Empire State Realty Trust Inc (ESRT) Raises 2023 Guidance Following Q3 Results
Empire State Realty Trust Inc (NYSE:ESRT) reported a net income per fully diluted share of $0.07 and core FFO per fully diluted share of $0.25 for Q3 2023.
The company's liquidity stands at $1.2 billion with no floating rate debt exposure and no debt maturity until November 2024.
ESRT raised its 2023 guidance following the Q3 results.
The company's property portfolio contained 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space, and 727 residential units as of September 30, 2023.
Empire State Realty Trust Inc (NYSE:ESRT) released its earnings report for the third quarter of 2023 on October 25, 2023. The company reported a net income per fully diluted share of $0.07 and a core FFO per fully diluted share of $0.25. ESRT also reported $1.2 billion of liquidity, no floating rate debt exposure, and no debt maturity until November 2024.
Financial Highlights
ESRT's property portfolio contained 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space, and 727 residential units as of September 30, 2023. The total commercial portfolio was 87.0% occupied and 90.5% leased. The total office space was 86.7% occupied and 90.5% leased. The total retail space was 90.4% occupied and 91.5% leased. The total multifamily portfolio was 97.1% leased.
During the third quarter of 2023, the company signed 21 leases in the total portfolio totaling 248,479 square feet. Within the Manhattan office portfolio, the company signed 18 office leases totaling 235,438 square feet.
Operational Highlights
Observatory revenue for the third quarter of 2023 was $37.6 million and expenses were $9.5 million. Observatory NOI was $28.1 million, a 14% increase year-over-year. This represents a 99% NOI recapture rate as a percentage of 2019 levels.
In the third quarter of 2023, the company closed on the acquisition of a prime retail asset located in the Williamsburg neighborhood of Brooklyn, New York, for $26.4 million. The transaction was funded by proceeds from a recent non-core asset disposition in a 1031, tax deferred exchange, and cash from the companys balance sheet.
Balance Sheet and Dividend Details
The company had $1.2 billion of total liquidity as of September 30, 2023, which was comprised of $354 million of cash, plus $850 million available under its revolving credit facility. At the same date, the company had total debt outstanding of approximately $2.2 billion, no floating rate debt exposure, and a weighted average interest rate of 3.9% per annum. The weighted average term to maturity was 5.7 years and the company has no debt maturity until November 2024. At September 30, 2023, the companys ratio of net debt to adjusted EBITDA was 5.5x.
On September 29, 2023, the company paid a quarterly dividend of $0.035 per share or unit, as applicable, for the third quarter of 2023 to holders of the companys Class A common stock (NYSE: ESRT) and Class B common stock and to holders of the Series ES, Series 250 and Series 60 partnership units (NYSE Arca: ESBA, FISK and OGCP, respectively) and Series PR partnership units of Empire State Realty OP, L.P., the companys operating partnership (the Operating Partnership).
2023 Earnings Outlook
The company updates the 2023 Core FFO guidance range to $0.85 to $0.87 per fully diluted share. This reflects an improvement in the 2023 same-store property cash NOI outlook. The companys guidance does not include the impact of any significant future lease termination fee income or any unannounced acquisition, disposition or other capital markets activity.
Explore the complete 8-K earnings release (here) from Empire State Realty Trust Inc for further details.
This article first appeared on GuruFocus.
