Essex Property Trust (ESS) Q3 2024 earnings summary

Executive summary

• Core FFO per share reached $3.91 in Q3 2024, up 3.4% year-over-year and exceeding guidance midpoint by $0.04, driven by strong same-property revenue growth and lower delinquencies.

• Net income per diluted share rose to $1.84 in Q3 2024, a 35.3% increase year-over-year, supported by gains on co-investment remeasurements.

• Major acquisitions included full ownership of Century Towers, Patina at Midtown, and the BEXAEW portfolio, consolidating over 2,000 apartment homes.

• Record low turnover, improved delinquency, and positive demand drivers contributed to results above original 2024 expectations.

• Financial occupancy remained robust at 96.2% for Q3 2024, with cash delinquencies declining to 0.7%.

Financial highlights

• Q3 2024 revenues rose to $450.7M, up 7.5% year-over-year; net income available to common stockholders was $118.4M.

• Core FFO for Q3 2024 was $260.0M ($3.91/share diluted); same-property revenues increased 3.5% year-over-year, NOI up 2.6%.

• Issued $200M of 10-year senior unsecured notes at a 5.1% yield, due April 2034.

• Liquidity stood at $1.2B as of October 2024, including undrawn credit facilities and cash.

• Debt-to-total assets ratio remained stable, with net debt to EBITDA at 5.5x.

Outlook and guidance

• Full-year 2024 Core FFO guidance raised to $15.56 per share, with net income guidance midpoint at $8.72 per diluted share.

• Same-property revenue growth guidance increased to 3.25%, NOI growth to 2.6%.

• 2025 earnings expected to surpass 2024 by 80-100 basis points, with additional tailwind from delinquency improvements.

• Renewals for Q4 sent out in the mid-4% range, with signed leases in the high 3% range.

• Management expects continued stability in occupancy and rental rates, supported by strong demand in West Coast markets.