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 and six month periods ended June 30, 2026 with the corresponding three and six month periods ended June 30, 2025 and reviews our 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.

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 nine month periods ended September 30, 2026 with the corresponding three and nine month periods ended September 30, 2025 and reviews our financial position as of September 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

Forward-looking statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others: economic and market conditions (including the impact of catastrophic events, pandemics, extreme weather, terrorism, armed hostilities, cybersecurity threats and other technology disruptions); increased costs due to tariffs or other economic factors; changes in the New York City office, retail, multifamily and tourism markets (including changes in the use of office space and remote work); leasing activity, tenant defaults, early terminations and renewals, occupancy levels and rental rates; performance of the Observatory (including tourism levels, currency and geopolitical impacts, weather and competition); interest rate volatility and capital markets conditions, including our ability to refinance, restructure or extend indebtedness; real estate valuation declines and potential impairment charges; our ability to execute capital projects and complete acquisitions on acceptable terms; risks relating to governmental regulation, environmental and climate-related requirements (including Local Law 97), and our ability to achieve sustainability goals and metrics; risks relating to our ground leases; our ability to maintain our qualification as a REIT; potential taxable gain arising from transactions structured to qualify under Section 1031; legal proceedings; and risks relating to our disclosure controls and internal control over financial reporting. For a discussion of these and other factors, see the section entitled “Risk Factors” in the Company’s Annual Report for the year ended December 31, 2025, and any additional factors that may be contained in any filing the Company makes with the SEC. We undertake no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

Current wording

Forward-looking statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others: economic and market conditions (including the impact of catastrophic events, pandemics, extreme weather, terrorism, armed hostilities, cybersecurity threats and other technology disruptions); increased costs due to tariffs or other economic factors; changes in the New York City office, retail, multifamily and tourism markets (including changes in the use of office space and remote work); leasing activity, tenant defaults, early terminations and renewals, occupancy levels and rental rates; performance of the Observatory (including tourism levels, currency and geopolitical impacts, weather and competition); interest rate volatility and capital markets conditions, including our ability to refinance, restructure or extend indebtedness; real estate valuation declines and potential impairment charges; our ability to execute capital projects and complete acquisitions on acceptable terms; risks relating to governmental regulation, environmental and climate-related requirements (including Local Law 97), and our ability to achieve sustainability goals and metrics; risks relating to our ground lease; our ability to maintain our qualification as a REIT; potential taxable gain arising from transactions structured to qualify under Section 1031; legal proceedings; and risks relating to our disclosure controls and internal control over financial reporting. For a discussion of these and other factors, see the section entitled “Risk Factors” in the Company’s Annual Report for the year ended December 31, 2025, and any additional factors that may be contained in any filing the Company makes with the SEC. We undertake no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

Previous wording

•Core Funds From Operations of $57.1 million attributable to common unitholders.

Current wording

•Core Funds From Operations of $52.7 million attributable to common unitholders.

Previous wording

•Signed a total of 381,799 rentable square feet of new, renewal, and expansion leases.

Current wording

•Signed a total of 189,477 rentable square feet of new, renewal, and expansion leases.

Previous wording

The discussion below relates to our results of operations for the three and six months ended June 30, 2026 and 2025, respectively.

Current wording

The discussion below relates to our results of operations for the three and nine months ended September 30, 2026 and 2025, respectively.

Previous 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.

Current wording

The increase in rental revenue during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily attributable to higher base rent from new or renewed tenants, increases in tenant reimbursement income partially offset by 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 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 wording

The increase in interest expense during the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to the December 2025 issuance of Series L senior unsecured notes of $175.0 million, the July 2026 issuance of Series M senior unsecured notes of $130.0 million and the draws on the revolving credit facility during 2026, partially offset by the December 2025 repayment of the Metro Center mortgage of $71.6 million, the $55.0 million paydown of Series B senior unsecured notes, and the purchaser's assumption of 250 West 57 th Street mortgage of $180.0 million.

Previous 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.

Current wording

The increase in rental revenue during the nine months ended September 30, 2026 compared to the nine months ended September 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 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 wording

The increase in other revenues and fees during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to the receipt of real estate tax abatement refunds related to 2024 and 2025.

Previous wording

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.

Current wording

The increase in property operating expenses during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to higher operating payroll costs and utilities costs.

Previous wording

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 wording

The increase in general and administrative expenses during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 was primarily due to $6.2 million of severance costs due to certain role eliminations.

Previous 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.

Current wording

The decrease in interest income during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 is primarily due to lower cash balances due to property acquisitions during 2025 and 2026. See "Financial Statements - Note 5. Debt" in this Quarterly Report on Form 10-Q.

Previous wording

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 wording

The gain on disposition activity for the nine months ended September 30, 2026 relates to the disposition of 250 West 57 th Street in New York, New York. The gain on disposition activity for the nine months ended September 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.

Previous wording

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 wording

Observatory revenues were lower due to a continued decline in visitation during the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 from a reduction in pass program performance and a continued decrease in international visitors.

Previous wording

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 wording

We recognized a non-cash goodwill impairment charge of $166.1 million during the nine months ended September 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 or 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.

Previous 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.

Current wording

At September 30, 2026, we had $85.3 million available in cash and cash equivalents and there was $520.0 million available under our unsecured revolving credit facility.

Previous 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.

Current wording

At September 30, 2026, we had approximately $2.2 billion of total indebtedness outstanding, with a weighted average interest rate of 4.78% and a weighted average maturity of 4.5 years.

