Essex Announces Second Quarter 2025 Results and Raises Full-Year 2025 Guidance
Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the three and six-month periods ended June 30, 2025 are detailed below.
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Three Months Ended
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Six Months Ended
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2025 |
2024 |
Change |
2025 |
2024 |
Change |
Per Diluted Share |
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Net Income |
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Total FFO |
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- |
Core FFO |
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Second Quarter 2025 Highlights:
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Reported Net Income per diluted share for the second quarter of 2025 of
, compared to$3.44 in the second quarter of 2024. The increase was primarily driven by a gain on sale of real estate.$1.45 -
Grew Core FFO per diluted share by
2.3% compared to the second quarter of 2024, exceeding the midpoint of the Company’s guidance range by . The outperformance was primarily driven by higher same-property revenue growth and favorable property taxes in$0.07 Washington . -
Achieved same-property revenue and net operating income (“NOI”) growth of
3.2% and3.3% , respectively, compared to the second quarter of 2024. On a sequential basis, same-property revenue and NOI improved1.0% and2.5% , respectively. -
Acquired two apartment home communities located in
Northern California for a total contract price of . Disposed of one apartment home community located in$240.5 million Southern California for a contract price of .$239.6 million - Raised full-year 2025 guidance range as detailed in the table below:
Full-Year 2025 Revised Guidance |
Revised
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Revised
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Change at
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Net Income per diluted share |
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Core FFO per diluted share |
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Same-Property Revenues |
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+ |
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Same-Property Operating Expenses |
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( |
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Same-Property NOI |
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+ |
Same-Property Operations
Same-property operating results exclude any properties that are not comparable for the periods presented. The table below illustrates the percentage change in same-property revenue on a year-over-year basis for the three and six-month periods ended June 30, 2025 and on a sequential basis for the three-month period ended June 30, 2025:
Revenue Change |
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Q2 2025
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YTD 2025
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Q2 2025
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% of Total Q2
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Total |
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Total |
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Same-Property Portfolio |
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The table below illustrates the components that drove the change in same-property revenue on a year-over-year basis for the three and six-month periods ended June 30, 2025 and on a sequential basis for the three-month period ended June 30, 2025:
Same-Property Revenue Components |
Q2 2025
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YTD 2025
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Q2 2025
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Scheduled Rents |
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Delinquency (1) |
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Cash Concessions |
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- |
Vacancy |
- |
- |
- |
Other Income |
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Q2 2025 Same-Property Revenue Growth |
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(1) |
Same-Property delinquency as a percentage of scheduled rent was |
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Year-Over-Year Change |
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Year-Over-Year Change |
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Q2 2025 compared to Q2 2024 |
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YTD 2025 compared to YTD 2024 |
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Revenues |
Operating
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NOI |
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Revenues |
Operating
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NOI |
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- |
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- |
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Same-Property Portfolio |
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Sequential Change |
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Q2 2025 compared to Q1 2025 |
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Revenues |
Operating
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NOI |
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- |
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- |
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Same-Property Portfolio |
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- |
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Financial Occupancies |
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Quarter Ended |
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6/30/2025 |
3/31/2025 |
6/30/2024 |
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Same-Property Portfolio |
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Investment Activity
Acquisitions
In May, the Company acquired two apartment home communities comprising 420 apartment homes located in
Dispositions
In April, the Company sold a 350-unit apartment home community located in
Subsequent to quarter end, the Company sold a 243-unit apartment home community located in
Other Investments
Subsequent to quarter end, the Company formed a new joint venture, Wesco VII LLC (“Wesco VII”), with the State of Wisconsin Investment Board with a total commitment from each partner of
Balance Sheet and Liquidity
Balance Sheet
In May, the Company obtained a
In May, the Company established a commercial paper program which allows the issuance, from time to time, of unsecured commercial paper notes up to a maximum aggregate principal amount outstanding of
Subsequent to quarter end, the Company increased its unsecured credit facility from
Common Stock and Liquidity
During the second quarter, the Company did not issue any shares of common stock through its equity distribution program, exercise any of its previously disclosed forward sale agreements, or repurchase any shares through its stock repurchase plan.
As of July 25, 2025, the Company had approximately
Guidance
For the second quarter of 2025, the Company exceeded the midpoint of the guidance range provided in its first quarter 2025 earnings release for Core FFO by
The following table provides a reconciliation of second quarter 2025 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s first quarter 2025 earnings release.
