Empire State Realty OP, L.P.

Previous wording

Unless the context otherwise requires or indicates, references in this section to “we,” “our,” and “us” refer to the Empire State Realty OP, L.P. and its consolidated subsidiaries. This Management’s Discussion and Analysis provides a comparison of our performance for the three month periods ended March 31, 2025 with the corresponding three month periods ended March 31, 2024 and reviews our financial position as of March 31, 2025. 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 the Empire State Realty OP, L.P. and its consolidated subsidiaries. This Management’s Discussion and Analysis provides a comparison of our performance for the three and six month periods ended June 30, 2025 with the corresponding three and six month periods ended June 30, 2024 and reviews our financial position as of June 30, 2025. 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 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 for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. You can identify forward-looking statements by the use of forward-looking terminology such as “aims," "anticipates," "approximately," "believes," "contemplates," "continues," "estimates," "expects," "forecasts," "hope," "intends," "may," "plans," "seeks," "should," "thinks," "will," "would" or the negative of these words and phrases or similar words or phrases. In particular, statements pertaining to ESRT's capital resources, portfolio performance, dividend policy and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our portfolio from operations, acquisitions and anticipated market conditions, demographics and results of operations are forward-looking statements.

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 for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. You can identify forward-looking statements by the use of forward-looking terminology such as “aims," "anticipates," "approximately," "believes," "contemplates," "continues," "estimates," "expects," "forecasts," "hope," "intends," "may," "plans," "seeks," "should," "thinks," "will," "would" or the negative of these words and phrases or similar words or phrases. In particular, statements pertaining to our capital resources, portfolio performance, distribution policy and results of operations contain forward-looking statements. Likewise, all of our statements regarding anticipated growth in our portfolio from operations, acquisitions and anticipated market conditions, demographics and results of operations are forward-looking statements.

Previous wording

•Net income attributable to common unitholders of $14.7 million.

Current wording

•Net income attributable to common unitholders of $10.3 million.

Previous wording

•Core Funds From Operations ("Core FFO") of $52.0 million attributable to common unitholders.

Current wording

•Core Funds From Operations ("Core FFO") of $59.2 million attributable to common unitholders.

Previous wording

•Signed a total of 231,000 rentable square feet of new, renewal, and expansion leases.

Current wording

•Signed a total of 232,108 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, 2025 and 2024, respectively.

Current wording

The discussion below relates to our results of operations for the three and six months ended June 30, 2025 and 2024, respectively.

Previous wording

The increase in rental revenue was primarily attributable to higher operating and real estate tax expense escalations driving a $5.0 million increase during the three months ended March 31, 2025 compared to the three months ended March 31, 2024. This was partially offset by the net impact of acquisitions and dispositions made during 2024, which reduced rental revenue by $4.0 million.

Current wording

The increase in rental revenue was primarily attributable to higher operating and real estate tax expense escalations driving a $3.8 million increase during the three months ended June 30, 2025 compared to the three months ended June 30, 2024. This was partially offset by the net impact of acquisitions and dispositions made during 2024, which reduced rental revenue by $2.2 million.

Previous wording

Property operating expenses was consistent primarily attributable to a $2.1 million decrease due to the net impact of acquisitions and dispositions made during 2024, primarily offset by increases in payroll costs and utilities.

Current wording

The increase in property operating expenses was primarily due to higher repair and maintenance costs, cleaning-related payroll costs, and utilities during the six months ended June 30, 2025 compared to the six months ended June 30, 2024. This was partially offset by the net impact of acquisitions and dispositions made during 2024.

Previous wording

The increase in interest expense was attributable to the June 2024 issuance of Series I-K senior unsecured notes, partially offset by the February 2025 release of the First Stamford Place senior mortgage obligation, and March 2025 paydown of the Series A senior unsecured notes and revolver.

Current wording

The increase in interest expense was attributable to the June 2024 issuance of Series I-K senior unsecured notes, partially offset by the February 2025 release of the First Stamford Place senior mortgage obligation, and the March 2025 paydown of the $120 million revolving credit facility and the $100 million Series A senior unsecured notes.

Previous wording

The gain on disposition activity for the three months ended March 31, 2025 primarily represents the mezzanine debt obligation which was deconsolidated in connection with the completion of the consensual foreclosure of First Stamford Place. See "Financial Statements - Note 3 Acquisitions and Dispositions" for additional details.

