ESS US S&P 500Russell 1000 Earnings call · transcribed from the recording
Essex Property Trust (ESS) · Q3 2026 results and valuation
Share price: $274.00 · 2026-11-11
Essex Property Trust is a real estate investment trust that owns, operates, and manages apartment communities. The company focuses on the acquisition and development of residential properties located along the West Coast of the United States. Source: 10-K annual report (2026-02-20)
Results Q3 2026 vs Q2 2026 · previous quarter · published 27 Oct 2026 and 30 Jul 2026
Management sounded upbeat, in its script and in answers to analysts.
1 · Numbers
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Figures not yet filed
Outlook given
2 · How management spoke
Upbeat
More upbeat than 74% of company calls
Answers to analysts: typical, in line with the script.
Last call it was different: the answers were less upbeat than the script.
3 · What stood out
Essex Property Trust executed approximately $600 million of swaps at an all-in fixed rate of 4.9% to hedge floating rate exposure from swaps expiring over the next six months.
Valuation
Is Essex Property Trust undervalued?
Reverse DCF on net income from the last full fiscal year (no meaningful free cash flow: a bank, insurer or a year of negative cash flow) (2025-12-31), grown for 10 years, discounted back, plus a terminal value. “Implied growth” is the rate the current price assumes.
At 5.5% growth a year (3-year revenue growth), the model's fair value is $175.90 a share — the stock trades 56% above it. Today's price assumes 11.5% growth a year.
Current price
$274.00
close of 2026-11-11
Market implies growth of iThe yearly free-cash-flow growth, for the next 10 years, that today’s share price already assumes. If you believe the company grows faster than this, the stock is cheap under this model; slower, and it is expensive.
+11.5% for 10 yrs
Fair value / share
$175.90
Buy below
$131.92
Price vs fair value
Overvalued 56%
Price vs buy-below price
Overvalued 108%
Management expects
Growth +2.9% · from the Q3 2026 report: “ESS is now anticipating full-year blended rent growth of around 2.9%, which is close to the high end of its guidance range.”
A guidance figure for growth, usually one year ahead, not a 10-year free-cash-flow rate.
Read between the lines
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Guidance
ESS is now anticipating full-year blended rent growth of around 2.9%, which is close to the high end of its guidance range.
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Key theme
The asset was priced over $200 million and is expected to generate a mid-5% yield because it is well below replacement cost.
Source quote
“Priced over $200 million and well below replacement cost, this asset is expected to generate a mid-5% yield.”
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Key theme
The industry is expected to grow faster in GDP over the next 10 years than the rest of the economy and is estimated to surpass over one and half trillion.
Source quote
“And that industry is expected to grow faster in GDP over the next 10 years than the rest the economy and it's estimated to surpass over one and half trillion in the next 10 years.”
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Figure
ESS achieved blended rent growth of 7.3% due to a strong leasing season with an extended peak continuing through September.
Source quote
“We achieved blended rent growth of 7.3%, which was elevated by a strong leasing season with an extended peak that continues through September.”
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Figure
The company raised the midpoint of same property NOI growth by 20 basis points to 3% to reflect sector-leading growth as 2026 concludes.
Source quote
“Taken together, we are raising the midpoint of same property NOI growth by 20 basis points to 3%, representing sector-leading growth as we conclude 2026.”
4 more
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Figure
The company reported that total debt maturities for 2027 at pro rata share are around $575 million, which includes $350 million in bonds maturing in May.
Source quote
“Our total debt maturities for 2027 at pro rata share are around $575 million, of which the lion's share is the $350 million in bonds that mature in May.”
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Figure
Over the course of 2026, Essex Property Trust has been proactively hedging its floating rate exposure by executing approximately $600 million of swaps at ProRata share at an all-in fixed rate of 4.9% to replace swaps that expire…
Source quote
“Lastly, over the course of 2026, we have been proactively hedging our floating rate exposure by executing approximately $600 million of swaps at ProRata share at an all-in fixed rate of 4.9% to replace swaps that expire over the next six months.”
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Figure
The company increased its earnings estimate from 150 basis points to include an additional five to 10 basis points.
Source quote
“So, our earning, which we originally published at around 150 basis points about a month ago, we are assuming a slightly higher earning, probably an additional five to 10 basis points.”
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Figure
The current figure of 25.7% is below the 20-year average of just under 30% and the historical peak of 36%, indicating room for growth.
Source quote
“It's currently sitting at 25.7%. This compares to the long-term average or 20-year average of just under 30% and a historical peak of 36% over the previous two decades, so a long way to run there.”
