Essex Property Trust, Inc.

Good day and welcome to the Essex Property Trust's first quarter 2026 earnings call. As a reminder, today's conference call is being recorded. Statements made on this conference call regarding expected operating results and other future events are forward-looking statements that involve risk and uncertainties. Forward-looking statements are made based on current expectations, assumptions, and beliefs, as well as information available to the company at this time. A number of factors could cause actual results to differ materially from those anticipated. Further information about these risks can be found on the company's filings with SEC. It is now my pleasure to introduce your host, Ms. Angela Kleinman, President and Chief Executive Officer for Essex Property Trust. Thank you. Ms. Kleinman, you may begin.

Good morning and welcome to Essex first quarter earnings call.

Today I will cover our first quarter performance, discuss regional trends, and conclude with an update on the transaction market. BARPAC will follow with prepared remarks and Rylan Burns is here for Q&A. Starting with the macro environment, U.S. economic conditions year-to-day have generally unfolded in line with our outlook, with national labor trends remaining soft. Additionally, Tightened geopolitical tensions and inflationary pressure in recent months have contributed to increased near-term uncertainty. Against this backdrop, we delivered a solid first quarter, with core FFO per share exceeding the high end of our guidance range and same property revenues trending ahead of plan. Two key factors contributed to these results. First, we successfully deployed an occupancy-focused strategy to maximize revenues, generating a 20 basis points year-over-year occupancy gain. Second is the strength in Northern California combined with the durability of our supply-constrained West Coast markets. There is a direct correlation between housing supply and the cost of housing for consumers. It is no surprise that markets with some of the highest rental rates are typically markets with significant legislative burden on housing providers. which deters building activities, leading to a chronic housing shortage. Looking forward, permitting activities remain at a historical low in California, and as such, we expect new housing deliveries to remain low at around half a percent of existing stock for the next several years. On the demand side, we are seeing early indicators of improvement in three areas. First, job postings from the top 20 technology companies have remained steady despite the layoff headlines. Second, elevated levels of venture capital investments in the Bay Area are funding a new wave of startup companies. And third, continued office expansion announcements in our markets. In summary, the low level of housing supply throughout our markets provides resilience across a wide range of economic conditions. while improving demand indicators positioned the portfolio for sector-leading long-term rent growth. Moving on to property operating highlights, we achieved same-store blended rent growth of 1.4% for the quarter, which is generally in line with our expectations as we executed an occupancy-focused strategy ahead of the peak leasing season. From a regional perspective, Northern California was our best market, performing ahead of plan for the quarter, with blended rent growth of 3.2% led by San Francisco and San Mateo, followed by Santa Clara County. During the quarter, while occupancy increased by 50 basis points sequentially, we were also able to increase rents, demonstrating the strength of this market. Attractive affordability, favorable demand drivers, and limited supply support our expectations for solid growth to continue in this region. As for Seattle, this region performed in line with our expectations for a slow start to the year, with blended rent growth of negative 80 basis points. This was primarily driven by a soft demand environment combined with the absorption of supply delivery last year. Encouragingly, during the quarter, we achieved sequential improvements each month in net expected new lease rent growth and occupancy while reducing concessions. With additional office expansions recently announced in the region, we maintain our conviction with the long-term outlook for this market. On to Southern California, which is closely linked to broader national employment trends. This region also performed on plan with blended rent growth of approximately 1%, led by Orange County and Ventura. In Los Angeles, incremental improvements continues at a modest pace. Heading into peak leasing season, we have shifted our operating strategy to driving rent growth across most markets, and our portfolio is well positioned with April financial occupancy in 96.4% and blended lease rate growth north of 3%. Turning to transaction activities, with minimal forward-looking supply deliveries and favorable fundamentals, interest in multifamily assets on the West Coast remains healthy. especially in the Bay Area, as evidenced by the 50 basis points cap rate compression since 2024. Essex has been the largest investor in this market in the past two years as we allocated approximately $1.7 billion of capital ahead of the cap rate compression, generating substantial value for our shareholders. Overall, cap rates across our markets remain consistently in the mid-4% range, However, with our stock trading close to a 6% implied cap rate over the past several months, which is a significant discount to private market valuation, we shifted gears and repurchased approximately $62 million of stock, thereby continuing our strong capital allocation track record of maximizing accretion for our shareholders. With that, I'll turn the call over to Barb.