ESBA

Empire State Realty OP, L.P.

NYSE · REAL ESTATE · REAL ESTATE INVESTMENT TRUSTS

4.83

+0.07 +1.47%

USD · close Oct 26

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MKT CAP —P/E 241.5DIV YIELD 2.90%FCF YIELD —REV TTM $784.2M +2.0%NET INCOME $9.3M −86.5%NET DEBT $520.7M52W 3.85 – 7.75SEC XBRL · TTM TO Invalid Date

How ESBA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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Any forward-looking statement speaks only as of the date of this report.
We undertake no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by law.
Overview 2025 Highlights • Net income attributable to the Company of $68.8 million. • Core Funds From Operations ("Core FFO") of $234.2 million attributable to common unitholders. • Signed a total of 1,009,009 rentable square feet of new, renewal and expansion leases. • In June 2025, we closed on the acquisition of two retail properties on North 6th Street in Williamsburg, Brooklyn for a purchase price of $31.0 million. • In December 2025, we closed on the acquisition of 130 Mercer Street, located in the SoHo submarket of Manhattan, for a purchase price of $386.0 million.
Results of Operations Overview The discussion below relates to the financial condition and results of operations for the years ended December 31, 2025 and 2024.
For a discussion of our 2023 financial results as compared to our 2024 financial results, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024 The following table summarizes the historical results of operations: Years Ended December 31, 2025 2024 Change % (amounts in thousands) Real Estate Segment Observatory Segment Total Real Estate Segment Observatory Segment Total Revenues: Rental revenue $ 626,213 $ — $ 626,213 $ 614,596 $ — $ 614,596 $ 11,617 1.9 % Observatory revenue — 128,329 128,329 — 136,377 136,377 (8,048) (5.9) % Lease termination fees 464 — 464 4,771 — 4,771 (4,307) (90.3) % Third-party management and other fees 1,483 — 1,483 1,170 — 1,170 313 26.8 % Other revenues and fees 11,781 — 11,781 11,009 — 11,009 772 7.0 % Total revenues 639,941 128,329 768,270 631,546 136,377 767,923 347 0.1 % Operating expenses: Property operating expenses 184,714 — 184,714 179,175 — 179,175 (5,539) (3.1) % Ground rent expenses 9,326 — 9,326 9,326 — 9,326 — — % General and administrative expenses 72,842 — 72,842 70,234 — 70,234 (2,608) (3.7) % Observatory expenses — 38,237 38,237 — 36,834 36,834 (1,403) (3.8) % Real estate taxes 132,740 — 132,740 128,826 — 128,826 (3,914) (3.0) % Depreciation and amortization 194,591 171 194,762 184,667 151 184,818 (9,944) (5.4) % Total operating expenses 594,213 38,408 632,621 572,228 36,985 609,213 (23,408) (3.8) % Operating income 45,728 89,921 135,649 59,318 99,392 158,710 (23,061) (14.5) % Intercompany rent income (expense) 76,306 (76,306) — 83,477 (83,477) — — — % Other income (expense): Interest income 8,222 526 8,748 20,853 445 21,298 (12,550) (58.9) % Interest expense (103,133) — (103,133) (105,239) — (105,239) 2,106 2.0 % Interest expense associated with property in receivership (647) — (647) (4,471) — (4,471) 3,824 85.5 % Loss on early extinguishment of debt (97) — (97) (553) — (553) 456 82.5 % Gain on disposition of properties 35,018 — 35,018 13,302 — 13,302 21,716 163.3 % Income before income taxes 61,397 14,141 75,538 66,687 16,360 83,047 (7,509) (9.0) % Income tax expense (1,131) (1,427) (2,558) (413) (2,275) (2,688) 130 4.8 % Net income 60,266 12,714 72,980 66,274 14,085 80,359 (7,379) (9.2) % Private perpetual preferred unit distributions (4,201) — (4,201) (4,201) — (4,201) — — % Net income attributable to non-controlling interests — — — (4) — (4) 4 100.0 % Net income attributable to common unit holders $ 56,065 $ 12,714 $ 68,779 $ 62,069 $ 14,085 $ 76,154 $ (7,375) (9.7) % Real Estate Segment Rental Revenue The increase in rental revenue during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily attributable to a $7.6 million increase in tenant reimbursement income and $5.9 million increase due to higher base rent from new or renewed tenants.
The increases were partially offset by a net $1.9 million decrease in revenue from our recent transaction activity as disclosed in "Financial Statements - Note 3.
Acquisitions and Dispositions" in this Annual Report on Form 10-K.
Property Operating Expenses The increase in property operating expenses during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily due to higher cleaning-related payroll costs, utilities costs, and repair and maintenance costs in 2025 relating to increased building utilization and certain local law compliance costs.
The increases were partially offset by a net decrease in property operating expenses from our recent transaction activity as disclosed in "Financial Statements - Note 3.
Real Estate Taxes The increase in real estate taxes during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily attributable to higher assessed values for multiple properties, partially offset by a net decrease from our recent transaction activity as disclosed in "Financial Statements - Note 3.
Depreciation and Amortization Depreciation and amortization increased during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 primarily due to depreciation on building and tenant improvement assets placed in service as a result of our increase in leasing activity.
