Empire State Realty Trust(ESRT) - 2025 Q2 - Quarterly Results

Forward-looking Statements This section outlines the company's forward-looking statements, emphasizing inherent risks and uncertainties that could cause actual results to differ - Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and beyond control, and should not be relied upon as predictions of future events[4] - Key risk factors include economic, market, political, and social impacts of catastrophic events, increased costs due to tariffs, reduced demand for space, increased borrowing costs, declining real estate valuations, and changes in governmental regulations[5] - The company assumes no obligation to update or revise publicly any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this press release, except as required by applicable law[6] Supplemental Definitions of Non-GAAP Financial Measures This section defines key non-GAAP financial measures like FFO, Core FAD, and EBITDA, explaining their calculation, use, and limitations Funds From Operations (FFO) FFO, a NAREIT-defined non-GAAP measure, excludes real estate-related items from net income, useful for REIT comparison but with limitations - FFO is defined by NAREIT as net income (loss) (GAAP), excluding impairment write-off of investments in depreciable real estate, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization, less distributions to non-controlling interests and gains/losses from discontinued operations[7] - FFO is a widely recognized non-GAAP financial measure for REITs, useful for understanding financial performance and comparison among REITs, but it does not represent cash generated from operating activities and should not be considered an alternative to GAAP net income or cash flow[7] Modified Funds From Operations (Modified FFO) Modified FFO adjusts traditional FFO by adding back amortization of below-market ground leases, providing a supplemental view of operating performance - Modified FFO adds back an adjustment for any below-market ground lease amortization to traditionally defined FFO[8] - This adjustment is considered useful due to the non-cash accounting treatment under GAAP for significantly below-market ground leases from the third quarter 2014 acquisition of two option properties[8] Core Funds From Operations (Core FFO) Core FFO refines Modified FFO by excluding non-recurring items, aiming to provide a clearer measure of ongoing operating performance - Core FFO adds back to Modified FFO items such as loss on early extinguishment of debt, acquisition expenses, severance expenses, IPO litigation expense, and interest expense associated with property in receivership[9] - The Company believes Core FFO is an important supplemental measure of its operating performance because it excludes non-recurring items[9] Core Funds Available for Distribution (Core FAD) Core FAD is derived from Core FFO by adjusting for non-real estate depreciation, deferred financing costs, and recurring capital improvements to assess dividend funding ability - Core FAD is calculated by adding non-real estate depreciation and amortization, amortization of deferred financing costs, amortization of debt discounts, and non-cash compensation expenses to Core FFO[10] - It also deducts straight-line rent, amortization of debt premiums and above/below market rent revenue, and recurring capital improvements (leasing commissions, tenant improvements, capital expenditures)[10] - Core FAD is presented as a supplemental disclosure to provide useful information regarding the company's ability to fund its dividends[10] Net Operating Income and Property Cash NOI (NOI) NOI is a non-GAAP measure used to evaluate property performance, with Property Cash NOI further excluding Observatory NOI and non-cash rental adjustments - NOI is a non-GAAP measure used by management to evaluate and compare property performance, unaffected by the cost of funds, depreciation/amortization, acquisition expenses, or general and administrative expenses[11] - Property Cash NOI excludes Observatory NOI and the effects of straight-line rent, fair value lease revenue, and straight-line ground rent expense adjustment, providing a measure that more closely reflects net cash generated at the property level[11] Same Store "Same Store" refers to properties owned throughout the entire comparative period, excluding recent acquisitions, dispositions, and specific property types for consistent comparison - Same Store properties are those owned by the Company throughout each period presented, ensuring meaningful comparisons of NOI between periods[12] - Same Store excludes properties acquired after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented, properties held-for-sale, those in receivership, and multifamily properties[13] - As of June 30, 2025, Same Store excludes the North Sixth Street Collection (acquired in 2023-2025) and First Stamford Place (placed into receivership