Empire State Realty Trust (ESRT) Q4 2024 earnings summary

Executive summary

• Achieved strong Q4 and full-year 2024 results, with Core FFO per diluted share of $0.24 in Q4 and $0.95 for the year, and over 1.3 million sq ft leased, the highest annual volume since 2019.

• Manhattan office portfolio leased rate rose to 94.2%, up 160 basis points year-over-year, with 14 consecutive quarters of positive lease spreads.

• Observatory business NOI exceeded 2019 and pre-COVID levels, growing 6% year-over-year, and remains a high-margin, inflation-hedged business.

• Strategic capital recycling shifted focus to high-quality NYC multifamily and retail assets, enhancing growth and reducing CapEx.

• Strong sustainability leadership: carbon neutral since 2022, 100% renewable wind-powered, and top industry ESG rankings.

Financial highlights

• Q4 2024 Core FFO was $0.24 per diluted share; full-year Core FFO was $0.95, up from $0.93 in 2023.

• Total revenues for 4Q 2024 were $197.6M, with full-year revenues at $767.9M.

• Same-store property cash NOI decreased 2.9% in Q4 but increased 5.2% for the year; Observatory NOI reached $29M in Q4 and $100M for the year.

• FAD for Q4 and full year were $3M and $91M, respectively; adjusted FAD payout ratios were 36% and 33%.

• Paid a quarterly dividend of $0.035 per share in Q4 2024.

Outlook and guidance

• 2025 Core FFO guidance is $0.86–$0.89 per diluted share, down from 2024 due to lower interest income and higher G&A.

• Commercial occupancy expected to rise to 89%-91% by year-end 2025, with positive cash revenue growth.

• Adjusted same-store property cash NOI growth projected at 0.5%-4% for 2025; guidance range is -2.0% to +1.5%.

• Observatory NOI guidance for 2025 is $97–$102 million, with expense assumptions of $9–$10 million per quarter.

• Focus on maximizing per capita Observatory revenue and managing expenses.