The remaining activity relates to our recent transaction activity as disclosed in "Financial Statements - Note 3.
Interest Income The decrease in interest income during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 is primarily due to lower cash balances due to unlevered property acquisitions during 2024 and 2025, the paydown of the $120.0 million revolving credit facility and the $100.0 million Series A senior unsecured notes in March 2025.
Debt" in this Annual Report on Form 10-K.
Gain on Sale/Disposition of Property The gain on disposition activity for the year ended December 31, 2025 relates to the disposition of Metro Center in Stamford, Connecticut as disclosed in "Financial Statements - Note 3.
The gain on disposition activity for the year ended December 31, 2024 relates to the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut.
Observatory Segment Observatory Revenue Observatory revenues were lower due to lower visitation during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024, primarily due to lower levels of international tourism in 2025 as compared to 2024.
While observatory revenues declined due to lower levels of international tourism, this was partially offset by an increase in domestic visitation and overall revenue per visitor for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024.
Observatory Expenses The increase in Observatory expenses during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was driven by increased costs such as marketing and maintenance costs.
Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, including lease-up costs, fund our redevelopment and repositioning programs, acquire properties, make distributions to our securityholders and fulfill other general business needs.
Based on the historical experience of our management and our business strategy, in the foreseeable future we anticipate we will generate positive cash flows from operations.
In order for ESRT to qualify as a REIT, ESRT is required under the Internal Revenue Code of 1986 to distribute to its stockholders, on an annual basis, at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains.
We expect to make quarterly distributions, as required, to our securityholders.
While we may be able to anticipate and plan for certain liquidity needs, there may be unexpected increases in uses of cash that are beyond our control and which would affect our financial condition and results of operations.
For example, we may be required to comply with new laws or regulations that cause us to incur unanticipated capital expenditures for our properties, thereby increasing our liquidity needs.
Even if there are no material changes to our anticipated liquidity requirements, our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or needed.
Our primary sources of liquidity will generally consist of cash on hand, cash generated from our operating activities, debt issuances, common and/or preferred equity issuances and unused borrowing capacity under our unsecured revolving credit facility.
We expect to meet our short-term liquidity requirements, including distributions, operating expenses, working capital, debt service, and capital expenditures from cash flows from operations, cash on hand, debt issuances, common and/or preferred issuances and available borrowing capacity under our unsecured revolving credit facility.
The availability of these borrowings is subject to the conditions set forth in the applicable loan agreements.
We expect to meet our long-term capital requirements, including acquisitions, redevelopments, repositioning and capital expenditures through our cash flows from operations, cash on hand, our unsecured revolving credit facility, mortgage financings, debt issuances, common and/or preferred equity issuances and asset sales.
Our properties require periodic investments of capital for individual lease related tenant improvements allowances, general capital improvements and costs associated with capital expenditures.
Our overall leverage will depend on our mix of investments and the cost of leverage.
ESRT's charter does not restrict the amount of leverage that we may use.
"Risk Factors — Risks Relating to Our Indebtedness and Liquidity" in this Annual Report on Form 10-K for more information.
At December 31, 2025, we had approximately $132.7 million available in cash and cash equivalents and there was $475.0 million available under our unsecured revolving credit facility.
At December 31, 2025, we had approximately $2.4 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.48% and a weighted average maturity of 4.8 years.
As of December 31, 2025, excluding debt amortization, we have a debt maturity of: Year Amortization Maturities Total 2026 $ 3,958 $ 50,000 $ 53,958 2027 4,276 155,000 159,276 2028 3,555 146,091 149,646 2029 3,890 395,000 398,890 2030 4,511 508,600 513,111 Thereafter 10,123 1,104,007 1,114,130 Total $ 30,313 $ 2,358,698 $ 2,389,011 As of December 31, 2025, interest expense obligations from 2026 through 2030 and thereafter amounts to approximately $515.4 million.
In connection with our three ground leases (i.e. long-term leaseholds of the land and the improvements) at 1350 Broadway, 111 West 33rd Street and 1400 Broadway, we also have contractual rent obligations totaling $65.2 million as of December 31, 2025, of which $7.4 million is due within the next five years.
Portfolio Transaction Activity Refer to Part I.

