Empire State Realty OP, L.P.

What they do

The company owns and operates roughly 7.9 million rentable square feet of office space, 0.8 million square feet of retail space and 743 residential units, all in New York City, with its office portfolio consisting of 10 Manhattan properties including three long-term ground leasehold interests. It runs two reporting segments: Real Estate, which collects rental revenue, and the Observatory, the observation deck atop the Empire State Building. ESRT owned approximately 61.4% of the operating partnership units as of December 31, 2025.

Revenue drivers

• Real Estate rental revenue — The dominant segment, generating $626.2 million of the $768.3 million total revenue in 2025, up 1.9% from $614.6 million in 2024.
• Empire State Building Observatory — A separate segment producing $128.3 million in 2025, down 5.9% from $136.4 million in 2024, and representing tourism-linked revenue with no rental component.
• Other revenues and fees — Includes $11.8 million of other revenues and fees plus $1.5 million of third-party management and other fees in 2025, alongside small lease termination fees of $0.5 million.

Recent performance

Full-year 2025 net income attributable to the company was $68.8 million, with Core FFO of $234.2 million and total revenues of $768.3 million, essentially flat versus 2024 as rental revenue growth of 1.9% was offset by a 5.9% decline in Observatory revenue. In the second quarter of 2026, the company reported a net loss attributable to the Company of $40.6 million, driven by a $166.1 million non-cash goodwill impairment on the Observatory reporting unit and $5.5 million of one-time severance, partly offset by a $124.6 million gain on the sale of 250 West 57th Street. Second-quarter 2026 total revenues rose 3.0% to $196.9 million, with rental revenue up 7.6% to $165.2 million but Observatory revenue down 28.5% to $24.2 million. Core FFO for the second quarter of 2026 was $57.1 million.

Strategy

Management's stated objectives are to maximize cash flow and total returns and increase property value by leasing space, benefiting from what it describes as a tenant flight to quality. In 2025 the company signed 1,009,009 rentable square feet of new, renewal and expansion leases and grew Manhattan office occupancy, excluding properties under redevelopment, storage and broadcasting, by 90 basis points to 89.9%. It has pursued acquisitions, buying two Williamsburg retail properties for $31.0 million in June 2025, 130 Mercer Street in SoHo for $386.0 million in December 2025, and in May 2026 the land under 111 West 33rd Street and 1400 Broadway for $110.0 million. The company also recycles capital, as shown by the 2026 disposition of 250 West 57th Street.

Risks

• Geographic concentration — The portfolio is entirely in New York City, exposing results to local economic, tax and regulatory conditions rather than a diversified national footprint.
• Property concentration — Three properties produced approximately 55.6% of 2025 rental revenue, with the Empire State Building alone at approximately 32.3%.
• Observatory performance — Observatory revenue fell to $128.3 million in 2025 from $136.4 million in 2024 and dropped 28.5% year-over-year in the second quarter of 2026, and the segment carried a $166.1 million goodwill impairment charge in that quarter.
• NYC regulatory and cost environment — The company cites compliance costs including Local Law 97, higher real estate taxes, and federal limits on state and local tax deductibility as risks to its New York-focused business.

Outlook

The filings describe ongoing execution of leasing, acquisition and capital recycling activity rather than issuing numeric guidance; the 10-K and 10-Q frame forward-looking statements around risks including remote work, tourism levels, interest rates and regulatory compliance. Management highlights continued strength in Manhattan office leasing and occupancy, alongside volatility in Observatory revenue. No specific future-period financial targets are provided in the excerpts reviewed.