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 March 31, 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 March 31, 2004
         and December 31, 2003

4Consolidated Statements of Operations for the three
          
         months ended March 31, 2004 and 2003

5Consolidated Statements of Partners' Capital for the three months
          
         ended March 31, 2004 and the year ended December 31, 2003

6Condensed Consolidated Statements of Cash Flows
          
         for the three months ended March 31, 2004 and 2003

7Notes to Consolidated Financial Statements

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

19Item 3.   Quantitative and Qualitative Disclosures About Market Risk

29



  Item 4.   Controls and Procedures

29PART II.  OTHER INFORMATIONItem 6.   Exhibits and Reports on Form 8-K

30Signature

31Explanatory Note: This Filing is the subject of a previously filed Form 12b-25.Part 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)March 31,    December 31,
                                                                      2004        2003 (1)
                                                                  ------------  ------------
                             Assets
Real estate:
  Rental properties:
     Land and land improvements                                  $    496,130  $    469,347
     Buildings and improvements                                     1,654,365     1,514,775
                                                                  ------------  ------------
                                                                    2,150,495     1,984,122
     Less accumulated depreciation                                   (284,203)     (265,763)
                                                                  ------------  ------------
                                                                    1,866,292     1,718,359
  Investments                                                          83,125        79,567
  Real estate under development                                        62,942        55,183
                                                                  ------------  ------------
                                                                    2,012,359     1,853,109
Cash and cash equivalents-unrestricted                                 17,709        14,768
                                                             --        17,313        11,175
Notes and other receivable from related parties                         5,338         5,738
Notes and other receivables                                             6,105         6,021
Prepaid expenses and other assets                                      21,215        17,426
Deferred charges, net                                                   9,757         8,574
                                                                  ------------  ------------
                                                                 $  2,089,796  $  1,916,811
                                                                  ============  ============

               Liabilities and Partners' Capital
Mortgage notes payable                                           $    967,392  $    891,798
Lines of credit                                                       199,100        93,100
Accounts payable and accrued liabilities                               29,938        24,981
Distributions payable                                                  22,955        22,379
Other liabilities                                                      10,871        17,153
                                                                  ------------  ------------
          Total liabilities                                         1,230,256     1,049,411
Minority interests                                                     54,733        55,592

Partners' capital:
    General partner:
       Common equity                                                  545,782       556,987
       Preferred equity (liquidation value of $25,000)                 24,412        24,412
                                                                  ------------  ------------
                                                                      570,194       581,399
                                                                  ------------  ------------
    Limited partners:
       Common equity                                                   54,498        50,294
       Preferred equity (liquidation value of of $185,000)            180,115       180,115
                                                                  ------------ -------------
                                                                      234,613       230,409
                                                                  ------------  ------------
          Total partners' capital                                     804,807       811,808
                                                                  ------------  ------------
Commitments and contingencies
    Total liabilities and partners' capital                      $  2,089,796  $  1,916,811
                                                                  ============  ============
(1) The December 31, 2003 consolidated balance sheet 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
                                                                 March 31,
                                                           ------------------------
                                                              2004       2003 (1)
                                                           -----------  -----------

Revenues:                                                 $    64,229  $    61,955
   Rental                                                       2,102        2,064
   Other property                                          -----------  -----------
                                                               66,331       64,019
      Total property                                            3,475        2,266
   Interest and other                                      -----------  -----------
                                                               69,806       66,285
      Total revenues                                       -----------  -----------

Expenses:
   Property operating expenses:                                 4,383        4,399
      Maintenance and repairs                                   5,544        4,829
      Real estate taxes                                         3,014        2,902
      Utilities                                                 6,916        6,841
      Administrative                                              840          963
      Advertising                                               1,144          856
      Insurance                                                18,432       13,302
      Depreciation and amortization                        -----------  -----------
                                                               40,273       34,092
                                                               14,310       13,207
   Interest                                                       273          220
   Amortization of deferred financing costs                     2,930        2,309
   General and administrative                              -----------  -----------
                                                               57,786       49,828
      Total expenses                                       -----------  -----------
   Income before minority interests                            12,020       16,457
   Minority interests                                            (768)      (1,068)
                                                           -----------  -----------
   Net income                                                  11,252       15,389
   Preferred return to general partner - Series F                (488)          --
   Distributions on preferred units - limited partners         (4,104)      (4,580)
                                                           -----------  -----------
   Net income available to common units                   $     6,660  $    10,809
                                                           ===========  ===========

