10-QPeriod: Q1 FY2020

ESSEX PROPERTY TRUST, INC. Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 7, 2020For Securities:ESS

Summary

Essex Property Trust, Inc. (ESS) reported its first-quarter 2020 financial results, showcasing strong revenue growth driven by its extensive portfolio of apartment communities on the West Coast. Total revenues increased by 10.1% year-over-year to $392.4 million. Net income available to common stockholders surged to $315.0 million, or $4.77 per diluted share, a significant jump from $118.9 million, or $1.81 per diluted share, in the prior year period. This substantial increase was notably boosted by a significant gain on the remeasurement of a co-investment amounting to $234.7 million. Despite the positive financial performance, the report also highlights the emerging impact of the COVID-19 pandemic. The company proactively implemented measures to support residents, including a 90-day eviction halt for those financially impacted by the pandemic and a moratorium on rent increases. While operational metrics like financial occupancy remained strong in the first quarter (96.8%), early indicators in April showed a slight decrease to 95.4% with a notable increase in cash delinquencies to 5.0% from 0.4% in the prior year, reflecting the nascent economic pressures. The company emphasizes its liquidity, with substantial unrestricted cash and marketable securities, and available credit facilities, positioning it to navigate the evolving economic landscape.

Financial Highlights

33 data points
Beta

Revenue

$392.37M

Net Income

$315.01M

80.3% Net Margin

EPS (Diluted)

$4.76

Total Assets

$13.45B

Cash & Equivalents

$271.88M

Free Cash Flow

$266.93M

Financial Statements
Beta
Revenue$392.37M
Operating Expenses$261.53M
Operating Income$130.84M
Interest Expense$55.15M
Net Income$315.01M
EPS (Basic)$4.77
EPS (Diluted)$4.76
Shares Outstanding (Basic)66.04M
Shares Outstanding (Diluted)66.20M

Key Highlights

  • 1Total revenues increased by 10.1% to $392.4 million for Q1 2020 compared to Q1 2019.
  • 2Net income available to common stockholders significantly increased to $315.0 million ($4.77 per diluted share) in Q1 2020 from $118.9 million ($1.81 per diluted share) in Q1 2019.
  • 3A substantial gain of $234.7 million on the remeasurement of a co-investment significantly boosted net income in Q1 2020.
  • 4The company reported strong financial occupancy of 96.8% for the Same-Property portfolio in Q1 2020.
  • 5Despite strong Q1 results, the company noted a slight decrease in average financial occupancy to 95.4% and a significant increase in cash delinquencies to 5.0% in April 2020 due to the COVID-19 pandemic.
  • 6Essex Property Trust maintained a strong liquidity position with $271.9 million in unrestricted cash and cash equivalents and $148.1 million in marketable securities as of March 31, 2020.
  • 7The company issued $500.0 million in senior unsecured notes due 2032 with a 2.650% coupon rate in February 2020.

Frequently Asked Questions

Essex Property Trust reported a 10.1% increase in total revenues to $392.4 million for the three months ended March 31, 2020, compared to $356.2 million for the same period in 2019. This growth was primarily driven by its rental and other property revenues.

While the first quarter financial results were strong, the company began to implement measures to mitigate the impact of COVID-19. These included halting evictions for 90 days for impacted residents, offering rent-free lease renewals for 90 days, and creating payment plans while waiving late fees. Early indicators in April showed a decrease in financial occupancy and an increase in cash delinquencies, highlighting the emerging economic pressures.

The company recorded a significant gain of $234.7 million on the remeasurement of a co-investment in the first quarter of 2020. This gain substantially contributed to the large increase in net income available to common stockholders, from $118.9 million in Q1 2019 to $315.0 million in Q1 2020.

As of March 31, 2020, Essex Property Trust maintained a strong liquidity position with $271.9 million in unrestricted cash and cash equivalents and $148.1 million in marketable securities. The company also has access to substantial credit facilities. In February 2020, they issued $500.0 million in senior unsecured notes, further strengthening their capital structure.