in May 2024 and title transferred in February 2025)[13] EBITDA and Adjusted EBITDA EBITDA indicates debt incurrence and serviceability, while Adjusted EBITDA further adds back impairment charges and (gain) loss on property disposition - EBITDA is computed as net income plus interest expense, interest expense associated with property in receivership, income taxes, and depreciation and amortization[14] - EBITDA provides investors with an additional indicator of the company's ability to incur and service debt[14] - For Adjusted EBITDA, impairment charges and (gain) loss on disposition of property are added back[14] Net Debt to Adjusted EBITDA This ratio assesses overall financial flexibility, capital structure, and leverage by comparing net debt to trailing twelve months Adjusted EBITDA - Net Debt to Adjusted EBITDA is computed as the Company's pro-rata share of gross debt less cash and cash equivalents divided by the Company's pro-rata share of trailing twelve months Adjusted EBITDA[15] - The Company reviews this ratio as part of the management of its overall financial flexibility, capital structure, and leverage[15] Company Profile ESRT is a NYC-focused REIT owning and operating office, retail, and multifamily assets, including the Empire State Building, with a focus on energy efficiency Overview Empire State Realty Trust, Inc. (ESRT) is a NYC-focused REIT specializing in office, retail, and multifamily assets, with the Empire State Building as its flagship property - ESRT is a NYC-focused REIT owning and operating office, retail, and multifamily assets[16] - The flagship property is the Empire State Building, featuring its iconic Observatory[16] - The company is a recognized leader in energy efficiency and indoor environmental quality[16] Board of Directors The Board of Directors includes Anthony E. Malkin as Chairman and CEO, alongside eight other directors, each chairing a key committee Board of Directors | Name | Role | | :--- | :--- | | Anthony E. Malkin | Chairman and Chief Executive Officer | | Steven J. Gilbert | Director, Lead Independent Director, Chair of the Compensation Committee | | S. Michael Giliberto | Director, Chair of the Audit Committee | | Patricia S. Han | Director | | Grant H. Hill | Director | | R. Paige Hood | Director, Chair of the Finance Committee | | George L. W. Malkin | Director | | James D. Robinson IV | Director, Chair of the Nominating and Corporate Governance Committee | | Christina Van Tassell | Director | | Hannah Yang | Director | Executive Management The executive management team is led by Anthony E. Malkin as Chairman and CEO, with Christina Chiu as President, Thomas P. Durels overseeing Real Estate, and Steve Horn as CFO & Chief Accounting Officer Executive Management | Name | Role | | :--- | :--- | | Anthony E. Malkin | Chairman and Chief Executive Officer | | Christina Chiu | President | | Thomas P. Durels | Executive Vice President, Real Estate | | Steve Horn | Executive Vice President, Chief Financial Officer & Chief Accounting Officer | Company Information Corporate headquarters are in New York, NY, with investor relations contact via email and ESRT as the NYSE trading symbol Company Contact Information | Category | Detail | | :--- | :--- | | Corporate Headquarters | 111 West 33rd Street, 12th Floor, New York, NY 10120 | | Investor Relations | IR@esrtreit.com | | New York Stock Exchange | Trading Symbol: ESRT | | Website | www.esrtreit.com | | Phone | (212) 687-8700 | Research Coverage The company is covered by research analysts from several financial institutions, including Bank of America Merrill Lynch, Citi, and Wells Fargo Securities - ESRT is covered by research analysts from Bank of America Merrill Lynch, BMO Capital Markets Corp., BTIG, Citi, Evercore ISI, Green Street Advisors, KeyBanc Capital Markets, Wells Fargo Securities, LLC, and Wolfe Research[20] Financial Statements This section presents condensed consolidated financial statements, including balance sheets, statements of operations, and reconciliations to key non-GAAP metrics Condensed Consolidated Balance Sheets Total assets decreased slightly from $4,114,380 thousand in Q1 2025 to $4,078,750 thousand in Q2 2025, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheets (in thousands) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Assets | | | | | | | Commercial real estate properties, net | $2,562,806 | $2,518,498 | $2,512,460 | $2,426,233 | $2,297,263 | | Cash and cash equivalents | $94,643 | $187,823 | $385,465 | $421,896 | $535,533 | | Total assets | $4,078,750 | $4,114,380 | $4,510,287 | $4,436,937 | $4,433,250 | | Liabilities and Equity | | | | | | | Mortgage notes payable, net | $691,440 | $691,816 | $692,176 | $692,989 | $700,348 | | Senior unsecured notes, net | $1,097,355 | $1,097,212 | $1,197,061 | $1,196,911 | $1,196,831 | | Total liabilities | $2,289,502 | $2,328,505 | $2,728,325 | $2,679,616 | $2,682,034 | | Total equity | $1,789,248 | $1,785,875 | $1,781,962 | $1,757,321 | $1,751,216 | | Total liabilities and equity | $4,078,750 | $4,114,380 | $4,510,287 | $4,436,937 | $4,433,250 | - The contract asset related to First Stamford Place was released on February 5, 2025, upon final resolution of the foreclosure process[23] Condensed Consolidated Statements of Operations Q2 2025 total revenues were $191,250 thousand, with net income attributable to common stockholders at $6,519 thousand, and diluted EPS at $0.04 Condensed Consolidated Statements of Operations (in thousands, except per share amounts) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenues | | | | | | | Rental revenue | $153,540 | $154,542 | $155,127 | $153,117 | $152,470 | | Observatory revenue | $33,899 | $23,161 | $38,275 | $39,382 | $34,124 | | Total revenues | $191,250 | $180,066 | $197,602 | $199,599 | $189,543 | | Operating expenses | | | | | | | Property operating expenses | $44,880 | $45,060 | $46,645 | $45,954 | $41,516 | | Total operating expenses | $156,128 | $154,278 | $154,662 | $154,253 | $150,182 | | Total operating income | $35,122 | $25,788 | $42,940 | $45,346 | $39,361 | | Net income | $11,385 | $15,778 | $18,793 | $22,796 | $28,555 | | Net income attributable to common stockholders | $6,519 | $9,220 | $11,168 | $13,541 | $17,071 | | Diluted EPS | $0.04 | $0.05 | $0.07 | $0.08 | $0.10 | | Dividends per share | $0.035 | $0.035 | $0.035 | $0.035 | $0.035 | - Rental revenue components include base rent and billed tenant expense reimbursement[27] FFO, Modified FFO, Core FFO, FAD and EBITDA Reconciliation For Q2 2025, Core FFO was $59,213 thousand ($0.22 diluted per share), Core FAD was $11,949 thousand, and EBITDA was $84,791 thousand FFO, Modified FFO, Core FFO, FAD, and EBITDA (in thousands, except per share amounts) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net Income | $11,385 | $15,778 | $18,793 | $22,796 | $28,555 | | FFO attributable to common stockholders and the Operating Partnership | $57,255 | $49,429 | $60,892 | $65,355 | $63,099 | | Modified FFO attributable to common stockholders and the Operating Partnership | $59,213 | $51,387 | $62,850 | $67,313 | $65,057 | | Core FFO attributable to common stockholders and the Operating Partnership | $59,213 | $52,034 | $64,771 | $69,235 | $65,685 | | Core FAD | $11,949 | $1,209 | $2,957 | $46,569 | $32,521 | | EBITDA | $84,791 | $91,523 | $94,610 | $99,467 | $102,729 | | Adjusted EBITDA | $84,791 | $78,353 | $93,373 | $98,205 | $91,926 | | Diluted Core FFO per share and unit | $0.22 | $0.19 | $0.24 | $0.26 | $0.24 | Highlights This section provides key operational and financial metrics for the company's office, retail, multifamily, and observatory segments, along with important financial ratios Office and Retail Metrics (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total rentable square footage | 8,626,395 | 8,617,292 | 8,616,284 | 8,592,481 | 8,549,496 | | Percent occupied | 89.0 % | 87.9 % | 88.6 % | 89.1 % | 88.9 % | | Percent leased | 92.9 % | 92.5 % | 93.5 % | 93.4 % | 93.1 % | | Total Same Store Property Cash NOI (excluding lease termination fees) | $67,280 | $65,565 | $68,351 | $69,151 | $71,507 | Multifamily and Observatory Metrics (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Multifamily Cash NOI | $5,173 | $4,643 | $4,168 | $4,506 | $4,533 | | Total number of units | 743 | 732 | 732 | 732 | 727 | | Multifamily Percent occupied | 98.6 % | 99.0 % | 98.5 % | 96.8 % | 97.9 % | | Observatory NOI | $24,077 | $15,043 | $28,545 | $29,667 | $25,166 | | Number of visitors | 629,000 | 428,000 | 718,000 | 727,000 | 648,000 | | Change in visitors year-over-year | (2.9)% | (11.8)% | 1.0 % | (2.2)% | (2.7)% | Key Financial Ratios (Three Months Ended) | Ratio | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Debt to Total Market Capitalization | 46.9 % | 47.8 % | 44.0 % | 42.3 % | 46.4 % | | Net Debt to Total Market Capitalization | 45.8 % | 45.4 % | 39.5 % | 37.5 % | 39.9 % | | Debt to Adjusted EBITDA | 5.8x | 5.8x | 6.4x | 6.4x | 6.6x | | Net Debt to Adjusted EBITDA | 5.6x | 5.2x | 5.3x | 5.2x | 5.1x | | Core FFO Payout Ratio | 16 % | 19 % | 15 % | 14 % | 15 % | | Core FAD Payout Ratio | 82 % | 805 % | 324 % | 21 % | 30 % | | Core FFO per share - diluted | $0.22 | $0.19 | $0.24 | $0.26 | $0.24 | | Dividends declared and paid per share | $0.035 | $0.035 | $0.035 | $0.035 | $0.035 | Selected Property Data This section provides detailed operational data for the company's property portfolio, including NOI breakdowns, leasing activity, property information, lease expirations, top tenants, future cash rent, capital expenditures, and Observatory summary Property Summary Net Operating Income For Q2 2025, total same store property cash NOI (excluding lease termination fees) was $67,280 thousand, a 5.9% year-over-year decrease Same Store Property Cash NOI (excluding lease termination fees, in thousands) | Category | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Manhattan office portfolio | $63,589 | $61,548 | $64,110 | $65,069 | $67,165 | | Greater New York office portfolio | $1,393 | $1,584 | $1,769 | $1,651 | $1,825 | | Retail portfolio | $2,298 | $2,433 | $2,472 | $2,431 | $2,517 | | Total Same Store Property Cash NOI | $67,280 | $65,565 | $68,351 | $69,151 | $71,507 | | Percent change over prior year | (5.9)% | (1.9)% | (2.9)% | 5.2 % | 7.4 % | Same Store Net Operating Income Reconciliation Net Operating Income for Q2 2025 was $101,201 thousand, leading to total cash NOI of $98,571 thousand, and total Same Store property cash NOI (excluding lease termination fees) of $67,280 thousand Reconciliation of Net Income to Cash NOI and Same Store Cash NOI (in thousands) | Item | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income | $11,385 | $15,778 | $18,793 | $22,796 | $28,555 | | Net operating income | $101,201 | $91,076 | $105,917 | $109,346 | $104,478 | | Total cash NOI (including Observatory and lease termination fees) | $98,571 | $86,953 | $103,156 | $108,551 | $104,023 | | Total Same Store property cash NOI (excluding Observatory and lease termination fees) | $67,280 | $65,565 | $68,351 | $69,151 | $71,507 | | Multifamily Cash NOI | $5,173 | $4,643 | $4,168 | $4,506 | $4,533 | Leasing Activity In Q2 2025, the total office and retail portfolio executed 232,108 square feet of leases with an average starting cash rent of $80.01 psf, a 7.0% increase over previous rents Total Office and Retail Portfolio Leasing For Q2 2025, the total office and retail portfolio executed 232,108 square feet across 22 leases, with a 7.0% increase in average starting cash rent over previous rents Total Office and Retail Portfolio Leasing Activity (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total leases executed | 22 | 20 | 20 | 31 | 35 | | Weighted average lease term | 9.9 years | 8.4 years | 8.0 years | 7.0 years | 7.0 years | | Total square footage executed | 232,108 | 230,548 | 378,913 | 304,210 | 271,981 | | Average starting cash rent psf | $80.01 | $67.08 | $78.40 | $75.74 | $67.41 | | Percentage of new cash rent over previously escalated rents | 7.0 % | 9.5 % | 10.4 % | (4.7)% | 2.7 % | | Leasing commission costs per square foot | $31.62 | $22.39 | $21.73 | $19.67 | $18.87 | | Tenant improvement costs per square foot | $86.85 | $47.92 | $49.46 | $42.90 | $65.69 | | Total LC and TI per square foot | $118.47 | $70.31 | $71.19 | $62.57 | $84.56 | Manhattan Office Portfolio Leasing Manhattan office new leases in Q2 2025 totaled 202,499 square feet with a 14.5% increase in cash rent over previous, while renewals saw an (11.2)% decrease Manhattan Office Portfolio Leasing Activity (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Office - New Leases: Total square footage executed | 202,499 | 43,184 | 184,258 | 130,688 | 162,655 | | Office - New Leases: % of new cash rent over previously escalated rents | 14.5 % | 3.5 % | 19.4 % | 4.5 % | 4.8 % | | Office - Renewal Leases: Total square footage executed | 19,277 | 177,328 | 182,464 | 158,641 | 98,656 | | Office - Renewal Leases: % of new cash rent over previously escalated rents | (11.2)% | 12.3 % | 4.6 % | 1.2 % | (2.4)% | | Total Manhattan Office Portfolio: Total square footage executed | 221,776 | 220,512 | 366,722 | 289,329 | 261,311 | | Total Manhattan Office Portfolio: % of new cash rent over previously escalated rents | 12.1 % | 10.4 % | 10.8 % | 2.6 % | 2.0 % | Retail Portfolio Leasing The retail portfolio executed 10,332 square feet across 4 leases in Q2 2025, with average starting cash rent (15.0)% lower than previously escalated rents Retail Portfolio Leasing Activity (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total leases executed | 4 | 1 | — | 5 | 3 | | Total square footage executed | 10,332 | 1,181 | — | 12,792 | 8,990 | | Average starting cash rent psf | $268.92 | $193.00 | $— | $203.88 | $91.14 | | Percentage of new cash rent over previously escalated rents | (15.0)% | 5.0 % | — | (38.7)% | 21.5 % | Multifamily Portfolio Occupancy The multifamily portfolio maintained a high occupancy rate of 98.6% in Q2 2025, with a total of 743 units Multifamily Portfolio Occupancy (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Percent occupied | 98.6 % | 99.0 % | 98.5 % | 96.8 % | 97.9 % | | Total number of units | 743 | 732 | 732 | 732 | 727 | Commercial Property Detail As of June 30, 2025, the total portfolio comprises 8,626,395 rentable square feet, with 89.0% occupied and 92.9% leased Office - Manhattan Manhattan office properties total 7,562,514 rentable square feet, with 89.5% occupied and 93.8% leased, and the Empire State Building is the largest property Manhattan Office Properties (as of June 30, 2025) | Property Name | Rentable Square Feet | Percent Occupied | Percent Leased | Annualized Rent per Occupied Square Foot | | :--- | :--- | :--- | :--- | :--- | | The Empire State Building | 