Empire State Earnings: Office Occupancy and Leased Rates Continue to Recover, but Shares Are Rich

No-moat-rated Empire State Realty reported decent results in the third quarter as core funds from operations, or FFO, was reported at $0.26 per share in the current quarter, compared with $0.25 per share during the same quarter last year. The third-quarter results were positively affected by $0.02 per share of lease termination fee income. Management has updated its 2024 full-year guidance to around the top end of its previous expectations. Core FFO in 2024 is expected to be in the $0.92-$0.94 per share range, with an occupancy rate in the 88%-89% range by the end of 2024 compared with 88.8% as of the end of the third quarter. Same-store property cash net operating income is now expected to be in the 3%-4% range for the full year. We are maintaining our fair value estimate of $9.60 per share for Empire State Realty after incorporating the third-quarter results.