Essex Property Trust's Q4 2024 Earnings Call: Contradictions in Renewal Rates and Delinquency Trends

These are the key contradictions discussed in Essex Property Trust's latest 2024Q4 earnings call, specifically including: Renewal Rate Growth Expectations, and Delinquency Trends and Improvements:



Revenue and Delinquency Reduction:
- Essex Property Trust achieved full-year same-property revenue growth of 3.3% and core FFO growth of 3.8%, exceeding high-end guidance.
- Growth was driven by improving demand, including return-to-office and migration patterns, as well as delinquency resolution by associates.

Strong Operating Performance:
- The company reported a 1.6% blended lease rate growth and a significant reduction in delinquency to 60 basis points of scheduled rent on a cash basis.
- This was supported by a continued reduction in delinquency and successful renewal strategies.

2025 Outlook and Economic Fundamentals:
- For 2025, Essex forecasts same-property revenues to grow by 3%, with blended rent growth of 3%.
- The West Coast is expected to outperform the U.S. average due to improving economic fundamentals and job growth in the technology sector.

Acquisition Strategy and Cap Rates:
- Essex was successful in acquiring and consolidating 13 properties, contributing significantly to its growth mode and accretion.
- Cap rates for high-quality properties were in the mid-to-high 4% range, with a focus on marginal IRR expectations of around 8%.