Essex (NYSE: ESS) nudges up 2026 Core FFO guidance while Northern California leads growth

What happened

Essex Property Trust, Inc. (NYSE: ESS) raised full-year 2026 guidance after third-quarter Core FFO per diluted share rose 0.8% to $4.00.

Core FFO beat the midpoint of the company's own quarterly guidance range by $0.01 per diluted share. Net income per diluted share fell to $1.52 from $2.56 a year earlier. Essex said gains on sales of real estate and land in the third quarter of 2025 drove most of that drop.

The company lifted full-year Core FFO guidance to $16.10 to $16.22 per diluted share. The $16.16 midpoint is $0.02 higher than before. Net income guidance rose by $0.10 at the midpoint to $5.68. The Total FFO midpoint held at $15.48.

Same-property guidance also tightened. Revenue growth is now seen at 2.8% to 3.0%, against 2.5% to 3.1% before. NOI growth is seen at 2.8% to 3.2%, against 2.3% to 3.3%.

Key numbers

Metric	Latest	Change	Source
Core FFO per diluted share, Q3 2026	$4.00	from $3.97, +0.8%	SEC 8-K Exhibit 99.1
Net income per diluted share, Q3 2026	$1.52	from $2.56, -40.6%	SEC 8-K Exhibit 99.1
Total FFO per diluted share, Q3 2026	$3.98	from $4.03, -1.2%	SEC 8-K Exhibit 99.1
Same-property revenue growth, Q3 2026 vs Q3 2025	3.0%		SEC 8-K Exhibit 99.1
Same-property NOI growth, Q3 2026 vs Q3 2025	3.1%		SEC 8-K Exhibit 99.1
2026 Core FFO guidance midpoint per diluted share	$16.16	+$0.02	SEC 8-K Exhibit 99.1

Read more: Essex Property Trust (ESS) company research

Where the growth came from

Northern California carried the quarter. Same-property revenue there grew 5.4% from a year earlier and NOI grew 7.0%. San Francisco revenue rose 8.0%, San Mateo County 6.6% and Santa Clara County 5.7%.

The other regions grew more slowly. Southern California revenue rose 1.5%. Los Angeles County, which is 16.7% of same-property revenue, rose 0.5%. Seattle Metro revenue rose 1.3%, its operating expenses climbed 5.3% and its NOI fell 0.4%.

Rents did the work. Scheduled rents added 2.5% to same-property revenue growth and other income added 0.4%. Vacancy added 0.1%. Delinquency and cash concessions each added nothing. Same-property financial occupancy was 96.3%, compared with 96.0% a year earlier.

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Why it matters

OptimistFi has argued that Essex works if supply-constrained coastal markets keep supporting rent growth while costs and financing stay controlled. This quarter backs the first half. The raised outlook rests on rents, and Northern California is growing fastest.

Costs are the softer spot. Compared with the second quarter, same-property revenue rose 1.0% but operating expenses rose 6.7%. Same-property NOI fell 1.3%.

Earnings quality also needs care. Total FFO fell 1.2% to $3.98 from $4.03 a year earlier, while Core FFO, which strips out non-core items, rose. Over nine months, those items include a $36.5 million settlement of the RealPage, Inc. case, another litigation matter totaling $19.3 million, and political advocacy costs of $2.0 million.

The third quarter also carried a $10.71 million impairment loss, which is added back in FFO. Nine-month Core FFO per diluted share rose 1.6% to $12.15, against $11.96 a year earlier.

Financing, liquidity and buybacks

Financing looks steady. In September Essex obtained a $275.0 million unsecured term loan priced at SOFR plus 0.80%. It matures in September 2029, with two one-year extension options at the company's option. Net interest expense was $63.42 million, against $63.33 million a year earlier.

One rate step is already scheduled. Essex has $600 million of swapped term loan debt. Half is fixed at an all-in 4.1% through April 2030. The other half is fixed at 4.1% only through October 2026, then at 4.5% through January 2031.

Liquidity was over $1.7 billion, counting available credit capacity, cash and marketable securities. The two unsecured credit lines total $1.58 billion. The larger $1.5 billion facility matures in January 2030, plus two six-month extension options.

Essex did not repurchase shares in the third quarter. Year to date it bought 254,001 shares for $61.9 million at an average $243.76. Another $500.0 million of repurchase authority remains. The filing lists a share price of $269.39 as of Sept. 30.

Asset sales and the Oakland community

Essex disposed of three apartment communities in the quarter for a total pro rata contract price of $111.9 million. They included a 76-unit Seattle community sold for $30.0 million. They also included a 268-unit San Jose community sold for $122.3 million by a joint venture in which Essex held 58%. The Seattle sale produced a $6.8 million gain and the San Jose sale a $5.8 million pro rata gain. Both are excluded from Total and Core FFO.

After quarter end, Essex acquired a 378-unit Oakland community built in 2024. The deal followed the liquidation of its $64.2 million subordinated loan interest and the payoff of a $92.3 million senior mortgage. Essex had not accrued income on the investment since the third quarter of 2025. It will consolidate the community in the fourth quarter of 2026.

What's next

Management hosts an earnings call on Oct. 28 at 9 a.m. PT (12 p.m. ET). Fourth-quarter Core FFO guidance is $3.95 to $4.07 per diluted share, with a $4.01 midpoint. That is the next figure to test.

Another quarter in which same-property expenses outpace revenue would weaken the case. Northern California rents holding up and the Oakland community adding income once consolidated would support it.

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