rented to a tenant. The Operating Partnership
expects to incur approximately $390 to $400 per weighted average occupancy unit
in non-revenue generating capital expenditures for the year ended December 31,
2004. These expenditures do not include the improvements required as a condition
to funding mortgage loans, expenditures for acquisition properties' renovations
and improvements, which are expected to generate additional revenue, and
renovation expenditures required pursuant to tax-exempt bond financings. The
Operating Partnership expects that cash from operations and/or its lines of
credit will fund such expenditures. However, there can be no assurance that the
actual expenditures incurred during 2004 and/or the funding thereof will not be
significantly different than the Operating Partnership's current
expectations.

The Operating Partnership is currently developing two multifamily residential
projects, with an aggregate of 444 multifamily units. Such projects involve
certain risks inherent in real estate development. See "Other Matters/ Risk
Factors--Risks that Development Activities Will be Delayed or Not Completed
and/or Fail to Achieve Expected Results" in Item 1 of the Operating
Partnership's Annual Report on Form 10-K for the year ended December 31, 2003.
In connection with these development projects, the Operating Partnership has
directly, or in some cases through its joint venture partners entered into
contractual construction related commitments with unrelated third parties and
the total projected estimated cost for these projects is approximately
$75,000,000.  As of June 30, 2004, the remaining commitment to fund these
development projects is approximately $9,000,000. The Operating Partnership
expects to fund such commitments by using a combination of some or all of the
following sources: its working capital, amounts available on its lines of
credit, net proceeds from public and private equity and debt issuances, and
proceeds from the disposition of properties, if any.

Although the Operating Partnership does not anticipate starting any new
development projects in 2004, it will continue to evaluate, as appropriate and
with due consideration given to current market conditions, potential development
projects of multifamily properties.

Essex Apartment Value Fund, L.P. ("Fund I"), is an investment fund
organized by the Operating Partnership in 2001 to add value through rental
growth and asset appreciation, utilizing the Operating Partnership's
development, redevelopment and asset management capabilities. Currently, Fund I
is considered fully invested based on its acquisitions to date and anticipated
development and redevelopment expenditures. An affiliate of the Operating
Partnership, Essex VFGP, L.P. ("VFGP"), is a 1% general partner and is
a 20.4% limited partner. The Operating Partnership owns a 99% limited
partnership interest in VFGP. Fund I now expects to utilize leverage of
approximately 61% of the estimated costs of the underlying real estate
portfolio, including estimated completion costs of development projects.  The
Operating Partnership is committed to invest 21.4% of the aggregate capital
committed to the Fund.  In addition, Essex will be compensated by Fund I for its
asset management, property management, development and redevelopment services
and may receive incentive payments if Fund I exceeds certain financial return
benchmarks.  The Operating Partnership's remaining unfunded capital commitment
as of June 30, 2004 is $9,614,000.

On June 1, 2004, the Operating Partnership, acting in its
capacity as general partner of Fund I, announced that it had retained Credit
Suisse First Boston (CSFB) to evaluate strategic alternatives for Fund I, which
could involve the sale of the Fund I portfolio.  Subsequent to retaining CSFB,
over 100 marketing packages were distributed to potential investors, which
resulted in the execution of more than 50 confidentiality agreements.  The
Operating Partnership received preliminary first round bids on July 9, 2004, and
is expecting final bids in the near future.  Following the receipt of final
bids, the Operating Partnership is expected to select a prospective purchaser
and potentially enter into a purchase and sale agreement, at which time the
prospective purchaser will commence due diligence activities. This could result
in the sale of Fund I as early as December 2004.  The Operating Partnership
projects that its incentive or promoted interest related to the Fund I sale
could exceed $18 million and would be recognized over a two-year period in
conjunction with the sale of Fund I properties beginning as early as December
2004.  There can be no assurance that the sale of Fund I will occur.

On July 1, 2004, the Operating Partnership announced the initial closing of
the Essex Apartment Value Fund II, L.P. ("Fund II").  The total equity
capital committed to Fund II at this time by Essex and other investors is $195
million. It is expected that upon the final closing, Fund II's equity
commitments will be approximately $250 million.

As with Fund I, the Operating Partnership is the general partner of Fund II
and will also acquire a minimum 20 percent limited partner interest. Fund II
expects to utilize leverage of approximately 65 percent of the estimated value
of the underlying real estate portfolio which, assuming that the targeted $250
million equity commitment is achieved, will allow the Operating Partnership to
invest approximately $700 million in its targeted West Coast markets.  As with
Fund I, the Operating Partnership will be compensated for its asset management,
property management, development and redevelopment services and may receive
incentive payments if Fund II exceeds certain financial return benchmarks.

