UPDATE: Bank of America Initiates Coverage on Empire State Realty Trust with Buy Rating, $15.75 PT on Value-Add Office Portfolio Concentrated in Midtown NYC

In a report published Monday, Bank of America analyst James Feldman initiated coverage on

with a Buy rating and $15.75 price target. In the report, Bank of America noted, “We are initiating coverage of Empire State Realty Trust (ESRT) with a $15.75 price objective and Buy rating. ESRT owns and operates a portfolio of primarily office buildings in Manhattan and the NYC suburbs, including the iconic Empire State Building (ESB). The ESB Observatory and broadcasting income now generate a combined 34% of ESRT's forward 12-month (FTM) NOI, and 79% of the ESB's FTM NOI, but this contribution should decline as ESRT leases vacant space in the portfolio. ESRT recently completed its IPO, which was a roll-up of the partnership interests that owned the same assets. ESRT plans to create value by leasing vacancy in the portfolio and acquiring Manhattan office assets. Our projected 2.4% yield and 19% potential total return warrant a Buy rating on valuation. Our PO is in line with our forward 12-month NAV.” Empire State Realty Trust closed on Friday at $13.51.