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Essex Property Trust Inc ESS

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Rent Concessions and Delinquencies Continue to Weigh Down Essex Operating Results in Q4

Kevin Brown Equity Analyst

Analyst Note

| Kevin Brown |

Essex Property Trust missed our fourth-quarter estimates, but there was nothing reported this quarter that would significantly impact our $273 fair value estimate for the no-moat company. For the second quarter in a row Essex reported a sequential occupancy increase with same-store occupancy rising 50 basis points to 96.5%, better than our estimate of a 50-basis-point decline. The fourth quarter's year-over-year average rental rate decline of 1.9% was also better than our estimate of a 3.3% decline. However, same-store revenue declined 8.0% as delinquencies and rent concessions dragged down the result by 5.8% combined, far worse than we had anticipated. Combined with operating expenses increasing 4.6%, Essex reported a fourth-quarter net operating income decline of 12.7% that was worse than the 9.9% drop we thought it might see, and core funds from operations fell 12.5% to $3.02 per share.

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Company Profile

Business Description

Essex Property Trust owns a portfolio of 250 apartment communities with over 60,000 units and is developing four additional properties with 955 units. The company focuses on owning large, high-quality properties on the West Coast in the urban and suburban submarkets of Southern California, Northern California, and Seattle.

1100 Park Place, Suite 200
San Mateo, CA, 94403
T +1 650 655-7800
Sector Real Estate
Industry REIT - Residential
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Hard Assets
Employees 1,799