The Operating Partnership has an outstanding unsecured line of
credit for an aggregate amount of $185,000,000.  At June 30, 2004, the Operating
Partnership had $103,000,000 outstanding on this line of credit.  At June 30,
2004, this line of credit bore an interest rate of approximately 2.4%.  On April
30, 2004, the Operating Partnership renewed this $185 million unsecured line of
credit facility for a three-year term, with an option to extend it for one year
thereafter.  The underlying interest rate on this line is based on a tiered rate
structure tied to the Operating Partnership's corporate ratings and is currently
LIBOR plus 1.0%. On December 18, 2003, the Operating Partnership obtained a 5-
year, $90,000,000 credit facility from Freddie Mac, secured by four of Essex's
multifamily communities.  The aggregate maximum principal amount of the facility
was $90,000,000, increasing to $100,000,000 on June 15, 2004 with the pledge of
one additional Essex's multifamily communities.  The Operating Partnership
borrowed $96,600,000 under this facility, comprised of two tranches as follows:
$64,600,000, locked for 30 days at a base rate of 1.586% (55 basis points over
Freddie Mac's Reference Rate) and $32,000,000 locked for 90 days at a base rate
of 1.834% (55 basis points over Freddie Mac's Reference Rate).

In addition to the Operating Partnership's unsecured lines of credit, the
Operating Partnership had $1,054,167,000 of secured indebtedness at June 30,
2004. Such indebtedness consisted of $869,656,000 in fixed rate debt with
interest rates varying from 4.14% to 8.29% and maturity dates ranging from 2006
to 2032.  The indebtedness also includes $184,511,000 of tax-exempt variable
rate demand bonds with interest rates, including credit enhancements and other
fees, paid during the three months ended June 30, 2004 that average 2.60% and
maturity dates ranging from 2020 to 2034. The tax-exempt variable rate demand
bonds are subject to interest rate caps.

The Company pays quarterly dividends from cash available for distribution.
Until it is distributed, cash available for distribution is invested by the
Operating Partnership primarily in short-term investment grade securities or is
used by the Operating Partnership to reduce balances outstanding under its line
of credit.

As of June 30, 2004, the Company had the capacity pursuant to existing shelf
registration statements to issue up to $219,455,250 in equity securities and the
Operating Partnership had the capacity pursuant to such registration statements
to issue up to $250,000,000 of debt securities.

On July 12, 2004, the Operating Partnership submitted a notice of redemption
to the holders of its $55.0 million principal value of its 9.25% Series E
Cumulative Redeemable Preferred Units.  The notice specifies September 3, 2004
as the redemption date.

Certain of the Company's properties are located in areas that are subject to earthquake activity.
Essex has certain limited earthquake coverage on its properties. In the second quarter of 2004, the
Company increased its coverage on these properties from $40.0 million to $80.0 million. Essex's
self-insurance retention and deductible on its insurance coverage remained at $15.0 million and
5% respectively.

Financing and Equity Issuances

On July 30, 2003, in connection with the Operating Partnership's acquisition,
by merger, of John M. Sachs, Inc. ("Sachs") that was completed on
December 17, 2002, and under the terms of the merger agreement, a final analysis
was prepared, which indicated that the actual net liabilities of Sachs were less
than the net liabilities of Sachs estimated to be outstanding as of the merger
date.  Based on the final analysis and as a post-closing adjustment payment
pursuant to the merger agreement, the Operating Partnership made a final payment
of approximately $1,766,000 in cash and issued an additional 35,860 shares
of common stock to certain of the pre-merger shareholders of Sachs.

On September 23, 2003, the Operating Partnership issued 1,000,000 shares of
its Series F Cumulative Redeemable Preferred Stock ("Series F Preferred
Stock") at a fixed price of $24.664 per share, a discount from the $25.00
per share liquidation value of the shares.  The shares did not begin to
accrue a dividend until November 25, 2003, and, following that date, will pay
quarterly distributions at an annualized rate of 7.8125% per year of the
liquidation value and will be redeemable by the Operating Partnership on or
after September 23, 2008.  The Operating Partnership amortized the original
discount in connection with the issuance of these shares in the fourth quarter
of 2003, resulting in a charge of approximately $336,000.  The shares were
issued pursuant to the Company's existing shelf registration statement. 
The Operating Partnership used the net proceeds from this sale of Series F
Preferred Stock to redeem all of the 9.125% Series C Cumulative Redeemable
Preferred Units (the "Series C Preferred Units") of  the Operating
Partnership.