Per common unit data:
   Basic:
   Net income available to common units                   $      0.27  $      0.46
                                                           ===========  ===========
      Weighted average number of common units
        outstanding during the period                      25,108,506   23,281,861
                                                           ===========  ===========

   Diluted:
   Net income available to common units                   $      0.26  $      0.46
                                                           ===========  ===========
      Weighted average number of common units
        outstanding during the period                      25,370,177   23,494,051
                                                           ===========  ===========

   Distribution on Operating Partnership common units     $      0.79  $      0.78
                                                           ===========  ===========
(1) The consolidated statement of operations for the three months ended March 31, 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 three months ended March 31, 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                 55      2,547             --        --         --             --      2,547
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        145             --        145
Reallocation of partners' capital                --     (1,638)            --        --      1,638             --         --
Net income                                       --      5,962            488        --        698          4,104     11,252
Partners' distributions                          --    (18,076)          (488)       --     (1,854)        (4,104)   (24,522)
                                           ---------  ---------  ------------- ---------  ---------  -------------  ---------
Balances at March 31, 2004                   22,881  $ 545,782  $      24,412     2,408  $  54,498  $     180,115  $ 804,807
                                           =========  =========  ============= =========  =========  =============  =========
(1) The partners' capital balances as of and for the year ended December 31, 2003 and certain balances as of December 31, 2002 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 PROPERTY TRUST, INC. AND SUBSIDIARIES

                 Condensed Consolidated Statements of Cash Flows

                                   (Unaudited)

                             (Dollars in thousands)Three Months Ended
                                                                                                      March 31,
                                                                                                  --------------------
                                                                                                    2004     2003 (1)
                                                                                                  ---------  ---------
Net cash provided by operating activities                                                        $  35,956  $  30,055
                                                                                                  ---------  ---------
Cash flows from investing activities:
   Additions to real estate:
       Acquisitions                                                                                (83,071)        --
       Improvements to recent acquisitions                                                          (3,039)      (997)
       Redevelopment                                                                                (1,446)      (181)
       Revenue generating capital expenditures                                                         (18)       (80)
       Other capital expenditures                                                                   (2,041)    (2,197)
   Increase/(decrease) in restricted cash                                                           (6,138)      (923)
   Additions to notes receivable from related parties and other receivables                            (97)      (739)
   Repayment of notes receivable from related parties and other receivables                            330        258
   Additions to real estate under development                                                       (7,600)    (6,742)
   Net distributions from (contributions to) investments in limited partnerships                    (2,746)      (821)
                                                                                                  ---------  ---------
       Net cash used in investing activities                                                      (105,866)   (12,422)
                                                                                                  ---------  ---------
Cash flows from financing activities:
   Proceeds from mortgage notes payable and lines of credit                                        124,425     27,447
   Repayment of mortgage notes payable and lines of credit                                         (26,011)   (19,922)
   Additions to deferred charges                                                                    (1,779)      (166)
   Net proceeds from stock options exercised and shares issued through dividend reinvestment plan    1,662        409
   Contributions from minority interest partners                                                        47         --
   Distributions to limited partners and minority interest                                          (6,673)    (6,523)
   Redemption of limited partners units and minority interest                                         (494)      (542)
   Distributions to general partner                                                                (18,326)   (15,336)
                                                                                                  ---------  ---------
      Net cash used in financing activities                                                         72,851    (14,633)
                                                                                                  ---------  ---------
Net increase in cash and cash equivalents                                                            2,941      3,000
Cash and cash equivalents at beginning of period                                                    14,768     12,076
                                                                                                  ---------  ---------
Cash and cash equivalents at end of period                                                       $  17,709  $  15,076
                                                                                                  =========  =========
Supplemental disclosure of cash flow information:
   Cash paid for interest, net of $916 and $902 capitalized
        in 2004 and 2003, respectively                                                           $  11,798  $   9,155
                                                                                                  =========  =========

   Accrued redemption of limited partner units                                                   $   3,472  $      --
                                                                                                  =========  =========

   Assumption of mortgage loan payable in conjunction with the purchase of real estate           $  83,179  $      --
                                                                                                  =========  =========

   Issuance of general partner common units pursuant to phantom stock plan                       $     798  $     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
                                                                                                  =========  =========
(1) The statement of cash flows for the three months ended March 31, 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 
                                             March 31, 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.
The Company is the sole general partner in the Operating Partnership, with a
90.5%, 90.8% and 89.9% general partnership interest as of March 31, 2004,
December 31, 2003 and March 31, 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 March 31, 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 March 31, 2004 is $9,614,000.