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RISK FACTORS You should carefully consider the following risks, together with all other information in this Annual Report on Form 10-K, before you decide to retain or make an investment in our securities.
Additional risks currently unknown or deemed immaterial could have a material adverse effect on us and our REIT qualification, which could reduce our share price and cause loss of all or part of your investment.
Some items below are forward-looking statements.
See “Forward-Looking Statements.” Risks Related to Our Business and Properties Risks Relating to Portfolio Concentration Our properties are geographically concentrated in New York and Connecticut, and adverse state or local economic or regulatory developments could have a material adverse effect on our business and financial condition.
Our commercial portfolio is comprised of properties primarily in New York City as well as in Stamford, Connecticut.
As a result, our business is dependent on the New York City economy in general and the market for office, retail and multifamily space in New York City in particular, which exposes us to greater economic and regulatory risks than if we owned a more geographically diverse portfolio.
These risks include business layoffs, downsizing, industry slowdowns, and relocations of businesses as well as increases in real estate and other local taxes, and regulatory compliance costs.
The current federal tax limits on the deductibility of state and local taxes as well as higher individual tax rate proposals may negatively impact demographic trends in high tax states like New York and Connecticut.
We rely on three properties, in particular the Empire State Building and its Observatory, for a significant portion of our revenue.
For the year ended December 31, 2024, three of our properties together accounted for approximately 55.5% of our portfolio’s rental revenues, with the Empire State Building individually accounting for approximately 31.9%.
Our revenue and cash available for distribution would be materially and adversely affected if any of these three properties were materially damaged or a significant number of their tenants experienced financial strain leading to lease default or bankruptcy filing.
Additionally, for fiscal years ended December 31, 2024, 2023 and 2022, we derived revenue of approximately $136.4 million, $129.4 million and $106.0 million, respectively, from the Empire State Building’s Observatory operations.
Loss of revenue from the Observatory has in the past and may in the future have a material adverse impact on our results of operations and financial condition.
Our five largest tenants represented approximately 16.5% of our total commercial portfolio’s annualized rent as of December 31, 2024.
As of December 31, 2024, our five largest tenants together represented approximately 16.5% of our total commercial portfolio’s annualized rent, with our largest tenant leasing an aggregate of 0.5 million rentable square feet of office space at one of our office properties, representing approximately 5.4% of our total commercial portfolio rentable square feet and approximately 6.1% of our total commercial portfolio annualized rent.
Our significant tenants have in the past, and may in the future, experience financial strain leading to lease default or bankruptcy.
In such cases, we may not recover our upfront investments in tenant improvement allowances, concessions, and transaction costs like professional fees and commissions.
Upon tenant default, we may experience delays and substantial costs in enforcing our rights and protecting our investment.
Our business and financial condition could be materially adversely affected if any of our significant tenants were to suffer a downturn in their business, become insolvent, default under their leases, and/or fail to renew on favorable terms or at all.
The threat or occurrence of a terrorist event, particularly in New York City, may materially and adversely affect the value of our properties and our ability to generate cash flow.
A terrorist event could cause insurance premiums at certain of our properties to increase significantly.
Additionally, the threat or occurrence of a terrorist event may cause people to relocate from New York City and Stamford, Connecticut to less populated, lower-profile areas.
This could trigger a decrease in the demand, occupancy and rental rates for, and materially affect the value of, our properties and our cash flow.
Such negative consequences may be even more likely in a high-profile property like the Empire State Building and its Observatory.
Risks Relating to the Real Estate Market Adverse economic and geopolitical conditions impacting the industries of our tenants could cause reduced demand, rental rates and occupancy for our office, multifamily, and retail space.
Downturn in global, national and/or local economies that decreases prospects, demand, occupancy and rental rates for our office, multifamily and retail space can have an adverse impact on the value or price of our assets.
For example, the COVID-19 pandemic impacted the entire U.S., including New York and Connecticut where our properties are located.
Any future public health crisis or economic downturn could have significant impacts on how people live, work, and travel in ways that have affected and may in the future affect our properties.
Such events can also cause delays, cost increases and/or cancellations of planned capital projects.
Certain remote work practices implemented in reaction to the pandemic are still in place and have shifted employers and employees away from fully in-person work environments, and a more permanent shift of this type could have an adverse effect on the overall demand for our office space.
Additionally, with increased employer flexibility to work from home, current and prospective residents may be less likely to live in dense urban centers or multifamily housing like the properties we own.
These trends have impacted our results of operations since the pandemic.
If these trends continue, it could impair demand and value at our properties.
As of December 31, 2024, approximately 19.4% of our commercial portfolio’s annualized rent was comprised of retail tenants.
In the past, the retail industry has faced reductions in sales revenues and increase in bankruptcies throughout the United States, due to changes in consumer behavior and shift to online shopping.
This has reduced rents and demand for physical retail space at street level, which typically commanded the highest rental rates per square foot in office properties.
This has also reduced rents and demand for physical retail space located above or below street level.
Continued reduced demand, rental rates and occupancy rates for our retail space could have a material adverse effect on our business and financial condition.
The bankruptcy or insolvency of any tenant could result in the termination of such tenant’s lease and material losses to us.
The occurrence of a tenant bankruptcy or insolvency has in the past, and could in the future, diminish or terminate the income we receive from that tenant.

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Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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