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Per Diluted
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Guidance midpoint of Core FFO per diluted share for Q2 2025 |
$ |
3.96 |
Consolidated NOI |
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0.05 |
G&A and Other |
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0.02 |
Core FFO per diluted share for Q2 2025 reported |
$ |
4.03 |
2025 Full-Year and Third Quarter Guidance |
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Per Diluted Share |
Previous
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Revised
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Revised
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Change at
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Net Income |
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Total FFO |
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Core FFO |
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Q3 2025 Core FFO |
N/A |
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N/A |
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Same-Property Portfolio Growth (1) |
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Revenues |
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+ |
Operating Expenses |
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( |
Net Operating Income |
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+ |
2025 Blended Rate Growth |
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( |
Excluding |
N/A |
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N/A |
(1) |
Reflects guidance on a cash basis. On a GAAP basis, the midpoints of the Company’s same-property revenue and NOI guidance are |
Sequential Components to 2025 Third Quarter Core FFO Guidance Midpoint |
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Per Diluted
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Core FFO per diluted share for Q2 2025 reported |
$ |
4.03 |
Consolidated Revenues |
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0.05 |
Consolidated Operating Expenses |
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(0.11) |
Structured Finance Investments |
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(0.02) |
G&A and Other |
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(0.01) |
Guidance midpoint of Core FFO per diluted share for Q3 2025 |
$ |
3.94 |
For additional details regarding the Company’s 2025 FFO guidance range, see page S-15 of the supplemental financial information.
Conference Call with Management
The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, July 30, 2025 at 9 a.m. PT (12 p.m. ET), which will be broadcast live via the Internet at www.essex.com, and accessible via phone by dialing toll-free, (877) 407-0784, or toll/international, (201) 689-8560. No passcode is necessary.
A rebroadcast of the live call will be available online for 30 days and digitally for 7 days. To access the replay online, go to www.essex.com and select the second quarter 2025 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13754643. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.com or calling (650) 655-7800.
Corporate Profile
Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 258 apartment communities comprising over 62,000 apartment homes with an additional property in active development. Additional information about the Company can be found on the Company’s website at www.essex.com.
This press release and accompanying supplemental financial information has been furnished to the Securities and Exchange Commission electronically on Form 8-K and can be accessed from the Company’s website at www.essex.com. If you are unable to obtain the information via the Web, please contact the Investor Relations Department at (650) 655-7800.
FFO Reconciliation
FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO and Core FFO do not represent net income or cash flows from operations as defined by
The following table sets forth the Company’s calculation of FFO and Core FFO per diluted share for the three and six-month periods ended June 30, 2025 and 2024 (dollars in thousands, except for share and per share amounts):
Three Months Ended June 30, |
Six Months Ended June 30, |
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2025 |
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2024 |
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2025 |
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2024 |
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Net income available to common stockholders |
$ |
221,362 |
$ |
92,914 |
$ |
424,472 |
$ |
365,645 |
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Adjustments: |
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Depreciation and amortization |
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151,501 |
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145,613 |
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302,788 |
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285,346 |
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Gains not included in FFO |
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(126,174) |
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- |
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(237,534) |
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(138,326) |
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Impairment loss from unconsolidated co-investments |
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- |
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- |
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- |
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3,726 |
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Depreciation and amortization from unconsolidated co-investments |
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14,406 |
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17,380 |
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28,784 |
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35,850 |
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Noncontrolling interest related to Operating Partnership units |
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7,781 |
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3,270 |
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15,060 |
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12,869 |
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Depreciation attributable to third party ownership and other |
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(38) |
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(390) |
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(84) |
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(779) |
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FFO attributable to common stockholders and unitholders |
$ |
268,838 |
$ |
258,787 |
$ |
533,486 |
$ |
564,331 |
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FFO per share – diluted |
$ |
4.03 |
$ |
3.89 |
$ |
8.00 |
$ |
8.49 |
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Expensed acquisition and investment related costs |
$ |
- |
$ |
- |
$ |
- |
$ |
68 |
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Tax benefit on unconsolidated technology co-investments |
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(232) |
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(807) |
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(395) |
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(758) |
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Realized and unrealized gains on marketable securities, net |
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(2,492) |
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(1,597) |
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(2,401) |
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(4,948) |
