Essex Announces Second Quarter 2025 Results and Raises Full-Year 2025 Guidance

Essex Property Trust, Inc. (NYSE: ESS) (the “Company”) announced today its second quarter 2025 earnings results and related business activities.

Net Income, Funds from Operations (“FFO”), and Core FFO per diluted share for the three and six-month periods ended June 30, 2025 are detailed below.

Second Quarter 2025 Highlights:

• Reported Net Income per diluted share for the second quarter of 2025 of $3.44, compared to $1.45 in the second quarter of 2024. The increase was primarily driven by a gain on sale of real estate.
• Grew Core FFO per diluted share by 2.3% compared to the second quarter of 2024, exceeding the midpoint of the Company’s guidance range by $0.07. The outperformance was primarily driven by higher same-property revenue growth and favorable property taxes in Washington.
• Achieved same-property revenue and net operating income (“NOI”) growth of 3.2% and 3.3%, respectively, compared to the second quarter of 2024. On a sequential basis, same-property revenue and NOI improved 1.0% and 2.5%, respectively.
• Acquired two apartment home communities located in Northern California for a total contract price of $240.5 million. Disposed of one apartment home community located in Southern California for a contract price of $239.6 million.
• Raised full-year 2025 guidance range as detailed in the table below:

Same-Property Operations

Same-property operating results exclude any properties that are not comparable for the periods presented. The table below illustrates the percentage change in same-property revenue on a year-over-year basis for the three and six-month periods ended June 30, 2025 and on a sequential basis for the three-month period ended June 30, 2025:

The table below illustrates the components that drove the change in same-property revenue on a year-over-year basis for the three and six-month periods ended June 30, 2025 and on a sequential basis for the three-month period ended June 30, 2025:

Investment Activity

Acquisitions

In May, the Company acquired two apartment home communities comprising 420 apartment homes located in Santa Clara County for a total contract price of $240.5 million.

Dispositions

In April, the Company sold a 350-unit apartment home community located in Santa Ana, CA for a contract price of $239.6 million. The Company recorded a gain on sale of real estate of $126.2 million in the second quarter, which has been excluded from Total and Core FFO.

Subsequent to quarter end, the Company sold a 243-unit apartment home community located in Oakland, CA for a contract price of $97.5 million.

Other Investments

Subsequent to quarter end, the Company formed a new joint venture, Wesco VII LLC (“Wesco VII”), with the State of Wisconsin Investment Board with a total commitment from each partner of $50.0 million to fund new structured finance investments. Essex has a 50% ownership interest in the venture. In July, Wesco VII originated a $42.6 million preferred equity investment for the development of a 480-unit apartment home community located in South San Francisco, CA. The investment has an initial preferred return of 13.5% and is expected to be fully funded by the fourth quarter of 2025.

Balance Sheet and Liquidity

Balance Sheet

In May, the Company obtained a $300.0 million unsecured term loan which is scheduled to mature in May 2028 with two one-year extension options, exercisable at the Company’s option. The loan is priced at SOFR plus 0.850%, with $150.0 million of the loan swapped to an all-in fixed rate of 4.1% through April 2030. The loan includes a 12-month delayed draw feature with $150.0 million in proceeds drawn as of June 30, 2025. The remaining portion will be drawn based on the Company’s future financing needs.

In May, the Company established a commercial paper program which allows the issuance, from time to time, of unsecured commercial paper notes up to a maximum aggregate principal amount outstanding of $750.0 million. The Company’s unsecured line of credit facilities will serve as a liquidity backstop for issuances under the program, and the proceeds will be utilized for general corporate and working capital purposes. As of June 30, 2025, an aggregate of $365.0 million was outstanding under the commercial paper program.

Subsequent to quarter end, the Company increased its unsecured credit facility from $1.2 billion to $1.5 billion and extended the maturity date to January 2030 with two six-month extension options, exercisable at the Company’s option. Pricing on the credit facility is SOFR plus 0.775%.

Common Stock and Liquidity

During the second quarter, the Company did not issue any shares of common stock through its equity distribution program, exercise any of its previously disclosed forward sale agreements, or repurchase any shares through its stock repurchase plan.