On October 6, 2003, the Company sold 1.6 million shares of common stock in a
public offering and received offering proceeds (before expenses) of $60.67 per
share, representing a 3.25% discount to the common stock's closing price on
September 30, 2003, the date of the underwriting agreement between the Company
and the underwriter, pursuant to which the shares were sold.  The shares
were issued pursuant to the Company's existing shelf registration
statement.  The proceeds of the offering were approximately $97,072,000.
Subsequent to the offering, the net proceeds generated from the offering were
used to acquire multifamily communities located in the Company's targeted West
Coast markets.

Using the proceeds of its September 2003 sale of its 7.8125% Series F
Cumulative Redeemable Preferred Stock, the Company on November 24, 2003,
redeemed all of the outstanding 9.125% Series C Cumulative Redeemable Preferred
Units of the Operating Partnership. In connection with this redemption the
Operating Partnership incurred a non-cash charge of $625,000 related to the
write-off of the issuance costs.

In January 2004, the Operating Partnership restructured its previously issued
$50 million, 9.30% Series D Cumulative Redeemable Preferred Units ("Series
D Units"), and its previously issued $80 million, 7.875% Series B
Cumulative Redeemable Preferred Units ("Series B Units").  The
existing distribution rate of 9.30% of the Series D Units will continue until
July 27, 2004 - the end of the current non-call period.  Effective July 28,
2004, the distribution rate on the Series D Units is to be reduced to 7.875%.
The date that the Series D Units can first be redeemed at the Operating
Partnership's option was extended by six years to July 28, 2010.  The date that
the Series B Units can first be redeemed at the Operating Partnership's option
was extended from February 6, 2003 to December 31, 2009.

On June 14, 2000 the Operating Partnership purchased Waterford Place, a 238-
unit apartment community located in San Jose, California for a contract price of
$35.0 million and an additional contingent payment.  The amount of the
contingent payment was disputed and submitted to binding
arbitration.   As a result of the arbitration, the Operating
Partnership was directed to issue an additional 109,874 units of limited
partnership interest ("Units") in the Operating Partnership to the sellers of
Waterford Place.  On March 31, 2004, the Operating Partnership
completed the issuance of these Units to the sellers.

In connection with this issuance, on March 31, 2004, the
Operating Partnership also redeemed for cash 55,564 Units from these sellers,
which included Units from the 109,874 issued to them that day as well as Units
previously acquired by them.

Operating Partnership Investments; Off-Balance Sheet Financing

The Operating Partnership invests in joint ventures, which are accounted
for under the equity or consolidation methods of accounting based on the
provisions of FIN 46 Revised or the voting control it exercises through its
ownership interests in these affiliates. Under the equity method of accounting,
the investment is carried at the cost of assets contributed or distributed, plus
the Operating Partnership's equity in undistributed earnings or losses since its
initial investment. The individual assets, liabilities, revenues and expenses of
the joint venture are not recorded in the Operating Partnership's consolidated
financial statements.

There is one VIE in which the Operating Partnership is not deemed to be the
primary beneficiary.  Total assets and liabilities of this entity as of June 30,
2004 were $14,038,000 and $14,427,000, respectively.  The Operating Partnership
is not exposed to a material loss from this entity.

At June 30, 2004 and December 31, 2003, the Operating Partnership did not
have any other relationship with unconsolidated entities or financial
partnerships, such as entities often referred to as structured finance or
special purpose entities, which would have been established for the purpose of
facilitating off-balance sheet arrangements or other contractually narrow or
limited purposes. As such, the Operating Partnership is not materially exposed
to any financing, liquidity, market or credit risk that could arise if the
Operating Partnership had engaged in such relationships.

Contractual Obligations and Commercial Commitments

The following table summarizes our contractual obligations and other
commitments at June 30, 2004, and the effect such obligations could have on our
liquidity and cash flow in future periods:

`Less Than        2-3         4-5       Over 5
                                      1 Year         Years       Years       Years        Total
(In thousands)                      -----------    ---------   ---------   ---------   -----------
Mortgage notes payable             $    13,398    $  67,803   $ 277,950   $ 695,016   $ 1,054,167
Lines of credit                             --           --     103,000      96,600       199,600
Development commitments (1)              9,000           --          --          --         9,000
Redevelopment commitments(2)            12,820           --          --          --        12,820
Essex Apartment Value Fund, L.P.
   capital commitment                    9,614           --          --          --         9,614
                                    -----------    ---------   ---------   ---------   -----------
                                   $    44,832    $  67,803   $ 380,950   $ 791,616   $ 1,285,201
                                    ===========    =========   =========   =========   ===========`

__________

(1) $8,972 of these commitments relate to actual
contracts as of June 30, 2004.

