Did Essex Property Trust beat earnings in Q4 2025?

Essex exceeded its Q4 Core FFO guidance midpoint, delivering 1.5% year-over-year growth. Same-property revenue and NOI both grew 3.8%, accelerating from 2.7% in Q3. Full-year 2025 Core FFO of $15.94 exceeded original guidance.

What is Essex Property Trust's 2026 guidance?

Essex guided 2026 Core FFO of $15.69-$16.19 per share (midpoint $15.94), flat versus 2025. Same-property revenue growth is expected at 1.7%-3.1% (midpoint 2.4%) with NOI growth of 0.8%-3.4% (midpoint 2.1%).

How did Essex stock react to Q4 2025 earnings?

ESS shares rose 1.8% on earnings day to $252.57, though the stock remains down 12% over the past year and trades well below its 52-week high of $316.29.

ESSEX PROPERTY TRUST (ESS)·Q4 2025 Earnings Summary

Essex Property Trust Delivers Strong Q4 as Same-Property Growth Accelerates to 3.8%

February 04, 2026 · by Fintool AI Agent

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Essex Property Trust (NYSE: ESS) reported Q4 2025 results that exceeded management's guidance, with same-property performance accelerating significantly in the final quarter of the year. Core FFO per share grew 1.5% year-over-year to $3.98, while same-property revenue and NOI both increased 3.8% — a notable acceleration from prior quarters .

The West Coast apartment REIT finished 2025 with full-year Core FFO of $15.94 per share, exceeding the midpoint of original guidance and representing 2.2% growth versus 2024 . However, 2026 guidance suggests flat Core FFO growth at the midpoint, though management notes that excluding structured finance headwinds, underlying growth would be 1.8% .

Did Essex Beat Earnings?

Core FFO: Essex delivered Core FFO of $3.98 per share, growing 1.5% year-over-year and consistent with full-year performance .

Same-Property Performance: The standout metric was same-property growth, which accelerated materially in Q4:

Metric	Q3 2025	Q4 2025	Change
Same-Property Revenue YoY	+2.7%	+3.8%	Accelerated
Same-Property NOI YoY	+2.4%	+3.8%	Accelerated
Financial Occupancy	96.1%	96.3%	+20 bps

Net Income: Net income per diluted share was $1.25 in Q4 2025, down sharply from $4.00 in Q4 2024. This decline was driven by gains on sale of real estate and gains on remeasurement of co-investments in the prior year period rather than operational weakness .

Full-Year 2025 Performance:

Same-property revenue: +3.3% (exceeded guidance midpoint)
Same-property NOI: +3.2% (exceeded guidance midpoint)
Core FFO: $15.94/share (+2.2% YoY)

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What Did Management Guide for 2026?

Essex provided 2026 guidance that implies a more challenging operating environment:

Metric	2025 Actual	2026 Guidance Range	2026 Midpoint
Net Income/Share	$10.40	$5.55 - $6.05	$5.80
Total FFO/Share	$15.98	$15.54 - $16.04	$15.79
Core FFO/Share	$15.94	$15.69 - $16.19	$15.94
Q1 2026 Core FFO/Share	—	$3.89 - $4.01	$3.95
Same-Property Revenue	+3.3%	+1.7% to +3.1%	+2.4%
Same-Property OpEx	+3.5%	+2.5% to +3.5%	+3.0%
Same-Property NOI	+3.2%	+0.8% to +3.4%	+2.1%

Key Takeaways:

Core FFO flat at midpoint: 2026 guidance of $15.94 midpoint implies no growth versus 2025
Structured finance headwinds: Excluding the ~$0.29 FFO impact (net of reinvestment) from structured finance redemptions, Core FFO would be $16.23 (+1.8% YoY growth)
Same-property deceleration: Revenue growth moderating from 3.3% to 2.4% at midpoint
NOI compression: Same-property NOI expected to slow from 3.2% to 2.1% as expense growth outpaces revenue
Net income decline: The sharp drop in guided net income reflects absence of prior-year asset sale gains

Guidance Bridge

Regional Same-Property Performance

Northern California outperformed in Q4, led by Santa Clara and San Mateo counties:

Region	Q4 2025 Revenue YoY	Q4 2025 vs Q3 2025	Financial Occupancy
Northern California	+4.2%	+0.6%	96.4%
Santa Clara County	+5.2%	+0.8%	96.7%
San Mateo County	+6.2%	+0.3%	96.3%
San Francisco	+2.0%	-1.2%	95.5%
Southern California	+3.8%	+1.1%	96.3%
Los Angeles County	+4.5%	+1.2%	96.1%
Orange County	+4.3%	+1.1%	96.8%
San Diego County	+2.1%	+0.8%	96.3%
Seattle Metro	+3.1%	-0.8%	96.1%

Net Effective Rent Growth (Q4 2025) :

New leases: -2.4% (improvement from prior quarters)
Renewals: +4.8%
Blended: +1.9%

What Changed From Last Quarter?

