Essex Property Trust (NYSE:ESS) 2026 Conference March 02, 2026 02:55 PM ET Company ParticipantsAngela L. Kleiman - President and CEOBarb M. Pak - EVP and CFONick Joseph - Managing Director, Head of the Real Estate and Lodging TeamConference Call ParticipantsEric Wolfe - Vice President and Equity Research AnalystNick JosephWelcome to Citi's 2026 Global Property CEO Conference. I'm Nick Joseph here with Eric Wolfe with Citi Research. I'm pleased to have with us Essex Property Trust and CEO Angela Kleiman. Thi ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to _____________ 001-13106 (Essex Property Trust, Inc.) 333-44467-01 (Essex Portfolio, L.P.) (Commission File Number) ESSEX PROPERTY TRUST, INC. ESSEX ...

Core Insights - ESS Tech, Inc. has appointed Randall Selesky as Chief Commercial Officer to enhance global growth and commercial execution in long-duration energy storage solutions [1] - Selesky brings over 20 years of experience in the energy sector, including significant expertise in the battery storage industry [1] - The appointment is part of ESS's leadership transformation aimed at strengthening governance, execution, and financial discipline [1] Company Overview - ESS Tech, Inc. is a leading manufacturer of long-duration iron flow energy storage solutions, established in 2011 [1] - The company focuses on accelerating decarbonization through sustainable energy storage using iron, salt, and water [1] - ESS aims to provide flexible storage solutions that enhance energy security and reliability while maximizing the value of excess energy [1] Leadership and Strategy - Randall Selesky will lead global commercial strategy, sales, marketing, product management, and business development initiatives [1] - His previous role as Chief Commercial Officer at VoltStorage involved shaping commercial strategy and guiding market expansion [1] - CEO Drew Buckley emphasized Selesky's proven ability to build high-performing teams and convert market demand into revenue [1] Market Context - The demand for long-duration energy storage is increasing, driven by the need for improved grid reliability and deeper renewable integration [1] - Selesky's expertise is expected to position ESS to expand its market presence and meet the growing needs of the energy transition [1] - The company is focused on delivering high-performing, market-ready solutions to customers seeking reliable long-duration storage [1]

Financial Data and Key Metrics Changes - The company achieved same-property revenue growth of 3.3% for 2025, which was at the high end of guidance and 30 basis points ahead of original projections [10][12] - FFO per share growth is expected to be flat year-over-year for 2026, reflecting a conservative modeling approach due to redemptions within the Structured Finance portfolio [13][14] - Same-property NOI growth is forecasted to increase by 2.1% at the midpoint for 2026 [12] Business Line Data and Key Metrics Changes - The fourth quarter saw a blended lease rate growth of 1.9% and occupancy increased by 20 basis points sequentially to 96.3% [4][5] - Los Angeles showed the best occupancy improvement, increasing 70 basis points sequentially, indicating progress towards stabilization [5][28] Market Data and Key Metrics Changes - Northern California outperformed expectations due to technology sector expansion, favorable migration trends, and limited new housing supply [4][6] - Rent growth across most Essex markets outperformed the U.S. average, demonstrating the advantage of limited housing supply even in a soft employment environment [4][6] Company Strategy and Development Direction - The company anticipates steady West Coast fundamentals to deliver solid blended rent growth above the U.S. average in 2026, led by Northern California [6][7] - The investment market remains healthy with $12.6 billion of non-portfolio institutional multifamily transactions in 2025, a 43% increase compared to 2024 [8] Management's Comments on Operating Environment and Future Outlook - The management noted that job growth is moderating, and major employers are cautious about hiring, which could temper near-term demand acceleration [6][7] - There is optimism regarding Northern California's recovery, supported by increased VC funding and positive office absorption [20][22] Other Important Information - The company is well-positioned from a funding perspective, with free cash flow covering dividends and planned capital expenditures [14][15] - The structured finance book is expected to stabilize, with a focus on new opportunities to backfill redemptions [60] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management acknowledged that Northern California is recovering, with job openings at top tech companies showing stability, while Seattle faced softness in the fourth quarter [18][21] Question: Expectations for new and renewal lease blends - The company expects new leases to grow flat to 2% and renewals around 3%-4% for the year [24] Question: Performance expectations for Los Angeles - Management indicated steady improvement in occupancy, with hopes to reach stabilization at 95% soon [28][29] Question: Cap rates and investment opportunities in Southern California - The company noted a healthy environment with transactions occurring in the 4.5-4.75 cap rate range, and they will evaluate opportunities to create value [35][39] Question: Legislative impacts on rental housing - Management reported no significant impact from immigration policies, with trends returning to pre-COVID levels [55][100] Question: Changes in move-in pace from outside core markets - An increase in immigration trends was noted, particularly in the northern region, driven by return-to-office policies [100]

