Essex Property Q1 Core FFO Beats Estimates, Revenues Increase Y/Y

Essex Property Trust Inc. ESS reported first-quarter 2025 core funds from operations (FFO) per share of $3.97, beating the Zacks Consensus Estimate of $3.92. The figure also improved 3.7% from the year-ago quarter.

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

Total revenues of $464.6 million outpaced the Zacks Consensus Estimate of $459.5 million. Revenues were up 8.8% year over year.

ESS’ Q1 in Detail

In the first quarter, Essex Property’s same-property revenues increased 3.4% from the prior-year period, up from our estimate of 2.5%. The same-property operating expenses rose 3.8% year over year compared with our estimate of 4%.

The same-property NOI increased 3.3% year over year, up from our estimate of 1.8%.

Financial occupancies of 96.3% in the first quarter remained unchanged year over year and increased 40 basis points sequentially. The metric was up from our estimate of 95.7%.

ESS Portfolio Activity

In the first quarter, ESS acquired three apartment home communities comprising 619 units located in Northern California for $345.4 million.

In February 2025, the company sold a 255-unit apartment home community located in Rancho Palos Verdes, CA, for $127 million.

Subsequent to quarter end, the company sold a 350-unit apartment home community located in Santa Ana, CA for $239.6 million, reflecting an attractive valuation of approximately $685,000 per unit.

Balance Sheet Position of ESS

ESS had $1.4 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of March 31, 2025. Essex Property exited the first quarter of 2025 with cash and cash equivalents, including restricted cash, of $107.9 million, up from the $75.9 million recorded at the end of the prior quarter.

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

2025 Guidance Reaffirmed by ESS

For the second quarter of 2025, Essex Property projects core FFO per share in the range of $3.90-$4.02. The Zacks Consensus Estimate is pegged at $3.98 per share.

For full-year 2025, the company projects the core FFO per share in the range of $15.56-$16.06. The Zacks Consensus Estimate of $15.98 per share is within this range.

The full-year guidance is based on projections for the same-property revenue growth of 2.25-3.75%, an operating expense increase of 3.25-4.25% and a NOI expansion of 1.4-4%.

Essex’s Zacks Rank

Essex Property 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

Upcoming Earnings Releases

We now look forward to the earnings releases of residential REITs like Camden Property Trust CPT and American Homes 4 Rent AMH. Both are slated to report on May 1. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The Zacks Consensus Estimate for Camden’s first-quarter 2025 FFO per share is pegged at $1.68, which indicates 0.6% growth year over year. CPT currently has a Zacks Rank #3.

The Zacks Consensus Estimate for American Homes’ first-quarter 2025 FFO per share is pegged at 45 cents, which implies a 4.7% year-over-year increase. AMH currently carries a Zacks Rank #3.

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

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research