Essex Property Q2 Core FFO & Revenues Beat Estimates, '25 Views Raised

Essex Property Trust Inc. ESS reported second-quarter 2025 core funds from operations (FFO) per share of $4.03, beating the Zacks Consensus Estimate of $3.99. The figure also improved 2.3% from the year-ago quarter.

However, amid the Federal Reserve meeting outcome on interest rates due today, the stock was under pressure and down around 1.5% in the pre-market trading hours.

Results reflected favorable growth in same-property revenues and net operating income (NOI). However, higher same-property operating expenses and interest expenses partly acted as a dampener. ESS raised its full-year 2025 guidance at the midpoint for core FFO per share.

Total revenues of $469.8 million outpaced the Zacks Consensus Estimate of $469.2 million. Revenues were up 6.2% year over year.

ESS’ Q2 in Detail

In the second quarter, Essex Property’s same-property revenues increased 3.2% from the prior-year period, up from our estimate of 2.3%. Same-property operating expenses rose 2.9% year over year compared with our estimate of 3.8%.

The same-property NOI jumped 3.3% year over year, up from our estimate of 1.7%.

Financial occupancies of 96.2% in the second quarter remained unchanged year over year and decreased 10 basis points sequentially. Our estimate stood at 96.6%.

However, interest expenses increased 9.7% year over year to $64.2 million.

ESS’ Portfolio Activity

In the second quarter, ESS acquired two apartment home communities comprising 420 units located in Northern California for $240.5 million.

In April 2025, the company sold a 350-unit apartment home community in Santa Ana, CA, for $239.6 million.

After the quarter end, Essex Property sold a 243-unit apartment home community in Oakland, CA, for $97.5 million.

Balance Sheet Position of ESS

ESS had $1.5 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of July 25, 2025. Essex Property exited the second quarter of 2025 with cash and cash equivalents, including restricted cash, of $67.9 million, down from the $107.9 million recorded at the end of the prior quarter.

During the second quarter, ESS did not repurchase any shares through its stock repurchase plan.

2025 Guidance Raised by ESS

For the third quarter of 2025, Essex Property projects core FFO per share in the range of $3.89-$3.99. The Zacks Consensus Estimate is pegged at $3.98 per share.

For full-year 2025, the company projects core FFO per share in the range of $15.80-$16.02, up from the earlier guided range of $15.56-$16.06, increasing at the midpoint by 10 cents. The Zacks Consensus Estimate of $15.94 is within this range.

The full-year guidance is based on projections for the same-property revenue growth of 2.90-3.40%, an operating expense increase of 3.00-3.50% and a NOI expansion of 2.70-3.50%.

Essex’s Zacks Rank

ESS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Essex Property Trust, Inc. Price, Consensus and EPS Surprise

Essex Property Trust, Inc. price-consensus-eps-surprise-chart | Essex Property Trust, Inc. Quote

Upcoming Earnings Releases

We now look forward to the earnings releases of residential REITs like Camden Property Trust CPT and Equity Residential EQR, slated to report on July 31 and Aug. 4, respectively.

The Zacks Consensus Estimate for Camden’s second-quarter 2025 FFO per share is pegged at $1.69, which indicates a 1.17% decrease year over year. CPT currently has a Zacks Rank #2.

The Zacks Consensus Estimate for Equity Residential’s second-quarter 2025 FFO per share stands at 99 cents, which implies a 2.06% year-over-year increase. EQR currently carries a Zacks Rank #2.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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