Essex Property Trust, Inc. (ESS Quick QuoteESS - Free Report) is scheduled to report its second-quarter 2025 results on July 29, after market close. The company’s quarterly results are likely to reflect year-over-year growth in revenues and core funds from operations (FFO) per share.

In the last reported quarter, this San Mateo, CA-based residential real estate investment trust (REIT) delivered a surprise of 1.28% in terms of core FFO per share. Results reflected favorable growth in same-property revenues and net operating income.

Over the trailing four quarters, Essex Property surpassed the Zacks Consensus Estimate on each occasion, the average surprise being 1.29%. The graph below depicts the surprise history of the company:

Essex Property Trust, Inc. Price and EPS Surprise

Essex Property Trust, Inc. price-eps-surprise | Essex Property Trust, Inc. Quote

Let’s see how things have shaped up before this announcement.

US Apartment Market in Q2

The U.S. apartment market remained impressively resilient in the second quarter of 2025, absorbing more than 227,000 units between April and June, a robust second-quarter figure. According to RealPage data, annual absorption surpassed even the peak leasing surge of 2021 and early 2022, defying a backdrop of slowing job growth, weak business sentiment and broader economic uncertainty.

While rent growth stayed muted, up just 0.19% in June, occupancy climbed steadily. At 95.6% in June, national occupancy rose 140 basis points year over year. Operators appear focused on maximizing occupancy, even if it means sacrificing rent increases. This “heads-in-beds” approach supports stability during a period of high new supply.

Supply, though moderating, remains historically elevated. More than 535,000 units were completed in the past year, with roughly 108,000 delivered in the second quarter alone. Yet the market’s ability to digest this volume underscores its underlying strength.

Regionally, tech-driven markets like San Francisco and San Jose, as well as Boston and New York, gained momentum — likely aided by easing supply and increased return-to-office trends. Sun Belt markets, such as Dallas, Atlanta and Jacksonville, FL, also showed signs of recovery in the second quarter, sustaining robust demand amid declining deliveries. Tourism-dependent cities, like Las Vegas, Orlando, FL, and Nashville, TN, faltered slightly, possibly reflecting softening discretionary spending. Supply-heavy markets like Austin, Phoenix and Denver continued to see the sharpest rent cuts.

Factors at Play and Projections for ESS’ Q2 Results

In this environment, Essex Property is poised to have benefited from its solid footprint on the West Coast, where tech-fueled job creation and elevated income levels sustain strong rental demand. Moreover, the company’s reallocation of its portfolio in the Northern California submarkets with potentially less supply and higher rental growth is likely to have aided occupancy and revenue growth.

The Zacks Consensus Estimate of $469.19 million for second-quarter revenues calls for a 6.07% increase year over year. For the second quarter, we expect same-store property revenue growth of 2.3% and net operating income to rise 1.7% year over year. Also, financial occupancy is expected at 96.6%, up 30 basis points sequentially.

However, high debt burden remains a challenge. We expect interest expenses to increase 7.7% year over year in the second quarter.

For the second quarter of 2025, Essex Property projected core FFO per share in the range of $3.90-$4.02. ESS projected second-quarter blended net effective rate growth for its same-property portfolio to be between 2.50% and 3.50%.

Before the second-quarter earnings release, Essex Property’s activities were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the quarterly core FFO per share has remained unchanged over the past three months at $3.99. However, it suggests a year-over-year increase of 1.27%.

What Our Quantitative Model Predicts for ESS Stock

Our proven model does not conclusively predict a surprise in terms of FFO per share for Essex Property this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an FFO beat, which is not the case here.

Essex Property currently carries a Zacks Rank of 2 and has an Earnings ESP of -0.08%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are two stocks from the broader REIT sector — AvalonBay Communities (AVB Quick QuoteAVB - Free Report) and Cousins Properties (CUZ Quick QuoteCUZ - Free Report) — that you may want to consider, as our model shows that these have the right combination of elements to report a surprise this quarter.

AvalonBay Communities, scheduled to report quarterly numbers on July 30, has an Earnings ESP of +0.02% and carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Cousins Properties, slated to release quarterly numbers on July 31, has an Earnings ESP of +0.36% and carries a Zacks Rank of 3 at present.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.