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 2024, up from $0.93 in 2023, and record leasing of 1.325 million sq ft, the highest since 2019.

• Manhattan office portfolio leased rate rose to 94.2% with 12 consecutive quarters of positive absorption and mark-to-market lease spreads.

• Observatory business delivered NOI above 2019 and pre-COVID levels, with $29 million in Q4 and $100 million for the year, up 6% year-over-year, and was named #1 global attraction by Tripadvisor.

• Portfolio is diversified across office, retail, multifamily, and observatory assets, emphasizing modern, amenitized, energy-efficient properties in prime NYC locations.

• 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, including $0.01 of non-recurring items; full-year Core FFO was $0.95 per share, or $0.91 adjusted for non-recurring items.

• Total revenues for 4Q 2024 were $197.6M, up from $192.9M in 4Q 2023; full-year revenues reached $767.9M, up from $739.6M in 2023.

• Same-store property cash NOI decreased 2.9% in Q4 but increased 5.2% for the year; flat in Q4 when adjusted for non-recurring items.

• Observatory NOI reached $29 million in Q4 and $100 million for the year, up 6% year-over-year.

• FAD for 2024 was $91 million, impacted by timing of a $23.5 million tenant improvement disbursement; adjusted FAD payout ratios were 36% for Q4 and 33% for the year.

Outlook and guidance

• 2025 Core FFO per diluted share guidance is $0.86–$0.89, reflecting a decline from 2024 due to lower interest income, higher G&A, and one-time items.

• Adjusted same-store property cash NOI growth expected between -2.0% and +4% in 2025, with commercial occupancy guidance of 89%-91% by year-end.

• 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, managing expenses, and maintaining balance sheet flexibility.