Empire State Realty Trust, Inc.
For the period ended Jun 30, 2026. Filed Aug 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 6, 2026
ESRT$5.31+0.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-07.
0001541401-26-000020
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001541401-26-000033
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 131 current paragraphs.
62 unchanged; 35 reworded; 33 added; 3 removed; 1 previous and 1 current paragraphs rearranged.
Tables are not compared: 7 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (33)
Current report
•In May 2026, we closed on the acquisition of land underlying the properties at 111 West 33 rd Street and 1400 Broadway for an aggregate purchase price of $110.0 million.
Current report
Other Revenues and Fees
Current report
The increase in other revenues and fees during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to receiving real estate tax abatement refunds related to 2024 and 2025.
Current report
General and Administrative Expenses
Current report
The increase in general and administrative expenses during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to $5.5 million of severance costs.
Current report
Gain on Disposition of Properties
Current report
The gain on disposition activity for the three months ended June 30, 2026 relates to the disposition of 250 West 57 th Street in New York, New York. See "Financial Statements - Note 3. Acquisitions and Dispositions" for additional details.
Current report
Goodwill Impairment Charge
Current report
We recognized a non-cash goodwill impairment charge of $166.1 million during the three months ended June 30, 2026 as a result of a decline in projected performance and expected future cash flows due to a sustained decline in visitor volume from a reduction in pass program performance and a continued decrease in international visitors. The $61.4 million goodwill remaining in the Observatory reporting unit remains at risk of future impairment if the fair value of the reporting unit decreases due to changes in the amount and timing of expected future cash flows, decreases in visitation in excess of expectations, an inability to execute management’s business strategies, or general market conditions. See "Financial Statements - Note 4. Deferred Costs, Acquired Lease Intangibles and Goodwill" for additional details.
Current report
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025
Current report
Real Estate Segment
Current report
Rental Revenue
Current report
Other Revenues and Fees
Current report
The increase in other revenues and fees during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to receiving real estate tax abatement refunds related to 2024 and 2025.
Current report
Property Operating Expenses
Current report
General and Administrative Expenses
Current report
The increase in general and administrative expenses during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to $5.5 million of severance costs.
Current report
Interest Expense
Current report
The increase in interest expense was attributable to the December 2025 issuance of Series L senior unsecured notes and the additional draws on the revolving credit facility during 2026, partially offset by the December 2025 repayment of the Metro Center mortgage.
Current report
Gain on Disposition of Properties
Current report
The gain on disposition activity for the six months ended June 30, 2026 relates to the disposition of 250 West 57 th Street in New York, New York. The gain on disposition activity for the six months ended June 30, 2025 represents the deconsolidation of the mezzanine debt obligation in connection with the completion of the consensual foreclosure of First Stamford Place in Stamford, Connecticut in February 2025. See "Financial Statements - Note 3. Acquisitions and Dispositions" for additional details.
Current report
Observatory Segment
Current report
Observatory Revenue
Current report
Observatory revenues were lower due to a continued decline in visitation during the six months ended June 30, 2026 compared to the six months ended June 30, 2025, from a reduction in pass program performance and a continued decrease in international visitors.
Current report
Goodwill Impairment Charge
Current report
We recognized a non-cash goodwill impairment charge of $166.1 million during the six months ended June 30, 2026 as a result of a decline in projected performance and expected future cash flows due to a sustained decline in visitor volume from a reduction in pass program performance and a continued decrease in international visitors. The $61.4 million goodwill remaining in the Observatory reporting unit remains at risk of future impairment if the fair value of the reporting unit decreases due to changes in the amount and timing of expected future cash flows, decreases in visitation in excess of expectations, an inability to execute management’s business strategies, or general market conditions. See "Financial Statements - Note 4. Deferred Costs, Acquired Lease Intangibles and Goodwill" for additional details.
Current report
In June 2026, we closed on the sale of 250 West 57 th Street at a sale price of $275.0 million, which included the purchaser's assumption of the $180.0 million mortgage.
Current report
In May 2026, we completed the purchase of land underlying the properties at 111 West 33 rd Street and 1400 Broadway, which carried remaining ground lease terms of approximately 51 and 38 years, respectively, for an aggregate purchase price of $110.0 million.
