Raymond James Lifts Essex Property (ESS) from Market Perform to Outperform
Essex benefits from its strong presence in tech-focused West Coast markets, which continue to lead national rent growth. Analysts noted that as of mid-June 2025, asking rents in San Francisco, San Jose, and Seattle had increased by 4.2%, 4.2%, and 2.5%, respectively.
An exterior view of a modern retail property, embodying a landlord's real estate investment.
Analysts consider Essex relatively safe from supply pressures impacting Sun Belt markets and suggest its conservative guidance allows room for upside. The firm noted improved cash delinquencies and early signs of rent growth recovery in Oakland, adding that Essex's cost of capital advantage could be a key asset in the second half of the year if attractive investment opportunities emerge.
Overall, Raymond James adopts a neutral to cautious outlook on most multifamily REITs, citing irregular seasonal leasing softness and unsteady rent growth across markets as factors limiting short-term visibility.
Essex Property Trust, Inc. (NYSE:ESS) is an REIT specializing in the acquisition, development, and management of multifamily residential properties in select West Coast markets.
While we acknowledge the potential of ESS as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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Financial results and analyses will be available on the Company's website on the 'Investors' and 'News & Events' drop-down menus ( and SEDAR+ ( Unaudited results, unless otherwise stated, all results are in U.S. dollars. Net Income / Loss (in thousands) Q2 2024 Q1 2025 Q2 2025 Revenues, Net $ 53,938 $ 44,818 $ 59,867 Cost of Goods Sold 25,264 24,753 27,936 Gross Profit 28,674 20,065 31,931 % of Net Revenue 53 % 45 % 53 % Operating Expenses: General and Administrative 17,366 15,083 14,618 Sales and Marketing 682 687 803 Professional Fees 1,860 1,668 1,965 Depreciation and Amortization 3,723 3,837 3,905 Impairment — 1,900 — Total Operating Expenses 23,631 23,175 21,291 Income (Loss) from Operations 5,043 (3,110 ) 10,640 Interest Expense 2,593 2,276 1,919 (Gain) Loss on Change in Fair Value of Contingent Liabilities and Shares Payable (7,910 ) (95 ) 95 Other (Income) Expense, Net 118 1,789 (5,087 ) Total Other (Income) Expense, Net (5,199 ) 3,970 (3,073 ) Income Taxes 203 2,928 4,969 Net Income (Loss) $ 10,039 $ (10,008 ) $ 8,744 Adjusted EBITDA (in thousands) Q2 2024 Q1 2025 Q2 2025 Net Income (Loss) (GAAP) $ 10,039 $ (10,008 ) $ 8,744 Depreciation and Amortization 3,723 3,837 3,905 Interest, Net 2,593 1,988 1,919 Income Tax Expense 203 2,928 4,969 EBITDA (Non-GAAP) 16,558 (1,255 ) 19,537 Adjustments: Share-Based Compensation 3,621 2,105 2,944 Stock Appreciation Rights Expense 51 (37 ) 37 (Gain) Loss on Equity Method Investments 94 (40 ) (44 ) Change in Fair Value of Derivative Asset and Liability (32 ) 1,733 328 Impairment Expense for Intangible Assets — 1,900 — Change in Fair Value of Contingent Liabilities and Shares Payable (7,910 ) (95 ) 95 Loss on Extinguishment of Debt — 292 — Employee Retention Tax Credits — (210 ) (4,750 ) Adjusted EBITDA (Non-GAAP) $ 12,382 $ 4,393 $ 18,147 Select Cash Flow Information (in thousands) Q2 2024 Q1 2025 Q2 2025 Net Income (Loss) $ 10,039 $ (10,008 ) $ 8,744 Depreciation and Amortization 3,723 3,837 3,905 Share-Based Compensation 3,621 2,105 2,944 Impairment Expense for Intangibles — 1,900 — (Gain) Loss on Change in Fair Value of Contingent Liabilities and Shares Payable (7,910 ) (95 ) 95 Other 1,326 2,573 881 Cash From Net Income (Loss) 10,799 312 16,569 Accounts Receivable (4,864 ) (1,424 ) (3,248 ) Income Taxes Receivable — — 996 Prepaid Expenses and Other Current Assets (911 ) 1,086 (243 ) Inventory (3,292 ) (1,430 ) (3,987 ) Other Assets 71 2,062 (96 ) Accounts Payable and Accrued Liabilities 7,366 (587 ) 4,290 Income Taxes Payable (476 ) 27 1,290 Other 207 2,425 2,166 Working Capital Impact (1,899 ) 2,159 1,168 Operating Activities Cash Flow 8,900 2,471 17,737 Purchases of Property and Equipment (3,912 ) (6,695 ) (9,458 ) Other — — 190 Investing Activities Cash Flow (3,912 ) (6,695 ) (9,268 ) Proceeds from the Issuance of Notes Payable — 49,140 — Payments on Notes Payable, Third Parties and Related Parties (1,890 ) (42,068 ) (1 ) Distributions to Preferred Shareholders (1,936 ) (1,938 ) (1,937 ) Other 309 (218 ) 55 Financing Activities Cash Flow (3,517 ) 4,916 (1,883 ) Net Increase in Cash, Restricted Cash and Cash Equivalents 1,471 692 6,586 Cash, Restricted Cash and Cash Equivalents, Beginning of Period 24,408 36,923 37,615 Cash, Restricted Cash and Cash Equivalents, End of Period $ 25,879 $ 37,615 $ 44,201 Select Balance Sheet Information (in thousands) Q2 2024 Q1 2025 Q2 2025 Cash and Restricted Cash $ 25,879 $ 34,615 $ 40,701 Accounts Receivable, Net 7,717 6,712 9,842 Income Taxes Receivable — 1,929 933 Prepaid Expenses and Other Current Assets 4,366 9,608 15,355 Inventory 14,503 15,682 19,669 Total Current Assets 52,465 68,546 86,500 Operating and Finance Lease Right-of-Use Assets, Net 10,713 10,188 6,974 Long Term Investments 2,251 2,381 172 Property, Plant and Equipment, Net 215,179 212,789 222,999 Intangible Assets, Net and Goodwill 20,868 12,120 11,939 Restricted Cash, Net of Current Portion — 3,000 3,500 Other Assets 4,367 2,566 2,477 TOTAL ASSETS $ 305,843 $ 311,590 $ 334,561 Accounts Payable and Accrued Liabilities $ 33,739 $ 30,708 $ 37,532 Income Taxes Payable 7,712 2,435 3,725 Contingent Shares and Earnout Liabilities 33,132 — — Shares Payable 5,825 2,485 — Current Portion of Operating and Finance Lease Liabilities 1,950 2,344 2,111 Current Portion of Notes Payable 7,552 — — Total Current Liabilities 89,910 37,972 43,368 Operating and Finance Lease Liabilities, Net of Current Portion 8,926 8,001 4,795 Other Non-Current Liabilities 6,624 25,259 28,237 Notes Payable, Net of Current Portion 53,699 65,797 65,845 TOTAL LIABILITIES 159,159 137,029 142,245 Preferred Equity Series B, C and D 81,808 89,002 91,790 Additional Paid-In Capital, Accumulated Deficit and Non-Controlling Interest 64,876 85,559 100,526 TOTAL SHAREHOLDERS' EQUITY 146,684 174,561 192,316 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 305,843 $ 311,590 $ 334,561 Notes Payable and Preferred Equity (in thousands) Q4 2024 Q1 2025 Q2 2025 Comments Notes Payable Secured Credit Facility $ — $ 50,000 $ 50,000 Maturity is 2/28/30 Secured Credit Agreement 41,875 — — Maturity of the Secured Credit Agreement was 11/30/2026. 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Series A 11,895 11,895 11,895 8% semi annual interest, cash or shares, higher of 10 day VWAP 5 trading days prior to pay date or $4.08, Maturity 4/15/27 Series B 4,111 4,111 4,111 8% semi annual interest, cash or shares, lower of 10 day VWAP 5 trading days prior to pay date or $10.00, Maturity 4/15/27 Plus Convertible Debt 16,006 16,006 16,006 Other 315 (209 ) (161 ) Mostly original issue discount Notes Payable Total $ 58,196 $ 65,797 $ 65,845 Preferred Equity Series B $ 65,084 $ 67,495 $ 70,042 Currently at 22.5% dividend with 10% cash payment Series C 6,279 6,507 6,748 Currently at 22.5% dividend with 10% cash payment Series D 15,000 15,000 15,000 Currently at 15% dividend with 15% cash payment Preferred Equity Total $ 86,363 $ 89,002 $ 91,790 Cash Payments Debt Amortization $ 1,889 $ 42,022 $ 1 Q1 2025 Includes $40.6 million paid on 2/28/2025 for the Secured Credit Agreement; principal payments on the Secured Credit Facility start in 2027 Cash Interest 1,474 876 1,203 8.58% interest rate on the Senior Secured Credit Facility, entered into on 2/28/25 Debt Service 3,363 42,898 1,204 Series B 1,250 1,250 1,249 10% annual rate until 2/28/27 when it increases to 20% Series C 125 125 125 10% annual rate until 6/30/27 when it increases to 20% Series D 563 563 563 15% annual rate until 8/24/28 when it increases to 20% Preferred Equity Dividends 1,938 1,938 1,937 Total Debt Service and Dividends $ 5,301 $ 44,836 $ 3,141 Dividend Rates for Series B, C, and D 22.5% 25.0% 20.0% Series B 8/31/2024 8/31/2025 2/28/2027 Currently at 22.5% dividend with 10% cash payment Series C 12/30/2024 12/30/2025 6/30/2027 Currently at 22.5% dividend with 10% cash payment Series D 8/24/2028 Currently at 15% dividend with 15% cash payment *Dividend in excess of cash dividend is paid out as PIK, outstanding preferred equity balance compounds quarterly. Equity Table (in thousands, except share price) Q2 2025 Q1 2025 Change Comments Total Equity and Exchangeable Shares 79,081 77,407 1,673 Shares issued in connection of exercise of RSUs and ISOs, Camarillo acquisition contingent shares, bonuses paid in shares, convertible debenture interest and NHC acquisition deferred shares Warrants Series D 2,980 2,980 — Exercise price of $6.00 with an expiration date of August 2028 Series C 1,000 1,000 — Exercise