As of July 25, 2025, the Company had approximately $1.5 billion in liquidity via available capacity on its unsecured credit facilities, cash and cash equivalents, and marketable securities.

Guidance

For the second quarter of 2025, the Company exceeded the midpoint of the guidance range provided in its first quarter 2025 earnings release for Core FFO by $0.07 per diluted share. The outperformance was primarily driven by higher same-property revenue growth and favorable property taxes in Washington.

The following table provides a reconciliation of second quarter 2025 Core FFO per diluted share to the midpoint of the guidance provided in the Company’s first quarter 2025 earnings release.

For additional details regarding the Company’s 2025 FFO guidance range, see page S-15 of the supplemental financial information.

Conference Call with Management

The Company will host an earnings conference call with management to discuss its quarterly results on Wednesday, July 30, 2025 at 9 a.m. PT (12 p.m. ET), which will be broadcast live via the Internet at www.essex.com, and accessible via phone by dialing toll-free, (877) 407-0784, or toll/international, (201) 689-8560. No passcode is necessary.

A rebroadcast of the live call will be available online for 30 days and digitally for 7 days. To access the replay online, go to www.essex.com and select the second quarter 2025 earnings link. To access the replay, dial (844) 512-2921 using the replay pin number 13754643. If you are unable to access the information via the Company’s website, please contact the Investor Relations Department at investors@essex.com or calling (650) 655-7800.

Corporate Profile

Essex Property Trust, Inc., an S&P 500 company, is a fully integrated real estate investment trust (REIT) that acquires, develops, redevelops, and manages multifamily residential properties in selected West Coast markets. Essex currently has ownership interests in 258 apartment communities comprising over 62,000 apartment homes with an additional property in active development. Additional information about the Company can be found on the Company’s website at www.essex.com.

This press release and accompanying supplemental financial information has been furnished to the Securities and Exchange Commission electronically on Form 8-K and can be accessed from the Company’s website at www.essex.com. If you are unable to obtain the information via the Web, please contact the Investor Relations Department at (650) 655-7800.

FFO Reconciliation

FFO, as defined by the National Association of Real Estate Investment Trusts (“Nareit”), is generally considered by industry analysts as an appropriate measure of performance of an equity REIT. Generally, FFO adjusts the net income of equity REITs for non-cash charges such as depreciation and amortization of rental properties, impairment charges, gains on sales of real estate and extraordinary items. Management considers FFO and FFO which excludes non-core items, which is referred to as “Core FFO,” to be useful supplemental operating performance measures of an equity REIT because, together with net income and cash flows, FFO and Core FFO provide investors with additional bases to evaluate the operating performance and ability of a REIT to incur and service debt and to fund acquisitions and other capital expenditures and to pay dividends. By excluding gains or losses related to sales of depreciated operating properties and land and excluding real estate depreciation (which can vary among owners of identical assets in similar condition based on historical cost accounting and useful life estimates), FFO can help investors compare the operating performance of a real estate company between periods or as compared to different companies. By further adjusting for items that are not considered part of the Company’s core business operations, Core FFO allows investors to compare the core operating performance of the Company to its performance in prior reporting periods and to the operating performance of other real estate companies without the effect of items that by their nature are not comparable from period to period and tend to obscure the Company’s actual operating results. FFO and Core FFO do not represent net income or cash flows from operations as defined by U.S. generally accepted accounting principles (“GAAP”) and are not intended to indicate whether cash flows will be sufficient to fund cash needs. These measures should not be considered as alternatives to net income as an indicator of the REIT's operating performance or to cash flows as a measure of liquidity. FFO and Core FFO do not measure whether cash flow is sufficient to fund all cash needs including principal amortization, capital improvements and distributions to stockholders. FFO and Core FFO also do not represent cash flows generated from operating, investing or financing activities as defined under GAAP. Management has consistently applied the Nareit definition of FFO to all periods presented. However, there is judgment involved and other REITs’ calculation of FFO may vary from the Nareit definition for this measure, and thus their disclosures of FFO may not be comparable to the Company’s calculation.