The Operating Partnership's equity in income from investments accounted for
using the equity method was $910,000 and $651,000 for the three months ended
March 31, 2004 and 2003, respectively, and is classified as a component of
"Revenue-Interest and other income" in the accompanying consolidated
statement of operations.
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, the
Operating Partnership has not entered into any arrangements that are deemed
VIEs.

Certain of the entities through which and with which we conduct business have
been deemed to be VIEs under the provisions of FIN 46 Revised.  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.  The Operating Partnership's increase in total assets and liabilities
related to the consolidation of these VIEs were approximately $192,000,000 and
$157,000,000, respectively, at March 31, 2004.

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 Essex's common stock on a one share per unit basis. Conversion
values will be based on the market value of the Essex'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
Essex's current dividend rate times the number of units held. At March 31, 2004,
the maximum number of shares that could be issued to meet redemption of these
Down REIT entities is 1,443,668.  As of March 31, 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 $152,341,000 and $152,669,000 as of
March 31, 2004 and December 31, 2003, respectively.
There is one VIE as to which the Operating Partnership is not deemed to be
the primary beneficiary of such VIE.  Total assets and liabilities of this
entity as of March 31, 2004 were $14,591,000 and $14,703,000, respectively.
The Operating Partnership is not exposed to a material loss from this entity.

Stock-Based CompensationAs 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. For the three months ended March 31, 2004 and 2003,
stock-based compensation expense under the fair value method was $136,000 and
$221,000, respectively.The Operating Partnership did not grant stock options for the three
months ended March 31, 2004.

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
                                    March 31,
                             -----------------------
                                2004      2003 (1)
                             ----------- -----------
Risk-free interest rates         n/a        2.17%
Expected lives                   n/a       6 years
Volatility                       n/a       17.91%
Dividend yield                   n/a        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 quarter ended March 31, 2003 is as follows
(dollars in thousands, except per unit amounts):


Net income previously reported                    $       11,517

Adjustment for effect of adopting FAS 123                   (110)
Adjustment for effect of adopting FIN 46 Revised            (598)

Net income as reported                            $       10,809


Per diluted unit previously reported              $         0.49

Adjustment for effect of adopting FAS 123                  (0.01)
Adjustment for effect of adopting FIN 46 Revised           (0.02)

Per diluted unit as reported                      $         0.46


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
approximately $640,000, $1.3 million, and $1.0 million, in the first, second,
and third quarter, 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.(2)	Significant Transactions for the Quarter ended September 30, 2003


AcquisitionsOn January 21, 2004, the Operating Partnership
purchased the improvements of Marina City Club, located in Marina del Rey,
California, which include a 101-unit apartment community, an adjacent marina
with approximately 340 boat slips and assorted retail space.  The total contract
price was approximately $27.7 million.  The improvements are on a long-term
ground lease with the County of Los Angeles that expires in 2067.  The property
is unencumbered.
On January 28, 2004, the Operating Partnership purchased Mountain View
Apartments, a 106-unit multifamily community located in Camarillo, California
for a contract price of approximately $14.3 million.  The property is
unencumbered.
On February 27, 2004, the Operating Partnership purchased Fountain Park
Apartments, a 705-unit multifamily community located in Playa Vista, California,
for a contract price of approximately $124.5 million.  In connection with the
transaction the Operating Partnership assumed tax-exempt variable rate bond
obligations totaling $83.2 million that mature in 2033.  Financing and other
agreements require 53% of the apartment homes in Fountain Park to be subject to
various rent restrictions based on resident income criteria.
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. At
March 31, 2004, the Operating Partnership had ownership interests in two
development communities (excluding the investments of Fund I described below),
aggregating 444 multifamily units with an estimated total cost of $74.9 million
with $12.0 million remaining to be expended.
Although the Operating Partnership does not anticipate starting any new
development projects in 2004, it will continue to evaluate, if deemed
appropriate, potential development projects of multifamily properties with
significant consideration given to current market conditions.

