Essex Property Trust Inc. ESS reported second-quarter 2025 core funds from operations (FFO) per share of $4.03, beating the Zacks Consensus Estimate of $3.99. The figure also improved 2.3% 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.
Total revenues of $469.8 million marginally outpaced the Zacks Consensus Estimate of $469.2 million. Revenues were up 6.2% year over year.
ESS’ Q2 in Detail
In the second quarter, Essex Property’s same-property revenues increased 3.2% from the prior-year period, up from our estimate of 2.3%. The same-property operating expenses rose 2.9% year over year compared with our estimate of 3.8%.
The same-property NOI increased 3.3% year over year, up from our estimate of 1.7%.
Financial occupancies of 96.2% in the second quarter remained unchanged year over year and decreased 10 basis points sequentially. The metric was down from our estimate of 96.6%.
ESS Portfolio Activity
In the second quarter, ESS acquired two apartment home communities, comprising 420 apartment homes, located in Northern California for $240.5 million.
In the second quarter, the company sold a 350-unit apartment home community located in Southern California for $239.6 million.
Subsequent to the quarter-end, it sold a 243-unit apartment home community located in Oakland, CA, for $97.5 million.
Balance Sheet Position of ESS
ESS had $1.5 billion in liquidity through the undrawn capacity on its unsecured credit facilities, cash and cash equivalents and marketable securities as of June 30, 2025. Essex Property exited the second quarter of 2025 with cash and cash equivalents, including restricted cash, of $67.9 million, down from the $107.9 million recorded at the end of the prior quarter.
During the second quarter, ESS did not repurchase any shares through its stock repurchase plan.
2025 Guidance for ESS
For the third quarter of 2025, Essex Property projects core FFO per share in the range of $3.89-$3.99. The Zacks Consensus Estimate is pegged at $3.98 per share.
For full-year 2025, the company projects core FFO per share in the range of $15.80-$16.02 compared to the prior guided range of $15.56-$16.06. The Zacks Consensus Estimate of $15.94 per share is within the new guided range.
The full-year guidance is based on projections for the same-property revenue growth of 2.90-3.40%, an operating expense increase of 3.00-3.50% and a NOI expansion of 2.70-3.50%.
Essex’s Zacks Rank
Essex Property currently carries a Zacks Rank #2 (Buy). 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 second-quarter 2025 earnings releases of residential REITs like Camden Property Trust CPT and American Homes 4 Rent AMH, which are slated to release on July 31.
The Zacks Consensus Estimate for Camden’s second-quarter 2025 FFO per share is pegged at $1.69, which indicates a 1.2% decrease year over year. CPT currently has a Zacks Rank #2.
The Zacks Consensus Estimate for American Homes’ second-quarter 2025 FFO per share is pegged at 46 cents, which implies a 2.2% year-over-year increase. AMH currently carries a Zacks Rank #2.
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).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
