esrt-20250331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2025


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-36106

EMPIRE STATE REALTY OP, L.P.

(Exact name of Registrant as specified in its charter)


Delaware						45-4685158
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

111 West 33rd Street, 12th Floor

New York, New York 10120

(Address of principal executive offices) (Zip Code)

(212) 687-8700

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol	Name of each exchange on which registered
Series ES operating partnership units	ESBA	NYSE Arca, Inc.
Series 60 operating partnership units	OGCP	NYSE Arca, Inc.
Series 250 operating partnership units	FISK	NYSE Arca, Inc.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 2, 2025, there were 17,733,682 units of the Registrant Series ES operating partnership units outstanding, 4,529,675 units of the Series 60 operating partnership units outstanding, and 2,359,560 units of the Series 250 operating partnership units outstanding.


	EMPIRE STATE REALTY OP, L.P.
	FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2025
	TABLE OF CONTENTS	PAGE
PART 1.	FINANCIAL INFORMATION
ITEM 1.	FINANCIAL STATEMENTS
	Condensed Consolidated Balance Sheets as of March 31, 2025 (unaudited) and December 31, 2024	2
	Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (unaudited)	3
	Condensed Consolidated Statements of Comprehensive Income for the three months ended March 31, 2025 and 2024 (unaudited)	4
	Condensed Consolidated Statements of Capital for the three months ended March 31, 2025 and 2024 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (unaudited)	6
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	27
ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK	36
ITEM 4.	CONTROLS AND PROCEDURES	36
PART II.	OTHER INFORMATION	36
ITEM 1.	LEGAL PROCEEDINGS	36
ITEM 1A.	RISK FACTORS	37
ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	37
ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	37
ITEM 4.	MINE SAFETY DISCLOSURES	37
ITEM 5.	OTHER INFORMATION	37
ITEM 6.	EXHIBITS	38
SIGNATURES		39

ITEM 1. FINANCIAL STATEMENTS

Empire State Realty OP, L.P.

Condensed Consolidated Balance Sheets


(amounts in thousands, except per unit amounts)	March 31, 2025		December 31, 2024
ASSETS	(unaudited)
Commercial real estate properties, at cost:
Land	$	386,423	$	386,423
Development costs	8,187		8,187
Building and improvements	3,430,812		3,392,043
	3,825,422		3,786,653
Less: accumulated depreciation	(1,306,924)		(1,274,193)
Commercial real estate properties, net	2,518,498		2,512,460
Contract asset	—		170,419
Cash and cash equivalents	187,823		385,465
Restricted cash	49,589		43,837

Tenant and other receivables	29,071		31,427
Deferred rent receivables	252,299		247,754
Prepaid expenses and other assets	64,233		101,852
Deferred costs, net	181,802		183,987
Acquired below-market ground leases, net	311,452		313,410
Right of use assets	28,134		28,197
Goodwill	491,479		491,479
Total assets	$	4,114,380	$	4,510,287
LIABILITIES AND CAPITAL
Liabilities:
Mortgage notes payable, net	$	691,816	$	692,176
Senior unsecured notes, net	1,097,212		1,197,061
Unsecured term loan facilities, net	268,807		268,731
Unsecured revolving credit facility	—		120,000
Debt associated with property in receivership	—		177,667
Accrued interest associated with property in receivership	—		5,433
Accounts payable and accrued expenses	135,298		132,016
Acquired below-market leases, net	18,306		19,497
Ground lease liabilities	28,134		28,197
Deferred revenue and other liabilities	61,888		62,639
Tenants’ security deposits	27,044		24,908

Total liabilities	2,328,505		2,728,325
Commitments and contingencies
Capital:
Private perpetual preferred units:
Series 2019 Private perpetual preferred units, $13.52 liquidation preference, 4,664 issued and outstanding in 2025 and 2024	21,936		21,936
Series 2014 Private perpetual preferred units, $16.62 liquidation preference, 1,560 issued and outstanding in 2025 and 2024	8,004		8,004
Series PR operating partnership units:
ESRT partner's capital (2,787 and 2,742 general partner operating partnership units and 165,283 and 164,641 limited partner operating partnership units outstanding in 2025 and 2024, respectively)	1,032,060		1,030,696
Limited partners' interests (85,866 and 81,605 limited partner operating partnership units outstanding in 2025 and 2024, respectively)	714,575		711,904
Series ES operating partnership units (17,869 and 18,181 limited partner operating partnership units outstanding in 2025 and 2024, respectively)	7,017		7,126
Series 60 operating partnership units (4,562 and 4,589 limited partner operating partnership units outstanding in 2025 and 2024, respectively)	1,430		1,436
Series 250 operating partnership units (2,365 and 2,393 limited partner operating partnership units outstanding in 2025 and 2024, respectively)	853		860
Total Empire State Realty OP, L.P.'s capital	1,785,875		1,781,962
Non-controlling interest in other partnerships	—		—
Total capital	1,785,875		1,781,962
Total liabilities and capital	$	4,114,380	$	4,510,287

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended March 31,
(amounts in thousands, except per unit amounts)	2025		2024
Revenues:
Rental revenue	$	154,542	$	153,882

Observatory revenue	23,161		24,596
Lease termination fees	—		—
Third-party management and other fees	431		265
Other revenue and fees	1,932		2,436
Total revenues	180,066		181,179
Operating expenses:
Property operating expenses	45,060		45,060
Ground rent expenses	2,331		2,331
General and administrative expenses	16,940		15,972
Observatory expenses	8,118		8,431
Real estate taxes	33,050		32,241


Depreciation and amortization	48,779		46,081
Total operating expenses	154,278		150,116
Total operating income	25,788		31,063
Other income (expense):
Interest income	3,786		4,178
Interest expense	(26,938)		(25,128)
Interest expense associated with property in receivership	(647)		—
Loss on early extinguishment of debt	—		(553)
Gain on disposition of property	13,170		—
Income before income taxes	15,159		9,560
Income tax benefit	619		655
Net income	15,778		10,215
Private perpetual preferred unit distributions	(1,050)		(1,050)
Net income attributable to non-controlling interests in other partnerships	—		(4)
Net income attributable to common unitholders	$	14,728	$	9,161

Total weighted average units:
Basic	267,073		264,562
Diluted	269,529		267,494

Earnings per unit attributable to common unitholders:
Basic	$	0.06	$	0.03
Diluted	$	0.05	$	0.03

Dividends per unit	$	0.035	$	0.035

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Comprehensive Income

(unaudited)


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
Net income	$	15,778	$	10,215
Other comprehensive income (loss):
Unrealized gain (loss) on valuation of interest rate swap agreements	(4,116)		8,198
Amount reclassified into interest expense	(1,049)		(2,324)
Other comprehensive income (loss)	(5,165)		5,874
Comprehensive income	10,613		16,089
Net income attributable to non-controlling interests in other partnerships	—		(4)
Other comprehensive income attributable to non-controlling interest in other partnerships	—		—
Comprehensive income attributable to OP unitholders	$	10,613	$	16,085

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Capital

For The Three Months Ended March 31, 2025 and 2024

(unaudited)


				Series PR Operating Partnership Units						Series ES Operating Partnership Units Limited Partners			Series 60 Operating Partnership Units Limited Partners			Series 250 Operating Partnership Units Limited Partners
				General Partner			Limited Partners
(amounts in thousands)	Private Perpetual Preferred Units	Private Perpetual Preferred Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Non-controlling Interest in Other Partnerships		Total Capital
Balance at December 31, 2024	6,224	$	29,940	167,383	$	1,030,696	81,605	$	711,904	18,181	$	7,126	4,589	$	1,436	2,393	$	860	$	—	$	1,781,962

Conversion of operating partnership units to ESRT Partner's Capital	—	—		533	1,585		(166)	(1,445)		(312)	(122)		(27)	(8)		(28)	(10)		—		—
Repurchases of common units	—	—		—	—		—	—		—	—		—	—		—	—		—		—


