Research · Sep 3, 2026
[ESS] Essex Property Trust Thesis 2026: Northern California Outperforms as Supply Cycle Eases
Essex Property Trust Inc. FY25 revenue $1.90B (+7%); op income $834M (+19%); NI $672M; EPS $10.41. Q4 blended lease rate growth +1.9%; occupancy 96.3% (+20bp sequential); concessions ~1 week. Q4 regional: Northern California best (tech sector expansion + migration + limited housing supply), Seattle second, Southern California third; LA occupancy +70bp sequential. FY same-store revenue growth at high end of guidance; FFO/share above midpoint. 2025 saw $12.6B non-portfolio institutional multifamily transactions (+43% YoY); cap rates compressed especially in Northern California and Seattle; Essex was largest NorCal investor over past 2 years with NAV appreciation. FCF $1.07B (+15% YoY). FY26 base case: same-store revenue growth led by NorCal; supply -20% YoY; same-store NOI +2.1% midpoint; same-property expense +3% midpoint (controllable expenses up ~2%, insurance -5%, utilities + property taxes higher); core FFO/share expected flat YoY (structured finance redemption non-recurring headwind).