Essex Property raises 2026 Core FFO forecast on same-property growth

Essex Property Trust Inc. (ESS) said in an earnings release filed with an 8-K on Oct. 27 that third-quarter net income was $1.52 per diluted share, down from $2.56 a year earlier. The company said the decline was driven by gains on sale of real estate and land recognized in the third quarter of 2025.

Total revenue was $492.69 million, in line with the $496.33 million consensus estimate compiled by Finnhub. The company also raised the midpoint of its full-year 2026 Core FFO guidance by 2 cents per share, to $16.16.

Here's how the company did:

• Net income per diluted share: $1.52 vs. $2.56 a year earlier
• Core FFO per diluted share: $4.00 vs. $3.97 a year earlier
• Revenue: $492.69 million vs. $473.30 million a year earlier

The company exceeded the midpoint of its second-quarter guidance for Core FFO by 1 cent per share, driven by same-property revenue growth. Same-property revenue rose 3.0% from a year earlier, and same-property net operating income rose 3.1%.

2026 guidance

The company now expects 2026 Core FFO of $16.10 to $16.22 per diluted share, from $16.03 to $16.25 previously. Total FFO is expected at $15.42 to $15.54 per share, from $15.37 to $15.59, and net income at $5.62 to $5.74 per diluted share, from $5.47 to $5.69.

Same-property revenue growth is now expected at 2.8% to 3.0%, from 2.5% to 3.1%, and same-property net operating income growth at 2.8% to 3.2%, from 2.3% to 3.3%. The company expects fourth-quarter Core FFO of $3.95 to $4.07 per diluted share.

Segment results

Same-property revenue rose 5.4% in Northern California, 1.5% in Southern California and 1.3% in Seattle Metro from a year earlier, according to the company's supplemental data.

Financial occupancy for the same-property portfolio was 96.3% at Sept. 30, up from 96.0% a year earlier.

Costs and charges

General and administrative expense was $16.56 million in the quarter, down from $18.06 million a year earlier. The company recorded a $10.71 million impairment loss.

In the first nine months, the company reached a settlement to fully resolve its case related to RealPage, Inc., totaling $36.5 million, and another litigation matter totaling $19.3 million.

Balance sheet and portfolio

The company sold three apartment communities in the third quarter for a total pro rata contract price of $111.9 million. It obtained a $275.0 million unsecured term loan due September 2029, priced at SOFR plus 0.80%.

The company did not repurchase shares in the third quarter and had $500.0 million of purchase authority remaining under its stock repurchase plan at Sept. 30. It said it had over $1.7 billion of liquidity at quarter end.

After the quarter, the company acquired a 378-unit apartment community in Oakland, California. The acquisition follows the liquidation of the company's $64.2 million subordinated loan interest and the payoff of an associated $92.3 million senior mortgage. It will consolidate the community in the fourth quarter of 2026.

Revenue has risen in each of the last three quarters, from $473.3 million in the third quarter of 2025 to $489.0 million in the second quarter of 2026, according to its SEC filings.

Essex Property Trust, Inc. is a fully integrated real estate investment trust that acquires, develops, redevelops and manages multifamily residential properties in selected West Coast markets. It has ownership interests in 255 apartment home communities with over 62,000 apartment homes.

The company will hold an earnings call with management on Oct. 28 at 9 a.m. PT, or 12 p.m. ET.