Financial Performance - Net income for the three months ended September 30, 2025, was $13.6 million, a decrease of 40.1% compared to $22.8 million in the same period of 2024[134] - Total revenues for the three months ended September 30, 2025, were $197.7 million, a slight decrease of 0.9% from $199.6 million in the same period of 2024[134] - Operating income for the three months ended September 30, 2025, was $39.3 million, down 13.3% from $45.3 million in 2024[134] - Total revenues for the nine months ended September 30, 2025, were $569.046 million, a decrease of 0.2% compared to $570.321 million in 2024[140] - Operating income fell by 13.4% to $100.243 million in 2025 from $115.770 million in 2024[140] - Net income attributable to common unitholders decreased by 35.5% to $37.657 million in 2025 from $58.411 million in 2024[140] - Core FFO attributable to common unitholders for the nine months ended September 30, 2025, was $172.540 million, compared to $191.449 million for the same period in 2024, reflecting a decrease of 9.9%[186] Revenue Breakdown - Rental revenue increased by 3.5% to $158.4 million for the three months ended September 30, 2025, compared to $153.1 million in 2024[134] - Observatory revenue decreased by 8.5% to $36.0 million due to lower visitation levels, primarily from reduced international tourism[134] - Rental revenue increased by 1.5% to $466.492 million in 2025 from $459.469 million in 2024, driven by new lease commencements[140][141] - Observatory revenue decreased by 5.1% to $93.097 million in 2025 from $98.102 million in 2024, attributed to lower international tourism and adverse weather conditions[140][146] - The Observatory hosted 1,705,000 visitors for the nine months ended September 30, 2025, down 8.3% from 1,860,000 visitors in the same period of 2024[189] - Observatory revenue for the nine months ended September 30, 2025, was $93.1 million, a decrease of 5.1% from $98.1 million in the same period of 2024[189] Expenses and Costs - Property operating expenses increased by 2.2% to $46.96 million, attributed to higher repair and maintenance costs and acquisitions[134] - Real estate taxes rose by 3.9% to $33.24 million, driven by higher tax rates and property valuations[137] - Interest income decreased by 83.5% to $1.15 million, primarily due to a decrease in cash and cash equivalents[138] - Net operating income (NOI) for the nine months ended September 30, 2025, was $297.6 million, compared to $306.7 million in 2024[181] - As of September 30, 2025, the company expects to incur approximately $96.8 million in additional costs for tenant improvements and leasing commissions[170] Leasing Activity - Signed a total of 87,880 rentable square feet of new, renewal, and expansion leases during the quarter[132] - Total new leases signed decreased from 82 in 2024 to 51 in 2025, with total square feet leased dropping from 921,671 to 523,002[165] - Weighted average annualized cash rent per square foot for new and renewal leases increased by 3.37% from $66.69 in 2024 to $68.94 in 2025[165] - The percentage of new cash rent over previously escalated rents rose significantly from 3.3% in 2024 to 9.8% in 2025[165] - Total leasing commissions and tenant improvement costs per square foot increased from $77.20 in 2024 to $90.47 in 2025[165] Cash Flow and Liquidity - Net cash provided by operating activities increased by $4.3 million to $215.2 million in 2025, primarily due to changes in working capital[176] - Net cash used in investing activities decreased by $130.4 million to $188.1 million, attributed to a $31.7 million acquisition in 2025 compared to a $143.4 million acquisition in 2024[177] - Distributions to equity holders amounted to $32.4 million in 2025, up from $31.8 million in 2024[174] - The company had $154.1 million in cash and cash equivalents and $620.0 million available under its unsecured revolving credit facility as of September 30, 2025[149] Debt and Financial Position - Total consolidated indebtedness as of September 30, 2025, was approximately $2.1 billion, with a weighted average interest rate of 4.34%[149] - The weighted average interest rate on $2.1 billion of fixed-rate indebtedness outstanding was 4.34% per annum as of September 30, 2025[197] - The fair value of outstanding debt was approximately $2.0 billion, which was about $0.1 billion less than the book value as of September 30, 2025[198] - The company has interest rate SOFR swap and cap agreements with an aggregate notional value of $447.5 million, maturing between December 31, 2026, and November 1, 2033[196] Strategic Positioning - The company believes it is well-positioned with a diversified portfolio across office, retail, multifamily, and the Empire State Building Observatory, despite economic uncertainties[192] - The company has a well-positioned balance sheet with modest leverage and good access to liquidity, providing optionality in capital allocation decisions[193] - The company expects to generate positive cash flows from operations and plans to make quarterly distributions to securityholders[147] - As of September 30, 2025, the company was in compliance with all financial covenants related to its unsecured facilities, including a maximum total leverage of 32.1%[153] - The company has $497.9 million remaining of the authorized $500.0 million repurchase program for Class A common stock and operating partnership units[175]
Empire State Realty OP(FISK) - 2025 Q3 - Quarterly Report