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Empire State Realty Trust Inc (ESRT)
:ESRT
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Empire State Realty
(NYSE:ESRT)
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Select Model
Rating:65Neutral
Price Target:
$8.50
▲(17.24% Upside)
Empire State Realty's overall stock score reflects strong financial performance with robust revenue growth and cash flow management. However, high leverage and a high P/E ratio pose risks. The technical indicators suggest bearish sentiment, while the earnings call highlights both achievements and challenges, leading to a balanced outlook.
Positive Factors
Strong Office Leasing Performance
The high leasing activity, especially in Manhattan, indicates strong demand for ESRT's office spaces, supporting long-term revenue stability and growth.
Sustainability Leadership
Leadership in sustainability enhances ESRT's brand value and attracts environmentally-conscious tenants, supporting long-term tenant retention and operational efficiency.
Strong Balance Sheet
A strong balance sheet with manageable debt levels provides financial stability and flexibility for future investments and growth opportunities.
Negative Factors
High Leverage
High leverage can increase financial risk, limiting the company's ability to invest in new opportunities and potentially impacting long-term financial health.
Increased Operating Expenses
Rising operating expenses can pressure profit margins and reduce cash available for reinvestment, affecting long-term profitability.
Challenges in Observatory Performance
Declines in Observatory performance can impact overall revenue and profitability, especially if tourism trends do not improve, affecting long-term financial outlook.
Empire State Realty (ESRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.23B
Dividend Yield1.82%
Average Volume (3M)1.56M
Price to Earnings (P/E)30.4
Beta (1Y)0.85
Revenue Growth1.77%
EPS Growth-8.72%
CountryUS
Employees667
SectorReal Estate
Sector Strength53
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.04
Shares Outstanding168,641,340
10 Day Avg. Volume1,630,870
30 Day Avg. Volume1,564,520
Financial Highlights & Ratios
PEG Ratio-9.89
Price to Book (P/B)1.65
Price to Sales (P/S)2.23
P/FCF Ratio6.52
Enterprise Value/Market Cap3.99
Enterprise Value/Revenue6.38
Enterprise Value/Gross Profit10.52
Enterprise Value/Ebitda13.74
Forecast
1Y Price Target
$8.58Price Target Upside18.34% Upside
Rating ConsensusHold
Number of Analyst Covering4
Empire State Realty Business Overview & Revenue Model
Company DescriptionEmpire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the World's Most Famous Building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of September 30, 2020, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio. Long the leader in energy efficiency retrofits and Indoor Environmental Quality, Empire State Realty Trust is the first commercial real estate portfolio in the U.S. to achieve the WELL Health-Safety Rating.
How the Company Makes MoneyEmpire State Realty Trust generates revenue primarily through leasing office and retail spaces within its properties. The company earns rental income from long-term leases with tenants, which typically include provisions for rent escalations over time. Additionally, ESRT benefits from ancillary income sources such as parking facilities, advertising, and revenue from retail operations within its properties. The company may also engage in property management services for third-party clients, further diversifying its revenue streams. Significant partnerships with major corporations and organizations for office leases, as well as its iconic status as a landmark, contribute to high occupancy rates and sustained demand, thus enhancing its earnings potential.
Empire State Realty Earnings Call Summary
Earnings Call Date:Jul 23, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 29, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mix of positive and negative aspects. On the positive side, Empire State Realty Trust demonstrated strong office leasing performance, leadership in sustainability, success in their multifamily portfolio, a strong balance sheet, and growth in retail acquisitions. However, these were balanced by challenges such as declines in Observatory performance, increased operating expenses, and revised guidance for Observatory NOI. The sentiment is balanced with both achievements and challenges highlighted.Q2-2025 Updates
Positive Updates
Strong Office Leasing Performance
Empire State Realty Trust achieved approximately 232,000 square feet of office leasing in the second quarter, including 202,000 square feet of new Manhattan office leasing at double-digit positive mark-to-market leasing spreads. The Manhattan office portfolio is 93.8% leased, showing an increase in occupancy.