Financial Data and Key Metrics Changes - The company achieved same-property revenue growth of 3.3% for 2025, at the high end of guidance and 30 basis points ahead of original projections [10] - FFO per share growth is expected to be flat year-over-year for 2026, reflecting a conservative modeling approach [13][14] - Same-property NOI growth is forecasted to increase by 2.1% at the midpoint for 2026 [12] Business Line Data and Key Metrics Changes - Blended lease rate growth was 1.9% in the fourth quarter, with occupancy increasing by 20 basis points to 96.3% [4] - Los Angeles showed the best occupancy improvement, increasing by 70 basis points sequentially [5] - The company anticipates blended lease rate growth of 2.5% at the midpoint for 2026, with new leases expected to range from flat to 2% and renewals around 3%-4% [24] Market Data and Key Metrics Changes - Northern California outperformed expectations due to technology sector expansion and favorable migration trends [4] - Rent growth across most Essex markets outperformed the U.S. average, demonstrating the advantage of limited housing supply [4] - Seattle experienced soft performance in the fourth quarter, with several corporate layoffs impacting expectations [21] Company Strategy and Development Direction - The company plans to continue evaluating opportunities and allocate capital with a focus on creating shareholder value [9] - The investment strategy emphasizes FFO per share and NAV per share accretion, targeting investments with higher growth profiles [35] - The company is cautious about new developments, indicating that significant reductions in land prices or substantial rent growth are needed for new projects to be economically viable [49] Management's Comments on Operating Environment and Future Outlook - The management noted a slow but stable economic growth outlook for the U.S. in 2026, with job growth expected to remain consistent [6] - There is a cautious approach to hiring among major employers, which could temper near-term demand acceleration [7] - The company sees potential for improvement in Northern California due to increased venture capital funding and positive office absorption trends [20] Other Important Information - The company reported $12.6 billion in non-portfolio institutional multifamily transactions in 2025, a 43% increase from 2024 [8] - The company has over $1.7 billion in liquidity and is well-positioned from a funding perspective [15] - Advocacy costs were $2 million in 2025, with expectations for minimal advocacy costs in 2026 [87] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management noted that Northern California is showing signs of recovery, with job openings at tech companies stabilizing, while Seattle's performance was soft due to layoffs [18][21] Question: Expectations for new and renewal lease blends - Management expects new leases to be flat to 2% and renewals around 3%-4% for the year [24] Question: Performance expectations for Los Angeles - Management indicated steady improvement in occupancy, with economic occupancy at 94.7%, close to stabilization [28] Question: Impact of immigration on demand - Management has not seen a direct impact from immigration but noted an increase in immigration trends in the northern region [101] Question: Legislative impacts on rental housing - Management is monitoring policy changes but has not seen significant adverse impacts from recent legislative trends [60][96]

Financial Data and Key Metrics Changes - In 2025, the company achieved same-store revenue growth of 3.3%, which was at the high end of guidance and 30 basis points ahead of original projections [9] - FFO per share growth was above the midpoint of guidance, reflecting strong operational performance [2] - The fourth quarter saw a blended lease rate growth of 1.9% and occupancy increased by 20 basis points to 96.3% [3][9] Business Line Data and Key Metrics Changes - The company reported improved occupancy in Los Angeles, which increased by 70 basis points sequentially, indicating progress towards stabilization [3] - Northern California outperformed expectations due to technology sector expansion and limited housing supply, while Seattle and Southern California followed [3][4] Market Data and Key Metrics Changes - The broader U.S. economy is expected to experience slow but stable growth, with job trends remaining consistent [4] - Northern California is projected to lead Essex markets in rent growth, followed by Seattle and Southern California, with total new housing supply expected to decline by approximately 20% year-over-year [4][5] Company Strategy and Development Direction - The company plans to continue evaluating investment opportunities with a disciplined focus on creating shareholder value [8] - The strategy includes reallocating capital into higher growth, fee simple acquisitions in Northern California, which are expected to provide better risk-adjusted returns [12] Management's Comments on Operating Environment and Future Outlook - Management noted that while job growth is soft nationally, Northern California is showing signs of recovery, particularly in venture capital funding and office absorption [19][20] - The company remains cautious about the unpredictable job environment influenced by public policy, which could temper near-term demand [21] Other Important Information - The investment market remains healthy, with $12.6 billion in non-portfolio institutional multifamily transactions in 2025, a 43% increase from 2024 [6] - Cap rates for highly sought-after submarkets are in the low 4% range, while the remaining submarkets are in the mid-4% range [7] Q&A Session Summary Question: Thoughts on demand for assets in Northern California and Seattle - Management indicated that Northern California is recovering, with job openings in tech companies showing stability, while Seattle has faced challenges due to layoffs but still has positive fundamentals [16][20] Question: Expectations for new and renewal lease blends - The company expects new leases to grow flat to 2% and renewals to be around 3-4% for the year, similar to 2025 [22] Question: Performance expectations for Los Angeles - Management noted steady improvement in LA's occupancy, with hopes to reach stabilization at 95% soon, driven by a decrease in supply [27][28] Question: Impact of concessions on San Francisco rent growth - The company clarified that concessions are not significantly affecting the recovery in San Francisco, which is currently about 9% above pre-COVID levels [30] Question: Cap rates and investment opportunities in Southern California - Management stated that transactions in Southern California have occurred in the 4.5-4.75 cap rate range, indicating a healthy investment environment [33] Question: Legislative impacts on rental housing - Management is monitoring legislative changes but does not expect significant impacts on their business from advocacy costs [86] Question: Changes in move-in pace from outside core markets - There has been an increase in immigration trends in Northern California, primarily driven by return-to-office policies rather than robust job growth [100]