Equity compensation	—	—		154	(327)		4,427	4,410		—	—		—	—		—	—		—		4,083
Distributions	—	(1,050)		—	(5,880)		—	(2,982)		—	(628)		—	(160)		—	(83)		—		(10,783)
Net income	—	1,050		—	9,220		—	4,139		—	987		—	250		—	132		—		15,778
Other comprehensive loss	—	—		—	(3,234)		—	(1,451)		—	(346)		—	(88)		—	(46)		—		(5,165)
Balance at March 31, 2025	6,224	$	29,940	168,070	$	1,032,060	85,866	$	714,575	17,869	$	7,017	4,562	$	1,430	2,365	$	853	$	—	$	1,785,875


				Series PR Operating Partnership Units						Series ES Operating Partnership Units Limited Partners			Series 60 Operating Partnership Units Limited Partners			Series 250 Operating Partnership Units Limited Partners
				General Partner			Limited Partners
(amounts in thousands)	Private Perpetual Preferred Units	Private Perpetual Preferred Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Operating Partnership Units	Operating Partnership Unitholders		Non-controlling Interest in Other Partnerships		Total Capital
Balance at December 31, 2023	6,224	$	29,940	163,046	$	985,518	80,189	$	694,512	19,947	$	4,427	5,144	$	779	2,619	$	462	$	15,407	$	1,731,045

Conversion of operating partnership units to ESRT Partner's Capital	—	—		1,566	7,132		(807)	(6,981)		(560)	(121)		(153)	(22)		(46)	(8)		—		—
Repurchases of common units	—	—		—	—		—	—		—	—		—	—		—	—		—		—
Acquisition of non-controlling interests in other partnerships	—	—		—	114		—	—		—	—		—	—		—	—		(15,411)		(15,297)
Equity compensation	—	—		186	(260)		2,884	3,709		—	—		—	—		—	—		—		3,449
Distributions	—	(1,050)		—	(5,765)		—	(2,793)		—	(679)		—	(175)		—	(90)		—		(10,552)
Net income	—	1,050		—	5,661		—	2,556		—	678		—	174		—	92		4		10,215
Other comprehensive income	—	—		—	3,722		—	1,572		—	417		—	107		—	56		—		5,874
Balance at March 31, 2024	6,224	$	29,940	164,798	$	996,122	82,266	$	692,575	19,387	$	4,722	4,991	$	863	2,573	$	512	$	—	$	1,724,734

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
Cash Flows From Operating Activities
Net income	$	15,778	$	10,215
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	48,779		46,081
Gain on disposition of property	(13,170)		—
Amortization of non-cash items within interest expense	2,175		2,076
Amortization of acquired above- and below-market leases, net	(798)		(514)
Amortization of acquired below-market ground leases	1,958		1,958
Straight-lining of rental revenue	(5,283)		(3,061)
Equity based compensation	4,980		3,449

Loss on early extinguishment of debt	—		553
Increase (decrease) in cash flows due to changes in operating assets and liabilities:
Security deposits	2,136		(10,042)
Tenant and other receivables	2,356		(1,371)
Deferred costs	(7,812)		(8,105)
Prepaid expenses and other assets	31,809		29,132
Accounts payable and accrued expenses	250		141
Deferred revenue and other liabilities	(12)		414

Net cash provided by operating activities	83,146		70,926
Cash Flows From Investing Activities
Additions to building and improvements	(42,063)		(53,000)

Acquisition of non-controlling interests in other partnerships	—		(14,226)

Post-closing costs from a prior period sale of property	—		(4,034)
Development costs	—		(9)

Net cash used in investing activities	(42,063)		(71,269)

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Condensed Consolidated Statements of Cash Flows (continued)

(unaudited)


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
Cash Flows From Financing Activities


Repayment of unsecured senior notes	(100,000)		—
Proceeds from unsecured revolving credit facility	—		120,000
Repayment of unsecured revolving credit facility	(120,000)		—
Proceeds from unsecured term loan	—		95,000
Repayment of unsecured term loan	—		(215,000)
Repayment of mortgage notes payable	(889)		(1,470)
Deferred financing costs	(404)		(9,280)


Taxes paid on withholding shares	(897)		—
Private perpetual preferred unit distributions	(1,050)		(1,050)
Distributions	(9,733)		(9,502)
Net cash used in financing activities	(232,973)		(21,302)
Net decrease in cash and cash equivalents and restricted cash	(191,890)		(21,645)
Cash and cash equivalents and restricted cash—beginning of period	429,302		406,956
Cash and cash equivalents and restricted cash—end of period	$	237,412	$	385,311

Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period	$	385,465	$	346,620
Restricted cash at beginning of period	43,837		60,336
Cash and cash equivalents and restricted cash at beginning of period	$	429,302	$	406,956

Cash and cash equivalents at end of period	$	187,823	$	333,573
Restricted cash at end of period	49,589		51,738
Cash and cash equivalents and restricted cash at end of period	$	237,412	$	385,311

Supplemental disclosures of cash flow information:
Cash paid for interest	$	20,357	$	21,984
Cash paid for income taxes	$	1,220	$	480

Non-cash investing and financing activities:
Building and improvements included in accounts payable and accrued expenses	$	79,042	$	48,771
Write-off of fully depreciated assets	9,270		551
Derivative instruments at fair values included in prepaid expenses and other assets	7,035		16,726

Contract asset	(171,003)		—
Debt associated with property in receivership	177,667		—
Accrued interest associated with property in receivership	6,080		—
Conversion of operating partnership units to ESRT partner's capital	1,585		7,132

The accompanying notes are an integral part of these consolidated financial statements

Empire State Realty OP, L.P.

Notes to Condensed Consolidated Financial Statements

(unaudited)

1. Description of Business and Organization

As used in these condensed consolidated financial statements, unless the context otherwise requires, “we,” “us,” “our,” and the “Company,” mean Empire State Realty OP, L.P. and its consolidated subsidiaries.

Empire State Realty OP, L.P. (the "Operating Partnership") is the entity through which Empire State Realty Trust, Inc. (NYSE: ESRT), a NYC-focused real estate investment trust ("REIT") that owns and operates a portfolio of well-leased, top of tier, modernized, amenitized, and well-located office, retail, and multifamily assets, conducts all of its business and owns (either directly or through subsidiaries) substantially all of its assets. ESRT’s flagship Empire State Building, the “World's Most Famous Building,” features its iconic Observatory that was declared the #1 Attraction in the World - and the #1 Attraction in the U.S. for the third consecutive year – in Tripadvisor’s 2024 Travelers’ Choice Awards: Best of the Best Things to Do. The Company is a recognized leader in energy efficiency and indoor environmental quality.

As of March 31, 2025, our portfolio was comprised of approximately 7.9 million rentable square feet of office space, 0.8 million rentable square feet of retail space and 732 residential units. Our office portfolio included 10 properties (including three long-term ground leasehold interests). Nine of these office properties are located in midtown Manhattan and encompass approximately 7.6 million rentable square feet of office space and 0.5 million rentable square feet of retail space, including the Empire State Building. The remaining office property is located in Stamford, Connecticut, with immediate access to mass transportation. Additionally, we have entitled land adjacent to the Stamford office property that can support the development of either office or residential per local zoning. Our multifamily portfolio included 732 residential units in New York City.

We were organized as a Delaware limited partnership on November 28, 2011, and commenced operations upon completion of the initial public offering of ESRT’s Class A common stock and related formation transactions on October 7, 2013 (the "Offering"). ESRT's Class A common stock, par value $0.01 per share, is listed on the New York Stock Exchange under the symbol "ESRT." ESRT, as the sole general partner in our Company, has responsibility and discretion in the management and control of our Company, and our limited partners, in such capacity, have no authority to transact business for, or participate in the management activities, of our Company. As of March 31, 2025, ESRT owned approximately 60.3% of our operating partnership units.

2. Summary of Significant Accounting Policies

There have been no material changes to the summary of significant accounting policies included in the "Summary of Significant Accounting Policies" section in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”).

Basis of Quarterly Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments and eliminations (including intercompany balances and transactions), consisting of normal recurring adjustments, considered necessary for the fair presentation of the financial statements have been included.