Current report
Subsequent to quarter-end, in July 2026, through our operating partnership, we entered into a first amendment to our amended and restated credit agreement, dated November 14, 2025, with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which governs our senior unsecured term loan credit facility (the “Wells Term Loan Facility”). The Wells Term Loan Facility has a$490.0 million initial maximum principal amount, comprised of the existing$245.0 million term loan credit facility and an incremental$245.0 million delayed draw term loan facility. The delayed draw term loan facility may be drawn in six months following the closing date. The senior unsecured term loan credit facility matures on January 15, 2031 and the delayed draw term loan facility matures on January 12, 2032.
Current report
Office Properties(1)
Current report
Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.
Current report
During the second quarter of 2026, the Company identified triggering events indicating that the fair value of its Observatory reporting unit may have declined below its carrying amount, including goodwill, due to a sustained decline in visitor volume from a reduction in pass program performance and a continued decrease in international visitors. As a result of a decline in the projected performance and expected future cash flows of the Observatory reporting unit, the Company engaged a third-party valuation consulting firm and performed an interim quantitative goodwill analysis as of June 30, 2026. The quantitative analysis used a discounted cash flow method (a form of the income approach) utilizing Level 3 unobservable inputs. Significant assumptions under the income approach included revenue and cost projections, weighted average cost of capital and long-term growth rate. As a result of the quantitative analysis, the carrying value of the Observatory reporting unit, including goodwill, exceeded its estimated fair value, and the Company recognized a non-cash goodwill impairment charge of $166.1 million for the three and six months ended June 30, 2026, in the Company’s consolidated statements of operations.
Current report
Although the Company does not currently anticipate significant changes in the assumptions used in the quantitative analysis, many of the assumptions underlying the estimated fair value of the Observatory reporting unit are inherently uncertain, are outside of our control, and actual results may differ materially from the Company’s estimates. The remaining goodwill relating to the Observatory reporting unit of $61.4 million remains at risk of future impairment if the fair value of the reporting unit decreases due to changes in the amount and timing of expected future cash flows, decreases in visitation in excess of expectations, an inability to execute management’s business strategies, or general market conditions, such as economic downturns and changes in interest rates, which may impact discount rates.
Removed paragraphs (3)
Previous report
Real Estate Taxes
Previous report
Office Properties(1)(2)
Previous report
Refer to our Annual Report for a discussion of our critical accounting estimates. There were no material changes to our critical accounting estimates disclosed in our Annual Report.
Reworded paragraphs (35)
Previous wording
Unless the context otherwise requires or indicates, references in this section to “we,” “our,” and “us” refer to our Company and its consolidated subsidiaries. This Management’s Discussion and Analysis provides a comparison of the Company’s performance for its three month periods ended March 31, 2026 with the corresponding three month periods ended March 31, 2025 and reviews the Company’s financial position as of March 31, 2026. The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.
Current wording
Unless the context otherwise requires or indicates, references in this section to “we,” “our,” and “us” refer to our Company and its consolidated subsidiaries. This Management’s Discussion and Analysis provides a comparison of the Company’s performance for its three and six month periods ended June 30, 2026 with the corresponding three and six month periods ended June 30, 2025 and reviews the Company’s financial position as of June 30, 2026. The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. We intend these forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and can generally be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “estimate,” “may,” “will,” “should,” “would,” and similar expressions.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend these forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and can generally be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “estimate,” “may,” “will,” “should,” “would,” and similar expressions.
Previous wording
•Net income attributable to common stockholders of $1.2 million.
Current wording
•Net loss attributable to common stockholders of $(25.8) million, which includes items that are excluded from Core Funds From Operations ("Core FFO"), including a non-cash goodwill impairment charge of $166.1 million related to our Observatory reporting unit, a $124.6 million gain on the disposition of 250 West 57 th Street, and $5.5 million of one-time severance costs included in general and administrative expenses.
Previous wording
•Core Funds From Operations ("Core FFO") of $53.2 million attributable to common stockholders and the operating partnership.
Current wording
•Core Funds From Operations of $57.1 million attributable to common stockholders and the operating partnership.
Previous wording
•Signed a total of 113,484 rentable square feet of new, renewal, and expansion leases.
Current wording
•Signed a total of 381,799 rentable square feet of new, renewal, and expansion leases.
Previous wording
The discussion below relates to our results of operations for the three months ended March 31, 2026 and 2025, respectively.
Current wording
The discussion below relates to our results of operations for the three and six months ended June 30, 2026 and 2025, respectively.
Previous wording
The increase in rental revenue during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily attributable to the net impact of acquisitions and dispositions made during 2025 as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Quarterly Report on Form 10-Q, and increases in tenant reimbursement income.
