Essex (ESS) Q2 Revenue Rises 6%

Core Insights - Essex Property Trust reported strong Q2 2025 results, with Core FFO per diluted share of $4.03, exceeding its forecast of $3.96 [1][5] - Revenue reached $467.6 million, surpassing the expected $466.33 million, and net income per share more than doubled year-over-year, driven by real estate gains [1][5] Financial Performance - Core FFO per share increased by 2.3% year-over-year, while revenue grew by 6.2% compared to the prior year [5] - Net income per share (GAAP) jumped 137.2% year-over-year, largely due to a $126.2 million gain from the sale of a Southern California property [5] - Same-property revenue growth was recorded at 3.2%, and net operating income (NOI) increased by 3.3% year-over-year [5][8] Portfolio Management - The company acquired two apartment communities in Santa Clara County for $240.5 million and sold a community in Southern California for $239.6 million [6] - Management highlighted ongoing strength in Santa Clara, San Mateo, San Francisco, and Seattle, while Los Angeles showed underperformance [6][10] Financial Strategy - Essex secured a $300 million unsecured term loan and expanded its credit facility to $1.5 billion, emphasizing liquidity and flexibility [7] - Total available liquidity at quarter's end was approximately $1.5 billion, with a net indebtedness to adjusted EBITDAre ratio of 5.5 times [7] Operational Insights - Same-property expense growth was 2.9% year-over-year, benefiting from lower property taxes in Seattle [8] - Portfolio occupancy remained stable at 96.2%, with overall delinquency improving to 0.5% [8] Regional Performance - Northern California led with 3.4% same-property revenue growth, while Seattle grew by 2.8% [9] - Southern California lagged, with Los Angeles posting only 2.8% same-property revenue growth [9] Development and Future Outlook - The company maintains a modest property development pipeline, with one major project in South San Francisco [11] - Management raised its full-year 2025 Core FFO guidance to a range of $15.80–$16.02, reflecting strong Q2 performance [12]