Sustainability Leadership
Empire State Realty Trust continues to lead in sustainability, with initiatives that focus on business outcomes and achieving sustainability objectives alongside tenants.
Multifamily Portfolio Success
The multifamily portfolio is 99% occupied, achieving 8% year-over-year rent growth in the second quarter.
Strong Balance Sheet
The company maintains a strong balance sheet with no floating rate debt, no unaddressed maturity until December 2026, and a net debt-to-EBITDA ratio of 5.6x.
Growth in Retail Acquisitions
Empire State Realty Trust closed on a $31 million retail acquisition on North 6th Street in Williamsburg, Brooklyn. This acquisition adds to their existing holdings and positions them for long-term growth.
Negative Updates
Challenges in Observatory Performance
The Observatory generated $24 million in NOI in the second quarter, facing a 4.3% decline year-over-year due to a visitation decline of 2.9% and adverse weather conditions.
Increased Operating Expenses
Operating expenses increased by 8.8%, primarily due to real estate taxes, cleaning-related payroll, and nonrecurring repair work.
Revised Observatory NOI Guidance
The NOI guidance for the Observatory was revised to a range of $90 million to $94 million due to reduced tourism and adverse weather impacts.
Lower Same-Store Property Cash NOI
Same-store property cash NOI was down 3% year-over-year after excluding lease termination fees and nonrecurring revenue items.
Company Guidance
During the Empire State Realty Trust's (ESRT) second quarter 2025 earnings call, the company provided a detailed update on its financial performance and forward-looking guidance. Core Funds from Operations (FFO) for the quarter was reported at $0.22 per diluted share, while same-store property cash Net Operating Income (NOI) decreased by 3% year-over-year. The Manhattan office portfolio was 93.8% leased, with a positive mark-to-market leasing spread of 7%. The Observatory business faced challenges due to adverse weather, generating $24 million in NOI, a 4.3% decline from the previous year, with a visitation drop of 2.9%. Revenue per capita saw a 2.3% year-over-year increase. ESRT adjusted its full-year Observatory NOI guidance to between $90 million and $94 million, reflecting these challenges. Operating expenses rose by 8.8%, mainly due to real estate taxes and nonrecurring repairs. Looking ahead, ESRT anticipates core FFO for 2025 to range between $0.83 and $0.86 per share, maintaining a strong balance sheet with a leverage ratio of 5.6x net debt-to-EBITDA. The company remains focused on strategic priorities, including leasing, capital management, and sustainability initiatives.Empire State Realty Financial Statement Overview
Summary
Empire State Realty demonstrates solid revenue growth and efficient cash flow management, with strong gross profit margins. However, high leverage and declining return on equity present potential financial risks. Overall, the company is on a positive growth trajectory but should monitor its debt levels closely.Income Statement
Empire State Realty shows a strong gross profit margin of 60.63% in TTM, indicating efficient cost management. However, the net profit margin has decreased to 5.81% from 6.77% in the previous year, reflecting a slight decline in profitability. Revenue growth is robust at 22.3% TTM, showcasing a positive growth trajectory. EBIT and EBITDA margins are stable, suggesting consistent operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio is high at 2.03 TTM, indicating significant leverage, which could pose financial risks. Return on equity has decreased to 4.31% TTM, reflecting reduced profitability for shareholders. The equity ratio stands at 25.46%, showing a moderate level of equity financing relative to total assets.65
Positive
Cash Flow
