10-QPeriod: Q3 FY2019

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q3 Ended Sep 30, 2019

Filed October 24, 2019For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its third-quarter results for 2019, showing continued revenue growth and solid operational performance. Total revenues increased by 4.6% year-over-year for the third quarter, driven by a 3.1% increase in Same-Property Revenues and a significant 32.4% increase in Non-Same Property Revenues, largely due to recent acquisitions and development completions. The company's balance sheet reflects growth in its real estate portfolio, with total assets increasing from $12.4 billion at the end of 2018 to $13.0 billion by September 30, 2019. This growth was supported by strategic debt issuances, including $500 million in senior unsecured notes in February/March 2019 and $400 million in August 2019. While debt increased, the company maintained a strong liquidity position with substantial cash and marketable securities. Financially, net income available to common stockholders rose by 23.3% for the third quarter compared to the prior year, reflecting improved operational efficiencies and strategic financial management. The company also continued its development pipeline, with ongoing projects in Southern California, Northern California, and the Seattle metropolitan area, positioning it for future growth.

Financial Highlights

33 data points
Beta

Revenue

$366.93M

Net Income

$99.33M

27.1% Net Margin

EPS (Diluted)

$1.51

Total Assets

$13.00B

Cash & Equivalents

$74.03M

Free Cash Flow

$277.09M

Financial Statements
Beta
Revenue$366.93M
Operating Expenses$242.89M
Operating Income$124.04M
Interest Expense$54.90M
Net Income$99.33M
EPS (Basic)$1.51
EPS (Diluted)$1.51
Shares Outstanding (Basic)65.85M
Shares Outstanding (Diluted)65.97M

Key Highlights

  • 1Total revenues increased by 4.6% to $364.5 million for Q3 2019 compared to Q3 2018, with Same-Property Revenues up 3.1% and Non-Same Property Revenues up significantly due to acquisitions.
  • 2Net income available to common stockholders increased by 23.3% to $99.3 million for Q3 2019 compared to $81.0 million for Q3 2018.
  • 3Total assets grew to $12.998 billion as of September 30, 2019, up from $12.384 billion at December 31, 2018.
  • 4The company issued $500 million in senior unsecured notes in February/March 2019 and $400 million in August 2019, increasing unsecured debt to support operations and acquisitions.
  • 5Average rental rates for Same-Property portfolio increased by 3.5% year-over-year for the nine months ended September 30, 2019.
  • 6The development pipeline includes five consolidated projects and two unconsolidated joint venture projects, totaling 1,960 apartment homes, with total estimated project costs of $1.3 billion.

Frequently Asked Questions

Essex Property Trust reported total revenues of $364.5 million for the three months ended September 30, 2019, an increase of 4.6% compared to $348.6 million in the same period of 2018. This growth was driven by a 3.1% increase in Same-Property Revenues and a substantial 32.4% increase in Non-Same Property Revenues, attributable to recent acquisitions and completed development projects.

Total debt increased from $5.6 billion at December 31, 2018, to $6.0 billion at September 30, 2019. This increase was primarily due to the issuance of $500 million in senior unsecured notes in February/March 2019 and $400 million in August 2019. The company also had $220 million outstanding on its credit lines as of September 30, 2019.

Essex Property Trust has an active development pipeline comprising five consolidated projects and two unconsolidated joint venture projects, totaling 1,960 apartment homes with an estimated total cost of $1.3 billion. The company also continues to evaluate new markets and considers co-investments as an alternative source of capital for acquisitions and development.

Net income available to common stockholders increased by 23.3% to $99.3 million for the third quarter of 2019, compared to $81.0 million in the third quarter of 2018. Diluted earnings per share were $1.51 for both periods. Funds From Operations (FFO) attributable to common stockholders and unitholders was $238.8 million for the third quarter of 2019, up from $220.1 million in the prior year.