Essex Property Trust, Inc. (NYSE:ESS) Q3 2023 Earnings Call Transcript October 27, 2023 1:00 PM ET
Operator
Good day, and welcome to the Essex Property Trust Third Quarter 2023 Earnings Conference Call. As a reminder, today's conference call is being recorded.
Statements made in this conference call regarding expected operating results and other future events are forward-looking statements, that involve risks 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 the SEC.
It is now my pleasure to introduce your host, Ms. Angela Kleiman, President and Chief Executive Officer for Essex Property Trust. Thank you, Ms. Kleiman, you may begin.
Angela Kleiman
Good morning, and thank you for joining Essex’s third quarter earnings call. Barb Pak and Jessica Anderson will follow with prepared remarks and Rylan Burns is here for Q&A. My comments today will focus on how we performed to date. Our initial outlook for 2024 and a brief update on the investment markets.
Overall, 2023 has unfolded generally in-line with our expectations. We increased our same-property revenue and NOI growth in middle of the year, despite a challenging operating environment, with almost 2% of rent delinquent for the first nine months of the year. For context, this delinquency level is approximately five times our historical average. The unprecedented eviction protections enacted during COVID exacerbated by subsequent court delays has resulted in protractive exposure to non-paying tenants and uncertainty on timing of when we could recapture these units.
That said, we made considerable progress reducing delinquency as a percentage of rent, which is now at 1.3% in October, this improvement has naturally resulted in a temporary trade-off between rate growth and occupancy but has proven to be an optimal strategy to maximize revenues as we make progress towards normalization in our markets.
Looking ahead to 2024, we plan to publish a more comprehensive outlook for the West Coast in conjunction with our full year guidance on our fourth quarter earnings call. For now, we have provided our initial 2024 supply outlook for our market on S-17 of the supplemental which forecasts total supply growth of only 0.5% of total housing stock. Unlike many other US markets, total housing supply in our markets is expected to remain at low level. And we do not see a near-term catalyst for increasing housing supply growth in the Essex markets. This supply landscape also minimizes our risk to job growth relative to other markets, especially if we encounter a softer demand environment and will be a tailwind for Essex when the economy accelerates.