Empire State Earnings: Results Largely in Line With Our Expectations; 2024 FFO Guidance Reaffirmed

No-moat-rated Empire State Realty reported a decent set of numbers in the first quarter as core funds from operations, or FFO, was reported at $0.21 per share in the current quarter, around 31% higher than the $0.16 in core FFO during the same quarter last year. The full-year 2024 guidance was reaffirmed, which we see as a good sign for leasing momentum in the Manhattan office market environment. Core FFO for 2024 is guided at $0.90-0.94 per share, up 2.2% at the midpoint compared with $0.90 in core FFO during 2023 after excluding nonrecurring items. The occupancy rate is expected to be in the 87%-89% range by the end of 2024 compared with 87.6% as of the end of the first quarter. We are maintaining our fair value estimate of $9.60 per share for Empire State Realty after incorporating the first-quarter results.