Redevelopment CommunitiesThe 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 March 31, 2004, the Operating Partnership had
ownership interests in two redevelopment communities (excluding the investments
of Fund I described below), aggregating 804 multifamily units with an estimated
redevelopment costs of $9.4 million, of which approximately $7.1 million remains
to be expended.
Debt TransactionOn February 20, 2004 the Operating Partnership prepaid an $8.7 million
non-recourse mortgage with an interest rate of 7.8% that was to mature in
January 2007.  In conjunction with this transaction, the Operating Partnership
paid a $175,000 prepayment fee.
EquityIn January 2004, the Operating Partnership restructured its previously
issued $50.0 million, 9.30% Series D Cumulative Redeemable Preferred Units
("Series D Units"), and its previously issued $80.0 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.  On 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 February 27, 2004, the Company increased its regular
quarterly cash dividend from $0.78 per common share to $0.79 per common share,
which was payable on April 15, 2004 to shareholders of record as of March 31,
2004.  On an annualized basis, the dividend represents a distribution of $3.16
per common share.
The Essex Apartment Value Fund ("Fund I")Fund I has acquired and committed to develop multifamily properties with
an aggregate cost at approximately $640 million, (including the estimated total
cost of 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.
Development Communities
At March 31, 2004, Fund I owned two development
communities with an aggregate of 480 multifamily units and an estimated total
cost of $101.7 million, of which $25.9 million remains to be expended and
approximately $5.5 million is expected to be funded by the Operating Partnership
through its capital commitments.   Fund I also owns a land parcel in Irvine,
California.
Redevelopment Communities
At March 31, 2004, Fund I was redeveloping a 174-unit apartment
community with an estimated total cost (specifically related to the
redevelopment project) of $3.5 million. As of March 31, 2004, $1.4 million
remains to be expended, of which approximately $302,000 is the Operating
Partnership's commitment.
The Essex Apartment Value Fund ("Fund II")The Operating Partnership is in the process of forming the second Essex
Apartment Value Fund ("Fund II"), which is expected to be similar to
Fund I in size and structure.  Essex anticipates an initial closing of Fund II
during the second quarter of 2004, and anticipates its capital commitment by a
subsidiary of the Operating Partnership to be approximately $50 million.


(3) Investments


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 (See Note 1).  The following table details the
Operating Partnership's investments accounted for under the equity method of
accounting (dollars in thousands):

March 31,    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                                                           $   15,200   $   13,020
   Limited partnership interest of 20.4% and general partner
     interest of 1% in Essex Apartment Value Fund, L.P                 51,131       51,110
   Limited partnership interest of 20% in AEW joint venture             4,288        4,406
   Class A member interest of 45% in Park Hill LLC                      5,673        5,731
   Preferred limited partnership interests in Mountain Vista
     Apartments                                                         6,806        5,276
   Other investments                                                       27           24
                                                                     ---------    ---------
       Total investments                                               83,125       79,567




The combined summarized financial information of investments, which are
accounted for under the equity method, are as follows:


March 31,    December 31,
                                                          2004         2003
 Balance sheets:                                        ---------    ---------
    Real estate and real estate under development     $  701,365   $  667,538
    Other assets                                          15,430       11,277
                                                        ---------    ---------
        Total assets                                  $  716,795   $  678,815
                                                        =========    =========

    Mortgage notes payable                            $  448,636   $  442,419
    Other liabilities                                     21,442       13,943
    Partners' equity                                     246,717      222,453
                                                        ---------    ---------
        Total liabilities and partners' equity        $  716,795   $  678,815
                                                        =========    =========

 Company's share of equity                            $   83,125   $   79,567
                                                        =========    =========



                                                        March 31,    March 31,
                                                          2004         2003
                                                        ---------    ---------
  Statements of operations:
     Total revenue                                    $   17,357   $   12,812
     Total expenses                                       15,415       11,668
                                                        ---------    ---------
         Total net income                             $    1,942   $    1,144
                                                        =========    =========

  Company's share of net income                       $      910   $      651
                                                        =========    =========




For a further discussion regarding these investments, see the Company'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 Transactions


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 (see Note 1).
Other income includes management fee income and investment income from the
Operating Partnership's investees of $1,805,000 and $3,016,000 for the three
months ended March 31, 2004 and 2003, respectively.
Notes and other receivables from related parties as of March 31, 2004 and
December 31, 2003 consist of the following (dollars in thousands):

March 31,    December 31,
                                                                                      2004          2003
                                                                                  ------------  ------------
   Notes and other receivable from related parties:

      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 prior to July 31, 2002, secured, bearing interest at 8%,
      due April 2006                                                                      633           633

      Other related party receivables, substantially due on demand                      1,705         1,905
                                                                                  ------------  ------------
                                                                                 $      5,338  $      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 Information



