Essex Property Trust Inc. (ESS) said Wednesday its third-quarter
earnings plunged 71% but a key profitability measure for the West
Coast apartment owner fell less than analysts had expected.
Separately, the company said Chief Executive Keith R. Guericke,
who has held the top post since 1988, would be stepping down at
year's end but remain vice chairman. Essex named its chief
operating officer of the last three years, Michael J. Schall, to
replace him.
In the latest results, comparable average revenue continued to
decline, and occupancy also slid. The fundamentals for
multifamily-housing real-estate investment trusts have been on an
arc of improvement after the economic slowdown and high
unemployment pushed occupancy and rental rates down. While the
economy has been slowly recovering, stubbornly high joblessness is
keeping REITs' improvement under pressure.
Last month, sector giant Equity Residential (EQR) reported its
profitability improved as occupancy rose on basically steady
average rents, and its same-property revenue returned to growth
after nearly two years of decline.
Essex Property posted a profit of $6.4 million, or 21 cents a
share, down from $21.7 million, or 74 cents a share, a year
earlier. Excluding nonrecurring items, funds from operations-a key
profitability measure-fell to $1.24 a share from $1.26. Analysts
surveyed by Thomson Reuters expected $1.22.
Average same-property revenue fell 1.9%, with the biggest
decline again in the Seattle metropolitan area, marking a year
straight the region has been the company's worst comparable revenue
performer.
Same-property occupancy was 96.7%, compared with 97% a year
earlier and 97.2% in the second quarter.
Looking ahead, the REIT raised its 2010 FFO view to $5.35 to
$5.45 a share from $5.14 to $5.30 due to selling securities and
interest income.
Essex Property shares closed Wednesday at $113.36 and weren't
active after hours. The stock has risen 36% so far this year.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com