Third Quarter 2026
Filed Oct 27, 2026Essex Announces Third Quarter 2026 Results and Raises Full-Year 2026 Guidance
Core FFO per diluted share grew 0.8%, same-property revenue and NOI grew 3.0% and 3.1%, respectively, and the Company raised full-year 2026 net income, Core FFO, same-property revenue and same-property NOI guidance. GAAP net income per diluted share declined 40.6%, primarily due to gains on sale of real estate and land recognized in the third quarter of 2025.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Q3 2026 total revenuesGAAP | $492.7M | – | – |
| Q3 2026 rental and other property revenueGAAP | $490.3M | – | – |
| Q3 2026 management and other fees from affiliatesGAAP | $2.34M | – | – |
| Q3 2026 property operating expensesGAAP | $149.5M | – | – |
| Q3 2026 depreciation and amortizationGAAP | $152.6M | – | – |
| Q3 2026 general and administrativeGAAP | $16.56M | – | – |
| Q3 2026 gain on sale of real estate and landGAAP | $6.78M | – | – |
| Q3 2026 earnings from operationsGAAP | $156.8M | – | – |
| Q3 2026 interest expense, netGAAP | $63.42M | – | – |
| Q3 2026 net incomeGAAP | $103.7M | – | – |
| Q3 2026 net income available to common stockholdersGAAP | $98.07M | – | – |
| Q3 2026 net income per share dilutedGAAP | $ 1.52 | – | -40.6% |
| Q3 2026 FFO attributable to common stockholders and unitholdersnon-GAAP | $264.7M | – | – |
| Q3 2026 FFO per share dilutednon-GAAP | $ 3.98 | – | -1.2% |
| Q3 2026 Core FFO attributable to common stockholders and unitholdersnon-GAAP | $266.2M | – | – |
| Q3 2026 Core FFO per share dilutednon-GAAP | $ 4.00 | – | 0.8% |
| Q3 2026 NOInon-GAAP | $340.9M | – | – |
| Q3 2026 same-property NOInon-GAAP | $313.2M | -1.3% | 3.1% |
| Q3 2026 same-property revenueother | $449.9M | 1.0% | 3.0% |
| Q3 2026 same-property operating expensesother | $136.7M | 6.7% | 2.8% |
| Q3 2026 same-property financial occupancyother | 96.3% | – | – |
| Nine months ended September 30, 2026 total revenuesGAAP | $1.47B | – | – |
| Nine months ended September 30, 2026 net incomeGAAP | $282.9M | – | – |
| Nine months ended September 30, 2026 net income per share dilutedGAAP | $ 4.14 | – | -54.8% |
| Nine months ended September 30, 2026 FFO per share dilutednon-GAAP | $ 11.47 | – | -4.7% |
| Nine months ended September 30, 2026 Core FFO per share dilutednon-GAAP | $ 12.15 | – | 1.6% |
| Nine months ended September 30, 2026 same-property NOInon-GAAP | $942.4M | – | 3.3% |
| Nine months ended September 30, 2026 same-property revenueother | $1.34B | – | 2.9% |
| Nine months ended September 30, 2026 same-property operating expensesother | $395.0M | – | 1.9% |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Total Southern California same-property revenueSame-property revenue growth was led by Orange County at 2.7%, followed by San Diego County at 2.1%. | $185.5M | 0.4% | 1.5% |
| Total Northern California same-property revenueSan Francisco grew 8.0%, San Mateo County grew 6.6%, and Santa Clara County grew 5.7%. | $184.7M | 1.7% | 5.4% |
| Seattle Metro same-property revenueFinancial occupancy was 96.1%, unchanged from Q3 2025. | $79.71M | 0.8% | 1.3% |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
Full-Year 2026 and Fourth Quarter 2026 outlook
- RevenueSame-Property Revenue 2.8% to 3.0%
- Operating expensesSame-Property Operating Expenses 2.6% to 2.9%
- NoteNet Income per diluted share $5.62 - $5.74
- NoteTotal FFO per diluted share $15.42 - $15.54
- NoteCore FFO per diluted share $16.10 - $16.22
- NoteQ4 2026 Core FFO per diluted share $3.95 - $4.07
- NoteSame-Property NOI 2.8% to 3.2%
- NoteFull-year Total NOI from Consolidated Communities $ 1,372,400 to $ 1,378,600 (dollars in thousands)
- NoteFull-year net interest expense $ (260,600 ) to $ (259,000 ) (dollars in thousands)
Capital returns
- During the third quarter of 2026, the Company did not repurchase any shares through its stock repurchase plan.
- Year-to-date, the Company repurchased 254,001 shares of its common stock totaling $61.9 million, including commissions, at an average price per share of $243.76.
- As of September 30, 2026, the Company had $500.0 million of purchase authority remaining under its stock repurchase plan.
- The Company received net cash proceeds of $16.4 million from settlement of forward sale agreements by issuing 52,600 shares of common stock at a weighted average price of $311.13 per share, net of commissions.
What drove it
- Same-property scheduled rents contributed 2.5% to Q3 2026 year-over-year same-property revenue growth, while other income contributed 0.4%.
- Northern California same-property revenue grew 5.4%, compared with 1.5% in Southern California and 1.3% in Seattle Metro.
- Q3 same-property financial occupancy was 96.3%, compared with 96.0% in Q3 2025.
