For fiscal 2007, analysts polled by Thomson Financial are expecting funds from operations, or FFO, of $5.30 per share and EPS of $1.68 for Essex Property Trust
Essex reported another lights-out Q4, in which its FFO increased by 11%, excluding non-recurring items, on a year-over-year basis. Net income available to common-share holders increased by 215%. Occupancy rates remained strong at 96%, and NOI growth was 8.5% to 15.5% in each of its three major West Coast markets. Other noteworthy items from the earnings release included the company exceeding its construction goal of $200 million for the year, increasing its development pipeline to $900 million, and expecting revenue from same-property operations to grow 5.5% to 6.5% in 2007.
Saying that 2006 was a successful year for apartment REIT investors would be a bit of an understatement. Shares of Essex and competitors AvalonBay Communities
A big reason for Essex's success is the positioning of its portfolio. Its apartment communities are concentrated in metropolitan areas in California and Seattle where vacancies are few and far between; many still can't afford to buy a home. Speaking to this, Keith Guericke, Essex's president and CEO, said, "Looking forward, we expect to see continued strength in our markets where rents are steadily increasing, yet still at historic lows compared to the alternative cost of homeownership."
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