Positive Developments:

Same-property growth accelerated from 2.7% (Q3) to 3.8% (Q4) on both revenue and NOI
Full-year 2025 results exceeded original guidance midpoints
Financial occupancy improved 40 bps YoY to 96.3%
Issued $350M of 10-year senior unsecured notes at 4.875%, demonstrating capital markets access
Liquidity exceeds $1.7 billion

Areas of Concern:

2026 guidance implies no Core FFO growth at midpoint
Same-property revenue and NOI growth expected to decelerate meaningfully
Stock has underperformed, down 12% over the past year

Capital Allocation Highlights

Essex remained active on the capital allocation front in 2025:

Activity	2025 Full Year
Acquisitions	7 communities for $829.4M
Dispositions	5 communities for $563.8M (pro rata)
Structured Finance Redemptions	$189.8M at 9.8% weighted average return
New Preferred Equity Investment	$21.3M at 13.5% return

Q4 2025 Acquisition: In November, the Company acquired 1250 Lakeside, a 250-unit community built in 2021 in Sunnyvale, CA for $143.5M ($574K/unit) .

Debt Activity: Issued $350M of 10-year senior unsecured notes at 4.875% coupon (4.988% YTM) to refinance April 2026 maturities .

How Did the Stock React?

ESS shares rose +1.8% on earnings day, closing at $252.57. However, context matters:

Metric	Value
Current Price	$252.57
52-Week High	$316.29
52-Week Low	$243.25
YTD Return	-1.7%
1-Year Return	-12.0%
Analyst Target Price	$282.70*

*Values retrieved from S&P Global

The stock trades 20% below its 52-week high, reflecting sector-wide pressure on apartment REITs from elevated interest rates and new supply in West Coast markets.

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Balance Sheet & Credit Profile

Essex maintains investment-grade credit ratings and strong liquidity:

Credit Metric	Q4 2025	Covenant
Debt/Total Assets	35%	< 65%
Secured Debt Ratio	4%	< 40%
Interest Coverage	510%	> 150%
Net Debt/Adj. EBITDAre	5.6x	—
Unsecured Debt Ratio	291%	> 150%
Unencumbered NOI/Total NOI	93%	—

Credit Ratings: Moody's Baa1 (Stable) / S&P BBB+ (Stable)

Liquidity: Over $1.7 billion via undrawn capacity on credit facilities, cash, and marketable securities

Debt Maturities: 8% of debt matures in 2026, with $450M senior notes due April 2026 to be repaid with December 2025 bond proceeds

2026 Supply Outlook

A key tailwind for 2026: West Coast multifamily supply is projected to decline sharply:

Market	2025 Supply	2026E Supply	Change
Total Essex Markets	52,400	42,300	-19%
Seattle	13,500	9,300	-31%
Northern California	10,700	7,000	-35%
Southern California	28,200	26,000	-8%

Total supply as a percentage of stock is expected to decline from 0.5% to 0.4% across Essex markets .

Development Pipeline

Essex has one active development project:

Project	Location	Units	Total Cost	Expected Stabilization
7 South Linden	South San Francisco, CA	543	$311M ($573K/unit)	Q1 2030

The company expects ~$80M in development funding for 2026 and does not plan to start any new developments .

Forward Catalysts

Potential Upside:

Multifamily supply in West Coast markets projected to decline ~19% in 2026
Improving Bay Area technology sector employment could boost Northern California demand
Strong same-property momentum from Q4 could carry into 2026
Management sees blended rate growth of 2.0%-3.0% (midpoint 2.5%) in 2026, similar to 2025

Key Risks:

Elevated interest rates continue to pressure REIT valuations
California regulatory environment remains challenging
AI-driven tech sector volatility could impact Bay Area demand
Soft U.S. job market could limit rent growth

Conference Call Details

Essex will host its Q4 2025 earnings conference call on February 5, 2026 at 9:00 AM PT / 12:00 PM ET .

Dial-in: (877) 407-0784 (toll-free) or (201) 689-8560 (international)
Webcast: www.essex.com
Replay: Available online for 30 days, or dial (844) 512-2921 with pin 13757926

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Essex Property Trust is an S&P 500 REIT that acquires, develops, and manages multifamily residential properties in West Coast markets. The company owns interests in 259 apartment communities comprising over 63,000 apartment homes with an additional property in active development.