Essex Property Upgraded with $320 NAV Target as SF Rents Jump 10.2%
ESS•Raymond James upgraded Essex Property Trust to outperform and raised its NAV target to $320.32 per share while forecasting 2026 core FFO of $16.12. The firm cited a 10.2% year-over-year rent increase in San Francisco and 6.2% in San Jose, driven by an AI-fueled Bay Area leasing boom.
1. Upgrade and Price Target
Raymond James raised its rating on Essex Property Trust to outperform from market perform, boosting its NAV target to $320.32 per share. The firm flagged an 11% discount of Essex shares to this revised NAV, suggesting upside potential.
2. AI-Driven Bay Area Rent Surge
Analysts highlighted that 40% of Essex’s net operating income comes from Northern California, where asking rents surged 10.2% year-over-year in San Francisco and 6.2% in San Jose. The AI boom is cited as a key driver behind accelerating leasing demand and pricing power not seen since the dot-com era.
3. Revised Forecasts and Valuation Metrics
Raymond James lifted 2026 core FFO per share to $16.12 and 2027 to $17.00, up from $16.05 and $16.75 respectively, reflecting stronger revenue momentum. At an 18.9x multiple on 2027 AFFO, Essex trades at a slight premium to peers, supported by its leading growth profile.