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Provision for credit losses |
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14 |
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19 |
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11 |
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66 |
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Equity loss (income) from unconsolidated technology co-investments |
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104 |
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143 |
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(1,612) |
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(5,727) |
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Loss on early retirement of debt |
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- |
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- |
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762 |
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- |
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Co-investment promote income |
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- |
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- |
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- |
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(1,531) |
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General and administrative and other, net (1) |
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2,661 |
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5,906 |
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3,937 |
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8,447 |
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Insurance reimbursements, legal settlements, and other, net (2) |
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(339) |
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(486) |
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(700) |
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(43,300) |
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Core FFO attributable to common stockholders and unitholders |
$ |
268,554 |
$ |
261,965 |
$ |
533,088 |
$ |
516,648 |
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Core FFO per share – diluted |
$ |
4.03 |
$ |
3.94 |
$ |
8.00 |
$ |
7.77 |
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Weighted average number of shares outstanding diluted (3) |
|
66,670,784 |
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66,486,464 |
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66,663,894 |
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66,477,724 |
(1) |
Includes political advocacy costs of |
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(2) |
There were no material gains from legal settlements during the three and six months ended June 30, 2025 and the three months ended June 30, 2024. During the six months ended June 30, 2024, the Company settled two lawsuits related to construction defects at two communities and received cash recoveries of |
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(3) | Assumes conversion of all outstanding limited partnership units in Essex Portfolio, L.P. (the “Operating Partnership”) into shares of the Company’s common stock and excludes DownREIT limited partnership units. |
Net Operating Income (“NOI”) and Same-Property NOI Reconciliations
NOI and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented (dollars in thousands):
Three Months Ended
|
Six Months Ended
|
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2025 |
2024 |
2025 |
2024 |
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Earnings from operations |
$ |
279,700 |
$ |
137,450 |
$ |
536,781 |
$ |
269,809 |
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Adjustments: |
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Corporate-level property management expenses |
|
12,220 |
|
11,622 |
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24,552 |
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22,721 |
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Depreciation and amortization |
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151,501 |
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145,613 |
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302,788 |
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285,346 |
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Management and other fees from affiliates |
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(2,223) |
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(2,573) |
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(4,717) |
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(5,286) |
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General and administrative |
|
17,157 |
|
21,136 |
|
33,449 |
|
38,307 |
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Expensed acquisition and investment related costs |
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- |
|
- |
|
- |
|
68 |
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Gain on sale of real estate and land |
|
(126,174) |
|
- |
|
(237,204) |
|
- |
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NOI |
|
332,181 |
|
313,248 |
|
655,649 |
|
610,965 |
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Less: Non-same property NOI |
|
(41,325) |
|
(31,667) |
|
(81,130) |
|
(54,858) |
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Same-Property NOI |
$ |
290,856 |
$ |
281,581 |
$ |
574,519 |
$ |
556,107 |
Safe Harbor Statement Under The Private Litigation Reform Act of 1995:
This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements which are not historical facts, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as “expects,” “assumes,” “anticipates,” “may,” “will,” “intends,” “plans,” “projects,” “believes,” “seeks,” “future,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s third quarter and full-year 2025 guidance (including net income, Total FFO and Core FFO, same-property growth and related assumptions) and anticipated yield on certain investments. While the Company's management believes the assumptions underlying its forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed.
Factors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: assumptions related to our third quarter and full-year 2025 guidance; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; tariffs, geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; the Company’s inability to maintain its investment grade credit rating with the rating agencies; the Company may be unsuccessful in the management of its relationships with its co-investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects; estimates of future income from an acquired property may prove to be inaccurate; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations and the anticipated or actual impact of future changes in laws or regulations; unexpected difficulties in leasing of future development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in the Company’s annual report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q, and those risk factors and special considerations set forth in the Company's other filings with the SEC which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this press release.
Definitions and Reconciliations
Non-GAAP financial measures and certain other capitalized terms, as used in this earnings release and supplemental financial information, are defined and further explained on pages S-17.1 through S-17.4, "Reconciliations of Non-GAAP Financial Measures and Other Terms," of the accompanying supplemental financial information. The supplemental financial information is available on the Company's website at www.essex.com.
View source version on businesswire.com: https://www.businesswire.com/news/home/20250729566958/en/
Loren Rainey
Sr. Director, Investor Relations
(650) 655-7800
lrainey@essex.com
Source: Essex Property Trust, Inc.