Essex Property Announces Common Stock

Residential real estate investment trust – Essex Property Trust (NYSE:ESS) announced the sale of common stock under its equity distribution agreement. Specifically, Essex would sell 250,000 shares of common stock, which Citigroup Global Markets Inc. of Citigroup Inc. (NYSE:C) would purchase as an underwriter.

The move will likely allow greater financial flexibility to Essex Property, as the company plans to use the generated proceeds for general corporate needs, including paying back debt and financing working capital requirements.

Moreover, with a solid property base and strong management team, we believe Essex Property would efficiently leverage the attractive market fundamentals in the West Coast. Earlier in May, Essex came up with encouraging results for first-quarter 2015.

Backed by the BRE acquisition and growth in same-property revenues, Essex Property reported core funds from operations (“FFO”) of $2.29 per share, which came in higher than the Zacks Consensus Estimate of $2.22 as well as the year-ago quarter figure of $2.02. For full-year 2015 too, Essex Property raised its guidance range.

Finally, Essex Property exited first-quarter 2015 with cash and cash equivalents of $255.2 million, up from $95.7 million at the prior year-end. Moreover, as of Apr 30, 2015, the company had over $900 million left as un-drawn capacity on its unsecured credit facilities.

Essex Property currently carries a Zacks Rank #3 (Hold). Investors interested in the residential REIT industry may consider stocks like Equity Residential (NYSE:EQR) and Post Properties Inc. (NYSE:PPS). Both the stocks hold a Zacks Rank #2 (Buy).

Note: FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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