ESSEX PROPERTY TRUST, INC. (ESS)
SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts
SEC company page: https://www.sec.gov/edgar/browse/?CIK=920522. Latest filing source: 0000920522-26-000003.
Informational only. Descriptive public-record data — not a rating, forecast, or investment advice. See Disclaimer.
At a glance
- Revenue
- 1,887,345,000 USD verified
- Net income
- 702,773,000 USD verified
- Assets
- 13,159,009,000 USD verified
- Net margin
- 37.24% computed
- Operating margin
- 47.65% computed
- Revenue YoY
- +6.36% computed
- ROE
- 12.68% computed
Peer & cluster context
Peer percentile fingerprint
Percentile = share of the N covered peers reporting that ratio whose value is lower (ties counted half); computed among grepcent-covered companies in SIC industry 6798 Real Estate Investment Trusts, not the whole market. A higher percentile means a higher value of the ratio, not a better company. Ratios with fewer than 8 reporting peers are omitted. Latest reported values per company; fiscal periods may differ. Descriptive arithmetic - not a score, rating, or ranking.
Selected Fundamentals
| Metric | Value | Unit | FY | Filed |
|---|---|---|---|---|
| Revenue | 1,887,345,000 | USD | 2025 | 2026-02-20 |
| Net income | 702,773,000 | USD | 2025 | 2026-02-20 |
| Assets | 13,159,009,000 | USD | 2025 | 2026-02-20 |
Financials
Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-02-20. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000920522.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | 1,363,899,000 | 1,400,053,000 | 1,460,155,000 | 1,495,748,000 | 1,440,556,000 | 1,606,814,000 | 1,669,395,000 | 1,774,450,000 | 1,887,345,000 | |
| Net income | 438,410,000 | 458,043,000 | 413,599,000 | 464,448,000 | 599,332,000 | 515,691,000 | 432,985,000 | 430,708,000 | 811,306,000 | 702,773,000 |
| Operating income | 420,800,000 | 472,945,000 | 511,989,000 | 481,112,000 | 491,441,000 | 529,995,000 | 595,229,000 | 584,342,000 | 703,095,000 | 899,316,000 |
| Gross profit | 1,128,406,000 | 1,170,506,000 | 1,242,649,000 | 1,318,978,000 | ||||||
| Diluted EPS | 6.27 | 6.57 | 5.90 | 6.66 | 8.69 | 7.51 | 6.27 | 6.32 | 11.54 | 10.40 |
| Operating cash flow | 716,792,000 | 769,607,000 | 826,554,000 | 919,079,000 | 803,108,000 | 905,259,000 | 975,649,000 | 980,064,000 | 1,068,305,000 | 1,074,423,000 |
| Share buybacks | 1,045,000 | 0.00 | 51,233,000 | 56,989,000 | 269,315,000 | 9,172,000 | 189,726,000 | 95,657,000 | 0.00 | 0.00 |
| Assets | 12,217,408,000 | 12,495,706,000 | 12,383,596,000 | 12,705,405,000 | 12,936,177,000 | 12,997,873,000 | 12,372,905,000 | 12,361,427,000 | 12,927,359,000 | 13,159,009,000 |
| Liabilities | 5,880,487,000 | 6,059,675,000 | 5,954,277,000 | 6,264,491,000 | 6,720,746,000 | 6,786,699,000 | 6,450,639,000 | 6,735,244,000 | 7,176,120,000 | 7,422,114,000 |
| Stockholders' equity | 6,192,178,000 | 6,277,406,000 | 6,267,073,000 | 6,220,427,000 | 6,000,410,000 | 5,993,603,000 | 5,716,372,000 | 5,422,746,000 | 5,537,046,000 | 5,541,372,000 |
| Cash and cash equivalents | 64,921,000 | 44,620,000 | 134,465,000 | 70,087,000 | 73,629,000 | 48,420,000 | 33,295,000 | 391,749,000 | 66,795,000 | 76,241,000 |
Ratios
| Metric | 2016 | 2017 | 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|---|---|---|---|---|
| Net margin | 33.58% | 29.54% | 31.81% | 40.07% | 35.80% | 26.95% | 25.80% | 45.72% | 37.24% | |
| Operating margin | 34.68% | 36.57% | 32.95% | 32.86% | 36.79% | 37.04% | 35.00% | 39.62% | 47.65% | |
| Return on equity | 7.08% | 7.30% | 6.60% | 7.47% | 9.99% | 8.60% | 7.57% | 7.94% | 14.65% | 12.68% |
| Return on assets | 3.59% | 3.67% | 3.34% | 3.66% | 4.63% | 3.97% | 3.50% | 3.48% | 6.28% | 5.34% |
| Liabilities / equity | 0.95 | 0.97 | 0.95 | 1.01 | 1.12 | 1.13 | 1.13 | 1.24 | 1.30 | 1.34 |