The results of operations for the periods presented are not necessarily indicative of the results that may be expected for the corresponding full years. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the financial statements for the year ended December 31, 2024 contained in our Annual Report. Our Observatory business is subject to tourism trends and the weather, and therefore does experience some seasonality. For the year ended December 31, 2024, approximately 18% of our annual Observatory revenue was realized in the first quarter, 25% was realized in the second quarter, 29% was realized in the third quarter, and 28% was realized in the fourth quarter. Our multifamily business experiences some seasonality based on general market trends in New York City – the winter months (November through January) are slower in terms of lease activity. We seek to mitigate this by staggering lease terms such that

lease expirations are matched with seasonal demand. We do not consider the balance of our business to be subject to material seasonal fluctuations.

We consolidate entities in which we have a controlling financial interest. In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members. For variable interest entities ("VIE"), we consolidate the entity if we are deemed to have a variable interest in the entity and through that interest we are deemed the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. At December 31, 2024 we were the primary beneficiary of a variable interest in the intermediary entities that hold title to the assets of the North 6th Street Collection acquired in 2024. The intermediary entities were utilized to execute like-kind exchanges, most of which were completed as of March 31, 2025 and the intermediary entities assigned its ownership interests in these entities to us. At March 31, 2025 we remained the primary beneficiary of a variable interest in one of the intermediary entities.

We will assess the accounting treatment for each investment we may have in the future. This assessment will include a review of each entity’s organizational agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we will review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity’s economic performance and benefit. In situations where we or our partner could approve, among other things, the annual budget, or leases that cover more than a nominal amount of space relative to the total rentable space at each property, we would not consolidate the investment as we consider these to be substantive participation rights that result in shared power of the activities that would most significantly impact the performance and benefit of such joint venture investment.

A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Non-controlling interests are required to be presented as a separate component of equity in the condensed consolidated balance sheets and in the condensed consolidated statements of operations by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests.

Accounting Estimates

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to use estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Significant items subject to such estimates and assumptions include allocation of the purchase price of acquired real estate properties among tangible and intangible assets, determination of the useful life of real estate properties and other long-lived assets, valuation and impairment analysis of commercial real estate properties, goodwill, right-of-use assets and other long-lived and indefinite-lived assets, estimate of tenant expense reimbursements, valuation of the allowance for doubtful accounts, and valuation of derivative instruments, ground lease liabilities, senior unsecured notes, mortgage notes payable, unsecured revolving credit and term loan facilities, and equity-based compensation. These estimates are prepared using management’s best judgment, after considering past, current, and expected events and economic conditions. Actual results could differ from those estimates.

3. Acquisitions and Dispositions

Property Acquisitions

In September and October 2024, we closed on the acquisition of a portfolio of retail properties on North 6th Street in Williamsburg, Brooklyn for an aggregate purchase price of $195.0 million. The following table summarizes the purchase price allocation of this acquisition (amounts in thousands):


						Intangibles
Property	Date Acquired	Land		Building and Improvements		Assets		Liabilities		Total
The North 6th Street Collection(1)	September 2024-October 2024	$	44,924	$	146,826	$	10,984	$	(9,664)	$	193,070
(1) Includes nine retail properties on North 6th Street in Williamsburg, Brooklyn. Includes capitalized transaction costs of $(1.9) million, net of certain closing credits.

In September 2024, we entered into an agreement for the acquisition of an additional retail property on North 6th Street in Williamsburg, Brooklyn for approximately $30.0 million. The acquisition is anticipated to close in mid-2025.

In March 2024, we executed a buyout of the 10% non-controlling interest in two of our multifamily properties located at 561 10th Avenue and 345 East 94th Street in Manhattan for $14.2 million in cash and the assumption of $18.0 million of in-place debt. As there was no change in control, we accounted for this acquisition as an equity transaction in accordance with Accounting Standards Codification 810-10 and no gain or loss was recognized.

Property Dispositions

The following table summarizes properties disposed of during the three and twelve months ended March 31, 2025 and December 31, 2024, respectively (amounts in thousands):


Property	Date of Disposal	Sales Price(1)		Gain on Disposition(2)
First Stamford Place, Stamford, Connecticut	5/22/2024	$	165,807	$	26,472
(1) We transferred the First Stamford Place, which was encumbered by mortgage and other debt obligations of $165.8 million back to the lender in consensual foreclosure and recognized non-cash gain upon the disposition. (2) Gain on disposition includes $13.2 million and $13.3 million for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively.

In April 2024, we worked with the First Stamford Place mortgage lender to structure a consensual foreclosure. On May 22, 2024, a receiver was appointed and we ended our management and control of the property. In connection with this, we removed the related assets and property liabilities from our condensed consolidated balance sheet and recognized a gain in the condensed consolidated statements of operations of $13.3 million for the twelve months ended December 31, 2024. We also recorded a contract asset of $170.4 million that represented the consideration not yet received for the senior mortgage obligation, including applicable accrued interest, we expected to be released upon the final resolution of the foreclosure process on First Stamford Place. On February 5, 2025, the consensual foreclosure of First Stamford Place was completed and we were released of the senior mortgage obligation and derecognized the related contract asset.

In connection with the completion of the consensual foreclosure we concluded that we are no longer the primary beneficiary of the entity that holds the First Stamford Place mezzanine debt obligation as we no longer have the power to direct the activities that most significantly impact the VIE's economic performance, nor the right to receive the benefits from the VIE. As a result, the entity was deconsolidated during the three months ended March 31, 2025 and we recognized a gain of $13.2 million representing other obligations relating to First Stamford Place. The gain is included as a component of gain on disposition of property in the accompanying condensed consolidated statement of operations.

4. Deferred Costs, Acquired Lease Intangibles and Goodwill

Deferred costs, net, consisted of the following:


(amounts in thousands)	March 31, 2025		December 31, 2024
Deferred leasing costs	$	220,044	$	230,836
Acquired in-place lease value, acquired deferred leasing costs and deferred acquisition costs	137,597		137,580
Acquired above-market leases	19,589		19,636
Total deferred costs, excluding deferred financing costs	377,230		388,052
Less: accumulated amortization	(204,207)		(212,972)
Total deferred costs, net, excluding net deferred financing costs	173,023		175,080
Deferred financing costs, net, of accumulated amortization of $8,313 and $7,783, respectively (See Note 5)	8,779		8,907
Total deferred costs, net	$	181,802	$	183,987

Acquired below-market ground leases, net, consisted of the following:


(amounts in thousands)	March 31, 2025		December 31, 2024
Acquired below-market ground leases	$	396,916	$	396,916
Less: accumulated amortization	(85,464)		(83,506)
Acquired below-market ground leases, net	$	311,452	$	313,410

Acquired below-market leases, net, consisted of the following:


(amounts in thousands)	March 31, 2025		December 31, 2024
Acquired below-market leases	$	(56,359)	$	(56,359)
Less: accumulated amortization	38,053		36,862
Acquired below-market leases, net	$	(18,306)	$	(19,497)

The total amortization related to deferred costs and acquired lease intangibles consisted of the following:


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
Rental revenue:
Amortization of below-market leases, net of above-market leases	$	798	$	514
Depreciation and amortization:
Amortization of deferred leasing costs and acquired deferred leasing costs	5,369		5,787
Amortization related to acquired in-place lease value	1,408		1,286

As of March 31, 2025 and December 31, 2024, we had goodwill of $491.5 million. Goodwill was allocated $227.5 million to the Observatory reportable segment and $264.0 million to the real estate reportable segment.

We performed our annual goodwill testing in October 2024, where we bypassed the optional qualitative goodwill impairment assessment and proceeded directly to a quantitative assessment of the Observatory reportable segment and engaged a third-party valuation consulting firm to perform the valuation process. The quantitative analysis used a combination of the discounted cash flow method (a form of the income approach) utilizing Level 3 unobservable inputs and the guideline company method (a form of the market approach). Significant assumptions under the former included revenue and cost projections, weighted average cost of capital, long-term growth rate and income tax considerations while the latter included guideline company enterprise values, revenue multiples, EBITDA multiples and control premium rates. Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred. The quantitative analysis performed concluded the fair value of the reporting unit exceeds its carrying value. We also perform quarterly qualitative assessments and have not identified any events which would indicate, on a more likely than not basis, that the goodwill allocated to the reporting unit was impaired. Many of the factors employed in determining whether or not goodwill is impaired are outside of our control, and it is reasonably likely that assumptions and estimates will change in future periods.

