Essex Property Q4 FFO Beats Estimates, Revenues Increase Y/Y

Core Insights - Essex Property Trust Inc. (ESS) reported fourth-quarter 2024 core funds from operations (FFO) per share of $3.92, exceeding the Zacks Consensus Estimate of $3.90 and reflecting a 2.3% year-over-year improvement [1] - Total revenues for the quarter reached $454.5 million, surpassing the Zacks Consensus Estimate of $453.1 million, and showing a 7.8% increase year over year [2] - For the full year 2024, core FFO per share was $15.60, a 3.8% increase from the previous year, and also beating the Zacks Consensus Estimate by two cents, supported by a 6.3% revenue growth to $1.77 billion [3] Financial Performance - Same-property revenues increased by 2.6% year over year in the fourth quarter, which was below the estimated 5.6% [4] - Same-property operating expenses rose by 4.7% year over year, compared to an estimated increase of 7.5% [4] - Same-property net operating income (NOI) increased by 1.7% year over year, falling short of the estimated 4.8% [4] - Financial occupancy was reported at 95.9%, down 20 basis points year over year and 30 basis points sequentially, which was below the estimated 96.1% [4] Portfolio Activity - In October, ESS acquired a 49.9% interest in the BEX II portfolio, consisting of 871 apartment units, for $337.5 million gross ($168.4 million pro rata) [5] - In November, the company acquired another community, Beaumont, with 344 apartment units for $136.1 million [5] - The company disposed of its 81.5% interest in an apartment community in San Mateo, CA, for $252.4 million gross ($205.7 million pro rata) [6] Balance Sheet Position - As of December 31, 2024, ESS had $1.3 billion in liquidity, including undrawn capacity on unsecured credit facilities, cash, cash equivalents, and marketable securities [7] - Cash and cash equivalents, including restricted cash, were reported at $75.8 million, down from $80.3 million at the end of the previous quarter [7] 2025 Guidance - For the first quarter of 2025, ESS projects core FFO per share in the range of $3.86-$3.98, with a midpoint of $3.92, compared to the Zacks Consensus Estimate of $3.93 [9] - For the full year 2025, the company projects core FFO per share in the range of $15.56-$16.06, with a midpoint of $15.81, aligning with the Zacks Consensus Estimate of $15.99 [9] - The full-year guidance is based on projections for same-property revenue growth of 2.25-3.75%, operating expense increases of 3.25-4.25%, and NOI expansion of 1.4-4.0% [10]