Financial Performance - Net income attributable to common unitholders for Q2 2025 was $10.3 million, a decrease of 62.4% compared to $27.5 million in Q2 2024[128]. - Core Funds From Operations (Core FFO) for Q2 2025 was $59.2 million, reflecting a decline from the previous year[128]. - Operating income for Q2 2025 was $35.12 million, a decrease of 10.8% from $39.36 million in Q2 2024[130]. - Net income attributable to common unitholders decreased to $25.062 million, down 31.6% from $36.665 million in 2024[139]. - For the six months ended June 30, 2025, the Company reported a net income of $11.4 million, compared to $28.6 million for the same period in 2024, reflecting a decrease of 60%[184]. - Core Funds From Operations (Core FFO) attributable to common unitholders for the six months ended June 30, 2025, was $111.2 million, a decrease of 7.9% from $122.2 million in 2024[184]. Revenue and Expenses - Total revenues for Q2 2025 increased to $191.25 million, up 0.9% from $189.54 million in Q2 2024[130]. - Rental revenue rose to $153.54 million, a 0.7% increase from $152.47 million in Q2 2024, driven by higher operating and real estate tax expenses[130][131]. - Observatory revenue decreased to $33.90 million, down 0.7% from $34.12 million in Q2 2024, attributed to lower visitation due to bad weather and reduced international tourism[130][136]. - Property operating expenses increased by 8.1% to $44.88 million, primarily due to higher repair and maintenance costs[130][133]. - Total revenues for the six months ended June 30, 2025, increased to $371.316 million, a 0.2% increase from $370.722 million in 2024[138]. - Rental revenue rose to $308.082 million, reflecting a 0.6% increase from $306.352 million in the prior year, driven by higher operating and real estate tax expenses[138][140]. - Observatory revenue decreased to $57.060 million, down 2.8% from $58.720 million, attributed to lower visitation due to adverse weather and reduced international tourism[138][146]. - Operating income fell to $60.910 million, a decline of 13.5% from $70.424 million in the previous year[138]. - Interest income fell by 63.3% to $1.87 million, mainly due to a decrease in cash and cash equivalents following debt repayments[130][134]. - Interest income dropped to $5.653 million, a 39.0% decrease from $9.270 million, primarily due to reduced cash and cash equivalents[138][143]. Leasing and Property Management - The company signed 232,108 rentable square feet of new, renewal, and expansion leases during the quarter[132]. - Total new leases signed decreased from 56 in 2024 to 37 in 2025, with total square feet leased dropping from 630,253 to 451,143[161]. - Weighted average annualized cash rent per square foot for new and renewal leases increased from $65.10 in 2024 to $68.78 in 2025, representing a 4.1% increase[161]. - The percentage of new cash rent over previously escalated rents rose significantly from 3.6% in 2024 to 10.9% in 2025[161]. - As of June 30, 2025, the Company had approximately 0.6 million rentable square feet available to lease, representing 7.4% of the net rentable square footage in its commercial portfolio[186]. Capital Expenditures and Investments - The company acquired two retail properties in Williamsburg, Brooklyn for a total of $31.0 million in June 2025[132]. - The company acquired two retail properties for $31.0 million in June 2025, continuing its market expansion strategy[150]. - Capital expenditures for the six months ended June 30, 2025, were $26.0 million, down from $37.8 million in 2024[165]. - Net cash used in investing activities rose by $27.9 million to $155.6 million, primarily due to the acquisition of two retail properties for $31.7 million[174]. Financial Position and Liquidity - Total consolidated indebtedness as of June 30, 2025, was approximately $2.1 billion, with a weighted average interest rate of 4.34%[149]. - As of June 30, 2025, the company had $94.6 million in cash and cash equivalents and $620.0 million available under its unsecured revolving credit facility[149]. - The company maintained compliance with financial covenants, including a maximum total leverage of 32.7%, well below the 60% requirement[153]. - The weighted average interest rate on the Company’s $2.1 billion of fixed-rate indebtedness was 4.34% per annum as of June 30, 2025[196]. - The fair value of the Company’s outstanding debt was approximately $2.0 billion, which was about $98.3 million less than the book value as of June 30, 2025[197]. - The Company has interest rate SOFR swap and cap agreements with an aggregate notional value of $448.0 million, maturing between December 31, 2026, and November 1, 2033[195]. - The Company maintains a well-positioned balance sheet with modest leverage and good access to liquidity, providing optionality for capital recycling, acquisitions, and buybacks[192]. Market Conditions and Outlook - The Company anticipates that the global economic environment may impact its operations, particularly in the office real estate market and visitor numbers to the Observatory[190]. - As of June 30, 2025, the company expects to incur approximately $103.9 million in additional costs for tenant improvements and leasing commissions[166]. - Net cash provided by operating activities increased by $1.8 million to $109.9 million for the six months ended June 30, 2025[173]. - Distributions to equity holders increased slightly from $21.2 million in 2024 to $21.6 million in 2025[171]. - The Observatory hosted 1,057,000 visitors in the first half of 2025, a decrease of 6.7% compared to 1,133,000 visitors in the same period of 2024[188]. - Observatory revenue for the six months ended June 30, 2025, was $57.1 million, down 2.8% from $58.7 million in 2024, primarily due to lower visitation[188]. Shareholder Returns - The company authorized a repurchase program of up to $500.0 million of its Class A common stock and operating partnership units from January 1, 2024, through December 31, 2025[172].
Empire State Realty OP(FISK) - 2025 Q2 - Quarterly Report