5. Debt

Debt consisted of the following:


	Principal Balance				As of March 31, 2025
(amounts in thousands)	March 31, 2025		December 31, 2024		Stated Rate		Effective Rate(1)		Maturity Date(2)
Fixed rate mortgage debt:
10 Union Square	$	50,000	$	50,000	3.70	%	3.97	%	4/1/2026
1542 Third Avenue	30,000		30,000		4.29	%	4.53	%	5/1/2027
1010 Third Avenue and 77 West 55th Street	33,815		34,048		4.01	%	4.21	%	1/5/2028
Metro Center (3)	71,600		71,600		3.59	%	3.67	%	11/5/2029
250 West 57th Street	180,000		180,000		2.83	%	3.21	%	12/1/2030


1333 Broadway	160,000		160,000		4.21	%	4.29	%	2/5/2033
345 East 94th Street - Series A	43,600		43,600		70% of SOFR plus 0.95%		3.56	%	11/1/2030
345 East 94th Street - Series B	6,300		6,490		SOFR plus 2.24%		3.56	%	11/1/2030
561 10th Avenue - Series A	114,500		114,500		70% of SOFR plus 1.07%		3.85	%	11/1/2033
561 10th Avenue - Series B	13,569		14,036		SOFR plus 2.45%		3.85	%	11/1/2033
Total mortgage debt	703,384		704,274
Senior unsecured notes:(4)
Series A	—		100,000		—		—		—
Series B	125,000		125,000		4.09	%	4.12	%	3/27/2027
Series C	125,000		125,000		4.18	%	4.21	%	3/27/2030
Series D	115,000		115,000		4.08	%	4.11	%	1/22/2028
Series E	160,000		160,000		4.26	%	4.27	%	3/22/2030
Series F	175,000		175,000		4.44	%	4.45	%	3/22/2033
Series G	100,000		100,000		3.61	%	4.89	%	3/17/2032
Series H	75,000		75,000		3.73	%	5.00	%	3/17/2035
Series I	155,000		155,000		7.20	%	7.39	%	6/17/2029
Series J	45,000		45,000		7.32	%	7.46	%	6/17/2031
Series K	25,000		25,000		7.41	%	7.52	%	6/17/2034
Unsecured term loan facility (4)	175,000		175,000		SOFR plus 1.50%		4.61	%	12/31/2026
Unsecured term loan facility (3),(4)	95,000		95,000		SOFR plus 1.50%		4.48	%	3/8/2029
Unsecured revolving credit facility (3),(4)	—		120,000		SOFR plus 1.30%		4.04	%	3/8/2029
Total principal	2,073,384		2,294,274
Deferred financing costs, net	(9,561)		(10,123)
Unamortized debt discount	(5,988)		(6,183)
Total	$	2,057,835	$	2,277,968

______________

(1)The effective rate is the yield as of March 31, 2025 and includes the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements.

(2)Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.

(3)Assumes extension options are exercised for the 2029 maturities of the term loan, revolving credit facility and Metro Center mortgage.

(4)At March 31, 2025, we were in compliance with all debt covenants.

Principal Payments

Aggregate required principal payments at March 31, 2025 are as follows (amounts in thousands):


Year	Amortization		Maturities		Total
2025	$	2,774	$	—	$	2,774
2026	3,957		225,000		228,957
2027	4,276		155,000		159,276
2028	3,555		146,091		149,646
2029	3,890		321,600		325,490
Thereafter	14,634		1,192,607		1,207,241
Total	$	33,086	$	2,040,298	$	2,073,384

Deferred Financing Costs

Deferred financing costs, net, consisted of the following:


(amounts in thousands)	March 31, 2025		December 31, 2024
Deferred financing costs, included as a component of net debt	$	32,225	$	36,309
Deferred financings costs, included as a component of net deferred costs (See Note 4)	17,092		16,638
Total deferred financing costs	$	49,317	$	52,947
Less: accumulated amortization	(30,977)		(33,970)
Total deferred financing costs, net	$	18,340	$	18,977

Amortization expense related to deferred financing costs was $1.1 million and $1.0 million for the three months ended March 31, 2025 and 2024, respectively.

Unsecured Revolving Credit and Term Loan Facilities

On March 8, 2024, through our Operating Partnership, we entered into a second amended and restated credit agreement with Bank of America, N.A., as administrative agent and the other lenders party thereto, that amends and restates the amended and restated credit agreement, dated August 29, 2017 which governs our senior unsecured revolving credit facility and term loan facility (collectively, the “BofA Credit Facilities”). The BofA Credit Facilities are comprised of a $620.0 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) and a $95.0 million term loan facility (the “BofA Term Loan Facility”). We may request that the BofA Credit Facilities be increased through one or more increases in the Revolving Credit Facility or one or more increases in the BofA Term Loan Facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount under the second amended and restated credit agreement not to exceed $1.5 billion.

The Revolving Credit Facility matures on March 8, 2029, inclusive of two six-month extension periods and replaced the existing revolving credit facility that was due to mature in March 2025. The BofA Term Loan Facility matures on March 8, 2029, inclusive of two twelve-month extension periods and replaced the existing term loan facility that was due to mature in March 2025. Initial interest rates on the BofA Credit Facilities, which may change based on our leverage levels, are SOFR plus a benchmark adjustment of 10.0 basis points ("adjusted SOFR") plus 130 basis points for any drawn portion of the Revolving Credit Facility and adjusted SOFR plus 150 basis points for the BofA Term Loan Facility. In addition, the BofA Credit Facilities have a sustainability-linked pricing mechanism that reduces the borrowing spread if certain benchmarks are achieved each year. On March 18, 2025, we repaid the $120.0 million borrowings previously drawn on the Revolving Credit Facility. As of March 31, 2025, we had no borrowings under the Revolving Credit Facility and $95.0 million under the BofA Term Loan Facility.

On March 13, 2024, through our Operating Partnership, we entered into a third amendment to our credit agreement dated March 19, 2020 with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which governs a senior unsecured term loan facility (the “Wells Term Loan Facility”). The Wells Term Loan Facility is in the original principal amount of $175.0 million and matures on December 31, 2026. The third amendment provides for, among other things, certain conforming changes to the BofA Credit Facilities agreement, including increases to the capitalization rate for certain of our properties. No other changes were made to the amount of the commitments, the maturity date of the outstanding loans or the covenants. We may request the Wells Term Loan Facility be increased through one or more increases or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $225.0 million. As of March 31, 2025, our borrowings amounted to $175.0 million under the Wells Term Loan Facility.

The terms of both the BofA Credit Facilities and the Wells Term Loan Facility include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. Both facilities also require compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio. The agreements governing both facilities also contain customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of REIT qualification, and occurrence of a change of control. As of March 31, 2025, we were in compliance with these covenants.

Senior Unsecured Notes

On March 27, 2025, the Series A senior unsecured notes matured and the aggregate principal amount of $100.0 million was repaid. The notes had a stated interest rate of 3.93%.

The terms of our senior unsecured notes, include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. The terms also require compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio. The agreements also contain customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, the occurrence of certain change of control transactions and loss of REIT qualification. As of March 31, 2025, we were in compliance with these covenants.

6. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


(amounts in thousands)	March 31, 2025		December 31, 2024
Capital expenditures included in accounts payable and accrued expenses	$	79,042	$	73,535
Accounts payable and accrued expenses	48,394		54,779

Accrued interest payable	7,862		3,702
Total accounts payable and accrued expenses	$	135,298	$	132,016

7. Financial Instruments and Fair Values

Derivative Financial Instruments

We use derivative financial instruments primarily to manage interest rate risk and such derivatives are not considered speculative. These derivative instruments are typically in the form of interest rate swap and forward agreements, and the primary objective is to minimize interest rate risks associated with investing and financing activities. The counterparties of these arrangements are major financial institutions with which we may also have other financial relationships. We are exposed to credit risk in the event of non-performance by these counterparties; however, we currently do not anticipate that any of the counterparties will fail to meet their obligations.

