Essex Property Q4 Core FFO Lags Estimates, Revenues Beat & Rise Y/Y

Essex Property Trust Inc. ESS reported fourth-quarter 2025 core funds from operations (FFO) per share of $3.98, missing the Zacks Consensus Estimate of $4. This compares favorably to the FFO of $3.92 per share a year ago.

Results reflect favorable growth in same-property net operating income (NOI) and higher occupancy. Higher interest expenses partly acted as a dampener.

Total revenues of $479.6 million were up 5.5% year over year. The reported figure beat the Zacks Consensus Estimate of $476.6 million.

For full-year 2025, core FFO per share came in at $15.94, improving 2.2% year over year. The reported figure missed the Zacks Consensus Estimate of $15.98. Total revenues grew 6.4% year over year to $1.89 billion.

ESS’ Q4 in Detail

In the fourth quarter, Essex Property’s same-property revenues and same-property operating expenses increased 3.8% from the prior-year period.

The same-property NOI rose 3.8% year over year. Financial occupancies of 96.3% in the fourth quarter were up 20 basis points (bps) sequentially and 40 bps year over year.

Interest expenses increased 7.1% year over year to $64.6 million.

ESS’ Portfolio Activity

During the fourth quarter, ESS acquired 1250 Lakeside, a 250-unit apartment community built in 2021 and situated in Sunnyvale, CA, for $143.5 million.

Balance Sheet Position of ESS

ESS had $1.7 billion in liquidity through the available capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of Dec. 31, 2025. Essex Property exited the fourth quarter of 2025 with cash and cash equivalents, including restricted cash, of $85.6 million, up from the $75.2 million recorded at the end of the prior quarter.

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

2026 Guidance by ESS

For the first quarter of 2026, Essex Property projects core FFO per share in the range of $3.89-$4.01, with the midpoint being $3.95. The Zacks Consensus Estimate is pegged at $4.01.

For full-year 2026, the company projects core FFO per share in the range of $15.69-$16.19, with the midpoint being $15.94. The Zacks Consensus Estimate of $16.28 lies above this range.

The full-year guidance is based on projections for the same-property revenue growth of 1.70-3.10%, an operating expense increase of 2.50-3.50% and an NOI expansion of 0.8-3.4%.

ESS currently carries a Zacks Rank #4 (Sell).

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

Mid-America Apartment Communities MAA reported fourth-quarter 2025 FFO per share of $2.23, which surpassed the Zacks Consensus Estimate of $2.22. This compares with the FFO of $2.23 a year ago.

Results reflected higher occupancy and same-store effective blended lease rate growth year over year. The same-store portfolio’s NOI and average effective rent per unit fell, undermining the performance.

AvalonBay Communities AVB reported fourth-quarter 2025 core FFO per share of $2.85, surpassing the Zacks Consensus Estimate of $2.84. The figure increased 1.8% from the prior-year quarter’s tally of $2.80.

Results reflected higher same-store NOI and occupancy growth year over year. Higher interest expenses undermined the performance to an extent.  AVB hiked its dividend per share.

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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