Empire State Realty's free cash flow growth rate is strong at 14.42% TTM, indicating improved cash generation. The operating cash flow to net income ratio is healthy at 2.52, suggesting strong cash flow relative to earnings. The free cash flow to net income ratio remains stable at 1.0, highlighting efficient cash conversion.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 768.52M | 763.15M | 739.57M | 727.04M | 624.09M | 609.23M |
| Gross Profit | 465.94M | 408.99M | 400.56M | 405.69M | 344.61M | 318.12M |
| EBITDA | 356.59M | 343.53M | 336.62M | 343.92M | 288.66M | 251.05M |
| Net Income | 44.65M | 51.64M | 53.24M | 40.64M | -6.51M | -12.52M |
Balance Sheet | ||||||
| Total Assets | 4.08B | 4.51B | 4.22B | 4.16B | 4.28B | 4.15B |
| Cash, Cash Equivalents and Short-Term Investments | 136.73M | 385.46M | 346.62M | 264.43M | 423.69M | 526.71M |
| Total Debt | 2.10B | 2.48B | 2.27B | 2.27B | 2.34B | 2.17B |
| Total Liabilities | 2.29B | 2.73B | 2.49B | 2.48B | 2.60B | 2.42B |
| Stockholders Equity | 1.04B | 1.03B | 985.52M | 954.38M | 998.13M | 1.06B |
Cash Flow | ||||||
| Free Cash Flow | 144.25M | 260.89M | 232.49M | 84.91M | 117.45M | 39.17M |
| Operating Cash Flow | 262.70M | 260.89M | 232.49M | 211.17M | 212.49M | 182.29M |
| Investing Cash Flow | -425.03M | -397.12M | -77.34M | -230.89M | -212.74M | -143.12M |
| Financing Cash Flow | -277.49M | 158.58M | -62.87M | -140.24M | -93.05M | 257.17M |
Empire State Realty Technical Analysis
Positive
7.25
Price Trends
7.55
Positive
7.72
Negative
7.97
Negative
Market Momentum
-0.07
Positive
55.96
Neutral
46.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESRT, the sentiment is Positive. The current price of 7.25 is below the 20-day moving average (MA) of 7.51, below the 50-day MA of 7.55, and below the 200-day MA of 7.97, indicating a neutral trend. The MACD of -0.07 indicates Positive momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 46.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ESRT.
Empire State Realty Risk Analysis
Empire State Realty disclosed 59 risk factors in its most recent earnings report. Empire State Realty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Empire State Realty Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $451.01M | 16.15 | 9.16% | 8.66% | 5.57% | -14.50% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $1.23B | 30.39 | 4.36% | 1.82% | 1.77% | -8.72% | |
62 Neutral | $1.20B | 16.10 | 6.26% | 6.81% | 11.68% | 37.31% | |
59 Neutral | $615.90M | 31.93 | 8.51% | 10.47% | 5.85% | ― | |
59 Neutral | $684.11M | 73.37 | 3.55% | 9.22% | -25.73% | ― | |
55 Neutral | $1.71B | ― | -11.87% | 11.09% | -11.06% | 29.36% |
* Real Estate Sector Average
ESRT
Empire State Realty
7.68
-3.05
-28.42%
GOOD
Gladstone Commercial
11.46
-3.77
-24.75%
OLP
One Liberty Properties
20.78
-4.73
-18.54%
AHH
Armada Hoffler Properties
6.78
-3.45
-33.72%
AAT
American Assets
19.89
-5.99
-23.15%
GNL
Global Net Lease
7.62
0.41
5.69%
Empire State Realty Corporate Events
Business Operations and StrategyStock BuybackFinancial Disclosures
Empire State Realty Reports Q2 2025 Financial Results
Positive
Jul 23, 2025
On July 23, 2025, Empire State Realty Trust announced its financial results for the second quarter of 2025, reporting a net income of $0.04 per share and core funds from operations of $0.22 per share. The company signed 232,108 rentable square feet of leases and maintained a strong liquidity position with $0.7 billion and no floating rate debt exposure. The Manhattan office portfolio saw a leasing rate increase to 93.8%, and the company completed the acquisition of a retail asset in Williamsburg, Brooklyn. The Empire State Building Observatory generated $24.1 million in net operating income, and the company continued its stock repurchase program, buying back $2.1 million of common stock during the quarter.
The most recent analyst rating on (ESRT) stock is a Sell with a $7.00 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.