Essex Property Trust (ESS) Q3 2024 earnings summary

Executive summary

• Core FFO per share for Q3 2024 was $3.91, exceeding guidance midpoint by $0.04 and up 3.4% year-over-year, driven by strong same-property revenue growth and lower delinquencies.

• Net income per diluted share rose to $1.84 in Q3 2024, a 35.3% year-over-year increase, supported by gains on co-investment remeasurements.

• Major acquisitions included full ownership of Century Towers, Patina at Midtown, and the BEXAEW portfolio, consolidating over 2,000 apartment homes.

• Financial occupancy remained robust at 96.2% for Q3 2024, with cash delinquencies declining to 0.7%.

• Liquidity position remained strong, with over $1.2 billion available and no significant 2024 debt maturities.

Financial highlights

• Q3 2024 revenues rose to $450.7M, up 7.5% year-over-year; net income available to common stockholders was $118.4M.

• Core FFO for Q3 2024 was $260.0M ($3.91/share diluted); same-property revenues increased 3.5% year-over-year, and NOI grew 2.6%.

• Issued $200M in 10-year senior unsecured notes at a 5.1% yield.

• Debt-to-total assets ratio remained stable, with net debt to EBITDA at 5.5x.

• Liquidity of $1.23B, including $1.12B undrawn credit facility and $113M in cash and marketable securities.

Outlook and guidance

• Full-year 2024 guidance raised: net income per diluted share midpoint to $8.72, Core FFO midpoint to $15.56, same-property revenue growth to 3.25%, and NOI growth to 2.6%.

• 2025 earnings expected to surpass 2024 by 80-100 basis points, with additional tailwind from delinquency improvements.

• Renewals for Q4 sent out in the mid-4% range, with signed leases in the high 3% range.

• Management expects continued stability in occupancy and rental rates, supported by strong demand in West Coast markets.