2,711,344 | 92.2 % | 96.6 % | $69.05 | | One Grand Central Place | 1,224,683 | 87.2 % | 93.3 % | $64.59 | | 1400 Broadway | 917,281 | 87.0 % | 94.5 % | $63.42 | | 111 West 33rd Street | 639,595 | 92.6 % | 94.3 % | $70.32 | | 250 West 57th Street | 476,831 | 81.6 % | 82.9 % | $71.46 | | 1359 Broadway | 456,634 | 89.3 % | 92.4 % | $59.71 | | 501 Seventh Avenue | 455,432 | 90.2 % | 90.2 % | $55.41 | | 1350 Broadway | 383,588 | 88.0 % | 97.0 % | $63.63 | | 1333 Broadway | 297,126 | 89.8 % | 89.8 % | $58.09 | | Total/Weighted Average Office - Manhattan | 7,562,514 | 89.5 % | 93.8 % | $65.83 | Office - Greater New York Metropolitan Area The Greater New York Metropolitan Area office portfolio consists of Metro Center in Stamford, CT, with 282,176 rentable square feet and 74.1% occupied Greater New York Metropolitan Area Office Properties (as of June 30, 2025) | Property Name | Location | Rentable Square Feet | Percent Occupied | Percent Leased | Annualized Rent per Occupied Square Foot | | :--- | :--- | :--- | :--- | :--- | :--- | | Metro Center | Stamford, CT | 282,176 | 74.1 % | 74.1 % | $58.12 | | Total/Weighted Average Office - Greater New York Metropolitan Area | | 282,176 | 74.1 % | 74.1 % | $58.12 | Retail Properties The retail portfolio totals 781,705 rentable square feet, with 89.9% occupied and 90.7% leased, led by the North Sixth Street Collection Retail Properties (as of June 30, 2025) | Property Name | Location | Rentable Square Feet | Percent Occupied | Percent Leased | Annualized Rent per Occupied Square Foot | | :--- | :--- | :--- | :--- | :--- | :--- | | North Sixth Street Collection | Williamsburg - Brooklyn | 102,191 | 78.0 % | 78.0 % | $140.50 | | 112 West 34th Street | Penn Station -Times Sq. South | 93,057 | 100.0 % | 100.0 % | $269.82 | | The Empire State Building | Penn Station -Times Sq. South | 88,445 | 78.7 % | 78.7 % | $115.45 | | One Grand Central Place | Grand Central | 70,810 | 79.6 % | 79.6 % | $123.23 | | 1333 Broadway | Penn Station -Times Sq. South | 67,001 | 100.0 % | 100.0 % | $153.70 | | 250 West 57th Street | Columbus Circle - West Side | 63,443 | 93.2 % | 93.2 % | $145.19 | | 10 Union Square | Union Square | 58,049 | 88.2 % | 88.2 % | $155.91 | | 1542 Third Avenue | Upper East Side | 56,211 | 95.0 % | 100.0 % | $47.16 | | 1010 Third Avenue | Upper East Side | 38,235 | 100.0 % | 100.0 % | $91.49 | | 1359 Broadway | Penn Station -Times Sq. South | 29,247 | 99.4 % | 99.4 % | $76.37 | | 501 Seventh Avenue | Penn Station -Times Sq. South | 27,213 | 78.9 % | 89.4 % | $67.20 | | 77 West 55th Street | Midtown | 25,388 | 100.0 % | 100.0 % | $83.69 | | 1350 Broadway | Penn Station -Times Sq. South | 19,511 | 100.0 % | 100.0 % | $212.06 | | 1400 Broadway | Penn Station -Times Sq. South | 17,017 | 82.2 % | 82.2 % | $125.39 | | 561 10th Avenue | Hudson Yards | 11,822 | 100.0 % | 100.0 % | $136.90 | | 298 Mulberry Street | NoHo | 10,365 | 100.0 % | 100.0 % | $191.19 | | 345 East 94th Street | Upper East Side | 3,700 | 100.0 % | 100.0 % | $70.72 | | Total/Weighted Average Retail Properties | | 781,705 | 89.9 % | 90.7 % | $141.83 | Portfolio Expirations and Vacates Summary The total office and retail portfolio has forecasted expirations of 257,553 square feet for July to December 2025, with 90,953 square feet expected to vacate Total Office and Retail Portfolio Expirations For July to December 2025, total office and retail expirations are 256,136 square feet, with 90,953 square feet expected to vacate Total Office and Retail Portfolio Expirations and Vacates Summary (in square feet) | Period | Total expirations | Renewals & relocations | New leases | Vacates | Unknown | | :--- | :--- | :--- | :--- | :--- | :--- | | March 31, 2025 (Actual) | 164,025 | 31,205 | 50,486 | 82,334 | — | | June 30, 2025 (Actual) | 79,269 | 8,483 | 21,120 | 49,666 | — | | Sep. 30, 2025 (Forecast) | 58,869 | 15,635 | — | 40,918 | 2,316 | | Dec. 31, 2025 (Forecast) | 197,267 | 14,461 | 126,391 | 50,035 | 6,380 | | July to Dec. 2025 (Forecast) | 256,136 | 30,096 | 126,391 | 90,953 | 8,696 | | Full Year 2026 (Forecast) | 510,412 | 119,513 | 19,463 | 229,314 | 142,122 | Manhattan Office Portfolio Expirations Manhattan office portfolio has forecasted expirations of 249,590 square feet for July to December 2025, with 84,760 square feet expected to vacate Manhattan Office Portfolio Expirations and Vacates Summary (in square feet) | Period | Office and retail expirations | Renewals & relocations | New leases | Vacates | Unknown | | :--- | :--- | :--- | :--- | :--- | :--- | | March 31, 2025 (Actual) | 147,055 | 16,775 | 50,486 | 79,794 | — | | June 30, 2025 (Actual) | 77,329 | 8,483 | 21,120 | 47,726 | — | | July to Dec. 2025 (Forecast) | 249,590 | 30,096 | 126,391 | 84,760 | 8,343 | | Full Year 2026 (Forecast) | 416,307 | 117,842 | 19,463 | 212,716 | 66,286 | Greater New York Metropolitan Area Office Portfolio Expirations The Greater New York Metropolitan Area office portfolio