Essex Property 4Q results top Street estimates

PALO ALTO, Calif. - Essex Property Trust Inc., an apartment real estate investment trust mainly operating on the West Coast, said Wednesday its fourth-quarter funds from operations climbed nearly 27 percent, beating Wall Street's expectations.

Funds from operations (FFO), which adds such items as amortization and depreciation to net income, is considered a key measure of REIT strength.

For the fourth quarter ended Dec. 31, Essex reported funds from operations of $44.1 million, or $1.54 a share, up from $34.7 million, or $1.25 a share, in the prior-year period. Excluding one-time items, Essex's FFO rose 15.2 percent, or $6.5 million.

That beat Wall Street's average forecast of $1.48 per share, according to a Thomson Reuters poll.

Essex reported net income after paying preferred dividends of $18.3 million, or 70 cents a share, down from $51.3 million, or $2.02 a share, in the same quarter in 2007.

Essex Property Trust, which operates communities in West Coast markets, said same-property revenues rose 3.4 percent, driven by properties in Northern California and Seattle. For the full year, FFO totaled $170.9 million, or $6.14 a share. That compares with $153.9 million, or $5.58 a share, in 2007.

Looking ahead, Essex said FFO per share in 2009 will range between $5.50 and $5.90, compared with Wall Street's average forecast of $5.89 per share. The company said it expects its portfolio rental rate overall to decline nearly 2 percent amid continued job losses in its markets, and said it plans to divest about $100 million in assets this year.

Essex's shares fell $1.34, or about 2.1 percent, to close at $61.74 on Wednesday. The stock was unchanged in aftermarket trading following the release of the earnings.

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