Essex Property Trust (ESS) shares rallied 4.1% in the last trading session to close at $282.95. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 9.3% loss over the past four weeks.The increased investor optimism in the stock can be attributed to the recent announcement from BMO Capital Markets, where its research analyst upgraded the ESS rating to “Outperform” from “Market Perform.”This real estate investment ...

Essex Property Trust, Inc. (ESS) is well-poised to gain from a robust property base in the West Coast market with several demand drivers. Efforts to leverage technology, scale and organizational capabilities are expected to drive margin expansion. A healthy balance sheet augurs well. Solid dividends aid shareholder wealth.However, the rising supply of apartment units in some of the company’s markets is likely to fuel competition and curb pricing power. A concentrated portfolio and substantial debt burden re ...

Core Viewpoint - Essex Property Trust, Inc. (ESS) is positioned to benefit from a strong property base in the West Coast market, driven by demand factors, although concerns exist regarding elevated rental unit supply and a concentrated portfolio in specific markets [1]. Financial Performance - In Q3 2024, ESS reported core funds from operations (FFO) per share of $3.91, exceeding the Zacks Consensus Estimate of $3.88, and reflecting a 3.4% year-over-year improvement [2]. - The company raised its full-year 2024 guidance following favorable growth in same-property revenues and net operating income (NOI) [2]. - ESS shares have increased by 14.1% over the past six months, outperforming the industry growth of 10.1% [2]. Market Drivers - The West Coast market, home to numerous innovation and technology companies, is expected to see increased renter demand due to slowing layoffs and a return to office trend [3]. - Rental and property revenues for ESS are projected to grow by 5.7% and 3.9% year-over-year in 2024 and 2025, respectively [3]. Operational Efficiency - ESS is leveraging technology and scale to enhance margin expansion and operational efficiency, which is anticipated to positively impact both top and bottom-line growth [4]. Financial Health - As of September 30, 2024, ESS had $1.2 billion in liquidity, with a net debt-to-adjusted EBITDAre ratio of 5.5X and an unencumbered NOI to adjusted total NOI of 93% [5]. - The company’s strong balance sheet allows it to access both secured and unsecured debt markets effectively [5]. Dividend Policy - ESS has consistently raised its dividend, increasing it five times in the last five years, with a five-year annualized growth rate of 4.35% [6]. - The low dividend payout ratio and solid balance sheet suggest that dividend payments are likely to remain sustainable [6]. Competitive Landscape - The company faces challenges in attracting renters due to elevated supply volumes in certain markets and competition from various housing alternatives, which may limit rent increases [7]. - A significant concentration of assets in Southern California, Northern California, and the Seattle metropolitan area exposes the company to local market fluctuations, with 42% and 38% of its portfolio NOI derived from Southern and Northern California, respectively [8].

Shares of Essex Property Trust (ESS) have rallied 16.7% over the past six months, outperforming the industry's upside of 10.6%.This residential REIT is well-poised to gain from a robust property base in the West Coast market that has several demand drivers. A healthy balance sheet also augurs well.Last October, ESS reported third-quarter 2024 core funds from operations (FFO) per share of $3.91, which beat the Zacks Consensus Estimate of $3.88. The figure also improved 3.4% from the year-ago quarter.Results ...

Financial Data and Key Metrics Changes - The company reported a core FFO per share of $3.91 for Q3 2024, exceeding the midpoint of guidance by $0.04, driven by higher same property revenues [6] - The full-year core FFO guidance was raised to $15.56 per share, reflecting a 3.5% year-over-year growth, with same property revenue growth expectations increased to 3.25% [6][8] - Same property NOI growth is expected to be 2.6%, a 30 basis points increase at the midpoint [6] Business Line Data and Key Metrics Changes - The blended rate growth for Q3 was 2.5%, tempered by seasonal moderation and difficult year-over-year comparisons [2] - Seattle achieved a strong 3.8% blended rate growth, while Northern California saw 2.3% growth, led by Santa Clara County at 3.6% [3] - Southern California's blended lease rate growth was 2.1%, with LA's recovery expected to improve next year as delinquency rates decrease [3] Market Data and Key Metrics Changes - The overall supply growth is expected to be only 50 basis points in 2025, consistent with low levels in 2024 [4] - Job postings at the top 20 technology companies have been recovering, indicating a shift towards future growth and increased demand in regions like San Jose and Seattle [4] - The company noted a stable market environment with financial occupancy at 96.1% for October [3] Company Strategy and Development Direction - The company is focusing on occupancy in anticipation of slower demand typical of seasonal trends [2] - There is strong investor interest in multifamily properties on the West Coast, with cap rates trading in the mid 4% range [5] - The company plans to continue acquiring properties to drive NAV and FFO per share accretion for shareholders [5] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic viability of LA due to upcoming events like the World Cup and Olympics, alongside improvements in delinquency rates [11] - The company anticipates a potential reacceleration in new lease rates due to easier year-over-year comparisons and stable market conditions [39] - Management highlighted that the concessionary environment is expected to remain stable, with no significant headwinds anticipated for the upcoming months [53] Other Important Information - The company spent $10 million on advocacy expenses in Q3, with a year-to-date total of $16 million, expecting to exceed $30 million for the full year [28] - The company has maintained a strong balance sheet with low leverage and over $1 billion in liquidity [8] Q&A Session Summary Question: What gives confidence that LA Alameda County will normalize? - Management noted significant improvement in delinquency rates, from nearly 5% to 1.6%, and positive economic indicators such as the World Cup and increased tax credits for the film industry [11] Question: Can you expand on the improving tech job backdrop? - Job openings at the top 20 tech companies have reached pre-COVID levels, indicating a positive trend for future hiring [12] Question: How is the pricing strategy evolving? - The company is focusing on occupancy strategies and anticipates a deceleration in demand, with renewals being sent out in the mid-4s [15] Question: What is the impact of potential rent control repeal? - Management indicated that only 8% of California cities have active rent control, and there is confidence that Proposition 33 will be defeated based on past trends [16] Question: What are the expectations for new lease rates? - Management expects new lease rates to inflect positively due to easier year-over-year comparisons and stable market conditions [39] Question: How are advocacy costs treated in core FFO? - Management clarified that advocacy costs are not seen as recurring and are excluded from core FFO calculations [44]