The 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 the commercial properties, recreational
vehicle parks, and manufactured housing communities. Other non-segment assets
include investments, real estate under development, cash, notes receivables,
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
                                                         March 31,
                                                        ------------------------
                                                           2004       2003 (1)
                                                        -----------  -----------
Revenues:
    Southern California                                $    37,052  $    33,079
    Northern California                                     15,818       16,216
    Pacific Northwest                                       12,199       11,156
    Other non-segment areas                                  1,262        3,568
                                                        -----------  -----------
                                                            66,331       64,019
Interest and other income                                    3,475        2,266
                                                        -----------  -----------
        Total revenues                                 $    69,806  $    66,285
                                                        ===========  ===========
Net operating income:
    Southern California                                $    25,262  $    22,855
    Northern California                                     10,741       11,362
    Pacific Northwest                                        7,955        7,307
    Other non-segment areas                                    532        1,705
                                                        -----------  -----------
        Total net operating income                          44,490       43,229
Interest and other income                                    3,475        2,266
Depreciation and amortization:
    Southern California                                    (10,326)      (6,537)
    Northern California                                     (5,501)      (3,315)
    Pacific Northwest                                       (1,185)      (2,965)
    Other non-segment areas                                 (1,420)        (485)
                                                        -----------  -----------
                                                           (18,432)     (13,302)
Interest:
    Southern California                                     (6,228)      (5,476)
    Northern California                                     (3,051)      (3,081)
    Pacific Northwest                                       (1,705)      (1,175)
    Other non-segment areas                                 (3,326)      (3,475)
                                                        -----------  -----------
                                                           (14,310)     (13,207)
Amortization of deferred financing costs                      (273)        (220)
General and administrative                                  (2,930)      (2,309)
                                                        -----------  -----------
Income before minority interests                       $    12,020  $    16,457
                                                        ===========  ===========





(5)	Segment Information  (continued)


March 31,   December 31,
                                                           2004       2003 (1)
                                                        -----------  -----------
Assets:
  Net real estate assets:
    Southern California                                $ 1,034,553  $   886,980
    Northern California                                    438,373      435,041
    Pacific Northwest                                      310,342      312,628
    Other non-segment areas                                 83,024       83,710
                                                        -----------  -----------
        Total net real estate assets                     1,866,292    1,718,359
  Other non-segment assets                                 223,504      198,452
                                                        -----------  -----------
        Total assets                                   $ 2,089,796  $ 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
                                                             March 31, 2004                    March 31, 2003
                                                    --------------------------------  --------------------------------
                                                                Weighted      Per                 Weighted      Per
                                                                 Average     Common                Average     Common
                                                                 Common       Unit                 Common       Unit
                                                      Income      Units      Amount    Income       Units      Amount
                                                    ---------  -----------  --------  ---------  -----------  --------
Basic - Net income available to
   common units                                    $   6,660       25,109      0.27  $  10,809       23,282      0.46

  Effect of Dilutive Securities:
    Stock options (1)                                     --          172                   --          156
    Vested series Z incentive units                       --           90                   --           56
                                                    ---------  -----------            ---------  -----------
                                                          --          262                   --          212
                                                    ---------  -----------            ---------  -----------
Diluted - Net income available to
   common units                                    $   6,660       25,371  $   0.26  $  10,809       23,494  $   0.46
                                                    =========               ========  =========               ========`

(1) 	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 share for the quarter and, therefore,
would be anti-dilutive:

`Three Months Ended
                                 March 31,
                        ------------------------
                           2004          2003
                        -----------  -----------
Number of options           --         72,000
Range of exercise prices    n/a      $51.01-54.25`

The Down REIT partnership units have historically been redeemed for cash. Essex has
never exercised its right to issue common stock to fund any redemption requests,
and therefore, the Operating Partnership has never issued limited partnership units to Essex,
its general partner, as consideration for issuing such units.  As such, the Operating Partnership
does not consider these to be common stock equivalents.

(7) Subsequent Event



On April 30, 2004, the Operating Partnership renewed its $185 million
unsecured line of credit facility for a three-year term.  The underlying
interest rate on this line is based on a tiered rate structure tied to the
Company's corporate ratings and is currently LIBOR plus 1.0%.

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 in the Operating Partnership, with a
90.5%, 90.8% and 89.9% general partnership interest as of March 31, 2004,
December 31, 2003 and March 31, 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.

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, the
Operating Partnership has not entered into any arrangements that are deemed
VIEs.

