Monday, September 21, 2020

Buying Empire State Realty Trust (ESRT) @ $6.00

 The company owns the Empire State building as well as a portfolio of mostly office properties in Manhattan.

This investment seems right for someone with some patience. The thought that covid-19 will cause New York city offices to remain empty sounds ridiculous to me and like an investment opportunity. Empire State Realty is pure play bet against that sentiment. Note that the NYC pure play is what I'm looking for.

- The company is well funded with $1B in cash.

- Recent surveys have indicated that most people want to work in offices.

- During Q2, rental renewal rates were up 2.8%

- ESRT collected 84% of second quarter total billings - 86% for office rental and 75% for commercial.

- The company has no near-term debt and revolving credit facility expires in August 2021 and has 2 six months extension options.

- The renovation of the Empire State Building observatory has been completed and should start generating (gradually) significant revenue.

- Starbucks has signed a lease for a 23,000 ft store in the building.

- This is a long term investment.

- My total exposure to real estate REIT's is now about 10% of portfolio.

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