price of $5.00 with an expiration date of August 2027 Series B 9,739 9,739 — Exercise price of $5.00 with an expiration date of August 2027 SPAC 30,665 30,665 — Exercise price of $11.50 with an expiration date of June 2026 Total Warrants 44,384 44,384 — Stock Options 381 489 (108 ) Weighted average exercise price of $3.09 with expiration dates from January 2026 to June 2026 RSUs 6,194 6,778 (584 ) Up to 3-year vesting through 2028 Total 6,575 7,267 (692 ) Share Price at Quarter End $ 6.05 $ 4.97 $ 1.08 Convertible Debentures Series A $ 11,895 $ 11,895 $ — 8% semi annual interest, cash or shares, higher of 10 day VWAP 5 trading days prior to pay date or $4.08, Maturity 4/15/27 Series B 4,111 4,111 — 8% semi annual interest, cash or shares, lower of 10 day VWAP 5 trading days prior to pay date or $10.00, Maturity 4/15/27 Total Convertible Debentures $ 16,006 $ 16,006 $ — Number of Shares if Converted Assuming Share Price at Quarter End 2,646 3,221 (575 ) Revenue (in thousands) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 FY 2023 FY 2024 Retail (B2C) $ 9,921 $ 10,885 $ 11,214 $ 11,796 $ 11,788 $ 12,262 $ 39,078 $ 43,816 Wholesale CPG (B2B) 4,253 3,979 4,777 4,987 4,747 5,483 16,062 17,996 Wholesale Biomass (B2B) 15,926 39,074 47,830 36,256 28,283 42,122 105,696 139,086 Total $ 30,100 $ 53,938 $ 63,821 $ 53,039 $ 44,818 $ 59,867 $ 160,836 $ 200,898 Sequential % Change Retail (B2C) 4 % 10 % 3 % 5 % — % 4 % Wholesale CPG (B2B) 4 % (6 )% 20 % 4 % (5 )% 16 % Wholesale Biomass (B2B) (40 )% 145 % 22 % (24 )% (22 )% 49 % Total (26 )% 79 % 18 % (17 )% (15 )% 34 % % Change to Prior Year Retail (B2C) 6 % 8 % 11 % 23 % 19 % 13 % 46 % 12 % Wholesale CPG (B2B) 14 % 1 % 11 % 22 % 12 % 38 % (4 )% 12 % Wholesale Biomass (B2B) 10 % 28 % 41 % 36 % 78 % 8 % 155 % 32 % Total 9 % 21 % 32 % 31 % 49 % 11 % 89 % 25 % Gross Profit (in thousands) Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 FY 2023 FY 2024 Retail (B2C) $ 5,253 $ 5,162 $ 4,952 $ 5,396 $ 5,653 $ 5,861 $ 21,551 $ 20,763 Wholesale CPG (B2B) 1,065 886 1,398 1,168 1,221 1,949 1,223 4,517 Wholesale Biomass (B2B) 6,208 22,626 27,092 16,187 13,191 24,121 58,195 72,113 Total $ 12,526 $ 28,674 $ 33,442 $ 22,751 $ 20,065 $ 31,931 $ 80,969 $ 97,393 % of Revenue Retail (B2C) 53 % 47 % 44 % 46 % 48 % 48 % 55 % 47 % Wholesale CPG (B2B) 25 % 22 % 29 % 23 % 26 % 36 % 8 % 25 % Wholesale Biomass (B2B) 39 % 58 % 57 % 45 % 47 % 57 % 55 % 52 % Total 42 % 53 % 52 % 43 % 45 % 53 % 50 % 48 % Wholesale Biomass Production and Cost per Pound Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 FY 2023 FY 2024 Equivalent Dry Pounds of Production 61,392 149,717 232,295 165,074 152,568 230,748 356,722 608,478 % Change to Prior Year 28 % 45 % 128 % 60 % 149 % 54 % 84 % 71 % Cost per Equivalent Dry Pounds of Production $ 182 $ 148 $ 103 $ 110 $ 108 $ 91 $ 136 $ 123 % Change to Prior Year (7 )% 6 % (13 )% (9 )% (41 )% (39 )% (6 )% (10 )% Ending Operational Canopy Licensed (000 sq. ft) 959 1,525 1,525 1,525 1,525 1,525 959 1,525 Wholesale Biomass Sold and Average Selling Price per Pound Q1 2024 Q2 2024 Q3 2024 Q4 2024 Q1 2025 Q2 2025 FY 2023 FY 2024 Equivalent Dry Pounds Sold 56,432 137,866 209,175 164,660 146,555 204,015 338,957 568,133 % Change to Prior Year 13 % 53 % 108 % 68 % 160 % 48 % 97 % 68 % Equivalent Dry Pounds Sold Average Selling Price $ 282 $ 283 $ 229 $ 220 $ 193 $ 206 $ 312 $ 245 % Change to Prior Year (3 )% (17 )% (32 )% (19 )% (32 )% (27 )% 43 % (21 )% Equivalent Dry Pounds Average Selling Price excludes the impact of cultivation tax. Conference Call The Company will host a conference call to discuss the results today, August 13, 2025 at 5:00 p.m. Eastern Time. Webcast and Replay: Register Here Dial-In Number: 1-800-715-9871 Conference ID: 3651206# (replay available for approximately 30 days) In addition, content related to the earnings call including a transcript and audio recording of the call, as well as the Company's financial statements and management's discussion and analysis of financial condition and results of operations for the period (upon completion), will be posted to the Company's website and can be found here. Content from previous reporting periods is also available. Non-GAAP Financial Measures Glass House defines EBITDA as Net Income (Loss) (GAAP) adjusted for interest and financing costs, income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA excluding share-based compensation, stock