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Sep 30, 2022
Empire State Realty Trust Q3 2022 Earnings Report
Announced third quarter 2022 results with net income of $0.03 per fully diluted share and Core FFO of $0.21 per fully diluted share.
Key Takeaways
Empire State Realty Trust reported its Q3 2022 results, with a net income of $0.03 per fully diluted share and Core FFO of $0.21 per fully diluted share. The company's total commercial portfolio is 88.5% leased, and the Empire State Building Observatory generated $24.5 million of NOI. ESRT repurchased $20.1 million of common stock and achieved carbon neutrality for its 9.9 million square foot commercial portfolio.
Core FFO of $0.21 per fully diluted share, compared to $0.20 per fully diluted share in Q3 2021.
Same-Store Property Cash Net Operating Income excluding lease termination fees decreased 7.5% from Q3 2021.
Total commercial portfolio is 88.5% leased; Manhattan office portfolio is 89.4% leased.
Empire State Building Observatory generated $24.5 million of NOI.
Forward Guidance
The Company updated its 2022 Core FFO guidance to a revised range of $0.83 to $0.85 per fully diluted share, from $0.80 to $0.85 per fully diluted share. The expected Observatory NOI for FY 2022 was revised from $74 to $77 million to $67 to $70 million.
Positive Outlook
- Includes $0.02 from the multifamily acquisition that closed in late-December 2021
- Includes ~270M fully diluted shares as of October 24, 2022
- SS Occupancy at year-end 84% to 86%
- Base case reflects 4Q22 hypothetical Observatory admissions at two-thirds of 4Q19 visitation
- Achievement of carbon neutrality for its 9.9 million square foot commercial portfolio
Challenges Ahead
- Primarily driven by normalization of operating expenses as building utilization increases; ~10% y/y increase in SS operating expenses
- Also impacted by late-2021 occupancy decline
- Reflects 4Q expenses of approximately $8M - $9M
Historical Earnings Impact
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Avg. Return Before/After Earnings
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