(2) $4,734 of these commitments relate to actual contracts as of June 30,
2004.

Forward Looking Statements

Certain statements in this "Management's Discussion and Analysis of
Financial Condition and Results of Operations," and elsewhere in this
quarterly report on Form 10-Q which are not historical facts may be considered
forward looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of
1934, as amended, including statements regarding the Operating Partnership's
expectations, hopes, intentions, beliefs and strategies regarding the future.
Forward looking statements include statements regarding the Operating
Partnership's expectations as to the timing of completion of current development
and redevelopment projects and the stabilization dates of such projects,
expectation as to the total projected costs and rental rates of acquisition and
development projects, beliefs as to the adequacy of future cash flows to meet
operating requirements and to provide for dividend payments in accordance with
REIT requirements, expectations as to the amount of capital expenditures,
expectations as to the amount of non-revenue generating capital expenditures,
future acquisitions,  developments, and redevelopment, the Operating
Partnership's anticipated development projects in 2004, the anticipated
performance of the Essex Apartment Value Fund, L.P.("Fund I"), the
anticipated sale of Fund I and estimate of the resulting incentive and promote
interest, the anticipated initial closing and the equity commitment amount of
the second Essex Apartment Value Fund ("Fund II"), the anticipated
performance of existing properties, anticipated results from various geographic
regions and the Operating Partnership's investment focus in such regions,
statements regarding the Operating Partnership's financing activities and the
use of proceeds from such activities.

Such forward-looking statements involve known and unknown risks,
uncertainties and other factors including, but not limited to, that the
Operating Partnership will fail to achieve its business objectives, that the
actual completion of development projects will be subject to delays, that the
stabilization dates of such projects will be delayed, that the total projected
costs of current development projects will exceed expectations, that the
Operating Partnership's 2004 development strategy will change, that such
development projects will not be completed, that development projects and
acquisitions will fail to meet expectations, that estimates of future income
from an acquired property may prove to be inaccurate, that future cash flows
will be inadequate to meet operating requirements and/or will be insufficient to
provide for dividend payments in accordance with REIT requirements, that the
actual non-revenue generating capital expenditures will exceed the Operating
Partnership's current expectations, that Fund I will fail to perform as
anticipated, that the sale of Fund I will not occur or will generate proceeds
that are less than anticipated, that the Operating Partnership's partners in
this Fund or Fund II fail to fund capital commitments as contractually required,
that there may be unexpected delays in the initial closing of Fund II, that
there may be a downturn in the markets in which the Operating Partnership's
properties are located, that the terms of any refinancing may not be as
favorable as the terms of existing indebtedness, as well as those risks, special
considerations, and other factors discussed under the caption "Potential
Factors Affecting Future Operating Results" below and those discussed under
the caption "Other Matters/Risk Factors" in Item 1 of the Operating
Partnership's Annual Report on Form 10-K for the year ended December 31, 2003,
and those other risk factors and special considerations set forth in the
Operating Partnership's other filings with the Securities and Exchange
Commission (the "SEC") which may cause the actual results, performance
or achievements of the Operating Partnership to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements.

Potential Factors Affecting Future Operating Results

Many factors affect the Operating Partnership's actual financial performance
and may cause the Operating Partnership's future results to be different from
past performance or trends. These factors include those factors discussed under
the caption "Other Matters/Risk Factors" in Item 1 of the Operating
Partnership's Annual Report on Form 10-K for the year ended December 31, 2003
and the following:

Economic Environment and Impact on Operating Results

Both the national economy and the economies of the western states in which
the Operating Partnership owns, manages and develops properties, some of which
are concentrated in high-tech sectors, have been and may be in an economic
downturn. The impacts of such downturn on operating results can include, and are
not limited to, reduction in rental rates, occupancy levels, property valuations
and increases in operating costs such as advertising, turnover and repair and
maintenance expense.