appreciation rights expense, loss (gain) on equity method investments, impairment expense for goodwill and intangible assets, change in fair value of derivative liabilities, change in fair value of contingent liabilities and shares payable, certain debt-related fees, acquisition related professional fees, non-operational start-up costs and employee retention tax credits. EBITDA and Adjusted EBITDA are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. Such supplemental non-GAAP financial measures are not standardized financial measures under U.S. GAAP used to prepare the Company's financial statements and might not be comparable to similar financial measures disclosed by other companies and, thus, should only be considered in conjunction with the GAAP financial measures presented herein. The Company has provided a table above that provides a reconciliation of the Company's Net Income (Loss) (GAAP) to Adjusted EBITDA for the three months ended June 30, 2025 compared to the three months ended June 30, 2024 and three months ended March 31, 2025. Footnotes and Sources: EBITDA and Adjusted EBITDA are non-GAAP financial measures that are not defined by U.S. GAAP and may not be comparable to similar measures presented by other companies. Please see 'Non-GAAP Financial Measures' herein for further information and for a reconciliation of such non-GAAP measures to the closest GAAP measure. Equivalent Dry Pound Production includes all dry production (flower, smalls and trim) plus equivalent dry weight for wet weight and fresh frozen not converted into dry weight by the Company. Cost per Equivalent Dry Pound of Production, is the application of a subset of Costs of Goods Sold for cannabis biomass production (including all expenses from nursery and cultivation to curing and trimming - the point at which product is ready for sales as wholesale cannabis or to be transferred to CPG) applied to the Company's metric of dry production which includes all dry production (flower, smalls and trim) plus equivalent dry weight for wet weight and fresh frozen that is not converted into dry goods by the Company. About Glass House Brands Glass House is one of the fastest-growing, vertically integrated cannabis companies in the U.S., with a dedicated focus on the California market and building leading, lasting brands to serve consumers across all segments. Whether it be through its portfolio of brands, which includes Glass House Farms, PLUS Products, Allswell and Mama Sue Wellness, or its network of retail dispensaries throughout the state of California, which includes The Farmacy, Natural Healing Center and The Pottery, Glass House is committed to realizing its vision of excellence: outstanding cannabis products, produced sustainably, for the benefit of all. For more information and company updates, visit and Forward Looking Statements This news release contains certain forward-looking information and forward-looking statements, as defined in applicable securities laws (collectively referred to herein as "forward-looking statements"). Forward-looking statements reflect current expectations or beliefs regarding future events or the Company's future performance or financial results. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "continues", "forecasts", "projects", "predicts", "intends", "anticipates", "targets" or "believes", or variations of, or the negatives of, such words and phrases or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements in this news release include, without limitation, the Company's: ability to further deliver strong operational and financial results; ability to continue growing high quality cannabis at the lowest cost; statement that California, the most competitive cannabis market in the world, is experiencing pricing at levels which the Company would describe as destructive, meaning many cultivators in the state are likely having 'going concern' issues; statement that while the Company expects lower prices to continue in the short-term, longer-term management expects Glass House will benefit, as the Company is built to weather market cycles and emerge even stronger; statement that consolidation has always been the Company's thesis which the company sees as an opportunity to expand market share; statement that the Company commenced commercial operation of Greenhouse 5 in January 2024; statement the Company completed Phase II expansion at its