Current wording

The gain on disposition activity for the six months ended June 30, 2024 and 2025, represents the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut in May 2024, and the subsequent deconsolidation of the mezzanine debt obligation in connection with the completion of the consensual foreclosure in February 2025, respectively. See "Financial Statements - Note 3 Acquisitions and Dispositions" for additional details.

Previous wording

At March 31, 2025, we had $187.8 million available in cash and cash equivalents, and $620.0 million available under our unsecured revolving credit facility.

Current wording

At June 30, 2025, we had $94.6 million available in cash and cash equivalents, and $620.0 million available under our unsecured revolving credit facility.

Previous wording

At March 31, 2025, we had approximately $2.1 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.30% and a weighted average maturity of 5.3 years.

Current wording

At June 30, 2025, we had approximately $2.1 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.34% and a weighted average maturity of 5.0 years.

Previous wording

As of March 31, 2025, mortgage notes payable, net, amounted to $691.8 million. We have no mortgage debt maturity until April 2026.

Current wording

As of June 30, 2025, mortgage notes payable, net, amounted to $691.4 million. We have no mortgage debt maturity until April 2026.

Previous wording

(1)Excludes an aggregate of 475,744 and 488,569 rentable square feet of retail space in our Manhattan office properties in 2025 and 2024, respectively.

Current wording

(1)Excludes an aggregate of 475,744 and 486,943 rentable square feet of retail space in our Manhattan office properties in 2025 and 2024, respectively.

Previous wording

(3)Beginning in June 2024, the number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration. Amounts for number of leases signed, total square feet, leasing commission costs per square foot and tenant improvement costs per square foot have been adjusted to include the impact of early renewals for the three months ended March 31, 2024.

Current wording

(3)The number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration.

Previous wording

(6)Includes an aggregate of 475,744 and 488,569 rentable square feet of retail space in our Manhattan office properties in 2025 and 2024, respectively.

Current wording

(6)Includes an aggregate of 475,744 and 486,943 rentable square feet of retail space in our Manhattan office properties in 2025 and 2024, respectively.

Previous wording

As of March 31, 2025, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $110.9 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, 2025, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $103.9 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.

Previous wording

Capital expenditures are considered part of both our short-term and long-term liquidity requirements. We intend to fund capital improvements through a combination of operating cash flow, cash on hand and borrowings.

Current wording

Capital expenditures are considered part of both our short-term and long-term liquidity requirements. We intend to fund capital improvements through a combination of operating cash flow, cash on hand and other borrowings.

Previous wording

Distributions and dividends amounting to $10.8 million and 10.6 million have been made to equity holders for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Distributions amounting to $21.6 million and $21.2 million have been made to equity holders for the six months ended June 30, 2025 and 2024, respectively.

Previous wording

ESRT's Board of Directors authorized the repurchase of up to $500.0 million of ESRT Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units from January 1, 2024 through December 31, 2025. Under the program, ESRT may purchase ESRT Class A common stock and we may purchase our Series ES, Series 250 and Series 60 operating partnership units in accordance with applicable securities laws from time to time in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be determined by ESRT and us at our discretion and will be subject to stock price, availability, trading volume, general market conditions, and applicable securities laws. The authorization does not obligate ESRT or us to acquire any particular amount of securities, and the program may be suspended or discontinued at ESRT's and our discretion without prior notice. As of March 31, 2025, we had $500.0 million remaining of the authorized repurchase amount. There were no repurchases of equity securities during the three months ended March 31, 2025. Subsequent to March 31, 2025 through May 7, 2025, ESRT repurchased $2.1 million of ESRT Class A common stock at a weighted average price of $6.90 per share. See "Financial Statements - Note 10. Capital."

Current wording

ESRT's Board of Directors authorized the repurchase of up to $500.0 million of ESRT Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units from January 1, 2024 through December 31, 2025. Under the program, ESRT may purchase ESRT Class A common stock and we may purchase our Series ES, Series 250 and Series 60 operating partnership units in accordance with applicable securities laws from time to time in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be determined by ESRT and us at our discretion and will be subject to stock price, availability, trading volume, general market conditions, and applicable securities laws. The authorization does not obligate ESRT or us to acquire any particular amount of securities, and the program may be suspended or discontinued at ESRT's and our discretion without prior notice. See "Financial Statements - Note 10. Capital." for a summary of ESRT's repurchases of equity securities in each of the three months ended June 30, 2025.