Core Insights - Essex Property Trust Inc. (ESS) reported a third-quarter 2024 core funds from operations (FFO) per share of $3.91, exceeding the Zacks Consensus Estimate of $3.88 and reflecting a 3.4% year-over-year improvement [1] - The company raised its full-year 2024 guidance following favorable growth in same-property revenues and net operating income (NOI) [1] Financial Performance - Total revenues for the third quarter reached $450.7 million, surpassing the Zacks Consensus Estimate of $445.9 million, and showing a year-over-year increase of 7.5% [2] - Same-property revenues increased by 3.5% year-over-year, while same-property operating expenses rose by 5.5% [3] - Same-property NOI grew by 2.6% year-over-year, with financial occupancy at 96.2%, down 20 basis points year-over-year [3] Growth Metrics - The blended rate growth for the third quarter was 2.5%, a decrease from 3.4% in the second quarter of 2024 [4] - Essex Property acquired two joint venture apartment communities in San Jose, CA, valued at a combined $290.5 million [4] Balance Sheet Overview - At the end of the third quarter, the company had cash and cash equivalents of $80.2 million, up from $64.2 million at the end of the previous quarter [5] - Total net debt stood at $6.37 billion, with a net debt-to-Adjusted EBITDAre ratio of 5.5X and a weighted average interest rate of 3.6% [6] 2024 Guidance - For the fourth quarter of 2024, Essex Property projects core FFO per share between $3.82 and $3.94, with a midpoint of $3.88, aligning closely with the Zacks Consensus Estimate of $3.89 [7] - The full-year 2024 core FFO per share guidance has been revised to a range of $15.50 to $15.62, with the midpoint at $15.56, compared to the previous range of $15.38 to $15.62 [7] - Same-property revenue growth is now projected between 3.1% and 3.4%, with operating expense growth expected to remain at 4.5% to 5% [8]

For the quarter ended September 2024, Essex Property Trust (ESS) reported revenue of $450.7 million, up 7.5% over the same period last year. EPS came in at $3.91, compared to $1.36 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $445.88 million, representing a surprise of +1.08%. The company delivered an EPS surprise of +0.77%, with the consensus EPS estimate being $3.88.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings ...

Essex Property Trust (ESS) came out with quarterly funds from operations (FFO) of $3.91 per share, beating the Zacks Consensus Estimate of $3.88 per share. This compares to FFO of $3.78 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an FFO surprise of 0.77%. A quarter ago, it was expected that this real estate investment trust would post FFO of $3.84 per share when it actually produced FFO of $3.94, delivering a surprise of 2.60%. Over the last fou ...

The upcoming report from Essex Property Trust (ESS) is expected to reveal quarterly earnings of $3.88 per share, indicating an increase of 2.7% compared to the year-ago period. Analysts forecast revenues of $445.88 million, representing an increase of 6.4% year over year.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Before a company reveals its earnings ...

Essex Property Trust, Inc. (ESS) is scheduled to report its third-quarter 2024 results on Oct. 29 after market close. The company’s quarterly results are likely to reflect year-over-year growth in revenues and core funds from operations (FFO) per share.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.In the last reported quarter, this San Mateo, CA-based residential real estate investment trust (REIT) delivered a surprise of 2.60% in terms of core FFO per share. Results reflected fav ...