Current wording
The increase in rental revenue during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily attributable to higher base rent from new or renewed tenants, increases in tenant reimbursement income, and the net impact of acquisitions and dispositions made during 2025 and 2026 as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Quarterly Report on Form 10-Q.
Previous wording
The increase in property operating expenses during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to higher operating payroll costs and utilities costs.
Current wording
The increase in property operating expenses during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to higher repair and maintenance costs, operating payroll costs and utilities costs.
Previous wording
Observatory revenues were lower due to lower visitation during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to lower levels of international tourism in 2026 as compared to 2025.
Current wording
Observatory revenues were lower due to a continued decline in visitation during the three months ended June 30, 2026 compared to the three months ended June 30, 2025 from a reduction in pass program performance and a continued decrease in international visitors.
Previous wording
The increase in real estate taxes during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to the net impact of acquisitions and dispositions made during 2025 as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Quarterly Report on Form 10-Q.
Current wording
The increase in rental revenue during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily attributable to the net impact of acquisitions and dispositions made during 2025 and 2026 as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Quarterly Report on Form 10-Q, higher base rent from new and renewed tenants, and increases in tenant reimbursement income.
Previous wording
The decrease in interest income during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is primarily due to lower cash balances due to property acquisitions during 2025 and 2026, the paydown of the $120.0 million revolving credit facility and the $100.0 million Series A senior unsecured notes in March 2025. See "Financial Statements — Note 5. Debt" in this Quarterly Report on Form 10-Q.
Current wording
The decrease in interest income during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 is primarily due to lower cash balances due to property acquisitions during 2025 and 2026, the $120.0 million paydown of the revolving credit facility and the $100.0 million Series A senior unsecured notes in March 2025. See "Financial Statements - Note 5. Debt" in this Quarterly Report on Form 10-Q.
Previous wording
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 to qualify as a REIT, we are required under the Internal Revenue Code of 1986 to distribute to our stockholders, on an annual basis, at least 90% of our 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.
Current wording
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 continue to generate positive cash flows from operations. In order to qualify as a REIT, we are required under the Internal Revenue Code of 1986 to distribute to our stockholders, on an annual basis, at least 90% of our 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.
Previous wording
At March 31, 2026, we had $68.8 million available in cash and cash equivalents and there was $530.0 million available under our unsecured revolving credit facility.
Current wording
At June 30, 2026, we had $85.6 million available in cash and cash equivalents and there was $445.0 million available under our unsecured revolving credit facility.
Previous wording
At March 31, 2026, we had approximately $2.3 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.54% and a weighted average maturity of 4.8 years.
Current wording
At June 30, 2026, we had approximately $2.2 billion of total indebtedness outstanding, with a weighted average interest rate of 4.70% and a weighted average maturity of 4.5 years.
Previous wording
As of March 31, 2026, unsecured term loan facilities, net, amounted to$337.0 million. We have no unsecured term loans maturing until March 2029.
Current wording
As of June 30, 2026, unsecured term loan facilities, net, amounted to$337.1 million. We have no unsecured term loans maturing until March 2029.
Previous wording
In the first quarter of 2026, we repaid $70.0 million of our previously drawn borrowings and drew $15.0 million on the Revolving Credit Facility. As of March 31, 2026, we had $90.0 million borrowings under the Revolving Credit Facility.
Current wording
As of June 30, 2026, we had $175.0 million borrowings under the Revolving Credit Facility.
Previous wording
As of March 31, 2026, mortgage notes payable, net, amounted to $621.4 million. Our next mortgage debt maturity is for $30.0 million in May 2027.
Current wording
As of June 30, 2026, mortgage notes payable, net, amounted to $443.1 million. Our next mortgage debt maturity is for $30.0 million in May 2027.
Previous wording
Subsequent to quarter-end on April 15, 2026, we entered into a Note Purchase Agreement with the purchasers named therein (the "Purchase Agreement") in connection with a private placement of $130.0 million aggregate principal amount of the 5.99% Series M Senior Notes due July 15, 2032 (the "Series M Notes"). The sale and purchase of the Series M Notes is scheduled to fund on July 15, 2026, subject to customary closing conditions.
Current wording
Subsequent to quarter-end, in July 2026, we closed on the issuance and sale of $130.0 million aggregate principal amount of 5.99% Series M Senior Notes due July 15, 2032.
Previous wording
(1)Office activity excludes an aggregate of 472,724 and 475,744 rentable square feet of retail space in our office properties in 2026 and 2025, respectively, that is included in the retail activity for the respective years.