Previous wording

Comparison of Three Months Ended March 31, 2025 to the Three Months Ended March 31, 2024

Current wording

Comparison of Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Previous wording

Net cash. Cash and cash equivalents and restricted cash were $237.4 million and $385.3 million, respectively, as of March 31, 2025 and 2024. 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 $136.7 million and $576.5 million as of June 30, 2025 and 2024, respectively. The decrease was primarily the result of the following changes in cash flows:

Previous wording

Operating activities. Net cash provided by operating activities increased by $12.2 million to $83.1 million primarily due to increases in working capital.

Current wording

Operating activities. Net cash provided by operating activities increased by $1.8 million to $109.9 million primarily due to changes in working capital.

Previous wording

Financing activities. Net cash used in financing activities increased by $211.7 million to $233.0 million primarily due to the repayment in full of the Series A senior unsecured notes and a pay-down on our unsecured revolving credit facility in the current period. See "Financial Statements - Note 5. Debt."

Current wording

Financing activities. Net cash used in financing activities increased by $436.1 million to $246.9 million primarily due to the 2025 repayments of the $120.0 million previously drawn on the revolving credit facility and the $100.0 million Series A senior unsecured notes, compared to the 2024 proceeds from the issuance of $225.0 million Series I-K senior unsecured notes. See "Financial Statements - Note 5. Debt."

Previous wording

As of March 31, 2025, there were approximately 0.7 million rentable square feet of space in our portfolio available to lease (excluding leases signed but not yet commenced) representing 7.9% of the net rentable square footage of the properties in our commercial portfolio. In addition, leases representing 4.7% and 6.5% of net rentable square footage of the properties in our commercial portfolio will expire in 2025 and in 2026, respectively. These leases are expected to represent approximately 5.0% and 6.4%, 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, 2025, there were approximately 0.6 million rentable square feet of space in our portfolio available to lease (excluding leases signed but not yet commenced) representing 7.4% of the net rentable square footage of the properties in our commercial portfolio. In addition, leases representing 3.5% and 5.8% of net rentable square footage of the properties in our commercial portfolio will expire in 2025 and in 2026, respectively. These leases are expected to represent approximately 3.5% and 5.4%, 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, 2025, the Observatory hosted 428,000 visitors, compared to 485,000 visitors for the three months ended March 31, 2024, a decrease of 11.8%. Observatory revenue for the three months ended March 31, 2025 was $23.2 million, a 5.8% decrease from $24.6 million for the three months ended March 31, 2024. The Observatory revenue decrease was driven by lower visitation levels due to the timing of the Easter holiday that fell in April during 2025 as compared to March in 2024.

Current wording

For the six months ended June 30, 2025, the Observatory hosted 1,057,000 visitors, compared to 1,133,000 visitors for the six months ended June 30, 2024, a decrease of 6.7%. Observatory revenue for the six months ended June 30, 2025 was $57.1 million, a 2.8% decrease from $58.7 million for the six months ended June 30, 2024. Observatory revenues were lower due to lower visitation during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to more bad weather days during holiday weekends and lower levels of international visitors in 2025 as compared to 2024.

Previous wording

We believe the global economy, including the real estate sector, currently navigates an environment of uncertainty around inflation, interest rates, questions on the direction of capital markets, risk of recession and geopolitical unrest. There have been concerns about the softening of the office real estate market in particular, amidst refinancing challenges of existing low interest rate loans and associated reduced new loan availability and increased costs of loans and related increased expectations of equity returns, coupled with the gradual pace of return-to-office and its impact on the physical utilization of space and asset valuations. Additionally, the risk of a global economic recession 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 and geopolitical unrest. There have been concerns about the softening of the office real estate market, amidst refinancing challenges of existing low interest rate loans and associated reduced new loan availability and increased costs of loans and related increased expectations of equity returns. 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.

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 indoor environmental quality, competitive rental rates and strong leased percentages. We believe our business is further fortified by the continued performance of our Observatory attraction.

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 Observatory. ESRT’s New York City-focused portfolio is modernized, amenitized, well-located and energy efficient, with indoor environmental quality, competitive rental rates and strong leased percentages.