The Operating Partnership's property type and diverse geographic locations
provide some degree of risk moderation but are not immune to a prolonged down
cycle in the real estate markets in which the Operating Partnership operates.
Although the Operating Partnership believes it is well positioned to meet the
challenges ahead, it is possible that reductions in occupancy and market rental
rates will result in reduction of rental revenues, operating income, cash flows,
and market value of the Operating Partnership's shares. Prolonged recession
could also affect the Operating Partnership's ability to obtain financing at
acceptable rates of interest and to access funds from the refinance or
disposition of properties at acceptable prices.

Development and Redevelopment Activities

The Operating Partnership pursues multifamily residential properties and
development and redevelopment projects from time to time. Development projects
generally require various government and other approvals, the receipt of which
cannot be assured. The Operating Partnership's development and redevelopment
activities generally entail certain risks, including the following:

- 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;
- 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.

These risks may reduce the funds available for distribution to
the Operating Partnership's stockholders. Further, the development and
redevelopment of properties is also subject to the general risks associated with
real estate investments.

Interest Rate Fluctuations

The Operating Partnership monitors changes in interest rates and believes
that it is well positioned from both a liquidity and interest rate risk
perspective. However, current interest rates are at historic lows and
potentially could increase rapidly to levels more in line with recent levels.
The immediate effect of significant and rapid interest rate increases would
result in higher interest expense on the Operating Partnership's variable
interest rate debt. The effect of prolonged interest rate increases could
negatively impact the Operating Partnership's ability to make acquisitions and
develop properties at economic returns on investment and the Operating
Partnership's ability to refinance existing borrowings at acceptable rates.

Inflation /Deflation

Substantial inflationary or deflationary pressures could have a negative
effect on rental rates and property operating expenses. The Operating
Partnership believes it effectively manages its property and other expenses but
understands that substantial annual rates of inflation or deflation could
adversely impact operating results.



Item 3: Quantitative and Qualitative Disclosures About
Market Risk

The Operating Partnership is exposed to interest rate changes primarily
as a result of its line of credit and long-term debt used to maintain liquidity
and fund capital expenditures and expansion of the Operating Partnership's real
estate investment portfolio and operations. The Operating Partnership's interest
rate risk management objective is to limit the impact of interest rate changes
on earnings and cash flows and to lower its overall borrowing costs. To achieve
its objectives the Operating Partnership borrows primarily at fixed rates and
may enter into derivative financial instruments such as interest rate swaps,
caps and treasury locks in order to mitigate its interest rate risk on a related
financial instrument. The Operating Partnership does not enter into derivative
or interest rate transactions for speculative purposes.

The Operating Partnership's interest rate risk is monitored using a variety
of techniques. The table below presents the principal amounts and weighted
average interest rates by year of expected maturity to evaluate the expected
cash flows and sensitivity to interest rate changes.

`Estimated
For the Years Ended           2004      2005      2006       2007      2008    Thereafter        Total     Fair value
                            --------  --------  ---------  --------  --------  -----------     ---------   ----------
Fixed rate debt
   (In thousands)
Amount                     $ 13,398  $ 43,734  $  24,069  $124,191  $153,759  $   510,505     $ 869,656   $  903,441
Average interest rate           6.7%      6.7%       6.7%      6.7%      6.7%         6.7%

Variable rate debt
   (In thousands)
Amount                     $     --  $     --  $      --  $103,000  $     --  $   281,111 (1) $ 384,111   $  384,111
Average interest                 --        --         --       2.4%       --          2.3%`



The table incorporates only those exposures that exist as of June 30, 2004;
it does not consider 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

As of June 30, 2004, we carried out an evaluation, under the supervision
and with the participation of management, including our Chief Executive Officer
and Chief Financial Officer, of the effectiveness of the design and operation of
our disclosure controls and procedures pursuant to Rules 13a-15 of the
Securities Exchange Act of 1934, as amended.  Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in timely alerting management
to material information relating to the Operating Partnership that is required
to be included in our periodic filings with the Securities and Exchange
Commission.  There were no changes in the Operating Partnership's internal
control over financial reporting, that occurred during the quarter ended June
30, 2004, that have materially affected, or are reasonably likely to materially
affect, the Operating Partnership's internal control over financial
reporting.



Item 6: Exhibits and Reports on Form 8-K

1. Exhibits
2. Reports on Form 8-K

None.



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SIGNATURE

Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.

ESSEX PORTFOLIO, L.P.
A California Limited Partnership
                  (Registrant)

Date: August 9, 2004

By: Essex Property Trust, Inc.
Its General Partner

By: /S/ Mark J. MiklMark J. MiklFirst Vice President, Treasurer and Controller
                 (Authorized Officer and Principal Accounting Officer)



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