Essex Property Trust(ESS) - 2024 Q4 - Annual Results

Financial Performance - Reported Net Income per diluted share for Q4 2024 was $4.00, a 292.2% increase from $1.02 in Q4 2023; full-year 2024 Net Income per diluted share was $11.54, up 82.6% from $6.32 in 2023[6] - For the three months ended December 31, 2024, net income available to common stockholders was $257,453,000, compared to $65,391,000 for the same period in 2023, representing a significant increase[37] - Net income available to common stockholders for Q4 2024 was $257.5 million, compared to $65.4 million in Q4 2023, representing a significant increase of 292.5%[50] - Funds from Operations (FFO) attributable to common stockholders and unitholders for the twelve months ended December 31, 2024, was $1,063,878,000, up from $1,013,713,000 in 2023, indicating a growth of approximately 4.9%[37] - Core Funds from Operations (Core FFO) for the three months ended December 31, 2024, was $261,517,000, compared to $254,333,000 in 2023, reflecting a year-over-year increase of about 2.5%[37] - Total revenues for the twelve months ended December 31, 2024, reached $1.77 billion, an increase of 6.3% from $1.67 billion in 2023[50] - Funds from Operations (FFO) for 2024 was $1,063.9 million, with a projected range for 2025 between $1,037.9 million and $1,071.0 million[97] Operational Metrics - Same-property revenues and NOI grew by 2.6% and 1.7% respectively in Q4 2024, and by 3.3% and 2.6% respectively for the full year, both exceeding the high-end of the original guidance[8] - Same-Property Net Operating Income (NOI) for the twelve months ended December 31, 2024, was $1,147,993,000, compared to $1,119,300,000 in 2023, showing an increase of approximately 2.6%[42] - Same-property net operating income (NOI) for Q4 2024 was $288.8 million, compared to $284.0 million in Q4 2023, reflecting a 1.0% increase[68] - Total same-property gross revenues for the twelve months ended December 31, 2024, were $1.64 billion, a 3.3% increase from $1.59 billion in 2023[75] - The company reported a net operating income (NOI) of $318,678,000 for the three months ended December 31, 2024, compared to $296,998,000 in 2023, indicating a growth of approximately 7.3%[42] Acquisitions and Dispositions - The company acquired or increased ownership in 13 apartment communities for a total contract price of $1.4 billion in 2024, while disposing of one community for $252.4 million[8] - The company acquired a total of 3,579 apartment homes in 2024, with a total contract price of $849,383,000[88] - The company sold its 81.5% interest in Hillsdale Garden for a contract price of $205,675,000 in Q4 2024[91] Guidance and Projections - For 2025, the company projects Net Income per diluted share in the range of $5.79 to $6.29, with a midpoint of $6.04[26] - Total and Core FFO for 2025 are projected to be between $15.56 and $16.06 per diluted share, with a midpoint of $15.81[26] - Estimated same-property revenue growth for 2025 is projected to be between 2.25% and 3.75%, with a midpoint of 3.00%[26] - The company expects to provide guidance for the first quarter and full-year 2025, including net income, Total FFO, and Core FFO, along with same-property growth assumptions[44] Liquidity and Capital Structure - The company has approximately $1.3 billion in liquidity as of December 31, 2024, from undrawn credit facilities, cash, and marketable securities[24] - The company reported a total debt of $6,601,617 thousand with a weighted average interest rate of 3.6%[64] - The company has a capacity of $1.2 billion for its unsecured line of credit, maturing in January 2029[61] - The interest coverage ratio stands at 540%, significantly above the required minimum of 150%[64] - The company’s unsecured debt ratio is 291%, exceeding the required threshold of 150%[64] Market Conditions and Economic Outlook - The company anticipates continued growth in occupancy rates and rental demand, despite potential challenges from competition and local economic conditions[46] - Job growth is forecasted at 1.4% for 2025, contributing to economic stability[106] - The company anticipates blended rate growth of 3.0% for 2025, driven by higher job growth in top-paying sectors[107] - Total multifamily/single-family supply in Southern California for 2024 is projected at 29,000 units, representing 0.5% of total stock[103] Expenses and Cost Management - Property operating expenses for Q4 2024 were $133.4 million, up 9.3% from $121.9 million in Q4 2023[52] - Same-property operating expenses for Q4 2024 totaled $122,469,000, a 4.7% increase from Q4 2023[76] - Year-to-date same-property operating expenses for 2024 reached $488,538,000, reflecting a 4.9% increase compared to 2023[76] - Interest expense for the twelve months ended December 31, 2024, was $232.4 million, an increase of 10.8% from $209.8 million in 2023[50] Shareholder Metrics - The Company reported diluted FFO per share of $3.69 for the three months ended December 31, 2024, down from $3.87 in the same period of 2023[37] - Core FFO per share-diluted increased by 2.3% to $3.92 in Q4 2024, compared to $3.83 in Q4 2023[54] - The number of shares used in calculating diluted net income per share was 64.3 million for Q4 2024, compared to 64.2 million for Q4 2023[50]