The following table sets forth the Company’s calculation of FFO and Core FFO per diluted share for the three and six-month periods ended June 30, 2025 and 2024 (dollars in thousands, except for share and per share amounts):

Net Operating Income (“NOI”) and Same-Property NOI Reconciliations

NOI and Same-Property NOI are considered by management to be important supplemental performance measures to earnings from operations included in the Company’s consolidated statements of income. The presentation of same-property NOI assists with the presentation of the Company’s operations prior to the allocation of depreciation and any corporate-level or financing-related costs. NOI reflects the operating performance of a community and allows for an easy comparison of the operating performance of individual communities or groups of communities. In addition, because prospective buyers of real estate have different financing and overhead structures, with varying marginal impacts to overhead by acquiring real estate, NOI is considered by many in the real estate industry to be a useful measure for determining the value of a real estate asset or group of assets. The Company defines same-property NOI as same-property revenues less same-property operating expenses, including property taxes. Please see the reconciliation of earnings from operations to NOI and same-property NOI, which in the table below is the NOI for stabilized properties consolidated by the Company for the periods presented (dollars in thousands):

Safe Harbor Statement Under The Private Litigation Reform Act of 1995:

This press release includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements are statements which are not historical facts, including statements regarding the Company's expectations, estimates, assumptions, hopes, intentions, beliefs and strategies regarding the future. Words such as “expects,” “assumes,” “anticipates,” “may,” “will,” “intends,” “plans,” “projects,” “believes,” “seeks,” “future,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements include, among other things, statements regarding the Company’s third quarter and full-year 2025 guidance (including net income, Total FFO and Core FFO, same-property growth and related assumptions) and anticipated yield on certain investments. While the Company's management believes the assumptions underlying its forward-looking statements are reasonable, such forward-looking statements involve known and unknown risks, uncertainties and other factors, many of which are beyond the Company’s control, which could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. The Company cannot assure the future results or outcome of the matters described in these statements; rather, these statements merely reflect the Company’s current expectations of the approximate outcomes of the matters discussed.

Factors that might cause the Company’s actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements include, but are not limited to, the following: assumptions related to our third quarter and full-year 2025 guidance; occupancy rates and rental demand may be adversely affected by competition and local economic and market conditions; there may be increased interest rates, inflation, escalated operating costs and possible recessionary impacts; tariffs, geopolitical tensions and regional conflicts, and the related impacts on macroeconomic conditions, including, among other things, interest rates and inflation; the terms of any refinancing may not be as favorable as the terms of existing indebtedness; the Company’s inability to maintain its investment grade credit rating with the rating agencies; the Company may be unsuccessful in the management of its relationships with its co-investment partners; the Company may fail to achieve its business objectives; time of actual completion and/or stabilization of development and redevelopment projects; estimates of future income from an acquired property may prove to be inaccurate; future cash flows may be inadequate to meet operating requirements and/or may be insufficient to provide for dividend payments in accordance with REIT requirements; changes in laws or regulations and the anticipated or actual impact of future changes in laws or regulations; unexpected difficulties in leasing of future development projects; volatility in financial and securities markets; the Company’s failure to successfully operate acquired properties; unforeseen consequences from cyber-intrusion; government approvals, actions and initiatives, including the need for compliance with environmental requirements; and those further risks, special considerations, and other factors referred to in the Company’s annual report on Form 10-K for the year ended December 31, 2024, quarterly reports on Form 10-Q, and those risk factors and special considerations set forth in the Company's other filings with the SEC which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. All forward-looking statements are made as of the date hereof, the Company assumes no obligation to update or supplement this information for any reason, and therefore, they may not represent the Company’s estimates and assumptions after the date of this press release.

Definitions and Reconciliations

Non-GAAP financial measures and certain other capitalized terms, as used in this earnings release and supplemental financial information, are defined and further explained on pages S-17.1 through S-17.4, "Reconciliations of Non-GAAP Financial Measures and Other Terms," of the accompanying supplemental financial information. The supplemental financial information is available on the Company's website at www.essex.com.

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