Industry Peer Context
Net margin peer context
Operating margin peer context
ROE peer context
ROA peer context
Financial Bridges
Income statement bridge from reported figures
Figure provenance: SEC companyfacts FY 2025. Revenue: accession 0000920522-26-000003; concept Revenues; source concepts us-gaap:Revenues | Gross profit: accession 0000920522-26-000003; concept GrossProfit; source concepts us-gaap:GrossProfit | Operating income: accession 0000920522-26-000003; concept OperatingIncomeLoss; source concepts us-gaap:OperatingIncomeLoss | Net income: accession 0000920522-26-000003; concept ProfitLoss; source concepts us-gaap:ProfitLoss
Financial Charts
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: Revenues. Source concepts: us-gaap:Revenues.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: ProfitLoss. Source concepts: us-gaap:ProfitLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: OperatingIncomeLoss. Source concepts: us-gaap:OperatingIncomeLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: GrossProfit. Source concepts: us-gaap:GrossProfit.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: NetCashProvidedByUsedInOperatingActivities. Source concepts: us-gaap:NetCashProvidedByUsedInOperatingActivities.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: PaymentsForRepurchaseOfCommonStock. Source concepts: us-gaap:PaymentsForRepurchaseOfCommonStock.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: Assets. Source concepts: us-gaap:Assets.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: Liabilities. Source concepts: us-gaap:Liabilities.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: StockholdersEquity. Source concepts: us-gaap:StockholdersEquity.
Figure provenance: SEC companyfacts. Latest point: FY 2025 ended 2025-12-31; accession 0000920522-26-000003; filed 2026-02-20. Concept: CashAndCashEquivalentsAtCarryingValue. Source concepts: us-gaap:CashAndCashEquivalentsAtCarryingValue.
As-reported value updates
Quarterly
Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-07-30. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000920522.json.
| Quarter | End Date | Revenue | Net Income | Diluted EPS | Method |
|---|---|---|---|---|---|
| 2022-Q3 | 2022-09-30 | 1.43 | reported discrete quarter | ||
| 2023-Q1 | 2023-03-31 | 2.38 | reported discrete quarter | ||
| 2023-Q2 | 2023-06-30 | 1.55 | reported discrete quarter | ||
| 2023-Q3 | 2023-09-30 | 419,183,000 | 93,009,000 | 1.36 | reported discrete quarter |
| 2023-Q4 | 2023-12-31 | 421,748,000 | 70,349,000 | derived Q4 = FY annual - nine-month YTD | |
| 2024-Q1 | 2024-03-31 | 426,928,000 | 285,140,000 | 4.25 | reported discrete quarter |
| 2024-Q2 | 2024-06-30 | 442,355,000 | 98,986,000 | 1.45 | reported discrete quarter |
| 2024-Q3 | 2024-09-30 | 450,698,000 | 125,487,000 | 1.84 | reported discrete quarter |
| 2024-Q4 | 2024-12-31 | 454,469,000 | 301,693,000 | derived Q4 = FY annual - nine-month YTD | |
| 2025-Q1 | 2025-03-31 | 464,583,000 | 212,778,000 | 3.16 | reported discrete quarter |
| 2025-Q2 | 2025-06-30 | 469,833,000 | 231,526,000 | 3.44 | reported discrete quarter |
| 2025-Q3 | 2025-09-30 | 473,303,000 | 172,724,000 | 2.56 | reported discrete quarter |
| 2025-Q4 | 2025-12-31 | 479,626,000 | 85,745,000 | derived Q4 = FY annual - nine-month YTD | |
| 2026-Q1 | 2026-03-31 | 484,756,000 | 112,208,000 | 1.65 | reported discrete quarter |
| 2026-Q2 | 2026-06-30 | 489,049,000 | 66,929,000 | 0.97 | reported discrete quarter |
Quarterly Charts
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000920522-26-000022; filed 2026-07-30. Concept: Revenues. Source concepts: us-gaap:Revenues.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000920522-26-000022; filed 2026-07-30. Concept: ProfitLoss. Source concepts: us-gaap:ProfitLoss.
