Angela L. Kleiman
President and Chief Executive Officer at Essex Property Trust
Good morning, and thank you for joining Essex's first quarter earnings call. Barb Park will follow with prepared remarks and Rylan Burns is here for Q&A. We are pleased to kick off our 2024 earnings with a notable increase in our full year guidance. This is primarily driven by solid first quarter results with core FFO per share of 4.9%, exceeding the high end of our original guidance. Barb will provide more details on our financial performance in a moment. Today, my comments will focus on market fundamentals and operational highlights, followed by an update on the investment market.
Heading into 2024, consensus forecast was a slowdown for the U.S. and so far, U.S. job growth has trended better than initial forecast. Job quality, on the other hand, has been concentrated in government and low-wage service sectors. In the West Coast, the tech industry is a primary source of high-paying jobs and job growth in this industry has led because of evolving business strategies as companies reallocate resources to artificial intelligence opportunities. However, we have seen encouraging signs, including a steady increase in job openings in our markets by the top 20 tech companies.
As for our near-term outlook, recent information data and Fed commentary have resulted in elevated uncertainty regarding the path of interest rate cuts. With this in mind, we do not anticipate an imminent improvement in job growth in the high-paying sectors, which is typically the key catalyst to accelerate demand for housing and rent growth. While job growth on the West Coast has remained soft. Our steady performance year-to-date is attributed to two factors: first, limited housing supply. This is a significant structural benefit and a pillar of our California investment thesis.
Lengthy and costly entitlement process effectively deters housing supply. To this point, total housing permits as a percentage of stock continues to remain well below 1% in Essex, California markets. Our performance today demonstrates this supply advantage. It is a key stabilizer during soft demand periods and a driver of rent growth outcomes over the long term. The second positive factor is rental affordability which is driven by wages growing faster than rents in FX markets. Additionally, the cost of homeownership continues to rise.
The median cost of owning a home is 2.5 times more expensive than renting in our markets. Likewise, the percentage of our turnover attributed to purchasing a home has fallen from around 12% historically to 5% today. Accordingly, rental affordability supports a long runway for rent growth in the FX markets. Turning to first quarter operations. We achieved a 2.2% growth in blended lease rates, which consists of 10 basis points on new leases and 3.9% on renewals.
Our new lease rates are tempered by delinquency-related turnover in LA and Alameda, which comprise of approximately 25% of our total same-store portfolio. If we excluded these two regions, new lease rates would have been 150 basis points higher at 1.6%. Moving on to regional highlights. Seattle was our best-performing region, achieving blended rates of 3.6% with new lease rate growth of 1.3%. New lease rates turned positive in February, led by the east side and the positive trend has continued.
Northern California was our second best performing region with 2.1% blended rate growth and flat new lease rates. San Mateo was our strongest market, offset by the east side, which remained challenged, primarily from delinquency impact in Alameda County. Excluding Alameda County, new lease rates in Northern California would have been 70 basis points. As for Southern California, this region continues to be a steady performer, generating blended rate growth of 1.7%, with negative 30 basis points in new lease rates caused by delinquency in Los Angeles.
Excluding Los Angeles, average new lease rates would have been positive 3.1% in Southern California. Along with the improvement in eviction processing time, our operations and support teams have done an excellent job recovering long-term delinquent units at a faster pace, which has led to lower delinquency. We welcome this trend and continue to proactively build occupancy in anticipation of recapturing more units in this region. We view this temporary trade-off as net beneficial to long-term revenue growth.
As for current operating conditions, at the end of April, we are in a solid position with 96% occupancy heading into peak leasing season. Concessions for the portfolio averaged only 3.5 days. And aside from areas with delinquency headwinds discussed earlier, we see opportunities to increase rental rates throughout our portfolio. Lastly on the transaction market. Deal volume remains thin compared to recent years, and we continue to see strong investor demand for multifamily properties in our markets.
With cap rates ranging from mid-4% for core to mid 5% for value-add communities. Against this backdrop of limited transaction volume, we have created external growth opportunities, generating FFO and NAV per share accretion through our joint venture platform. In the first quarter, we purchased our partner's interest in a $505 million joint venture portfolio that will produce almost $2 million of FFO accretion for us in 2024.
In fact, since inception, our private equity platform has delivered a 20% IRR and over $160 million to promote income for our shareholders and remains an attractive alternative source of capital. In conclusion, we intend to pursue growth through acquisitions while maintaining our disciplined capital allocation strategy and our core principle of generating accretion to create significant value for our shareholders.
With that, I'll turn the call over to Barb.