Current wording
(1)Office activity excludes an aggregate of 409,281 and 475,744 rentable square feet of retail space in our office properties in 2026 and 2025, respectively, that is included in the retail activity for the respective years.
Previous wording
(2)The tables above include base retail in our multifamily properties.
Current wording
(2)Includes base retail in our multifamily properties.
Previous wording
(3)The number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration.
Current wording
(3)The number of leases signed includes "Early Renewals" which are leases signed over two years prior to the lease expiration.
Previous wording
As of March 31, 2026, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $93.9 million for tenant improvements and leasing commissions. We intend to fund the tenant improvements and leasing commission costs through a combination of operating cash flow, cash on hand and other borrowings.
Current wording
As of June 30, 2026, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $107.3 million for tenant improvements and leasing commissions. We intend to fund the tenant improvements and leasing commission costs through a combination of operating cash flow, cash on hand and other borrowings.
Previous wording
Distributions and dividends amounting to $10.7 million and $10.8 million have been accrued or paid to equity holders for the three months ended March 31, 2026 and 2025, respectively.
Current wording
Distributions and dividends amounting to $21.5 million and $21.6 million have been accrued or paid to equity holders for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
Comparison of Three Months Ended March 31, 2026 to the Three Months Ended March 31, 2025
Current wording
Comparison of Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Previous wording
Net cash. Cash and cash equivalents and restricted cash were $106.1 million and $237.4 million as of March 31, 2026 and 2025, respectively. The decrease was primarily the result of the following changes in cash flows:
Current wording
Net cash. Cash and cash equivalents and restricted cash were $128.2 million and $136.7 million as of June 30, 2026 and 2025, respectively. The decrease was primarily the result of the following changes in cash flows:
Previous wording
Operating activities. Net cash provided by operating activities decreased by $14.2 million to $68.9 million primarily due to changes in working capital.
Current wording
Operating activities. Net cash provided by operating activities decreased by $21.4 million to $88.5 million primarily due to increases in rent concessions from new and renewed tenants and changes in working capital.
Previous wording
Investing activities. Net cash used in investing activities increased by $22.6 million to $64.7 million primarily due to the $46.5 million acquisition of a retail property on North 6 th Street in Williamsburg in March 2026, inclusive of transaction costs and closing credits, partially offset by a $23.9 million decrease in capital expenditures in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
Investing activities. Net cash used in investing activities decreased by $21.3 million to $134.3 million primarily due to the $75.7 million net proceeds from the disposition of 250 West 57 th Street in June 2026, and the $74.7 million decrease in capital expenditures in the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This was partially offset by our acquisition activities in 2026 which included the $114.3 million acquisition, inclusive of transactions costs, of land underlying the properties at 111 West 33 rd Street and 1400 Broadway in May 2026, and the $46.5 million acquisition, inclusive of transaction costs and closing credits, of a retail property on North 6 th Street in Williamsburg in March 2026 compared to the $31.7 million acquisition, inclusive of transaction costs and closing credits, of two retail properties on North 6 th Street in Williamsburg in June 2025.
Previous wording
Financing activities. Net cash used in financing activities decreased by $168.4 million to $64.6 million primarily due to the net $55.0 million repayments of the unsecured revolving credit facility in the three months ended March 31, 2026 compared to $120.0 million repayments of the unsecured revolving credit facility in the three months ended March 31, 2025, in addition to the repayments of the$100.0 million Series A senior unsecured notes in the three months ended March 31, 2025. See "Financial Statements - Note 5. Debt."
Current wording
Financing activities. Net cash provided by financing activities increased by $254.4 million to $7.6 million primarily due to the net $30.0 million borrowings on the unsecured revolving credit facility in the six months ended June 30, 2026 compared to the repayments in the six months ended June 30, 2025, which included $120.0 million repayments of the unsecured revolving credit facility and the $100.0 million repayment of Series A senior unsecured notes. See "Financial Statements - Note 5. Debt."
Previous wording
The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to NOI:
Current wording
The following table presents a reconciliation of our net income (loss), the most directly comparable GAAP measure, to NOI:
Previous wording
Core FFO adds back to Modified FFO the following items: loss on early extinguishment of debt, acquisition expenses, severance expenses, IPO litigation expense and interest expense associated with property in receivership. The Company believes Core FFO is an important supplemental measure of its operating performance because it excludes non-recurring items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.
Current wording
Core FFO adds back to Modified FFO the following items: loss on early extinguishment of debt, acquisition expenses, severance expenses, IPO litigation expense, goodwill impairment charge and interest expense associated with property in receivership. The Company believes Core FFO is an important supplemental measure of its operating performance because it excludes non-recurring items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.
