Essex Property Trust (ESS) Q4 2025 earnings summary

Executive summary

• Achieved full-year same-store revenue growth at the high end and FFO per share growth above the midpoint of guidance for 2025, driven by strong property operations and improved delinquency recovery near pre-COVID levels.

• Net income per diluted share for Q4 2025 was $1.25, down from $4.00 in Q4 2024; full-year 2025 net income per diluted share was $10.40, compared to $11.54 in 2024, mainly due to prior year gains on asset sales and remeasurement of co-investments.

• Core FFO per diluted share grew 1.5% year-over-year for Q4 and 2.2% for the full year, surpassing original guidance midpoint, driven by strong same-property revenue growth.

• Northern California outperformed due to tech sector expansion, favorable migration, and limited new supply; rent growth in most markets exceeded the U.S. average.

• Los Angeles showed the best sequential occupancy improvement, nearing stabilization, while San Francisco continued its recovery, now 9% above pre-COVID levels.

Financial highlights

• Same-property revenue and NOI grew 3.8% year-over-year in Q4 2025; full-year growth was 3.3% and 3.2%, respectively, both above guidance midpoint.

• Blended lease rate growth in Q4 was 1.9%; occupancy increased 20 bps sequentially to 96.3%.

• Issued $350 million of 10-year senior unsecured notes at 4.875% interest in Q4 2025.

• Total market capitalization as of 12/31/2025 was $24.3 billion, with equity comprising 72% and debt 28%.

• Liquidity at year-end 2025 exceeded $1.7 billion, including $1.575 billion in available unsecured commitments and $191 million in cash and equivalents.

Outlook and guidance

• 2026 full-year guidance midpoint: net income per diluted share $5.80, total FFO $15.79, core FFO $15.94; same-property revenue and NOI growth expected at 2.5% and 2.1% (midpoint, cash basis).

• 2026 guidance assumes steady demand, with new housing supply forecasted to decline by 20% year-over-year.

• Blended lease rate growth expected at 2.5% for 2026; new leases flat to 2%, renewals 3-4%.

• Same property expense growth forecasted at 3%, lowest in several years, with insurance costs down 5% year-over-year.

• Guidance assumes $175M in structured finance maturities and $80M in development funding; no new developments planned.