Empire State Realty Reports Middling Third-Quarter Results; Reducing Fair Value Estimate to $10

No-moat Empire State Realty Trust reported middling third-quarter results. Core funds from operations came in at $0.21 per share, higher than the $0.20 in core FFO during the same quarter last year. As per management's previous guidance, same-store property cash net operating income excluding lease termination fees decreased 7.5% from the third quarter of 2021, primarily driven by the normalization of operating expenses due to increased building utilization. The company reported an occupancy rate of 84.2% in the third quarter, down 10 basis points on a sequential basis and up 70 basis points from a year ago. We have reduced our fair value estimate to $10 per share from $10.50 after moderating our long-term rent growth and occupancy expectations for the company.