- The Company sold three apartment communities during Q3 for a total pro rata contract price of $111.9 million.
- Wesco VII originated two preferred equity investments totaling $36.2 million, or $18.1 million at pro rata share, with an initial preferred return of 11.5%.
Concerns
- GAAP net income per diluted share declined to $1.52 from $2.56, primarily due to gains on sale of real estate and land recognized in the third quarter of 2025.
- Q3 same-property operating expenses increased 2.8%, while sequential same-property operating expenses increased 6.7%, resulting in sequential same-property NOI decline of 1.3%.
- Seattle Metro same-property NOI declined 0.4% year over year as revenue increased 1.3% and operating expenses increased 5.3%.
- The Company recorded an impairment loss of $ 10,709 (dollars in thousands) in Q3 2026.
- During the nine months ended September 30, 2026, the Company reached a settlement related to RealPage, Inc. totaling $36.5 million and another litigation matter totaling $19.3 million.
What to watch
- Achievement of the revised full-year same-property revenue guidance range of 2.8% to 3.0% and same-property NOI guidance range of 2.8% to 3.2%.
- Q4 2026 Core FFO per diluted share against the guidance range of $3.95 - $4.07.
- Northern California revenue growth, particularly in San Francisco, San Mateo County and Santa Clara County.
- Operating-expense trajectory following the 6.7% sequential increase in Q3 same-property operating expenses.
- Consolidation in Q4 2026 of the 378-unit Oakland, CA community acquired subsequent to quarter end.
- The maturity and refinancing profile following the new $275.0 million unsecured term loan and the Company’s 5.4 Net Indebtedness Divided by Adjusted EBITDAre, normalized and annualized ratio.
Balance sheet and cash flow
- Cash and cash equivalents, including restricted cash, were $ 80,298 (dollars in thousands) as of September 30, 2026.
- Marketable securities were $ 102,665 (dollars in thousands) as of September 30, 2026.
- Unsecured debt, net was $ 5,844,670 (dollars in thousands) and mortgage notes payable, net was $ 761,144 (dollars in thousands) as of September 30, 2026.
- Total debt, net was $ 6,605,814 (dollars in thousands), with a 3.8% weighted average interest rate and 6.6 weighted average maturity in years.
- In September 2026, the Company obtained a $275.0 million unsecured term loan scheduled to mature in September 2029, with two one-year extension options, priced at SOFR plus 0.80%.
- As of September 30, 2026, the Company had over $1.7 billion of liquidity via available capacity on unsecured credit facilities, cash and cash equivalents, and marketable securities.
- Operating cash flow and free cash flow were not reported.
Analysis
Essex delivered a solid operating quarter, with Core FFO per diluted share of $4.00, up 0.8% from $3.97, and $0.01 above the midpoint of its prior quarterly guidance range. Same-property revenue increased 3.0% and same-property NOI increased 3.1%. The operating result was supported by 2.5% growth in scheduled rents and 0.4% contribution from other income. Financial occupancy reached 96.3%, compared with 96.0% in the prior-year quarter.
Northern California remained the principal source of portfolio momentum. Same-property revenue rose 5.4% in Northern California, led by San Francisco at 8.0%, San Mateo County at 6.6%, and Santa Clara County at 5.7%. Southern California grew 1.5% and Seattle Metro grew 1.3%. Sequentially, portfolio same-property revenue increased 1.0%, with Northern California up 1.7%. Expense growth was a counterweight: same-property operating expenses rose 2.8% year over year and 6.7% sequentially, producing a 1.3% sequential decline in same-property NOI.
GAAP earnings declined because prior-year disposition gains were substantially larger. Net income per diluted share was $1.52 versus $2.56, and the Company cited gains on sale of real estate and land recognized in the third quarter of 2025 as the primary cause. Q3 2026 included a $ 6,781 gain on sale of real estate and land, compared with $ 62,320 in the prior-year period, as well as an impairment loss of $ 10,709. Core FFO excluded these non-core effects, providing the clearer view of underlying operations.
Capital allocation included the disposition of three apartment communities for a total pro rata contract price of $111.9 million and two preferred equity investments totaling $36.2 million, or $18.1 million at pro rata share, with an initial preferred return of 11.5%. The Company also obtained a $275.0 million unsecured term loan at SOFR plus 0.80%. Year-to-date repurchases totaled $61.9 million for 254,001 shares, while $500.0 million of repurchase authority remained. The Company reported over $1.7 billion of liquidity.
Management raised full-year guidance for net income per diluted share to $5.62 - $5.74, Core FFO per diluted share to $16.10 - $16.22, same-property revenue growth to 2.8% to 3.0%, and same-property NOI growth to 2.8% to 3.2%. Total FFO per diluted share guidance of $15.42 - $15.54 and same-property operating-expense growth guidance of 2.6% to 2.9% were unchanged at the midpoint. The fourth-quarter Core FFO outlook is $3.95 - $4.07 per diluted share.
Not in the filing
stated, not guessed- Prior outlook section was not provided, so no comparison of reported results with prior guidance was made.
- Cash flow from operating activities was not reported.
- Free cash flow was not reported.
- Dividend declaration or payment information was not reported.
- Gross margin was not reported.
- A company-wide segment revenue presentation was not reported; geographic segment entries reflect same-property revenue results.
- No named executive quotations were included in the filing text.
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.