has forecasted expirations of 5,079 square feet for July to December 2025, all expected to vacate Greater New York Metropolitan Area Office Portfolio Expirations and Vacates Summary (in square feet) | Period | Office expirations | Renewals & relocations | New leases | Vacates | Unknown | | :--- | :--- | :--- | :--- | :--- | :--- | | March 31, 2025 (Actual) | 2,540 | — | — | 2,540 | — | | June 30, 2025 (Actual) | — | — | — | — | — | | July to Dec. 2025 (Forecast) | 5,079 | — | — | 5,079 | — | | Full Year 2026 (Forecast) | 23,268 | — | — | — | 23,268 | Retail Portfolio Expirations The retail portfolio has forecasted expirations of 1,467 square feet for July to December 2025, with 1,114 square feet expected to vacate Retail Portfolio Expirations and Vacates Summary (in square feet) | Period | Office expirations | Renewals & relocations | New leases | Vacates | Unknown | | :--- | :--- | :--- | :--- | :--- | :--- | | March 31, 2025 (Actual) | 14,430 | 14,430 | — | — | — | | June 30, 2025 (Actual) | 1,940 | — | — | 1,940 | — | | July to Dec. 2025 (Forecast) | 1,467 | — | — | 1,114 | 353 | | Full Year 2026 (Forecast) | 70,837 | 1,671 | — | 16,598 | 52,568 | Tenant Lease Expirations The total office and retail portfolio has 3.5% of rentable square feet expiring in 2025 and 5.8% in 2026, representing $19.6 million and $30.2 million in annualized rent, respectively Total Office and Retail Lease Expirations For the total office and retail portfolio, 3.5% of rentable square feet and annualized rent expire in 2025, with 5.8% of square feet and 5.4% of annualized rent expiring in 2026 Total Office and Retail Lease Expirations (as of June 30, 2025) | Year | Rentable Square Feet Expiring | Percent of Portfolio Rentable Square Feet Expiring | Annualized Rent | Percent of Annualized Rent | | :--- | :--- | :--- | :--- | :--- | | Total 2025 | 301,963 | 3.5 % | $19,610,246 | 3.5 % | | Total 2026 | 510,412 | 5.8 % | $30,162,300 | 5.4 % | | 2027 | 707,724 | 8.2 % | $47,867,236 | 8.6 % | | 2028 | 873,723 | 10.1 % | $52,913,755 | 9.5 % | | 2029 | 795,575 | 9.2 % | $68,365,795 | 12.3 % | | 2030 | 777,381 | 9.0 % | $58,892,496 | 10.6 % | | Thereafter | 1,930,006 | 22.7 % | $138,663,796 | 25.0 % | | Total | 8,626,395 | 100.0 % | $555,770,954 | 100.0 % | Manhattan Office Properties Lease Expirations Manhattan office properties have 3.9% of rentable square feet and 4.3% of annualized rent expiring in 2025, with 5.5% of square feet and 5.9% of annualized rent expiring in 2026 Manhattan Office Properties Lease Expirations (as of June 30, 2025) | Year | Rentable Square Feet Expiring | Percent of Portfolio Rentable Square Feet Expiring | Annualized Rent | Percent of Annualized Rent | | :--- | :--- | :--- | :--- | :--- | | Total 2025 | 293,477 | 3.9 % | $18,956,024 | 4.3 % | | Total 2026 | 416,307 | 5.5 % | $26,093,135 | 5.9 % | | 2027 | 626,173 | 8.3 % | $38,399,735 | 8.7 % | | 2028 | 854,533 | 11.3 % | $50,714,632 | 11.4 % | | 2029 | 648,524 | 8.6 % | $42,748,001 | 9.6 % | | 2030 | 657,412 | 8.7 % | $44,481,444 | 10.0 % | | Thereafter | 1,769,596 | 23.2 % | $118,730,340 | 26.7 % | | Total | 7,562,514 | 100.0 % | $443,912,587 | 100.0 % | Greater New York Metropolitan Area Office Portfolio Lease Expirations The Greater New York Metropolitan Area office portfolio has 1.8% of rentable square feet and 2.4% of annualized rent expiring in 2025, with 8.2% of square feet and 11.9% of annualized rent expiring in 2026 Greater New York Metropolitan Area Office Portfolio Lease Expirations (as of June 30, 2025) | Year | Rentable Square Feet Expiring | Percent of Portfolio Rentable Square Feet Expiring | Annualized Rent | Percent of Annualized Rent | | :--- | :--- | :--- | :--- | :--- | | Total 2025 | 5,079 | 1.8 % | $291,898 | 2.4 % | | Total 2026 | 23,268 | 8.2 % | $1,448,235 | 11.9 % | | 2027 | 21,546 | 7.6 % | $1,264,659 | 10.4 % | | 2028 | 11,480 | 4.1 % | $658,539 | 5.4 % | | 2029 | 12,208 | 4.3 % | $720,869 | 5.9 % | | 2030 | 42,827 | 15.2 % | $2,516,457 | 20.7 % | | Thereafter | — | — % | — | — % | | Total | 282,176 | 100.0 % | $12,148,780 | 100.0 % | Retail Properties Lease Expirations Retail properties have 0.4% of rentable square feet and 0.3% of annualized rent expiring in 2025, with 9.1% of square feet and 2.7% of annualized rent expiring in 2026 Retail Properties Lease Expirations (as of June 30, 2025) | Year | Rentable Square Feet Expiring | Percent of Portfolio Rentable Square Feet Expiring | Annualized Rent | Percent of Annualized Rent | | :--- | :--- | :--- | :--- | :--- | | Total 2025 | 3,407 | 0.4 % | $362,324 | 0.3 % | | Total 2026 | 70,837 | 9.1 % | $2,620,930 | 2.7 % | | 2027 | 60,005 | 7.7 % | $8,202,842 | 8.2 % | | 2028 | 7,710 | 1.0 % | $1,540,584 | 1.5 % | | 2029 | 134,843 | 17.2 % | $24,896,925 | 25.0 % | | 2030 | 77,142 | 9.9 % | $11,894,595 | 11.9 % | | Thereafter | 160,410 | 20.5 % | $19,933,456 | 20.1 % | | Total | 781,705 | 100.0 % | $99,709,587 | 100.0 % | Largest