Analyst Note| Yousuf Hafuda |
Empire State Realty reported third-quarter results that demonstrate the firm’s vulnerability amid the current pandemic environment. The company reported third-quarter core funds from operations of $0.12 per share, a significant decline as compared with $0.22 during the third quarter of 2019. The precipitous decline highlights the firm’s tough position with a slightly lower quality portfolio of office properties and an observatory deck that is being badly impacted by depressed tourism numbers. With the recent results providing some greater clarity, we are reducing our fair value estimate for no-moat rated Empire State Realty to $11 per share from $13.