Figure provenance: SEC companyfacts. Latest point: FY 2026 ended 2026-06-30; accession 0000920522-26-000022; filed 2026-07-30. Concept: EarningsPerShareDiluted. Source concepts: us-gaap:EarningsPerShareDiluted.
Business
Read ESS's verbatim Item 1 Business section from its latest 10-K: Business.
Risk Factors
Read ESS's verbatim Item 1A Risk Factors from its latest 10-K: Risk Factors.
Latest quarter (10-Q)
Latest 10-Q source: 0000920522-26-000022.
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the Company’s Condensed Consolidated Financial Statements and accompanying Notes thereto included elsewhere herein and with the Company’s 2025 annual report on Form 10-K for the year ended December 31, 2025. Capitalized terms not defined in this section have the meaning ascribed to them elsewhere in this quarterly report on Form 10-Q. The Company makes statements in this section that are forward-looking statements within the meaning of the federal securities laws. For a complete discussion of forward-looking statements, see the section in this Form 10-Q entitled “Forward-Looking Statements.”
Essex is a self-administered and self-managed REIT that acquires, develops, redevelops, and manages apartment home communities in selected residential areas located on the West Coast of the United States. Essex owns all of its interests in its real estate investments, directly or indirectly through the Operating Partnership. Essex is the sole general partner of the Operating Partnership and, as of June 30, 2026, had an approximately 96.7% general partner interest in the Operating Partnership.
The Company’s investment strategy has two components: constant monitoring of existing markets, and evaluation of new markets to identify areas with the characteristics that underlie rental growth. The Company’s strong financial condition supports its investment strategy by enhancing its ability to quickly shift acquisition, development, redevelopment, and disposition activities to markets that will optimize the performance of the Company’s Portfolio.
As of June 30, 2026, the Company owned or had ownership interests in 258 operating apartment communities, comprising 62,881 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, two operating commercial buildings, and a development pipeline comprised of one consolidated project and various predevelopment projects.
The Company’s apartment home communities are predominantly located in the following major regions:
Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties)
Northern California (the San Francisco Bay Area)
Seattle Metro (the Seattle metropolitan area)
The Company’s consolidated operating communities were as follows:
| June 30, 2026 | June 30, 2025 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Apartment Homes | % | Apartment Homes | % | ||||||||
| Southern California | 23,616 | 42 | % | 23,222 | 42 | % | |||||
| Northern California | 21,101 | 38 | % | 21,027 | 38 | % | |||||
| Seattle Metro | 10,899 | 20 | % | 10,899 | 20 | % | |||||
| Total | 55,616 | 100 | % | 55,148 | 100 | % |
Co-investments, including Wesco I, Wesco III, Wesco IV, Wesco V, Wesco VI, BEX IV and other co-investments, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.
Market Considerations
Domestic and international policy actions, including tariff and trade policy, as well as continuing geopolitical tensions, war and regional conflicts have the potential to trigger market uncertainty. The long-term impact of these developments on our Company will largely depend on the impact on broader trends in job growth, inflation, the economy, and reactions by consumers, companies, governmental entities and capital market participants.
The foregoing macroeconomic conditions have not negatively impacted the Company’s ability to access traditional funding sources which have been historically available to it. The Company is not at material risk of failing to meet the covenants in its credit agreements and is able to timely service its debt and other obligations.
38
Table of Contents
RESULTS OF OPERATIONS
Comparison of the Three Months Ended June 30, 2026 to the Three Months Ended June 30, 2025
The average financial occupancy for the Company’s 2026 Same-Property portfolio (stabilized properties consolidated by the Company for the quarters ended June 30, 2026 and 2025) was 96.3% and 96.2% for the three months ended June 30, 2026 and 2025, respectively. Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. The Company believes that financial occupancy is a meaningful measure of occupancy because it considers the value of each vacant apartment home at its estimated market rate.