We have agreements with our derivative counterparties that contain a provision where if we either default or are capable of being declared in default on any of our indebtedness, then we could also be declared in default on our derivative obligations. As of March 31, 2025, we did not have derivatives in a net liability position.

As of March 31, 2025 and December 31, 2024, we had interest rate swaps and caps with an aggregate notional value of $448.5 million and $664.0 million, respectively. The notional value does not represent exposure to credit, interest rate or market risks. As of March 31, 2025 and December 31, 2024, the fair value of our derivative instruments in an asset position amounted to $7.0 million and $13.1 million, respectively, which is included in prepaid expenses and other assets on the condensed consolidated balance sheet. These interest rate swaps have been designated as cash flow hedges and hedge the variability in future cash flows associated with our existing variable-rate term loan facilities. Interest rate caps not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements.

As of March 31, 2025 and 2024, our cash flow hedges are deemed highly effective. A net unrealized gain (loss) of $(5.2) million and $5.9 million for the three months ended March 31, 2025 and 2024, respectively, relating to both active and terminated hedges of interest rate risk, are reflected in the condensed consolidated statements of comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the debt. We estimate that $0.2 million net gain of the current balance held in accumulated other comprehensive income (loss) will be reclassified into interest expense within the next 12 months. Cash payments and receipts related to our cash flow hedges are classified as operating activities and included within our disclosure of cash paid for interest on our condensed consolidated statements of cash flows, consistent with the classification of the hedged interest payments.

The table below summarizes the terms of agreements and the fair values of our derivative financial instruments:


(amounts in thousands, except percentages)							March 31, 2025				December 31, 2024
Derivative	Notional Amount		Receive Rate	Pay Rate	Effective Date	Expiration Date	Asset		Liability		Asset		Liability
Interest rate swap	$	36,820	70% of 1 Month SOFR	2.5000%	December 1, 2021	November 1, 2030	$	265	$	—	$	759	$	—
Interest rate swap	103,790		70% of 1 Month SOFR	2.5000%	December 1, 2021	November 1, 2033	1,167		—		2,825		—
Interest rate swap	10,710		70% of 1 Month SOFR	1.7570%	December 1, 2021	November 1, 2033	576		—		743		—
Interest rate swap	13,726		1 Month SOFR	2.2540%	December 1, 2021	November 1, 2030	566		—		754		—
Interest rate swap	175,000		SOFR Compound	2.5620%	August 31, 2022	December 31, 2026	3,406		—		4,895		—
Interest rate swap	—		SOFR Compound	2.6260%	August 19, 2022	March 19, 2025	—		—		383		—
Interest rate swap	—		SOFR OIS Compound	2.6280%	August 19, 2022	March 19, 2025	—		—		382		—
Interest rate cap	6,780		70% of 1 Month SOFR	4.5000%	October 1, 2024	November 1, 2030	25		—		35		—
Interest rate cap	6,676		1 Month SOFR	5.5000%	October 1, 2024	November 1, 2030	57		—		81		—
Interest rate swap	47,500		1 Month SOFR	3.3090%	March 19, 2025	March 8, 2029	482		—		1,117		—
Interest rate swap	47,500		1 Month SOFR	3.3030%	March 19, 2025	March 8, 2029	491		—		1,124		—
	$	448,502					$	7,035	$	—	$	13,098	$	—

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on accumulated other comprehensive income (loss):


	Three Months Ended
(amounts in thousands)	March 31, 2025		March 31, 2024
Amount of (loss) gain recognized in other comprehensive income (loss)	$	(4,116)	$	8,198
Amount of gain reclassified from accumulated other comprehensive income (loss) into interest expense	(1,049)		(2,324)

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the condensed consolidated statements of operations:


	Three Months Ended
(amounts in thousands)	March 31, 2025		March 31, 2024
Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded	$	(26,938)	$	(25,128)
Amount of gain reclassified from accumulated other comprehensive income (loss) into interest expense	1,049		2,324

Fair Valuation

The estimated fair values at March 31, 2025 and December 31, 2024 were determined by management, using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The fair value of derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. Although the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our

counterparties. The impact of such credit valuation adjustments, determined based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all our derivatives were classified as Level 2 of the fair value hierarchy.

The fair values of our mortgage notes payable, senior unsecured notes (Series A-K), unsecured term loan facilities and unsecured revolving credit facility which are determined using Level 3 inputs are estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made by us.

The following tables summarize the carrying and estimated fair values of our financial instruments:


	March 31, 2025
			Estimated Fair Value
(amounts in thousands)	Carrying Value		Total		Level 1		Level 2		Level 3
Interest rate swaps and caps included in prepaid expenses and other assets	$	7,035	$	7,035	$	—	$	7,035	$	—

Mortgage notes payable	691,816		629,476		—		—		629,476
Senior unsecured notes - Series B-K	1,097,212		1,033,230		—		—		1,033,230
Unsecured term loan facilities	268,807		270,000		—		—		270,000


	December 31, 2024
			Estimated Fair Value
(amounts in thousands)	Carrying Value		Total		Level 1		Level 2		Level 3
Interest rate swaps and caps included in prepaid expenses and other assets	$	13,098	$	13,098	$	—	$	13,098	$	—

Mortgage notes payable	692,176		618,378		—		—		618,378
Senior unsecured notes - Series A-K	1,197,061		1,116,149		—		—		1,116,149
Unsecured term loan facilities	268,731		270,000		—		—		270,000
Unsecured revolving credit facility	120,000		120,000		—		—		120,000

Disclosure about the fair value of financial instruments is based on pertinent information available to us as of March 31, 2025 and December 31, 2024. Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

8. Leases

Lessor

We lease various spaces to tenants over terms ranging from one to 30 years. Certain leases have termination options for a fee and/or renewal options. The leases provide for base monthly rentals and reimbursements for real estate taxes, escalations linked to the consumer price index or common area maintenance known as operating expense escalation. Tenant expense reimbursements are reflected in our March 31, 2025 and 2024 condensed consolidated statements of operations as rental revenue.

Rental revenue includes fixed and variable payments. Fixed payments primarily relate to base rent and variable payments primarily relate to tenant expense reimbursements for certain property operating costs. The components of rental revenue consisted of the following:


	Three Months Ended
(amounts in thousands)	March 31, 2025		March 31, 2024
Fixed payments	$	135,956	$	136,353
Variable payments	18,586		17,529
Total rental revenue	$	154,542	$	153,882

As of March 31, 2025, we were entitled to the following future contractual minimum lease payments (excluding tenant expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2054 (amounts in thousands):


Remainder of 2025	$	375,551
2026	477,099
2027	445,498
2028	407,976
2029	342,144
Thereafter	1,629,266
	$	3,677,534

The above future minimum lease payments exclude tenant recoveries and the net accretion of above-market leases and below-market lease intangibles. Some leases are subject to termination options generally upon payment of a termination fee. The preceding table is prepared assuming such options are not exercised.

As of March 31, 2025, the future lease payments to be received for signed leases that have not yet commenced was approximately $590.7 million.

Lessee

We determine if an arrangement is a lease at inception. Our operating lease agreements relate to three ground lease assets and are reflected in right-of-use assets and lease liabilities of $28.1 million as of March 31, 2025 and right-of-use assets and lease liabilities of $28.2 million as of December 31, 2024 in our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

The ground leases are due to expire between the years 2050 and 2077, inclusive of extension options, and have no variable payments or residual value guarantees. As our leases do not provide an implicit rate, we determined our incremental borrowing rate based on information available at the date of adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), in determining the present value of lease payments. The weighted average incremental borrowing rate used to calculate the right-of-use assets and lease liabilities as of March 31, 2025 was 4.5%. Rent expense for lease payments related to our operating leases is recognized on a straight-line basis over the non-cancellable term of the leases. The weighted average remaining lease term as of March 31, 2025 was 45.3 years.

As of March 31, 2025, the following table summarizes our future minimum lease payments discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):


Remainder of 2025	$	1,138
2026	1,503
2027	1,482
2028	1,482
2029	1,482
Thereafter	59,283
Total undiscounted lease payments	66,370
Present value discount	(38,236)
Ground lease liabilities	$	28,134

9. Commitments and Contingencies

Legal Proceedings

Except as described below, as of March 31, 2025, we were not involved in any material litigation, nor, to our knowledge, was any material litigation threatened against us or our properties, other than routine litigation arising in the ordinary course of business such as disputes with tenants. We believe that the costs and related liabilities, if any, which may result from such actions will not materially affect our condensed consolidated financial position, operating results or liquidity.

