On July 24, 2024, Empire State Realty Trust Inc (ESRT, Financial) released its 8-K filing for the second quarter of 2024. Empire State Realty Trust operates as a pure-play greater New York and Manhattan-focused REIT, featuring its landmark Empire State Building office and observation deck. The company owns and operates around 9.4 million square feet of office space, about 80% of which is located in Manhattan.
Performance Overview
Empire State Realty Trust Inc (ESRT, Financial) reported a net income per fully diluted share of $0.10, surpassing the analyst estimate of $0.04. The company also reported core funds from operations (FFO) per fully diluted share of $0.24. Revenue for the quarter came in at $189.54 million, slightly above the estimated $189.40 million.
Key Financial Achievements
Empire State Realty Trust Inc (ESRT, Financial) achieved several notable financial milestones during the second quarter:
- Signed 272,000 rentable square feet of leases, marking the 10th consecutive quarter of positive leased absorption and the 12th consecutive quarter of positive leasing spreads.
- Maintained over $1.0 billion in liquidity with no floating rate debt exposure.
- Reaffirmed its 2024 FFO guidance.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $189.54 million | $190.54 million |
| Net Income | $28.56 million | $36.96 million |
| Net Income per Share | $0.10 | $0.14 |
Balance Sheet and Cash Flow
As of June 30, 2024, Empire State Realty Trust Inc (ESRT, Financial) reported total liquidity of $1.0 billion, including $536 million in cash and $500 million available under its revolving credit facility. The company had total debt outstanding of approximately $2.3 billion with a weighted average interest rate of 4.27% per annum and no floating rate debt exposure. The ratio of net debt to adjusted EBITDA stood at 5.1x.
Leasing and Occupancy
The company signed 35 leases totaling 271,981 square feet during the quarter, with an average cash rent of $67.41 per square foot. The total commercial portfolio was 88.5% occupied and 92.6% leased as of June 30, 2024.
Observatory Performance
The Empire State Building Observatory generated $34.1 million in revenue and $25.2 million in net operating income (NOI) for the second quarter, reflecting a 1.6% year-over-year increase in NOI.
Portfolio Transactions
Subsequent to the quarter end, Empire State Realty Trust Inc (ESRT, Financial) entered into agreements to acquire prime retail portfolios on North 6th Street in Williamsburg, Brooklyn for a total of $195 million. These acquisitions are consistent with the company's strategy to recycle capital from non-core suburban assets into strong NYC assets.
Dividend and Share Repurchase
On June 28, 2024, the company paid a quarterly dividend of $0.035 per share for the second quarter of 2024. The stock repurchase program, which began in March 2020, has repurchased approximately $293.7 million worth of shares at a weighted average price of $8.18 per share, with no repurchases during the second quarter.
Conclusion
Empire State Realty Trust Inc (ESRT, Financial) demonstrated strong financial performance and leasing activity in the second quarter of 2024, exceeding analyst estimates and reaffirming its 2024 FFO guidance. The company's strategic acquisitions and robust liquidity position it well for future growth in the competitive NYC real estate market.
Explore the complete 8-K earnings release (here) from Empire State Realty Trust Inc for further details.