Market rates are determined using the recently signed effective rates on new leases at the property and are used as the starting point in the determination of the market rates of vacant apartment homes. The Company may increase or decrease these rates based on a variety of factors, including overall supply and demand for housing, concentration of new apartment deliveries within the same submarket which can cause periodic disruption due to greater rental concessions to increase leasing velocity, and rental affordability. Financial occupancy may not completely reflect short-term trends in physical occupancy and financial occupancy rates, and the Company’s calculation of financial occupancy may not be comparable to financial occupancy disclosed by other REITs.
The Company does not take into account delinquency and concessions to calculate actual rent for occupied apartment homes and market rents for vacant apartment homes. The calculation of financial occupancy compares contractual rates for occupied apartment homes to estimated market rents for unoccupied apartment homes, and thus the calculation compares the gross value of all apartment homes excluding delinquency and concessions. For apartment communities that are development properties in lease-up without stabilized occupancy figures, the Company believes the physical occupancy rate is the appropriate performance metric. While an apartment community is in the lease-up phase, the Company’s primary motivation is to stabilize the property, which may entail the use of rent concessions and other incentives, and thus financial occupancy, which is based on contractual income, is not considered the best metric to quantify occupancy.
The regional breakdown of the Company’s 2026 Same-Property portfolio for financial occupancy for the three months ended June 30, 2026 and 2025 was as follows:
| Three Months Ended June 30, | |||||
|---|---|---|---|---|---|
| 2026 | 2025 | ||||
| Southern California | 95.7 | % | 95.6 | % | |
| Northern California | 96.8 | % | 96.6 | % | |
| Seattle Metro | 96.4 | % | 96.4 | % |
The following table provides a breakdown of rental and other property revenues, including the revenues attributable to the 2026 Same-Property portfolio ($ in thousands):
| Number of Apartment Homes | Three Months Ended June 30, | Dollar Change | Percentage Change | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2026 | 2025 | |||||||||||||||||
| 2026 Same-Property: | ||||||||||||||||||
| Southern California | 22,389 | $ | 184,753 | $ | 182,005 | $ | 2,748 | 1.5 | % | |||||||||
| Northern California | 18,847 | 181,650 | 174,068 | 7,582 | 4.4 | % | ||||||||||||
| Seattle Metro | 10,899 | 79,632 | 78,297 | 1,335 | 1.7 | % | ||||||||||||
| Total 2026 Same-Property | 52,135 | 446,035 | 434,370 | 11,665 | 2.7 | % | ||||||||||||
| 2026 Non-Same Property | 40,696 | 33,240 | 7,456 | 22.4 | % | |||||||||||||
| Total rental and other property revenues | $ | 486,731 | $ | 467,610 | $ | 19,121 | 4.1 | % |
39
Table of Contents
2026 Same-Property Revenues increased by $11.7 million or 2.7% to $446.0 million for the second quarter of 2026 from $434.4 million for the second quarter of 2025. The increase was primarily attributable to an increase of 2.2% in average rental rates from $2,683 per apartment home for the second quarter of 2025 to $2,743 per apartment home for the second quarter of 2026.
2026 Non-Same Property Revenues increased by $7.5 million or 22.4% to $40.7 million in the second quarter of 2026 from $33.2 million in the second quarter of 2025. The increase was primarily due to the acquisitions of Revere Campbell, The Parc at Pruneyard, ViO, 1250 Lakeside, and the consolidation of Artizan and Skylux on Wilshire (fka TENTEN Downtown) in 2025. The increases were partially offset by the sale of The Grand, and Fourth & U in 2025.
Property operating expenses, excluding real estate taxes increased by $3.2 million or 3.7% to $89.6 million for the second quarter of 2026 compared to $86.4 million for the second quarter of 2025, primarily due to acquisitions in 2025 identified in the Non-Same Property Revenues section above and the increase of Same-Property operating expenses discussed below, partially offset by dispositions in 2025. Same-Property operating expenses, excluding real estate taxes, increased by $2.1 million or 2.6% to $83.2 million in the second quarter of 2026 compared to $81.1 million in the second quarter of 2025, primarily due to an increase of $2.2 million in utilities expenses resulting from increases in trash removal, gas, water and sewer costs.