Violet Shuker Shasha Trust et al. v. Peter L. Malkin, Anthony E. Malkin et al.

As previously disclosed, in October 2014, 12 former investors (the "Claimants") in Empire State Building Associates L.L.C. (“ESBA”), which, prior to the Offering, owned the fee title to the Empire State Building, filed an arbitration with the American Arbitration Association against Peter L. Malkin, Anthony E. Malkin, Thomas N. Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA, (the "Respondents"). The statement of claim (also filed later in federal court in New York for the expressed purpose of tolling the statute of limitations) alleged breach of fiduciary duty and related claims in connection with the Offering and sought monetary damages and declaratory relief. Claimants had opted out of a prior class action bringing similar claims that were settled with court approval. Respondents filed an answer and counterclaims. In March 2015, the federal court action was stayed on consent of all parties pending the arbitration. Arbitration hearings started in May 2016 and concluded in August 2018. On August 26, 2020, the arbitration panel issued an award that denied all Claimants’ claims with one exception, on which it awarded the Claimants approximately $1.2 million, inclusive of seven years of interest through October 2, 2020. This amount was recorded as an Offering litigation expense in the consolidated statements of operations for the year ended December 31, 2020.

Respondents believe that such award in favor of the Claimants is entirely without merit and sought to vacate that portion of the award. On July 31, 2023, the New York State court denied the Respondents’ petition to vacate in part and confirmed the award. On January 22, 2024, that court entered judgment in favor of the Claimants (save for one Claimant, whose petition to confirm was granted in a separate proceeding on July 22, 2024) in an amount of approximately $1.3 million, inclusive of interest. The Respondents believe those rulings are incorrect and appealed them. On March 13, 2025, the appeals court affirmed. The Respondents have filed a motion for reargument or, in the alternative, leave to appeal to the New York Court of Appeals. In addition, certain of the Claimants in the federal court action brought to toll the statute of limitations and sought to pursue claims in that case against the Respondents. Respondents believe that any such claims are meritless. The magistrate judge assigned to the action has issued a Report and Recommendation rejecting the Claimants’ claims; on January 30, 2025, the district judge adopted that Report and Recommendation and dismissed the case. Those Claimants have appealed that ruling.

Pursuant to indemnification agreements which were made with our directors, executive officers and chairman emeritus as part of our formation transactions, Anthony E. Malkin, Peter L. Malkin and Thomas N. Keltner, Jr. have defense and indemnity rights from us with respect to this arbitration.

Unfunded Capital Expenditures

At March 31, 2025, we estimate that we will incur approximately $110.9 million of capital expenditures (including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements. We expect to fund these capital expenditures with operating cash flow, cash on hand and other borrowings. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs. We expect that these financing requirements will be met in a similar fashion.

Concentration of Credit Risk

Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, tenant and other receivables and deferred rent receivables. At March 31, 2025, we held on deposit at various major financial institutions cash and cash equivalents and restricted cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation.

Asset Retirement Obligations

We are required to accrue costs that we are legally obligated to incur on retirement of our properties which result from acquisition, construction, development and/or normal operation of such properties. Retirement includes sale, abandonment or

disposal of a property. Under that standard, a conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within a company’s control and a liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated. Environmental site assessments and investigations have identified asbestos or asbestos-containing building materials in certain of our properties. As of March 31, 2025, management has no plans to remove or alter these properties in a manner that would trigger federal and other applicable regulations for asbestos removal, and accordingly, the obligations to remove the asbestos or asbestos-containing building materials from these properties have indeterminable settlement dates. As such, we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. However ongoing asbestos abatement, maintenance programs and other required documentation are carried out as required and related costs are expensed as incurred.

Other Environmental Matters

Under various federal, state and/or local laws, ordinances and regulations, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or release of hazardous substances, waste, or petroleum products at, on, in, under or from such property, including costs for investigation or remediation, natural resource damages, or third-party liability for personal injury or property damage. Some of our properties have been or may be impacted by contamination arising from current or prior uses of the property or adjacent properties for commercial, industrial or other purposes. Such contamination may arise from spills of petroleum or hazardous substances or releases from tanks used to store such materials. We also may be liable for the costs of remediating contamination at off-site disposal or treatment facilities when we arrange for disposal or treatment of hazardous substances at such facilities, without regard to whether we comply with environmental laws in doing so. The presence of contamination or the failure to remediate contamination on our properties may adversely affect our ability to attract and/or retain tenants, and our ability to develop or sell or borrow against those properties. In addition to potential liability for cleanup costs, private plaintiffs may bring claims for personal injury, property damage or for similar reasons. Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination. Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property.

Some of our properties are adjacent to or near other properties which are used for industrial or commercial purposes or have contained or currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances. Releases from these properties could impact our properties. In addition, some of our properties have previously been used by former owners or tenants for commercial or industrial activities, e.g., gas stations and dry cleaners, and a portion of the Metro Tower site is currently used for automobile parking and was formerly leased to a fueling facility that may release petroleum products or other hazardous or toxic substances at such properties or to surrounding properties. While certain properties contain or contained uses that could have or have impacted our properties, we are not aware of any liabilities related to environmental contamination that we believe will have a material adverse effect on our operations.

In addition, our properties are subject to various federal, state and local environmental and health and safety laws and regulations. Noncompliance with these laws and regulations could subject us or our tenants to liability. These liabilities could affect a tenant’s ability to make rental payments to us. Moreover, changes in laws could increase the potential costs of compliance with such laws and regulations or increase liability for noncompliance. We sometimes require our tenants to comply with environmental and health and safety laws and regulations and to indemnify us for any related liabilities in our leases with them. But in the event of the bankruptcy or inability of any of our tenants to satisfy such obligations, we may be required to satisfy such obligations. We do not believe we have any instances of material non-compliance with environmental or health and safety laws or regulations at our properties, and we believe that we and/or our tenants have all material permits and approvals necessary under current laws and regulations to operate our properties.

In addition, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a carbon tax), which could increase our operating costs. In particular, as the owner of large commercial and multifamily buildings in New York City, we are subject to Local Law 97 passed by the New York City Council in April 2019, which for each such covered building establishes annual limits for greenhouse gas emissions, requires yearly emissions reports beginning in May 2025 for calendar year 2024 performance, and imposes penalties for emissions above such limits. Based upon our present understanding of the law and calculations related thereto, we expect to pay no Local Law 97 fine on any covered building in our portfolio in the 2024-2029 period of enforcement.

As the owner or operator of real property, we may also incur liability based on various building conditions. For example, environmental site assessments have identified asbestos or asbestos-containing material (“ACM”) in certain of our properties, and it is possible that other properties that we currently own or operate or acquire in the future contain ACM. Environmental and health and safety laws require that ACM be properly managed and maintained and may impose fines or

penalties on owners, operators or employers for non-compliance with those requirements. In addition, we may be subject to liability for personal injury or property damage sustained as a result of releases of ACM into the environment. We do not believe we have any material liabilities related to building conditions, including any instances of material non-compliance with asbestos requirements or any material liabilities related to asbestos.

Our properties may contain or develop harmful mold or suffer from other indoor air quality or water quality issues, which could lead to liability for adverse health effects or property damage or costs for remediation. When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria. Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne or waterborne contaminants from the affected property or increase indoor ventilation or flush and treat water systems. In addition, the presence of significant mold or other airborne or waterborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs. We do not believe we have any material adverse indoor air quality or water quality issues at our properties.

As of March 31, 2025, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents. All such maintenance costs are expensed as incurred. However, we cannot be certain that we have identified all environmental liabilities at our properties, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that such environmental liabilities arise.

Insurance Coverage

We carry insurance coverage on our properties of types and in amounts with deductibles that we believe are in line with coverage customarily obtained by owners of similar properties.