Certain of the entities through which and with which we conduct business have
been deemed to be VIEs under the provisions of FIN 46 Revised.  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.  The Operating Partnership's increase in total assets and liabilities
related to the consolidation of these VIEs were approximately $192,000,000 and
$157,000,000, respectively, at March 31, 2004.

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 Essex's common stock on a one share per unit basis. Conversion
values will be based on the market value of the Essex'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
Essex's current dividend rate times the number of units held. At March 31, 2004,
the maximum number of shares that could be issued to meet redemption of these
Down REIT entities is 1,443,668.  As of March 31, 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 $152,341,000 and $152,669,000 as of
March 31, 2004 and December 31, 2003, respectively.

There is one VIE as to which the Operating Partnership is not deemed to be
the primary beneficiary of such VIE.  Total assets and liabilities of this
entity as of March 31, 2004 were $14,591,000 and $14,703,000, 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. For the three months ended March 31, 2004 and 2003,
stock-based compensation expense under the fair value method was $136,000 and
$221,000, respectively, or less than $0.01 per diluted share for the periods
presented.  The Operating Partnership did not grant stock options for the three
months ended March 31, 2004.

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
                                      March 31,
                             -----------------------
                                2004      2003 (1)
                             ----------- -----------
Risk-free interest rates         n/a        2.17%
Expected lives                   n/a       6 years
Volatility                       n/a       17.91%
Dividend yield                   n/a        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 quarter ended March 31, 2003 is as follows
(dollars in thousands, except per share amounts):

`Net income previously reported                    $       11,517

Adjustment for effect of adopting FAS 123                   (110)
Adjustment for effect of adopting FIN 46 Revised            (598)

Net income as reported                            $       10,809


Per diluted unit previously reported              $         0.49

Adjustment for effect of adopting FAS 123                  (0.01)
Adjustment for effect of adopting FIN 46 Revised           (0.02)

Per diluted unit as reported                      $         0.46`

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
approximately $640,000, $1.3 million, and $1.0 million, in the first, second,
and third quarter, 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 Operating Partnership believes that quality job growth
will lead to demand for multifamily and for-sale housing.  Based on a variety of
considerations, the Operating Partnership 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 Operating Partnership 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 Operating Partnership prefers areas with
relatively expensive for-sale housing, which is usually caused by an
insufficient amount of single-family housing construction.  The Operating
Partnership 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 Operating Partnership 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 representing
17% of its multifamily units in this region. 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 March 31, 2004, we have ownership interests representing 59% of
our multifamily units in this region.  During the three months ended March 31,
2004, the region continued to perform well, with same store property revenues
increasing 4.4% versus the comparable period in 2003.  Same store property
revenues remained flat 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 March 31, 2004, the Operating Partnership
had ownership interests representing 17% of its multifamily units in this
region.  Several years of job losses have resulted in declining rents.  In the
three months ended March 31, 2004, same store property revenues decreased 8.2%
versus the comparable period in 2003 and decreased 0.7% 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 March 31, 2004, the Operating Partnership had
ownership interests representing 22% of its multifamily units in the region.
This region also lost jobs in 2003, but at a lower rate compared to the
Company's Northern California region.  In the three months ended March 31, 2004,
same store property revenues decreased 0.1% versus the comparable period in 2003
and increased 1.5% versus the immediately preceding quarter.  The Operating
Partnership expects job growth in this region in fiscal year 2004, and believes
this region will generate a slight increase in same property revenue versus
2003.  The Operating Partnership expects positive multifamily fundamentals in
this region after 2004, and 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 which 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 greater than 96% of
its property revenues for the three months ended March 31, 2004 and 2003.  The
Company'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 March 31, 2004 is $9,614,000.

The Operating Partnership is in the process of forming the second Essex
Apartment Value Fund ("Fund II"), which is expected to be similar to
Fund I in size and structure.  Essex anticipates an initial closing of Fund II
during the second quarter of 2004, and anticipates its capital commitment by a
subsidiary of the Operating Partnership to be approximately $50 million.

Since its formation, Fund I has acquired ownership interests in 17
multifamily residential properties, representing 4,926 apartment units with an
aggregate cost at 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
March 31, 2004, the remaining commitments to fund these development projects is
approximately $25.9 million of which approximately $5.5 million is the Operating
Partnership's commitment.  Fund I also owns a land parcel in Irvine,
California.

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 $74.9 million.  As of March
31, 2004, the remaining commitment to fund these projects is approximately $12.0
million.