Real estate taxes increased by $2.4 million or 4.9% to $51.4 million for the second quarter of 2026 compared to $49.0 million for the second quarter of 2025, primarily due to the acquisitions in 2025 identified in the Non-Same Property Revenues section above and increases in assessed values. Same-Property real estate taxes increased by $1.4 million or 3.3% to $46.0 million for the second quarter of 2026 compared to $44.6 million for the second quarter of 2025, primarily due to an increase in assessed values.
Depreciation and amortization expense increased by $2.6 million or 1.7% to $154.1 million for the second quarter of 2026 compared to $151.5 million for the second quarter of 2025, primarily due to acquisitions in 2025 identified in the Non-Same Property Revenues section above, partially offset by dispositions in 2025.
General and administrative expense increased by $55.9 million or 325.0% to $73.1 million for the second quarter of 2026 compared to $17.2 million for the second quarter of 2025, primarily due to legal settlement costs of $36.5 million to fully resolve its case related to RealPage and $19.3 million related to another litigation matter.
Gain on sale of real estate and land of $2.0 million for the second quarter of 2026 was due to the recognition of contingent consideration related to a previous sale of a land parcel in 2023. Gain on sale of real estate and land of $126.2 million for the second quarter of 2025 was attributable to the disposition of Essex Skyline.
Interest expense increased by $1.5 million or 2.3% to $66.8 million for the second quarter of 2026 compared to $65.3 million for the second quarter of 2025, primarily due to the issuance in December 2025 of $350.0 million senior unsecured notes due February 2036 and borrowing on the $300.0 million unsecured term loan in 2025 which resulted in an increase in interest expense of $7.5 million for the second quarter of 2026. These increases to interest expense were partially offset by various debt that was paid off, matured, or regular principal amortization during and after the second quarter of 2025, but primarily due to the payoff of $450.0 million of senior unsecured notes due April 2026, which resulted in a decrease in interest expense of $5.2 million for the second quarter of 2026. Additionally, there was an incr
[Excerpt truncated for page length; source filing is linked above.]
Latest 10-K MD&A (excerpt)
Latest 10-K Item 7 source: 0000920522-26-000003. The complete FY 2025 MD&A is published at /company/ESS/mda/fy2025/.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements and notes thereto. These consolidated financial statements include all adjustments which are, in the opinion of management, necessary to reflect a fair statement of the results and all such adjustments are of a normal recurring nature.
OVERVIEW
Essex is a self-administered and self-managed REIT that acquires, develops, redevelops, and manages apartment home communities in selected residential areas located on the West Coast of the United States. Essex owns all of its interests in its real estate investments, directly or indirectly, through the Operating Partnership. Essex is the sole general partner of the Operating Partnership and, as of December 31, 2025, had an approximately 96.6% general partner interest in the Operating Partnership.
The Company’s investment strategy has two components: constant monitoring of existing markets, and evaluation of new markets to identify areas with the characteristics that underlie rental growth. The Company’s strong financial condition supports its investment strategy by enhancing its ability to quickly shift acquisition, development, redevelopment, and disposition activities to markets that will optimize the performance of the Company’s portfolio.
As of December 31, 2025, the Company owned or had ownership interests in 259 operating apartment communities, comprising 63,077 apartment homes, excluding the Company’s ownership in preferred equity co-investments, loan investments, two operating commercial buildings and a development pipeline comprised of one consolidated project and various predevelopment projects.
The Company’s apartment home communities are predominately located in the following major regions:
Southern California (primarily Los Angeles, Orange, San Diego, and Ventura counties)
Northern California (the San Francisco Bay Area)
Seattle Metro (Seattle metropolitan area)
By region, the Company’s operating results for 2025 and 2024 and projection for 2026 new housing supply (defined as new multifamily apartment homes and single family homes, excluding developments with fewer than 50 apartment homes as well as student, senior and 100% affordable housing) are as follows:
Southern California Region: As of December 31, 2025, this region represented 42% of the Company’s consolidated operating apartment homes. Revenues for “2025 Same-Properties” (as defined below), or “Same-Property revenues,” increased 3.3% in 2025 as compared to 2024.