Tenants and Portfolio Tenant Diversification by Industry The top 20 largest tenants account for 32.71% of occupied square feet and 36.94% of annualized rent, with LinkedIn as the largest tenant 20 Largest Tenants LinkedIn is the largest tenant, occupying 423,544 square feet (4.97% of portfolio) with an annualized rent of $31.0 million (5.58% of portfolio) 20 Largest Tenants (as of June 30, 2025) | Rank | Tenant | Property | Weighted Average Remaining Lease Term | Total Occupied Square Feet | Percent of Portfolio Rentable Square Feet | Annualized Rent | Percent of Portfolio Annualized Rent | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | 1. | LinkedIn | Empire State Building | 10.3 years | 423,544 | 4.97 % | $31,010,761 | 5.58 % | | 2. | Flagstar Bank | 1400 Broadway | 14.2 years | 313,109 | 3.68 % | $19,600,190 | 3.53 % | | 3. | Centric Brands Inc. | Empire State Building | 3.3 years | 252,929 | 2.97 % | $14,255,159 | 2.56 % | | 4. | PVH Corp. | 501 Seventh Avenue | 2.7 years | 237,281 | 2.79 % | $13,507,462 | 2.43 % | | 5. | Institutional Capital Network, Inc. | One Grand Central Place | 15.6 years | 154,050 | 1.81 % | $11,012,076 | 1.98 % | | 6. | Sephora USA, Inc. | 112 West 34th Street | 3.6 years | 11,334 | 0.13 % | $10,563,141 | 1.90 % | | 7. | Target Corporation | 112 West 34th St., 10 Union Sq. | 12.6 years | 81,340 | 0.95 % | $9,543,763 | 1.72 % | | 8. | Macy's | 111 West 33rd Street | 4.9 years | 131,117 | 1.54 % | $9,520,794 | 1.71 % | | 9. | Coty Inc. | Empire State Building | 4.6 years | 157,892 | 1.85 % | $9,339,709 | 1.68 % | | 10. | URBAN OUTFITTERS | 1333 Broadway | 4.3 years | 56,730 | 0.67 % | $8,287,997 | 1.49 % | | Total (Top 20) | | | | 2,785,891 | 32.71 % | $205,388,467 | 36.94 % | Portfolio Tenant Diversification by Industry The portfolio exhibits tenant diversification across various industries, based on annualized rent[71][72] Initial Cash Rent and Capital Expenditures The company expects $69.6 million in initial annual cash rent from commenced and signed leases, with Q2 2025 capital expenditures totaling $61,572 thousand Initial Cash Rent Contributing to Cash NOI Initial annual cash rent contributing to Cash NOI from commenced and signed leases is projected to be $69,647 thousand, growing to $67,981 thousand by 2029 Initial Cash Rent Contributing to Cash NOI (in thousands) | Expected Cash Commencement | Initial Annual Cash Rent | 2025 | 2026 | 2027 | 2028 | 2029 | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Commenced leases in free rent period | $37,527 | $4,136 | $28,089 | $37,527 | $37,270 | $37,026 | | Signed leases not commenced | $32,120 | $466 | $5,026 | $21,021 | $26,367 | $30,955 | | Total | $69,647 | $4,602 | $33,115 | $58,548 | $63,637 | $67,981 | Capital Expenditures Total capital expenditures for Q2 2025 were $61,572 thousand, primarily driven by second-generation tenant improvements and building improvements Capital Expenditures (in thousands) | Capital expenditures | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Tenant improvements - first generation | $39 | $174 | $2,744 | $— | $— | | Tenant improvements - second generation | $36,890 | $39,304 | $45,969 | $17,149 | $25,087 | | Leasing commissions - first generation | $— | $— | $98 | $138 | $129 | | Leasing commissions - second generation | $7,605 | $7,629 | $10,769 | $3,753 | $3,807 | | Building improvements - first generation | $236 | $— | $180 | $128 | $— | | Building improvements - second generation | $7,868 | $5,770 | $9,377 | $7,838 | $11,362 | | Non-recurring capital improvements | $8,934 | $2,910 | $14,420 | $2,825 | $5,979 | | Total | $61,572 | $55,787 | $83,557 | $31,831 | $46,364 | Observatory Summary For Q2 2025, Observatory NOI was $24,077 thousand, with 629,000 visitors, representing a 2.9% year-over-year decrease in visitors and 21 bad weather days Observatory NOI and Metrics (Three Months Ended) | Metric | June 30, 2025 | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | :--- | | Observatory revenue | $33,899 | $23,161 | $38,275 | $39,382 | $34,124 | | Observatory expenses | $9,822 | $8,118 | $9,730 | $9,715 | $8,958 | | NOI | $24,077 | $15,043 | $28,545 | $29,667 | $25,166 | | Number of visitors | 629,000 | 428,000 | 718,000 | 727,000 | 648,000 | | Change in visitors year over year | (2.9)% | (11.8)% | 1.0 % | (2.2)% | (2.7)% | | Number of bad weather days ("BWD") | 21 | 13 | 8 | 8 | 8 | Debt and Ground Lease Analysis This section details the company's debt structure, including types, interest rates, maturities, covenant compliance, and future ground lease commitments Consolidated Debt Analysis As of June 30, 2025, total debt was $2,072,478 thousand with a weighted average interest rate of 4.34% and 5.0 years maturity, and the company is in compliance with all debt covenants Debt Summary Total debt as of June 30, 2025, was $2,072,478 thousand, primarily fixed-rate, with a weighted average interest rate of 4.34% and a