SoCal Farm and Greenhouse 5 had its first full quarter of production and sales in Q2 2024; statement that production volumes, quality and yields from this facility have all substantially exceeded original expectations; statement that the Company expects to start generating revenue from Greenhouse 2 by the fourth quarter of 2025, with Greenhouse 2 production estimated at 275,000 pounds of cannabis in its first full year of production; statement the Company secured a new $50 million senior secured credit facility that strengthens its balance sheet, significantly improves cash flow and pushes out the maturity of senior secured debt into 2030; statement the Company completed a preferred equity refinancing that has eliminated burdensome Payment-in-Kind terms related to the former Series B and Series C Preferred Stock in turn reducing cumulative interest, statement the Company's second quarter results surpassed expectations across key metrics including biomass production, revenue, gross profit, Adjusted EBITDA; statement that guidance for Q3 of 2025 and remainder of the year is based on the decision to reduce production due to temporary labor constraints at our farms amidst changes made in response to recent events; guidance that Q3 revenue is expected to be between $35 million and $38 million, roughly $25 million to $30 million below where we were tracking based on production levels prior to July 10th; guidance that the Company anticipates Q3 biomass production of 95,000 and 100,000 pounds, less than 40% of what we would typically expect; guidance that coinciding with a ramp in staffing, Q4 production is expected to be approximately double Q3 levels; guidance that with the increased production, we expect Q4 revenues to rebound and be slightly below last year's period at approximately $53 million; guidance that full-year revenue is anticipated to be in the range of $190 million and $195 million, down from prior guidance of $220 million to $230 million; guidance that Q3 average selling price for wholesale biomass is assumed to be between $178 and $183 per pound, down from $229 last year; guidance that Q3 cost of production will be approximately $160 per pound due to lower production in the quarter and labor inefficiency of bringing on a new workforce; guidance that Q4 cost of production is expected to be approximately $110 per pound as production increases and efficiency improves with the workforce; guidance that we anticipate gross margin in the second half of the year will be in the mid 30% range; guidance that full year adjusted EBITDA is now expected to be between $23 million and $26 million which compared to prior guidance in the mid $40 million with AEBITDA in the second half estimated at flat to $3 million; and guidance that full year wholesale biomass production is forecasted to be approximately 670,000 with a cost of production of approximately $110 and an average selling price between $183 and $188 per pound. Although the Company believes that the expectations expressed in such statements are based on reasonable assumptions, such statements do not guarantee future performance and actual results or developments may differ materially from those in the statements. There are certain factors that could cause actual results to differ materially from those in the forward-looking information, including financial and operational results not proving to be as expected or on the timelines expected; the Company not completing certain proposed acquisition or financing transactions at all, or on the timelines expected; the Company not achieving the synergies expected; and other risks disclosed in the Company's Annual Information Form and other public filings on SEDAR+ at Accordingly, readers should not place undue reliance on forward-looking statements. For more information on the Company, investors are encouraged to review the Company's public filings on SEDAR+ at The forward-looking statements and financial outlooks contained in this news release speak only as of the date of this news release or as of the date or dates specified in such statements. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law. For further information, please contact: Glass House Brands DeCourcey, Vice President of Investor RelationsT: (781) 724-6869E: ir@ Investor Relations Contact: KCSA Strategic CommunicationsPhil CarlsonT: 212-896-1233E: GlassHouseIR@ in to access your portfolio