10. Capital

As of March 31, 2025, there were 167,093,536 shares of Class A common stock, 976,082 shares of Class B common stock and 110,662,788 operating partnership units outstanding. The controlling interest of 60.3% is owned by ESRT. The other 39.7% non-controlling interest in the OP is diversified among various limited partners, some of whom include Company directors, senior management and employees. ESRT has two classes of common stock as a means to give its OP Unit holders voting rights in the public company that correspond to their economic interest in the combined entity. A one-time option was created at our formation transactions for any pre-Offering OP Unit holder to exchange one OP Unit out of every 50 OP Units they owned for one ESRT Class B share, and such ESRT Class B share carries 50 votes per share.

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

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.

Private Perpetual Preferred Units

As of March 31, 2025, there were 4,664,038 Series 2019 Preferred Units ("Series 2019 Preferred Units") and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units") outstanding. The Series 2019 Preferred Units have a liquidation preference of $13.52 per unit and are entitled to receive cumulative preferential annual cash

distributions of $0.70 per unit payable in arrears on a quarterly basis. The Series 2014 Preferred Units which have a liquidation preference of $16.62 per unit and are entitled to receive cumulative preferential annual cash distributions of $0.60 per unit payable in arrears on a quarterly basis. Both series are not redeemable at the option of the holders and are redeemable at our option only in the case of specific defined events.

Distributions

The following is a summary of distribution activity:


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
Distributions paid to OP unitholders	$	(9,733)	$	(9,502)
Distributions paid to preferred unitholders	(1,050)		(1,050)

Incentive and Share-Based Compensation

On May 9, 2024, the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2024 Equity Incentive Plan (the “2024 Plan”) was approved by our shareholders. The 2024 Plan provides for grants to directors, employees and consultants of ESRT and the Operating Partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards, and replaced the First Amended and Restated Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. 2019 Equity Incentive Plan ("2019 Plan", and collectively with the 2024 Plan, the "Plans"). The shares of ESRT Class A common stock underlying any awards under the Plans that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the Plans to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan. In addition, shares of ESRT Class A common stock repurchased on the open market will not be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan.

An aggregate of 11.0 million shares of ESRT common stock was authorized for issuance under awards granted pursuant to the 2024 Plan, and as of March 31, 2025, 6.2 million shares of common stock remain available for future issuance.

Long-term incentive plan ("LTIP") units are a special class of partnership interests. Each LTIP unit awarded will be deemed equivalent to an award of one share of ESRT stock under the Plans, reducing the availability for other equity awards on a one-for-one basis. The vesting period for LTIP units, if any, will be determined at the time of issuance. Under the terms of the LTIP units, we will revalue for tax purposes its assets upon the occurrence of certain specified events, and any increase in valuation from the time of one such event to the next such event will be allocated first to the holders of LTIP units to equalize the capital accounts of such holders with the capital accounts of unitholders. Subject to any agreed upon exceptions, once vested and having achieved parity with unitholders, LTIP units are convertible into Series PR operating partnership units on a one-for-one basis.

LTIP units subject to time-based vesting, whether vested or not, receive the same per unit distributions as operating partnership units, which equal per share dividends (both regular and special) on our common stock. Market and performance-based LTIPs receive 10% of such distributions currently, unless and until such LTIP units are earned based on performance, at which time they will receive the accrued and unpaid 90% and will commence receiving 100% of such distributions thereafter.

In March 2025, we made grants of LTIP units to executive officers under the 2024 Plan, including:


(amounts in thousands, except units)	Units	Grant Date Fair Value
Time-based vesting LTIP units	1,399,681	$	9,399
Market-based vesting LTIP units	1,462,922	$	5,995
Performance-based vesting LTIP units	969,328	$	5,995

In March 2025, we made grants of LTIP units and restricted stock to certain other employees under the 2024 Plan, including:


(amounts in thousands, except units)	Units	Grant Date Fair Value
Time-based vesting LTIP units	282,000	$	2,104
Time-based vesting restricted stock	244,560	$	1,956
Market-based vesting LTIP units	216,398	$	1,043
Performance-based LTIP units	143,381	$	1,043

The awards subject to time-based vesting vest ratably over a period of years, subject generally to the grantee's continued employment. The vesting of the LTIP units subject to market-based vesting is based on the achievement of relative total stockholder return ("TSR") hurdles over a three-year performance period. The vesting of the LTIP units subject to performance-based vesting is based on the achievement of (i) operational metrics over a one-year performance period, subject to a three-year absolute TSR modifier, and (ii) sustainability metrics over a three-year performance period.

Share-based compensation for time-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the shorter of (i) the stated vesting period, which is generally three, four or five years, or (ii) the period from the date of grant to the date the employee becomes retirement eligible for awards granted to non-named executive officer employees and awards granted before 2025 to named executive officers, which may occur upon grant. An employee is retirement eligible when the employee attains the (i) age of 65 and (ii) the date on which the employee has first completed the requisite years of continuous service with us or our affiliates. Share-based compensation for market-based equity awards and performance-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over three or four years. Additionally, for the performance-based equity awards, we assess, at each reporting period, whether it is probable that the performance conditions will be satisfied. We recognize expense respective to the number of awards we expect to vest at the conclusion of the measurement period. Changes in estimate are accounted for in the period of change through a cumulative catch-up adjustment. Any forfeitures of share-based compensation awards are recognized as they occur.

In 2025, our Chief Executive Officer, Anthony E. Malkin, waived the right to immediately vest unvested awards in the event of a voluntary termination following his retirement eligibility date for awards granted in 2024. The amendment was recognized as Type I modification in accordance with ASC 718-20 that extends the requisite service period. The applicable unamortized expense as of the modification date of $6.6 million will be recognized on a straight-line basis over the remaining applicable service periods of two to three years.

For the market-based LTIP units, the fair value of the awards was estimated using a Monte Carlo Simulation model and discounted for the restriction period during which the LTIP units cannot be redeemed or transferred and the uncertainty regarding if, and when, the book capital account of the LTIP units will equal that of the common units. Our stock price, along with the prices of the comparative indexes, is assumed to follow the Geometric Brownian Motion Process. Geometric Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case the stock price) to vary randomly from its current value and take any value greater than zero. The volatilities of the returns on our stock price and the comparative indexes were estimated based on implied volatilities and historical volatilities using an appropriate look-back period. The expected growth rate of the stock prices over the performance period is determined with consideration of the risk-free rate as of the grant date. For LTIP unit awards that are time or performance based, the fair value of the awards was estimated based on the fair value of our stock at the grant date discounted for the restriction period during which the LTIP units cannot be redeemed or transferred and the uncertainty regarding if, and when, the book capital account of the LTIP units will equal that of the common units. For restricted stock awards, the fair value of the awards is based on the market price of ESRT stock at the grant date.

LTIP units and ESRT restricted stock issued during the three months ended March 31, 2025 were valued at $27.5 million. The weighted average per unit or share fair value was $5.84 for grants issued for the three months ended March 31, 2025. The fair value per unit or share granted in 2025 was estimated on the respective dates of grant using the following assumptions:


			2025
Expected life			2.0 to 5.3 years
Dividend rate			1.7%
Risk-free interest rate			3.9% - 4.0%
Expected price volatility			35.0% - 44.0%

No other stock options, dividend equivalents, or stock appreciation rights were issued or outstanding during the three months ended March 31, 2025.

The following is a summary of ESRT restricted stock and LTIP unit activity for the three months ended March 31, 2025:


	Restricted Stock	Time-based LTIPs	Market-based LTIPs	Performance-based LTIPs	Weighted Average Grant Fair Value
Unvested balance at December 31, 2024	612,416	3,615,771	2,629,002	2,078,099	$	6.87
Vested	(210,040)	(1,167,816)	(340,736)	(229,162)	7.50
Granted	244,560	1,681,681	1,679,320	1,112,709	5.84
Forfeited or unearned	(3,297)	—	—	(46,846)	7.60
Unvested balance at March 31, 2025	643,639	4,129,636	3,967,586	2,914,800	$	6.34

The time-based LTIPs and ESRT restricted stock awards granted to non-named executive officers or granted to certain named executive officers before 2025, are treated for accounting purposes as immediately vested upon the later of (i) the date the grantee attains the age of 65, and (ii) the date on which grantee has first completed the requisite years of continuous service with our Company or its affiliates. For award agreements that qualify, we recognize noncash compensation expense on the grant date for the time-based awards and ratably over the vesting period for the market-based and performance-based awards, and accordingly, we recognized $1.1 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. Unrecognized compensation expense was $5.6 million at March 31, 2025, which will be recognized over a weighted average period of 1.6 years.