Northern California Region: As of December 31, 2025, this region represented 38% of the Company’s consolidated operating apartment homes. 2025 Same-Property revenues increased 3.6% in 2025 as compared to 2024.
Seattle Metro Region: As of December 31, 2025, this region represented 20% of the Company’s consolidated operating apartment homes. 2025 Same-Property revenues increased 2.8% in 2025 as compared to 2024.
In each of these regions, projected 2026 growth in new residential supply of apartment homes and single family homes is expected to be less than 1% of the total housing stock.
The Company’s consolidated operating communities as of December 31, 2025 and 2024 were as follows:
| December 31, 2025 | December 31, 2024 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Apartment Homes | % | Apartment Homes | % | ||||||||
| Southern California | 23,598 | 42 | % | 23,817 | 44 | % | |||||
| Northern California | 21,097 | 38 | % | 19,747 | 36 | % | |||||
| Seattle Metro | 10,899 | 20 | % | 10,899 | 20 | % | |||||
| Total | 55,594 | 100 | % | 54,463 | 100 | % |
38
Table of Contents
Co-investments, including Wesco I, Wesco III, Wesco IV, Wesco V, Wesco VI, BEX IV, and other co-investments, developments under construction, and preferred equity interest co-investment communities are not included in the table presented above for both periods.
Market Considerations
Domestic and international policy actions, including tariff and trade policy, as well as continuing geopolitical tensions and regional conflicts have the potential to trigger broad market uncertainty. The long-term impact of these developments on our company will largely depend on the impact on broader trends in job growth, inflation, the economy, and reactions by consumers, companies, governmental entities and capital market participants.
The foregoing macroeconomic conditions have not negatively impacted the Company’s ability to access traditional funding sources which have been historically available to it. The Company is not at material risk of failing to meet the covenants in its credit agreements and is able to timely service its debt and other obligations.
RESULTS OF OPERATIONS
Comparison of Year Ended December 31, 2025 to the Year Ended December 31, 2024
The average financial occupancy for the Company’s 2025 Same-Property portfolio (stabilized properties consolidated by the Company for the years ended December 31, 2025 and 2024) was 96.2% for each of the years ended December 31, 2025 and 2024. Financial occupancy is defined as the percentage resulting from dividing actual rental income by total scheduled rental income. Actual rental income represents contractual rental income pursuant to leases without considering delinquency and concessions. Total scheduled rental income represents the value of all apartment homes, with occupied apartment homes valued at contractual rental rates pursuant to leases and vacant apartment homes valued at estimated market rents. The Company believes that financial occupancy is a meaningful measure of occupancy because it considers the value of each vacant apartment home at its estimated market rate.
Market rates are determined using the recently signed effective rates on new leases at the property and are used as the starting point in the determination of the market rates of vacant apartment homes. The Company may increase or decrease these rates based on a variety of factors, including overall supply and demand for housing, concentration of new apartment deliveries within the same submarket which can cause periodic disruption due to greater rental concessions to increase leasing velocity, and rental affordability. Financial occupancy may not completely reflect short-term trends in physical occupancy and financial occupancy rates, and the Company’s calculation of financial occupancy may not be comparable to financial occupancy disclosed by other REITs.
The Company does not take into account delinquency and concessions to calculate actual rent for occupied apartment homes and market rents for vacant apartment homes. The calculation of financial occupancy compares contractual rates for occupied apartment homes to estimated market rents for unoccupied apartment homes, and thus the calculation compares the gross value of all apartment homes excluding delinquency and concessions. For apartment communities that are development properties in lease-up without stabilized occupancy figures, the Company believes the physical occupancy rate is the appropriate performance metric. While an apartment community is in the lease-up phase, the Company’s primary motivation is to stabilize the property, which may entail the use of rent concessions and other incentives, and thus financial occupancy, which is based on contractual income, is not considered the best metric to quantify occupancy.