Results of Operations

Comparison of the Three Months Ended March 31, 2004 to the Three Months
Ended March 31, 2003

Average financial occupancy rates of the Operating Partnership's multifamily
Quarterly Same Store Properties (stabilized properties consolidated by the
Operating Partnership for each of the three months ended March 31, 2004 and
2003) was 96.0% and 95.2%, for the three months ended March 31, 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 March 31, 2004 and
2003 are as follows:



`Three months ended
                                                          March 31,
                                                    ----------------------
                                                      2004        2003
                                                    ---------  -----------
Southern California                                     96.2%        95.2%
Northern California                                     95.8%        95.9%
Pacific Northwest                                       95.9%        94.5%`

Total Revenues increased by $3,521,000 or 5.3% to $69,806,000 in the
first quarter of 2004 from $66,285,000 in the first 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
                                                                 March 31,
                                                 Number of   --------------------   Dollar   Percentage
                                                Properties     2004       2003      Change     Change
                                                -----------  ---------  ---------  --------- -----------
Revenues:                                                    (Dollars in thousands)
  Property revenues - quarterly
    Quarterly Same Store Properties
      Southern California                               42  $  24,604  $  23,567  $   1,037         4.4 %
      Northern California                               17     12,593     13,725     (1,132)       (8.2)
      Pacific Northwest                                 23     10,311     10,321        (10)       (0.1)
                                                -----------  ---------  ---------  --------- -----------
          Properties                                    82     47,508     47,613       (105)       (0.2)
  Property revenues - properties
    acquired or consolidated subsequent to
    December 31, 2002 (1)                                      18,823     16,406      2,417        14.7
                                                             ---------  ---------  --------- -----------
      Total property revenues                                  66,331     64,019      2,312         3.6
Interest and other income                                       3,475      2,266      1,209        53.4
                                                             ---------  ---------  --------- -----------
      Total revenues                                        $  69,806  $  66,285  $   3,521         5.3 %
                                                             =========  =========  ========= ===========`



As set forth in the above table, the $3,521,000 net
increase in total revenues was primarily attributable to an increase of
$2,417,000 due to acquisition of thirteen multifamily properties (the
"Quarterly Acquisition Properties") subsequent to December 31, 2002
and the increase in interest and other income of  $1,209,000.

Interest and other income increased by $1,209,000 or 53.4% to $3,475,000 in
the first quarter of 2004 from $2,266,000 in the first quarter of 2003. The
increase primarily relates to an increase in equity income in co-investments
and leasing income.

Property revenues from the Quarterly Same Store Properties decreased by
$105,000 or 0.2% to $47,508,000 in the first quarter of 2004 from $47,613,000 in
the first quarter of 2003. The relatively minor decrease was attributable to the
17 Quarterly Same Store Properties located in Northern California offset by the
results of the 42 Quarterly Same Store Properties located in Southern
California. The property revenues of the Quarterly Same Store Properties in
Northern California decreased by $1,132,000 or 8.2% to $12,593,000 in the first
quarter of 2004 from $13,725,000 in the first quarter of 2003. The decrease in
Northern California is primarily attributable to rental rate decreases and a
decrease in financial occupancy to 95.8% in the first quarter of 2004 from 95.9%
in the first quarter of 2003. The property revenues of the Quarterly Same Store
Properties in the Pacific Northwest decreased slightly by $10,000 or 0.1% to
$10,311,000 in the first quarter of 2004 from $10,321,000 in the first quarter
of 2003. The 42

Total Expenses

Net income decreased by $4,149,000 or 38.4% to net income of
$6,660,000 in the first quarter of 2004 from net income of $10,809,000 in the
first quarter of 2003. The decrease in net income is mainly attributable to the
factors noted above.

Liquidity and Capital Resources

At March 31, 2004, the Operating Partnership had $17,709,000 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, refinance 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.

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 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
$74,900,000. As of March 31, 2004, the remaining commitment to fund these
development projects is approximately $12,000,000. 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 March 31, 2004 is $9,614,000.

The Operating Partnership is in the process of forming the second Essex
Apartment Value Fund ("Fund II"), which is expected to be similar to
Fund I in size and structure.  Essex anticipates an initial closing of Fund II
during the second quarter of 2004, and anticipates its capital commitment by a
subsidiary of the Operating Partnership to be approximately $50 million.