Tone
How upbeat the language was, compared with other companiesiTone counts positive minus negative finance words, adjusted for length. Executives mostly speak positively, so the labels compare each call with every company's latest call: “typical” is the middle third, “very upbeat” the top tenth, “cautious” the bottom tenth.. Dot: Q3 2026. Ring: Q2 2026.
Script and answers carried a similar tone, so the script's message held up under questioning.
Sentences that drove the tone
“Taken together, we are raising the midpoint of same property NOI growth by 20 basis points to 3%, representing sector-leading growth as we conclude 2026.”
“Turning to our full-year outlook, revenues continue to exceed expectations, and as such, we are raising the midpoint of staying property revenue growth by 10 basis points to 2.9%, driven...”
“We achieved blended rent growth of 7.3%, which was elevated by a strong leasing season with an extended peak that continues through September.”
Full figures
Q3 2026 figures are not available yet: the company files its quarterly report (10-Q) a few weeks after the call. This page compares what management said; the figures are added when the report is filed.
Topics
Most discussed now
- If Essex Property Trust looks at new lease rate growth this year compared to last year at the same time, it certainly...
- Essex Property Trust does have three swaps maturing within the joint venture portfolio, one December 1st of this year and then two...
- Although, historically, Essex Property Trust's data shows that rate moves have less impact on pricing and cap rates in markets with…
- Positioning Essex Property Trust's markets comfortably to generate rent growth within a modest job growth environment.
- Even against this backdrop, West Coast multifamily fundamentals offer a compelling case for continued growth above the U.S.
Faded since Q2 2026
- Fading Essex Property Trust is pleased to report a solid first half of 2026, highlighted by a substantial outperformance led by strong…
- Fading Essex Property Trust is also encouraged by recent office expansion announcements from several notable companies.
- Fading Better operating performance within Essex Property Trust's portfolio is the key driver of the increase.
- Fading What Essex Property Trust is seeing on the ground here is that Northern California momentum remains strong.
Latest announcements
Official filings, newest first. Summaries are generated from each filing and its attachment; every figure is checked against the source.
- Results of operations · SEC 8-K
Essex Property Trust reported Core FFO per diluted share of $4.00 for the third quarter of 2026, an increase of 0.8% compared to $3.97 in the third quarter of 2025.
- Material agreement; New financial obligation · SEC 8-K
Essex Property Trust, Inc. entered into a $275 million unsecured term loan agreement with Bank of America, N.A., with an option to increase the facility to $500 million.
- Regulation FD disclosure · SEC 8-K
Essex Property Trust, Inc. announced that CEO Angela L. Kleiman will participate in a roundtable presentation at the Bank of America Global Real Estate Conference on September 16, 2026.
- Results of operations · SEC 8-K
Essex Property Trust reported Core FFO of $4.08 per diluted share for the second quarter of 2026, an increase of 1.2% compared to $4.03 in the second quarter of 2025.
- Regulation FD disclosure · SEC 8-K
Essex Property Trust, Inc. will deliver an investor presentation on June 3, 2026, with a soft copy available on the company's website.
- Shareholder vote results · SEC 8-K · routine
- Results of operations · SEC 8-K
Essex Property Trust reported a net income of $1.65 per diluted share for the first quarter of 2026, compared to $3.16 in the first quarter of 2025.
- Results of operations · SEC 8-K
Essex Property Trust reported Core FFO per diluted share of $3.98 for the fourth quarter of 2025, up 1.5% from $3.92 in the fourth quarter of 2024.
Catalyst calendar
management-stated targets — from the latest earnings call; plans, not promises.
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through September
extended peak of a strong leasing season
Source quote
“We achieved blended rent growth of 7.3%, which was elevated by a strong leasing season with an extended peak that continues through September.”
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fourth quarter
volume declines
Source quote
“It would not be a surprise if fourth quarter volume declines as buyers and sellers adjust to the new rate environment.”
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as we conclude 2026
representing sector-leading growth
Source quote
“Taken together, we are raising the midpoint of same property NOI growth by 20 basis points to 3%, representing sector-leading growth as we conclude 2026.”
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2027
total debt maturities
Source quote
“Our total debt maturities for 2027 at pro rata share are around $575 million, of which the lion's share is the $350 million in bonds that mature in May.”
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over the course of 2026
proactively hedging our floating rate exposure
Source quote
“Lastly, over the course of 2026, we have been proactively hedging our floating rate exposure by executing approximately $600 million of swaps at ProRata share at an all-in fixed rate of 4.9% to replace swaps that expire over the next six months.”