OFC - Wells Fargo goes bearish on Empire State Realty Trust after YTD rally

Wells Fargo analyst Blaine Heck downgrades the Empire State Realty Trust ([[ESRT]] -0.3%) to Underweight from Equal Weight as the analyst sees the office REIT sector lagging after its YTD rally.Trims price target to $10 from $11 as ESRT has outperformed its peers YTD.Heck sees office REIT earnings initially improving as employees return to the office and collection rates return to pre-pandemic levels, but he sees that phase followed by a period of space rationalization as tenants reduce office footprints due to work-from-home and hybrid-working models.His top picks in office REITs are Highwoods Properties ([[HIW]] +0.9%) and Cousins Properties ([[CUZ]] +1.2%) due to their exposure to Sun Belt cities "that we believe will benefit from corporate expansions and relocations."Also recommends Corporate Office Properties Trust ([[OFC]] +0.0%) as its U.S. government and government contractor leased assets continue to see strong demand.Heck's rating is less optimistic than the Neutral Quant rating and the

For further details see:

Wells Fargo goes bearish on Empire State Realty Trust after YTD rally