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.

• Northern California outperformed, driven by tech sector expansion, migration trends, and limited new supply, while Los Angeles showed the best occupancy improvement, nearing stabilization.

• Rent growth across most markets exceeded the U.S. average, with blended lease rate growth of 1.9% in Q4 and occupancy up 20 bps sequentially to 96.3%.

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

• Received $189.8 million from nine structured finance redemptions at a 9.8% return and committed $21.3 million to a new investment at a 13.5% return.

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, both above guidance midpoint.

• Q4 outperformance driven by lower concessions, higher occupancy, and other income.

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

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

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

Outlook and guidance

• 2026 guidance assumes same property revenue growth of 2.5% at the midpoint, with blended lease rate growth of 2.5%.

• 2026 Core FFO per diluted share guidance midpoint: $15.94, flat year-over-year; excluding structured finance headwinds, midpoint would be $16.23 (1.8% growth).

• New housing supply expected to decline by 20% year-over-year, supporting steady fundamentals.

• Expense growth forecasted at 3%, with controllable expenses up 2% and insurance costs down 5%.

• Structured finance headwinds expected to subside after 2026.