Essex Property Trust — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported Net Income per diluted share of $1.52 for the three months ended September 30, 2026, a 40.6% decrease from $2.56 in the prior year period, primarily driven by gains on sale of real estate and land recognized in Q3 2025.
• Total FFO per diluted share was $3.98 for the quarter, a 1.2% decrease year-over-year; for the nine months ended September 30, 2026, Total FFO per share was $11.47, a 4.7% decrease from $12.03.
• Core FFO per diluted share increased 0.8% year-over-year to $4.00 for the quarter and 1.6% to $12.15 for the nine-month period.
• Same-property revenue grew 3.0% year-over-year and 1.0% sequentially; same-property Net Operating Income (NOI) grew 3.1% year-over-year.
• Total rental and other property revenues were $490.3 million for the quarter and $1.46 billion for the nine months ended September 30, 2026.
• Same-property operating expenses increased 2.8% year-over-year for the quarter and 1.9% for the nine-month period.
• The Company recorded a gain on sale of real estate and land of $6.8 million in the quarter and $8.8 million for the nine-month period.
• Total assets were $12.82 billion as of September 30, 2026, compared to $13.16 billion as of December 31, 2025.
• Total debt, net, was $6.61 billion as of September 30, 2026.

Guidance and Future Outlook:

• Raised full-year 2026 Net Income per diluted share guidance to a range of $5.62–$5.74 (midpoint $5.68), an increase of $0.10 from the previous midpoint.
• Raised full-year 2026 Core FFO per diluted share guidance to a range of $16.10–$16.22 (midpoint $16.16), an increase of $0.02 from the previous midpoint.
• Revised full-year 2026 Same-Property Revenue growth guidance to 2.8%–3.0% (midpoint 2.9%), up 0.10% from the previous midpoint.
• Revised full-year 2026 Same-Property NOI growth guidance to 2.8%–3.2% (midpoint 3.0%), up 0.20% from the previous midpoint.
• Provided Q4 2026 Core FFO guidance of $3.95–$4.07 per diluted share (midpoint $4.01).
• Management noted that Q3 2026 Core FFO exceeded the midpoint of the prior guidance range by $0.01 per share, driven by same-property revenue growth.

Business Segments and Product Lines:

• Same-property revenue growth was driven by scheduled rents (2.5% year-over-year) and other income (0.4% year-over-year).
• Northern California same-property revenue grew 5.4% year-over-year, with San Francisco leading at 8.0% and Santa Clara at 5.7%.
• Southern California same-property revenue grew 1.5% year-over-year, with Orange County leading at 2.7%.
• Seattle Metro same-property revenue grew 1.3% year-over-year.
• The Company disposed of three apartment communities for a total pro rata contract price of $111.9 million.
• In August 2026, the Company sold a 76-unit community in Seattle, WA, for $30.0 million.
• In August 2026, a joint venture in which the Company owned a 58% interest sold a 268-unit community in San Jose, CA, for $122.3 million ($70.9 million pro rata share).
• In July 2026, the Company's joint venture Wesco VII originated two preferred equity investments totaling $36.2 million ($18.1 million pro rata share) yielding an initial preferred return of 11.5%.
• Subsequent to quarter end, the Company acquired a 378-unit community in Oakland, CA, built in 2024, following the liquidation of a $64.2 million subordinated loan and payoff of a $92.3 million senior mortgage.
• The Company has one property in active development (7 South Linden in South San Francisco, CA) with 543 estimated apartment homes.

Market and Competitive Landscape:

• Financial occupancy for the same-property portfolio was 96.3% as of September 30, 2026, compared to 96.0% in the prior year period.
• Average monthly rental rates for the same-property portfolio were $2,777 in Q3 2026, up from $2,709 in Q3 2025.
• The Company operates in selected West Coast markets including Southern California, Northern California, and Seattle Metro.
• The Company holds an investment grade credit rating with Moody's (Baa1, Stable) and Standard & Poor's (BBB+, Stable).

Risks and Challenges:

• The press release notes forward-looking statements involve risks including potential adverse effects from competition, local economic conditions, increased interest rates, inflation, and recessionary impacts.
• Risks include the inability to maintain investment grade credit ratings, unsuccessful management of co-investment relationships, and failure to achieve business objectives.
• Litigation settlements totaling $55.8 million ($36.5 million for RealPage, Inc. and $19.3 million for another matter) were included in General and Administrative expenses for the nine months ended September 30, 2026.
• Political advocacy costs of $2.0 million were included in General and Administrative expenses for the nine months ended September 30, 2026.

Management Commentary and Tone:

• Management highlighted that Core FFO per share growth was driven by same-property revenue growth across all regions, with continued strength in Northern California.
• The tone regarding financial performance was positive regarding the guidance raise and revenue growth, despite the year-over-year decline in Net Income due to prior year one-time gains.

Other Key Points:

• Obtained a $275.0 million unsecured term loan in September 2026 priced at SOFR plus 0.80%, maturing in September 2029 with two one-year extension options.
• Received net cash proceeds of $16.4 million from the settlement of forward sale agreements entered in Q1 2025.
• As of September 30, 2026, the Company had $883.5 million of available authority remaining under its ATM program and $500.0 million of purchase authority remaining under its stock repurchase plan.
• Year-to-date, the Company repurchased 254,001 shares of common stock totaling $61.9 million at an average price of $243.76 per share.
• The Company reported over $1.7 billion of liquidity via available capacity on unsecured credit facilities, cash, and marketable securities as of September 30, 2026.
• The Company has two unsecured line of credit facilities with an aggregate capacity of $1.58 billion and a commercial paper program with a capacity of $750 million.