Previous 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.

Current wording

As of September 30, 2026, unsecured term loan facilities, net, amounted to$337.3 million. We have no unsecured term loans maturing until March 2029.

Previous wording

Subsequent to quarter-end, in July 2026, 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 wording

In July 2026, 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.

Previous wording

As of June 30, 2026, we had $175.0 million borrowings under the Revolving Credit Facility.

Current wording

As of September 30, 2026, we had $100.0 million borrowings under the Revolving Credit Facility.

Previous 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.

Current wording

As of September 30, 2026, mortgage notes payable, net, amounted to $442.4 million. Our next mortgage debt maturity is for $30.0 million in May 2027.

Previous 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.

Current wording

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 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.

Current wording

(1)Office activity excludes an aggregate of 409,281 and 475,442 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

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

Current wording

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

Previous wording

(4)Presents a renewed and expansion lease as one lease signed.

Current wording

(3)Presents a renewed and expansion lease as one lease signed.

Previous wording

(5)Presents all tenant improvement and leasing commission costs as if they were incurred in the period in which the lease was signed, which may be different than the period in which they were actually paid.

Current wording

(4)Presents all tenant improvement and leasing commission costs as if they were incurred in the period in which the lease was signed, which may be different than the period in which they were actually paid.

Previous wording

(2)Includes base retail in our multifamily properties.

Current wording

(5)Includes base retail in our multifamily properties.

Previous 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.

Current wording

As of September 30, 2026, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $112.4 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 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.

Current wording

Distributions amounting to $32.4 million and $32.4 million have been accrued or paid to equity holders for the nine months ended September 30, 2026 and 2025, respectively.

Previous wording

ESRT's Board of Directors authorized the repurchase of up to $500.0 million of ESRT's Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units from January 1, 2026 through December 31, 2027. 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 us to acquire any particular amount of securities, and the program may be suspended or discontinued at our discretion without prior notice. As of June 30, 2026, ESRT had $500.0 million remaining of the authorized repurchase amount. There were no repurchases of equity securities during the three months ended June 30, 2026. See "Financial Statements - Note 10. Capital."

Current wording

ESRT's Board of Directors authorized the repurchase of up to $500.0 million of ESRT's Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units from January 1, 2026 through December 31, 2027. 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 us to acquire any particular amount of securities, and the program may be suspended or discontinued at our discretion without prior notice. See "Financial Statements - Note 10. Capital" for a summary of ESRT's repurchase of equity securities in each of the three months ended September 30, 2026.

Previous wording

Comparison of Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025

Current wording

Comparison of Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025

Previous 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:

Current wording

Net cash. Cash and cash equivalents and restricted cash were $119.7 million and $197.8 million as of September 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 $21.4 million to $88.5 million primarily due to increases in rent concessions from new and renewed tenants and changes in working capital.

Current wording

Operating activities. Net cash provided by operating activities decreased by $65.3 million to $149.9 million primarily due to changes in working capital, lease expirations and new lease commencements that are in a free rent period.

Previous 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.

Current wording

Investing activities. Net cash used in investing activities decreased by $22.9 million to $165.2 million primarily due to the $76.3 million decrease in capital expenditures in the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025 and the $75.7 million net proceeds from the disposition of 250 West 57 th Street in June 2026. This was partially offset by our acquisition activities in 2026 which included the $114.3 million acquisition, inclusive of transaction 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 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."

Current wording

Financing activities. Net cash used in financing activities decreased by $228.5 million to $30.1 million primarily due to the $130.0 million issuance of Series M senior unsecured notes partially offset by the net repayments on the unsecured revolving credit facility of $45.0 million, the $55.0 million partial repayment of Series B senior unsecured notes, and $22.8 million of repurchases of ESRT Class A common stock in the nine months ended September 30, 2026 compared to the repayments in the nine months ended September 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

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.

Current wording

As of September 30, 2026, with the exclusion of 1359 Broadway that was sold subsequent to quarter-end, there were approximately 0.7 million rentable square feet of space in our portfolio available to occupy (including leases signed but not yet commenced) representing 9.5% of the net rentable square footage of the properties in our commercial portfolio. In addition, leases representing 2.5% and 4.9% 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 2.1% and 4.4%, 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 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.

Current wording

For the nine months ended September 30, 2026, the Observatory hosted 1,281,000 visitors, compared to 1,705,000 visitors for the nine months ended September 30, 2025, a decrease of 24.9%. Observatory revenue for the nine months ended September 30, 2026 was $69.5 million, a 25.3% decrease from $93.1 million for the nine months ended September 30, 2025. Observatory revenues were lower primarily from a reduction in pass program performance and a continued decrease in international visitors.

Previous wording

In addition to our diversified portfolio, our business is supported by a well-positioned balance sheet, modest leverage and good access to liquidity as set forth herein. The absence of unaddressed near term debt maturities provides an added degree of security. This provides us optionality in capital allocation decisions.

Current wording

In addition to our diversified portfolio, our business is supported by a well-positioned balance sheet with good access to liquidity as set forth herein. The absence of unaddressed near term debt maturities provides an added degree of security. This provides us optionality in capital allocation decisions.

Previous wording

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 wording

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 zero and $166.1 million during the three and nine months ended September 30, 2026, respectively, in the accompanying consolidated statements of operations.

Previous wording

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.

Current wording

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 or 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.