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Core Insights - Essex Property Trust Inc. (ESS) reported fourth-quarter 2025 core funds from operations (FFO) per share of $3.98, missing the Zacks Consensus Estimate of $4, but showing improvement from $3.92 per share a year ago [1][8] - The company experienced favorable growth in same-property net operating income (NOI) and higher occupancy, although higher interest expenses acted as a dampener [1][8] Financial Performance - Total revenues for the fourth quarter reached $479.6 million, up 5.5% year over year, surpassing the Zacks Consensus Estimate of $476.6 million [2] - For the full year 2025, core FFO per share was $15.94, a 2.2% year-over-year improvement, but missed the Zacks Consensus Estimate of $15.98; total revenues grew 6.4% year over year to $1.89 billion [2] Operational Metrics - In Q4, same-property revenues and same-property operating expenses increased by 3.8% compared to the prior year [3] - Same-property NOI rose by 3.8% year over year, with financial occupancy at 96.3%, up 20 basis points sequentially and 40 basis points year over year [3][8] - Interest expenses increased by 7.1% year over year to $64.6 million [3][8] Portfolio Activity - During Q4, ESS acquired 1250 Lakeside, a 250-unit apartment community built in 2021, for $143.5 million [4] Balance Sheet Position - As of December 31, 2025, ESS had $1.7 billion in liquidity, including cash and cash equivalents of $85.6 million, up from $75.2 million at the end of the prior quarter [5] - The company did not repurchase any shares during the fourth quarter [5] 2026 Guidance - For Q1 2026, ESS projects core FFO per share in the range of $3.89-$4.01, with a midpoint of $3.95, while the Zacks Consensus Estimate is $4.01 [6] - For the full year 2026, the projected core FFO per share is between $15.69-$16.19, with a midpoint of $15.94, below the Zacks Consensus Estimate of $16.28 [6] - The full-year guidance is based on projections for same-property revenue growth of 1.70-3.10%, operating expense increase of 2.50-3.50%, and NOI expansion of 0.8-3.4% [7]

Core Insights - Essex Property Trust reported revenue of $479.63 million for the quarter ended December 2025, reflecting a year-over-year increase of 5.5% [1] - The company's EPS was $3.98, slightly down from $4.00 in the same quarter last year, indicating a -0.52% surprise compared to the consensus estimate of $4.00 [1] - The revenue exceeded the Zacks Consensus Estimate of $476.57 million by 0.64% [1] Financial Performance Metrics - Financial occupancy for the same-property portfolio was reported at 96.3%, surpassing the average estimate of 96% from four analysts [4] - Total revenues from rental and other property reached $477.32 million, exceeding the seven-analyst average estimate of $475.08 million, with a year-over-year change of +5.6% [4] - Management and other fees from affiliates generated $2.3 million, slightly above the average estimate of $2.29 million, but down -4.7% year-over-year [4] - Same-property revenues totaled $414.85 million, marginally above the three-analyst average estimate of $414.75 million, reflecting a +0.9% year-over-year change [4] - Rental income was reported at $470.11 million, slightly above the estimate of $469.95 million, with a +5.6% change compared to the previous year [4] - Net earnings per share (diluted) were $1.25, below the five-analyst average estimate of $1.38 [4] Stock Performance - Over the past month, shares of Essex Property Trust have returned -3.5%, contrasting with the Zacks S&P 500 composite's +0.9% change [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential underperformance relative to the broader market in the near term [3]

分组1 - Essex Property Trust (ESS) reported quarterly funds from operations (FFO) of $3.98 per share, missing the Zacks Consensus Estimate of $4 per share, but showing an increase from $3.92 per share a year ago, resulting in an FFO surprise of -0.52% [1] - The company posted revenues of $479.63 million for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 0.64% and increasing from $454.47 million year-over-year [2] - Over the last four quarters, Essex Property Trust has surpassed consensus FFO estimates three times and topped consensus revenue estimates three times [2] 分组2 - The stock has underperformed the market, losing about 5.4% since the beginning of the year compared to the S&P 500's gain of 1.1% [3] - The current consensus FFO estimate for the coming quarter is $4.01 on revenues of $479.93 million, and for the current fiscal year, it is $16.28 on revenues of $1.95 billion [7] - The Zacks Industry Rank for REIT and Equity Trust - Residential is currently in the bottom 35% of over 250 Zacks industries, indicating potential underperformance compared to higher-ranked industries [8]