Essex Property Trust(ESS) - 2025 Q3 - Quarterly Results

Financial Performance - Reported Net Income per diluted share for Q3 2025 was $2.56, a 39.1% increase from $1.84 in Q3 2024, primarily driven by gains on sale of real estate[9] - Core FFO per diluted share grew by 1.5% year-over-year, reported at $3.97, exceeding the midpoint of the guidance range by $0.03[9] - For the three months ended September 30, 2025, net income available to common stockholders was $164,621,000, compared to $118,424,000 for the same period in 2024, representing an increase of 39%[42] - FFO attributable to common stockholders and unitholders for the three months ended September 30, 2025, was $268,673,000, up from $253,533,000 in 2024, reflecting a growth of 6%[42] - The Company reported earnings from operations of $210,399,000 for the three months ended September 30, 2025, compared to $128,790,000 in 2024, which is an increase of 63%[46] - Net income available to common stockholders for the nine months ended September 30, 2025, was $589,093,000, up from $484,069,000 in the same period of 2024, representing a 21.7% increase[57] - Funds from operations (FFO) attributable to common stockholders and unitholders for Q3 2025 were $268,673,000, compared to $253,533,000 in Q3 2024, reflecting a 6.0% increase[57] - Core FFO per share – diluted for the three months ended September 30, 2025, was $3.97, compared to $3.91 for the same period in 2024, indicating a 1.5% increase[42] - The company reported a gain on the sale of real estate and land amounting to $62,320,000 in Q3 2025, compared to no gain in Q3 2024[54] - The company reported a gain on the sale of real estate and land amounting to $299,524,000 for the nine months ended September 30, 2025[128] Revenue and Occupancy - Same-property revenue and net operating income (NOI) growth were 2.7% and 2.4%, respectively, compared to Q3 2024, with a sequential revenue improvement of 0.7%[9] - Same-property revenue components showed scheduled rents increased by 2.4% year-over-year in Q3 2025[11] - Rental and other property revenues for Q3 2025 were $470,942,000, a 5.8% increase from $448,135,000 in Q3 2024[54] - Total rental and other property revenues for Q3 2025 reached $470.9 million, a 4.8% increase from $448.1 million in Q3 2024[70] - Same-property net operating income (NOI) for Q3 2025 was $285.9 million, compared to $279.3 million in Q3 2024, reflecting a 2.4% year-over-year growth[70] - Financial occupancy rate for Q3 2025 was 96.1%, slightly down from 96.2% in Q3 2024[70] - Total same-property financial occupancy was 96.2% for YTD 2025, slightly down from 96.3% in YTD 2024[76] - The annualized turnover rate increased to 43% in Q3 2025, up from 39% in Q2 2025[70] - Delinquency as a percentage of scheduled rent remained stable at 0.5% for Q3 2025, consistent with Q2 2025[70] Guidance and Projections - Full-year Net Income per diluted share guidance raised by $0.41 to a range of $10.53 to $10.63[9] - Full-year Core FFO per diluted share guidance increased by $0.03 to a range of $15.89 to $15.99, representing 2.2% growth at the midpoint compared to the prior year[9] - For Q4 2025, Core FFO per diluted share guidance is set at $3.93 to $4.03[30] - Total FFO guidance for 2025 is projected to be in the range of $3.20 to $3.30 per share[1] - The guidance for total Net Operating Income (NOI) from consolidated communities for 2025 is projected between $1,314,600,000 and $1,319,200,000, reflecting a same-property NOI growth of 3.4%[94] - Funds from Operations (FFO) for the first nine months of 2025 totaled $802,159,000, with a projected full-year range of $1,060,828,000 to $1,067,428,000[94] - Core Funds from Operations (Core FFO) for the first nine months of 2025 was $797,594,000, with a projected full-year range of $1,059,500,000 to $1,065,800,000[94] - The diluted EPS for 2025 is projected to be between $10.53 and $10.63, with a diluted FFO per share range of $15.91 to $16.01[98] Acquisitions and Dispositions - Acquired one apartment community for $100.0 million and disposed of three communities for a total of $244.7 million in Q3 2025[9] - Total acquisitions for 2025 reached 1,273 apartment homes with a total contract price of $685,875,000, averaging $526 per apartment home[89] - Total dispositions for 2025 amounted to 1,230 apartment homes with a total contract price of $563,805,000, averaging $496 per apartment home[90] - Acquisitions contributed $44.0 million to rental and other property revenues in Q3 2025, up from $17.0 million in Q3 2024[70] Financial Position and Debt - As of September 30, 2025, the company had approximately $1.5 billion in liquidity from available credit facilities, cash, and marketable securities[25] - Total assets increased to $13,150,241 thousand as of September 30, 2025, compared to $12,927,359 thousand at December 31, 2024, reflecting a growth of 1.7%[59] - Total liabilities rose to $7,318,968 thousand, up from $7,176,120 thousand, indicating an increase of 2.0%[59] - Total stockholders' equity reached $5,631,316 thousand, a slight increase from $5,537,046 thousand, representing a growth of 1.7%[59] - The company reported a total debt of $6,661,909 thousand with a weighted average interest rate of 3.7% and a maturity of 6.7 years[60] - The interest coverage ratio stood at 517%, significantly above the required minimum of 150%[65] - The company has a commercial paper program allowing for the issuance of unsecured short-term notes up to $750 million[63] - Total consolidated debt, net as of September 30, 2025, is $6,661,909,000, with net indebtedness totaling $7,472,329,000[125] Operational Insights - The Company has ownership interests in 257 apartment home communities comprising over 62,000 apartment homes, with an additional property in active development[37] - Management anticipates that occupancy rates and rental demand may be adversely affected by competition and local economic conditions[50] - The Company plans to continue its market expansion and development projects to enhance its portfolio and revenue streams[50] - The company reported a blended lease tradeout growth of 2.5% in Q3 2025, compared to 1.6% in Q3 2024[73] - The operating margin for same-property metrics was 69% in Q3 2025, down from 71% in Q2 2025[70] - The company has targeted acquisitions in Northern California, with approximately $636 million in net acquisition activity since 2024, focusing on high-quality submarkets[105] - The company anticipates a financial occupancy rate that reflects actual rental income divided by total scheduled rental income, indicating strong performance in rental management[115] - New lease net effective rate growth and renewal net effective rate growth are key metrics for assessing leasing performance, reflecting the impact of leasing incentives[116]