The Operating Partnership has an outstanding unsecured line of credit for an
aggregate amount of $185,000,000.  At March 31, 2004, the Operating Partnership
had $118,500,000 outstanding on this line of credit.  At March 31, 2004, this
line of credit bore an interest rate of approximately 2.2%.  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
is $90,000,000, increasing to $100,000,000 on July 1, 2004.  The Operating
Partnership borrowed $80,600,000 under this facility, comprised of two tranches
as follows: $41,000,000, locked for 60 days at a base rate of 1.586% (55 basis
points over Freddie Mac's Reference Rate) and $39,600,000 locked for 180 days at
a base rate of 1.695% (59 basis points over Freddie Mac's Reference Rate).

In addition to the Operating Partnership's unsecured lines of credit, the
Operating Partnership had $967,392,000 of secured indebtedness at March 31,
2004. Such indebtedness consisted of $786,662,000 in fixed rate debt with
interest rates varying from 4.25% to 8.25% and maturity dates ranging from 2005
to 2014. The indebtedness also includes $180,730,000 of tax-exempt variable rate
demand bonds with interest rates, including credit enhancements and other fees,
paid during the three months ended March 31, 2004 that average 2.60% and
maturity dates ranging from 2020 to 2034. The tax-exempt variable rate demand
bonds are subject to interest rates 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 March 31, 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.

Financing and Equity Issuances

On July 30, 2003, in connection with Essex'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, Essex 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 Company 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 Company 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 Company 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 Company 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.  On 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 Company'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 as to which the Operating Partnership is not deemed to be
the primary beneficiary of such VIE.  Total assets and liabilities of this
entity as of March 31, 2004 were $14,591,000 and $14,703,000, respectively.
The Operating Partnership is not exposed to a material loss from the entity.
At March 31, 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 March 31, 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            $     15,154    $     65,435  $    240,644  $    646,159  $    967,392
Lines of credit                        118,500 (1)          --            --        80,600       199,100
Development commitments(2)              17,543              --            --            --        17,543
Redevelopment commitments(3)             7,439              --            --            --         7,439
Essex Apartment Value Fund, L.P.
   capital commitment                    9,614              --            --            --         9,614
                                   ------------    ------------  ------------  ------------  ------------
                                  $    168,250    $     65,435  $    240,644  $    726,759  $  1,201,088
                                   ============    ============  ============  ============  ============`

__________



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 Company'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 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 and developments, the
anticipated performance of the Essex Apartment Value Fund, L.P.("Fund
I"), the anticipated initial closing of the second Essex Apartment Value
Fund ("Fund II"), the anticipated performance of existing properties,
statements regarding the Company'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 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 Operating Partnership's partners in this Fund 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, and that the Operating Partnership will not be able to complete
property acquisitions, as anticipated, for which the proceeds from recent equity
issuances were intended to be used, 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 Company 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 Company'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 Company'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 Company'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.

`For the Years Ended           2004      2005      2006       2007      2008    Thereafter        Total     Fair value
                            --------  --------  ---------  --------  --------  -----------     ---------   ----------
Fixed rate debt
   (In thousands)
Amount                     $ 15,154  $ 42,583  $  22,852  $ 87,628  $153,016  $   465,429     $ 786,662   $  749,839
Average interest rate           6.8%      6.8%       6.8%      6.7%      6.7%         6.8%

Variable rate debt
   (In thousands)
Amount                     $118,500  $     --  $      --  $     --  $     --  $   261,330 (1) $ 379,830   $  379,830
Average interest                2.2%       --         --        --        --          2.3%`

The table incorporates only those exposures that exist as
of March 31, 2004; it does not consider those exposures or positions that could
arise after that date. As a result, our ultimate realized gain or loss, with
respect to interest rate fluctuations, would depend on the exposures that arise
during the period, our hedging strategies at the time, and interest rates.

Item 4: Controls and Procedures

As of March 31, 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 our general partner, 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, of our general partner, 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 March 31, 2004, that have materially affected, or are
reasonably likely to materially affect, the Operating Partnership's internal
control over financial reporting.



Part II -- Other Information

Item 2: Changes in Securities and Use of Proceeds

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.  On 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.   This private placement of Units was completed pursuant to the
exemption from registration contained in Section 4(2) of the Securities Act of
1933, as amended.

Item 6: Exhibits and Reports on Form 8-K

1. Exhibits
2. Reports on Form 8-K

None.



---



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 PROPERTY TRUST, INC.
                  (Registrant)

May 17, 2004

By: /s/ MARK J. MIKL

Mark J. Mikl
                  First Vice President, Treasurer and Controller(Authorized Officer and Principal Accounting Officer)



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