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Essex Property Trust reports FY'16 FFO gain, releases guidance

Essex Property Trust Inc. reported gains in funds from operations for the fourth quarter and full year 2016, and released guidance for the full year 2017.

For the fourth quarter, FFO attributable to common stockholders and unit holders totaled $193.5 million, or $2.85 per share, up 12.6% on a per-share basis from $171.6 million, or $2.53 per share, a year earlier. Core FFO attributable to common stockholders and unit holders came to $190.8 million, or $2.81 per share, up 6.8% on a per-share basis from $178.3 million, or $2.63 per share, in the year-ago quarter.

For the full year 2016, FFO attributable to common stockholders and unit holders was $754.6 million, or $11.12 per share, up 14.4% on a per-share basis from $654.1 million, or $9.72 per share, in 2015. Core FFO attributable to common stockholders and unit holders totaled $749.2 million, or $11.04 per share, up 12.4% on a per-share basis from $660.7 million, or $9.82 per share, a year earlier.

The S&P Capital IQ consensus FFO-per-share estimates for the fourth quarter and full year 2016 were $2.82 and $11.05, respectively.

Same-store NOI grew on a year-over-year basis by 7.1% in the fourth quarter and 8.1% in 2016.

In 2017, rent growth is expected to "moderate to long-term averages in the Essex portfolio," and the company's portfolio will "continue to outperform the nation, although less dramatically as compared to the past several years," President and CEO Mike Schall said in a release.

For the full year 2017, the company expects FFO-per-share in the range of $11.46 to $11.86 and core FFO in the range of $11.48 to $11.88.

The S&P Capital IQ consensus FFO-per-share estimate for the full year 2017 is $11.77.

In October, the company disposed of Tuscana Apartments, in Tracy, Calif., for a total contract price of $6.7 million.

In December, the company raised $153.2 million of capital through the contribution of four wholly owned apartment properties to a new joint venture entity, BEX II LLC. The total contract price of the four apartment properties was $307.0 million. Essex has a majority ownership interest in the entity.

In November, Essex converted its existing $12.9 million preferred equity investment in Marquis Apartments, in downtown San Jose, Calif., to a 50% joint venture common equity interest in the property. The property is encumbered by $45.8 million of mortgage debt at a rate of 3.4%. The same month, the company originated two preferred equity investments totaling $33.7 million in multifamily developments in San Jose, Calif., and Redmond, Wash.

In November, the company repaid its existing $225 million term loan and entered into a new $350 million term loan. The new five-year loan has a delayed draw feature for the first year and carries a variable rate of LIBOR plus 95 basis points. In January, the company extended its $1 billion unsecured line of credit facility to mature in December 2020 with one 18-month extension, exercisable at the company's option. The pricing on the line remains unchanged at LIBOR plus 90 basis points.