Previous wording
The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO:
Current wording
The following table presents a reconciliation of our net income (loss), the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO:
Previous wording
As of March 31, 2026, there were approximately 1.2 million rentable square feet of space in our portfolio available to lease (including leases signed but not yet commenced) representing 13.2% of the net rentable square footage of the properties in our commercial portfolio. In addition, leases representing 4.2% and 7.0% of net rentable square footage of the properties in our commercial portfolio will expire in 2026 and in 2027, respectively. These leases are expected to represent approximately 3.9% and 6.7%, respectively, of our annualized rent for such periods. Our revenues and results of operations can be impacted by expiring leases that are not renewed or re-leased or that are renewed or re-leased at base rental rates equal to, above or below the current average base rental rates. Further, our revenues and results of operations can also be affected by downtime after space is vacated and the costs we incur to re-lease available space, including payment of leasing commissions, redevelopments and build-to-suit remodeling that may not be borne by the tenant.
Current wording
As of June 30, 2026, there were approximately 1.0 million rentable square feet of space in our portfolio available to occupy (including leases signed but not yet commenced) representing 12.1% of the net rentable square footage of the properties in our commercial portfolio. In addition, leases representing 3.1% and 5.9% of net rentable square footage of the properties in our commercial portfolio will expire in 2026 and in 2027, respectively. These leases are expected to represent approximately 3.0% and 5.6%, respectively, of our annualized rent for such periods. Our revenues and results of operations can be impacted by expiring leases that are not renewed or re-leased or that are renewed or re-leased at base rental rates equal to, above or below the current average base rental rates. Further, our revenues and results of operations can also be affected by downtime after space is vacated and the costs we incur to re-lease available space, including payment of leasing commissions, redevelopments and build-to-suit remodeling that may not be borne by the tenant.
Previous wording
For the three months ended March 31, 2026, the Observatory hosted 350,000 visitors, compared to 428,000 visitors for the three months ended March 31, 2025, a decrease of 18.2%. Observatory revenue for the three months ended March 31, 2026 was $18.5 million, a 20.1% decrease from $23.2 million for the three months ended March 31, 2025. Observatory revenues were lower primarily due to lower levels of international visitors in 2026 as compared to 2025.
Current wording
For the six months ended June 30, 2026, the Observatory hosted 800,000 visitors, compared to 1,057,000 visitors for the six months ended June 30, 2025, a decrease of 24.3%. Observatory revenue for the six months ended June 30, 2026 was $42.7 million, a 25.1% decrease from $57.1 million for the six months ended June 30, 2025. Observatory revenues were lower primarily from a reduction in pass program performance and a continued decrease in international visitors.
Previous wording
We believe the global economy, including the real estate sector, currently navigates an environment of uncertainty around inflation, interest rates, tariffs, economic growth, geopolitical unrest, and volatile oil prices. There have been concerns about the challenges of refinancing existing low interest rate loans at higher rates. Additionally, the risk of slower global economic growth could impact the number of visitors to the Empire State Building Observatory, as well as our pricing power.
Current wording
We believe the global economy, including the real estate sector, currently navigates an environment of uncertainty around inflation, interest rates, tariffs, economic growth, geopolitical unrest, and volatile oil prices. There have been concerns about the challenges of refinancing existing low interest rate loans at higher rates. Additionally, the risk of slower global economic growth could impact the number of visitors to the Empire State Building Observation Deck, as well as our pricing power.
Previous wording
Despite this global economic backdrop, we believe that ESRT is in a good competitive position with diversified drivers of income across office, retail, multifamily and the Empire State Building Observatory. ESRT’s New York City-focused portfolio is modernized, amenitized, well-located and energy efficient, with high indoor environmental quality, competitive rental rates and strong leased percentages.
Current wording
Despite this global economic backdrop, we believe that ESRT is in a good competitive position with diversified drivers of income across office, retail, multifamily and the Empire State Building Observation Deck. ESRT’s New York City-focused portfolio is modernized, amenitized, well-located and energy efficient, with high indoor environmental quality, competitive rental rates and strong leased percentages.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
The increase in property operating expenses during the six months ended June 30, 2026 compared to the six months ended June 30, 2025 was primarily due to higher operating payroll costs and utilities costs.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
In March 2026, we closed on the acquisition of a retail property on North 6 th Street in Williamsburg, Brooklyn for a purchase price of $46.0 million.