Essex Property Trust, Inc. ESS rallied 1.79% during Monday’s regular trading session after the residential REIT announced raising the second-quarter and full-year 2021 core FFO per share guidance ranges in light of the improving market conditions and declining concession usage. Particularly, the company now expects second-quarter core FFO per share of $2.92-$3.00, suggesting a 4-cent increase at the mid-point from the prior guided range of $2.84-$3.00. The Zacks Consensus Estimate for the same is currently pinned at $2.99. Further, the REIT sees full-year 2021 core FFO per share of $12.02-$12.46, indicating an 8-cent increase at the mid-point from the previous estimate of $11.86-$12.46. The mid-point of the latest outlook of $12.24 is ahead of the Zacks Consensus Estimate of$12.21. The residential REIT also raised its full-year guidance ranges for same-propertyrevenues and net operating income (NOI). Presently, Essex Property estimates same-property gross revenue decline of 1.4-2.4%, an operating expense rise of 2-3% and NOI contraction of 2.8-4.7%.The company’s earlier full-year outlook incorporated same-property gross revenue decline of 1.5-3.5%, an operating expense rise of 2-3% and NOI contraction of 3-6.25%. Notably, as a result of more severe and lengthy government restrictions due to the pandemic, Essex Property's markets have lagged the U.S. recovery. However, the statewide reopenings in California and Washington on Jun 15 and Jun 30, respectively, are raising hopes. The job markets have improved amid the reopeningprogress and a significant acceleration in hiring, indicating prospects of uptick in rental demand. In addition, demand across all walk scores have steadily improved owing to eased restrictions in California and Washington, the company noted. Amid these, same-property results and net effective rental rates continue to improve and this is mostly attributable toreduced concession usage. Another residential REIT behemoth — AvalonBay Communities, Inc. ( AVB Quick Quote AVB - Free Report) — is witnessing improvements in occupancy level as well as like-term effective rents in May. Moreover, the average asking rent climbed from fourth-quarter 2020, while the average concession per new move-in lease executed in May 2021 declined from the fourth-quarter level. The widespread vaccinations and reopening of local economies are raising hopes for residential REITs, including Essex Property, AvalonBay, Equity Residential ( EQR Quick Quote EQR - Free Report) , and UDR Inc. UDR. Improvement in the job market and a significant household formation among young adults are helping in this buoyancy in rental demand. Essex Property is poised to gain from its sturdy property base on the West Coast market and balance-sheet strength. It is also leveraging technology and scale to drive growth. Currently, Essex Property carries a Zacks Rank #3 (Hold). Shares of this residential REIT have gained 30.8% so far in the year compared with its industry’s rally of 25%. You can see . the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here Image Source: Zacks Investment Research More Stock News: This Is Bigger than the iPhone!
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