Empire State Realty Trust (ESRT) Q2 2024 earnings summary

Executive summary

• Achieved strong Q2 and year-to-date results with continued leasing momentum, 93.3% leased Manhattan office portfolio, and 12 consecutive quarters of positive lease spreads and absorption.

• Empire State Building Observatory named #1 global attraction by Tripadvisor, with Q2 NOI of $25.2 million and year-to-date NOI up 5.8% year-over-year.

• Entered agreements to acquire two prime retail portfolios in Williamsburg, Brooklyn for $195 million, expected to close in Q3 2024.

• Sustainability remains a core focus, with carbon neutrality since 2022, 100% renewable wind power, and the 2024 BOMA International Earth Award.

• Management team has deep NYC market expertise and significant shareholder alignment.

Financial highlights

• Core FFO for Q2 2024 was $66 million, or $0.24 per diluted share; net income for Q2 2024 was $28.6 million.

• Same-store property cash NOI increased 7.4% year-over-year, with adjusted same-store cash NOI up 6% excluding one-time items.

• Total Q2 2024 revenues were $189.5 million; NOI for Q2 2024 was $104.5 million.

• Rental revenue for the trailing twelve months ended June 30, 2024, was $540.6 million.

• Observatory segment Q2 revenue was $34.1 million, with 1,133,000 visitors in the first half of 2024, up 2% year-over-year.

Outlook and guidance

• 2024 Core FFO guidance reaffirmed at $0.90–$0.94 per diluted share, including $0.04 from multifamily assets.

• Year-end commercial occupancy expected at 87% to 89% and same-store property cash NOI growth projected at 0% to 3%.

• Observatory NOI guidance for 2024 is $94–$102 million, assuming positive revenue growth and 6-7% y/y expense increase.

• G&A expenses projected to rise to $68 million for 2024 due to executive compensation changes.

• Near-term upside from $47 million in contracted initial cash revenues from signed leases not yet commenced and free rent burn-off.