Essex Property Trust, Inc. (NYSE: ESS) raised its full-year 2026 guidance after same-property revenue and net operating income increased in the third quarter, supporting 0.8% year-over-year growth in Core funds from operations per diluted share.
The apartment real estate investment trust reported third-quarter net income of $1.52 per diluted share, down from $2.56 a year earlier. Essex attributed the decline primarily to gains from real estate and land sales recorded in the third quarter of 2025.
Core FFO per diluted share exceeded the midpoint of the company’s guidance range by $0.01, driven by same-property revenue growth. Same-property revenue rose 3.0% from a year earlier, while same-property NOI increased 3.1%. Revenue advanced 1.0% sequentially, reflecting growth across all regions and continued strength in Northern California.
Full-Year Outlook Raised
Essex increased the midpoint of its 2026 net income guidance by $0.10 per diluted share to $5.68, narrowing the projected range to $5.62 to $5.74. The company raised the midpoint of Core FFO guidance by $0.02 to $16.16 per diluted share, with a revised range of $16.10 to $16.22.
The midpoint of total FFO guidance remained unchanged at $15.48 per diluted share, although the range was narrowed to $15.42 to $15.54.
For its same-property portfolio, Essex now expects cash-basis revenue growth of 2.8% to 3.0%, with a 2.9% midpoint, and NOI growth of 2.8% to 3.2%, with a 3.0% midpoint. Those midpoints increased by 0.1 and 0.2 percentage points, respectively. The operating-expense growth forecast is 2.6% to 2.9%, with the 2.8% midpoint unchanged. The guidance is based on 52,059 apartment homes. On a GAAP basis, the midpoints for same-property revenue and NOI growth are 2.9% and 3.0%, respectively.
Portfolio Transactions and Liquidity
During the quarter, Essex disposed of three apartment communities for a total pro rata contract price of $111.9 million. It also obtained a $275 million unsecured term loan priced at the Secured Overnight Financing Rate plus 0.80%.
Immediately available liquidity totaled $1.75 billion as of September 30, comprising $1.575 billion of available unsecured commitments and $175 million of cash, cash equivalents and marketable securities. The company had no commercial paper outstanding.
Net indebtedness to adjusted EBITDAre was 5.4 times, unchanged from the second quarter and down from 5.5 times a year earlier. Debt represented 33% of total assets, while secured debt accounted for 4%. Unencumbered NOI remained 93% of adjusted total NOI.
Essex reported interest coverage of 509% and an unsecured debt ratio of 301%, both above its public bond covenant thresholds. Unsecured borrowings represented 88% of consolidated debt. Moody’s rated the company Baa1 with a stable outlook, while S&P assigned a BBB+ rating with a stable outlook.
The company cautioned that its guidance and other forward-looking statements depend on assumptions subject to significant uncertainties and contingencies. Actual results could differ materially if risks emerge or underlying assumptions prove incorrect.
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