Essex Property Q3 Core FFO Beats Estimates, '25 View Raised

Essex Property Trust Inc. ESS reported third-quarter 2025 core funds from operations (FFO) per share of $3.97, beating the Zacks Consensus Estimate of $3.96. The figure also improved 1.5% from the year-ago quarter.

However, amid the Federal Reserve meeting outcome on interest rates yesterday, the stock was under pressure and fell, though it is recovering some of the losses today.

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 $473.3 million were up 5% year over year but narrowly missed the Zacks Consensus Estimate of $475.5 million.

ESS’ Q3 in Detail

In the third quarter, Essex Property’s same-property revenues increased 2.7% from the prior-year period, in line with our estimate. Same-property operating expenses rose 3.5% year over year compared with our estimate of 3%. 

The same-property NOI increased 2.4% year over year compared to our estimate of 2.6%. Financial occupancies of 96.1% in the third quarter were down 10 basis points both sequentially and year over year. It was also below our estimate of 96.4%.

However, interest expenses increased 8.4% year over year to $63.3 million. It is also close to our estimate of $63.7 million.

ESS’ Portfolio Activity

During the third quarter, ESS acquired ViO, a 234-unit apartment community built in 2016 and situated in San Jose, CA, for $100 million.

It disposed of three apartment home communities for a total contract price of $244.7 million, with $197.2 million at pro rata share.

Balance Sheet Position of ESS

ESS had $1.5 billion in liquidity through the available capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of Sept. 30, 2025. Essex Property exited the third quarter of 2025 with cash and cash equivalents, including restricted cash, of $75.2 million, up from the $67.9 million recorded at the end of the prior quarter.

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

ESS Raises 2025 Guidance

For the fourth quarter of 2025, Essex Property projects core FFO per share in the range of $3.93-$4.03. The Zacks Consensus Estimate is pegged at $4.01 per share.

For full-year 2025, the company projects core FFO per share in the range of $15.89-$15.99, up from the earlier guided range of $15.80-$16.02, increasing at the midpoint by three cents. The Zacks Consensus Estimate of $15.96 is within this range.

The full-year guidance is based on projections for the same-property revenue growth of 3.00-3.30%, an operating expense increase of 3.00-3.50% and a NOI expansion of 2.80-3.40%.

Essex’s Zacks Rank

ESS currently carries a Zacks Rank #3 (Hold). 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

Performance of Other Residential REITs: AvalonBay and UDR

AvalonBay Communities AVB reported third-quarter 2025 core FFO per share of $2.75, missing the Zacks Consensus Estimate of $2.81. However, the figure increased marginally from the prior-year quarter’s tally of $2.74. AvalonBay lowered its 2025 core FFO per share, same-store residential revenue and NOI growth outlook following the Q3 core FFO per share and revenue estimate miss. 

UDR Inc. UDR reported third-quarter 2025 funds from operations as adjusted (FFOA) per share of 65 cents, outpacing the Zacks Consensus Estimate of 63 cents. This also compares favorably with the prior-year quarter’s reported figure of 62 cents. UDR’s results reflected year-over-year growth in same-store NOI. UDR raised its 2025 FFOA midpoint per share guidance.  

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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