The regional breakdown of the Company’s 2025 Same-Property portfolio for financial occupancy for the years ended December 31, 2025 and 2024 was as follows:
| Year Ended December 31, | |||||
|---|---|---|---|---|---|
| 2025 | 2024 | ||||
| Southern California | 95.9 | % | 95.8 | % | |
| Northern California | 96.5 | % | 96.3 | % | |
| Seattle Metro | 96.2 | % | 96.7 | % |
The following table provides a breakdown of rental and other property revenues, including the revenues attributable to 2025 Same-Properties ($ in thousands):
39
Table of Contents
| Number of Apartment Homes | Year Ended December 31, | Dollar Change | Percentage Change | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | |||||||||||||||||
| 2025 Same-Properties: | ||||||||||||||||||
| Southern California | 20,654 | $ | 679,826 | $ | 658,315 | $ | 21,511 | 3.3 | % | |||||||||
| Northern California | 18,037 | 664,800 | 641,795 | 23,005 | 3.6 | % | ||||||||||||
| Seattle Metro | 10,341 | 298,363 | 290,294 | 8,069 | 2.8 | % | ||||||||||||
| Total 2025 Same-Property | 49,032 | 1,642,989 | 1,590,404 | 52,585 | 3.3 | % | ||||||||||||
| 2025 Non-Same Property | 234,975 | 173,781 | 61,194 | 35.2 | % | |||||||||||||
| Total rental and other property revenues | $ | 1,877,964 | $ | 1,764,185 | $ | 113,779 | 6.4 | % |
2025 Same-Property Revenues increased by $52.6 million or 3.3%. The increase was primarily attributable to an increase of 2.3% in average rental rates from $2,638 for 2024 to $2,699 for 2025 and 0.5% from a decrease in delinquencies.
2025 Non-Same Property Revenues increased by $61.2 million or 35.2% to $235.0 million in 2025 compared to $173.8 million in 2024. The increase was primarily due to the acquisitions of The Plaza, One Hundred Grand, ROEN Menlo Park, Revere
Campbell, The Parc at Pruneyard, ViO, 1250 Lakeside, and the consolidation of Artizan and TENTEN Downtown in 2025, as well as ARLO Mountain View, Maxwell Sunnyvale, and Beaumont, along with the Company’s acquisition of its joint venture partner’s interests in the BEXAEW and BEX II portfolios, Patina at Midtown, and Century Towers in 2024. The increases were partially offset by the sale of Highridge, Essex Skyline, The Grand, and Fourth & U in 2025 and Hillsdale Garden in 2024.
Property operating expenses, excluding real estate taxes increased by $25.3 million or 7.7% to $353.4 million in 2025 compared to $328.1 million in 2024, primarily due to acquisitions in 2024 and 2025 identified in the Non-Same Property revenues section above and the increase of Same-Property operating expenses discussed below, partially offset by dispositions in 2024 and 2025. 2025 Same-Property operating expenses, excluding real estate taxes, increased by $16.4 million or 5.5% to $316.5 million in 2025 compared to $300.1 million in 2024, primarily due to increases of $8.1 million in utilities expenses resulting from increases in trash removal, water and sewer costs, $3.7 million in personnel costs due to wage inflation, and $2.6 million in maintenance and repairs expenses due to increases in water damage remediation costs.
Real estate taxes increased by $12.2 million or 6.3% to $205.6 million in 2025 compared to $193.4 million in 2024, primarily due to the net impact of acquisitions and dispositions in 2024 and 2025 identified in the Non-Same Property revenues section above. 2025 Same-Property real estate taxes increased by $0.4 million or 0.3% to $176.1 million in 2025 compared to $175.7 million in 2024 primarily due to increases in tax rates in California, partially offset by decreases in both assessed values and tax rates in the Seattle Metro region for 2025.
Depreciation and amortization expense increased by $27.3 million or 4.7% to $607.5 million in 2025 compared to $580.2 million in 2024, primarily due to acquisitions in 2024 and 2025 identified in the Non-Same Property revenues section above. The increase was partially offset by dispositions in 2024 and 2025.
General and administrative expense decreased by $27.0 million or 27.3% to $71.9 million in 2025 compared to $98.9 million in 2024, primarily due to a decrease of $31.3 million in political advocacy costs, partially offset by an increase of $5.8 million in personnel costs due to wage inflation.
Gain on sale of real estate and land increased to $299.5 million in 2025 compa
[Excerpt truncated for page length; the complete text is on the linked full-MD&A page.]
MD&A history
Prior-year 10-K MD&A spans are extracted from SEC filings with the same bounded parser used for the latest filing. Each year's full verbatim text is on its own sub-page.