weighted average maturity of 5.0 years Debt Summary (as of June 30, 2025, in thousands) | Debt Type | Balance | Interest Rate | Maturity (Years) | | :--- | :--- | :--- | :--- | | Mortgage debt | $702,478 | 3.64 % | 5.8 | | Senior unsecured notes | $1,100,000 | 4.76 % | 5.2 | | Unsecured term loan facilities | $270,000 | 4.43 % | 2.3 | | Total fixed rate debt | $2,072,478 | 4.34 % | 5.0 | | Total variable rate debt | $— | — | — | | Total debt | $2,072,478 | 4.34 % | 5.0 | Available Capacity The company has an unsecured revolving credit facility with a total capacity of $620,000 thousand, all of which was available as of June 30, 2025 Available Capacity (as of June 30, 2025, in thousands) | Facility | Total Facility | Outstanding at June 30, 2025 | Letters of Credit | Available Capacity | | :--- | :--- | :--- | :--- | :--- | | Unsecured revolving credit facility | $620,000 | $— | $— | $620,000 | Covenant Summary The company is in compliance with all debt covenants as of June 30, 2025, including Maximum Total Leverage of 32.7% and Minimum Fixed Charge Coverage of 3.1x Covenant Summary (as of June 30, 2025) | Covenant | Required | Current Quarter | In Compliance | | :--- | :--- | :--- | :--- | | Maximum Total Leverage | < 60% | 32.7 % | Yes | | Maximum Secured Leverage | < 40% | 11.6 % | Yes | | Minimum Fixed Charge Coverage | > 1.50x | 3.1x | Yes | | Minimum Unencumbered Interest Coverage | > 1.75x | 5.0x | Yes | | Maximum Unsecured Leverage | < 60% | 25.1 % | Yes | Debt Detail The company's debt portfolio includes various mortgage notes and senior unsecured notes with stated interest rates ranging from 2.83% to 7.41% and maturities extending from 2026 to 2035 Debt Detail (as of June 30, 2025, in thousands) | Debt Instrument | Stated Interest Rate (%) | Principal Balance | Maturity Date | Amortization | | :--- | :--- | :--- | :--- | :--- | | 10 Union Square | 3.70 % | $50,000 | 4/1/2026 | Interest only | | 1542 Third Avenue | 4.29 % | $30,000 | 5/1/2027 | Interest only | | 1010 Third Avenue & 77 West 55th St. | 4.01 % | $33,580 | 1/5/2028 | 30 years | | Metro Center | 3.59 % | $71,600 | 11/5/2029 | Interest only | | 250 West 57th Street | 2.83 % | $180,000 | 12/1/2030 | Interest only | | 1333 Broadway | 4.21 % | $160,000 | 2/5/2033 | Interest only | | 345 East 94th Street - Series A | 70% of SOFR plus 0.95% | $43,600 | 11/1/2030 | Interest only | | 345 East 94th Street - Series B | SOFR plus 2.24% | $6,106 | 11/1/2030 | 30 years | | 561 10th Avenue - Series A | 70% of SOFR plus 1.07% | $114,500 | 11/1/2033 | Interest only | | 561 10th Avenue - Series B | SOFR plus 2.45% | $13,092 | 11/1/2033 | 30 years | | Unsecured term loan facility (1) | SOFR plus 1.50% | $175,000 | 12/31/2026 | Interest only | | Unsecured term loan facility (2) | SOFR plus 1.50% | $95,000 | 3/8/2029 | Interest only | | Senior unsecured notes (Series B-K) | 3.61% - 7.41% | $1,100,000 | 2027-2034 | Interest only | | Total / weighted average debt | 4.34 % | $2,072,478 | | | Debt Maturities and Ground Lease Commitments The company has significant debt maturities in 2030 ($508,600 thousand) and 2033 ($439,007 thousand), with ground lease commitments totaling $760 thousand in 2025 Debt Maturities The largest debt maturities are concentrated in 2030 ($508,600 thousand) and 2033 ($439,007 thousand), representing 24.8% and 21.3% of total debt, respectively Debt Maturities (in thousands) | Year | Maturities | Amortization | Total | Percentage of Total Debt | Weighted Average Interest Rate of Maturing Debt | | :--- | :--- | :--- | :--- | :--- | :--- | | 2025 | $— | $1,868 | $1,868 | 0.1 % | N/A | | 2026 | $225,000 | $3,957 | $228,957 | 11.1 % | 4.06 % | | 2027 | $155,000 | $4,276 | $159,276 | 7.7 % | 4.13 % | | 2028 | $146,091 | $3,555 | $149,646 | 7.2 % | 4.06 % | | 2029 | $321,600 | $3,890 | $325,490 | 15.7 % | 5.72 % | | 2030 | $508,600 | $4,511 | $513,111 | 24.8 % | 3.67 % | | 2031 | $45,000 | $3,283 | $48,283 | 2.3 % | 7.32 % | | 2032 | $100,000 | $3,591 | $103,591 | 5.0 % | 3.61 % | | 2033 | $439,007 | $3,249 | $442,256 | 21.3 % | 4.20 % | | 2034 | $25,000 | $— | $25,000 | 1.2 % | 7.41 % | | 2035 | $75,000 | $— | $75,000 | 3.6 % | 3.73 % | | Total debt | $2,040,298 | $32,180 | $2,072,478 | 100.0 % | 4.34 % | Ground Lease Commitments Ground lease commitments total $760 thousand in 2025 and $1,503 thousand in 2026, with no fair value market resets or escalations Ground Lease Commitments (in thousands) | Year | 1350 Broadway | 1400 Broadway | 111 West 33rd Street | Total | | :--- | :--- | :--- | :--- | :--- | | 2025 | $54 | $338 | $368 | $760 | | 2026 | $93 | $675 | $735 | $1,503 | | 2027 | $72 | $675 | $735 | $1,482 | | 2028 | $72 | $675 | $735 | $1,482 | | 2029 | $72 | $675 | $735 | $1,482 | | Thereafter | $1,482 | $22,950 | $34,851 | $59,283 | | Total | $1,845 | $25,988 | $38,159 | $65,992 | - The ground lease commitments have no fair value market resets, no step-ups, and no escalations[90]