Essex Property Trust (ESS) Q4 2025 earnings summary

Executive summary

• Achieved full-year same-store revenue growth of 3.3% in 2025, at the high end of guidance, with Core FFO per share growth above the midpoint and net income per diluted share of $10.40, down from $11.54 in 2024 due to prior year gains on asset sales and remeasurement of co-investments.

• Core FFO per diluted share grew 2.2% for the full year, surpassing original guidance midpoint, driven by strong same-property revenue growth.

• Northern California outperformed due to tech sector expansion, migration trends, and limited new supply; rent growth in most markets exceeded U.S. average.

• Occupancy increased to 96.3% in Q4, with Los Angeles showing the strongest sequential improvement.

• Acquired seven apartment communities for $829.4 million and disposed of five for $563.8 million in 2025.

Financial highlights

• Same-property revenue and NOI grew 3.8% year-over-year in Q4 2025; full-year growth was 3.3% and 3.2%, respectively.

• Blended lease rate growth was 1.9% in Q4; full-year blended lease rate growth expected at 2.5% for 2026.

• Issued $350 million of 10-year senior unsecured notes at 4.875% interest in Q4 2025.

• Liquidity at year-end 2025 exceeded $1.7 billion, including $1.575 billion in available unsecured commitments and $191 million in cash and equivalents.

• Total market capitalization as of 12/31/2025 was $24.3 billion, with equity comprising 72% and debt 28%.

Outlook and guidance

• 2026 guidance assumes steady demand, with new housing supply forecasted to decline by 20% year-over-year.

• 2026 full-year guidance midpoint: net income per diluted share $5.80, total FFO $15.79, core FFO $15.94, with same-property revenue and NOI growth expected at 2.5% and 2.1% (midpoint, cash basis).

• Blended rent growth in 2026 expected to be above U.S. average, led by Northern California, then Seattle, then Southern California.

• Operating expense growth forecasted at 3%, the lowest in several years, with insurance costs expected to decline 5%.

• Structured finance headwinds expected to end after 2026.