For the remainder of the LTIP unit awards, we recognized noncash compensation expense ratably over the vesting period, and accordingly, we recognized noncash compensation expense of $3.9 million and $2.7 million for the three months ended March 31, 2025 and 2024, respectively. Unrecognized compensation expense was $49.1 million at March 31, 2025, which will be recognized over a weighted average period of 2.9 years.

Earnings Per Unit

Earnings per unit is calculated by dividing the net income attributable to common unitholders by the weighted average number of units outstanding during the respective period. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Share-based payment awards are included in the calculation of diluted income using the treasury stock method if dilutive.

Earnings per unit is computed as follows:


	Three Months Ended
(amounts in thousands, except per unit amounts)	March 31, 2025		March 31, 2024
Numerator:
Net income	$	15,778	$	10,215
Private perpetual preferred unit distributions	(1,050)		(1,050)
Net income attributable to non-controlling interests in other partnerships	—		(4)

Net income attributable to common unitholders – basic and diluted	$	14,728	$	9,161

Denominator:
Weighted average units outstanding – basic	267,073		264,562
Effect of dilutive securities:
Stock-based compensation plans	2,456		2,932
Weighted average units outstanding – diluted	269,529		267,494

Earnings per unit:
Basic	$	0.06	$	0.03
Diluted	$	0.05	$	0.03

There were zero antidilutive shares and LTIP units for the three months ended March 31, 2025 and 2024.

11. Related Party Transactions

Supervisory Fee Revenue

Since we became a public company, we have earned supervisory fees from entities affiliated with Anthony E. Malkin, our Chairman and Chief Executive Officer. These fees were $0.4 million and $0.2 million for the three months ended March 31, 2025 and 2024, respectively. These fees are included within third-party management and other fees.

Property Management Fee Revenue

Since we became a public company, we have earned property management fees from entities affiliated with Anthony E. Malkin. These fees were $0.1 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively. These fees are included within third-party management and other fees.

Other

We receive rent generally at the market rental rate for 5,447 square feet of leased space from an entity affiliated with Anthony E. Malkin at one of our properties. Under the lease, the tenant has the right to cancel such lease without special payment on 90 days’ notice. We also have a shared use agreement with such tenant, to occupy a portion of the leased premises as the office location for Peter L. Malkin, our chairman emeritus, utilizing approximately 15% of the space, for which we pay to such tenant an allocable pro rata share of the cost. We also have agreements with these entities and excluded properties and businesses to provide them with general computer-related support services. Total aggregate revenue was $0.1 million and $0.1 million for the three months ended March 31, 2025 and 2024, respectively.

One of ESRT's directors, Hannah Yang, is sister to Heela Yang, who is Founder and Chief Executive Officer of Sol de Janeiro USA, a tenant at One Grand Central Place — the lease commenced in April 2025 with a starting annualized rent of $3.5 million. Sol de Janeiro is a subsidiary of L’Occitane, a tenant at 111 W. 33rd Street.

12. Segment Reporting

The Company's operating segments are based on our method of internal reporting and include our office properties, retail portfolio, multifamily portfolio, and the Observatory. These operating segments have been aggregated for reporting into two reportable segments: (1) real estate and (2) Observatory. Our real estate segment includes all activities related to the ownership, management, operation, acquisition, redevelopment, repositioning and disposition of our traditional real estate assets. Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. These two lines of businesses are managed separately because each business requires different support infrastructures, provides different services and has dissimilar economic characteristics such as investments needed, stream of revenues and marketing strategies. We account for intersegment sales and rents as if the sales or rents were to third parties, that is, at current market prices.

Our Chief Executive Officer, who also serves as our CODM, manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. The CODM uses Net Operating Income ("NOI") to review actual performance and decide whether to invest in capital expenditures, pursue acquisitions and/or dispositions, determine dividend payments, and/or engage in other capital transactions. Our CODM does not evaluate operating segments using asset or liability information.

The following tables provide components of segment net income for each segment:


	Three Months Ended March 31, 2025
(amounts in thousands)	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Revenue, excluding third-party management and other fees	$	156,474	$	23,161	$	—	$	179,635
Intercompany rental revenue	15,160		—		(15,160)		—
Total revenues	171,634		23,161		(15,160)		179,635
Segment operating expenses:
Property operating expenses	45,060		—		—		45,060
Observatory expenses	—		8,118		—		8,118
Other segment expenses1	35,381		15,160		(15,160)		35,381
Total segment operating expenses	80,441		23,278		(15,160)		88,559
Net operating income	$	91,193	$	(117)	$	—	$	91,076

Segment assets	$	3,851,216	$	263,164	$	—	$	4,114,380

(1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense.


	Three Months Ended March 31, 2024
(amounts in thousands)	Real Estate		Observatory		Intersegment Elimination		Total
Revenues:
Revenue, excluding third-party management and other fees	$	156,318	$	24,596	$	—	$	180,914
Intercompany rental revenue	16,067		—		(16,067)		—
Total revenues	172,385		24,596		(16,067)		180,914
Segment operating expenses:
Property operating expenses	45,060		—		—		45,060
Observatory expenses	—		8,431		—		8,431
Other segment expenses1	34,572		16,067		(16,067)		34,572
Total segment operating expenses	79,632		24,498		(16,067)		88,063
Net operating income	$	92,753	$	98	$	—	$	92,851

Segment assets	$	3,931,685	$	258,902	$	—	$	4,190,587

(1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense.

Below is a reconciliation of Net income to Net operating income:


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
	(unaudited)
Net income	$	15,778	$	10,215
Add:
General and administrative expenses	16,940		15,972
Depreciation and amortization	48,779		46,081
Interest expense	26,938		25,128
Interest expense associated with property in receivership	647		—
Loss on early extinguishment of debt	—		553
Less:
Income tax benefit	(619)		(655)
Gain on disposition of property	(13,170)		—
Third-party management and other fees	(431)		(265)
Interest income	(3,786)		(4,178)
Net operating income	$	91,076	$	92,851

13. Subsequent Events

None.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

FORWARD-LOOKING STATEMENTS

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.

Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control, and you should not rely on them as predictions of future events. Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

Many important factors could cause actual results, performance, achievements, and future events to differ materially from those set forth, implied, anticipated, expected, projected, assumed or contemplated in the forward-looking statements, including, among other things: (i) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, natural disasters and extreme weather events, terrorism and other armed hostilities, as well as cybersecurity threats and technology disruptions; (ii) increased costs due to tariffs or other economic factors; (iii) a failure of conditions or performance regarding any event or transaction described herein; (iv) resolution of legal proceedings involving the Company; (v) reduced demand for office, multifamily or retail space, including as a result of the changes in the use of office space and remote work; (vi) changes in our business strategy; (vii) a decline in Observatory visitors due to changes in domestic or international tourism, including due to health crises, geopolitical events, currency exchange rates, and/or competition from other observatories; (viii) defaults on, early terminations of, or non-renewal of, leases by tenants; (ix) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (x) declining real estate valuations and impairment charges; (xi) termination of our ground leases; (xii) limitations on our ability to pay down, refinance, restructure or extend our indebtedness or borrow additional funds; (xiii) decreased rental rates or increased vacancy rates; (xiv) difficulties in executing capital projects or development projects successfully or on the anticipated timeline or budget; (xv) difficulties in identifying and completing acquisitions; (xvi) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvii) our failure to qualify as a REIT; (xviii) incurrence of taxable capital gain on disposition of an asset due to failure of compliance with a 1031 exchange program; (xix) our disclosure controls and internal control over financial reporting, including any material weakness; and (xx) failure to achieve sustainability metrics and goals, including as a result of tenant collaboration, and impact of governmental regulation on our sustainability efforts. For a further discussion of these and other factors that could impact the Company's future results, performance, or transactions, see the section entitled “Risk Factors” in the Company’s Annual Report for the year ended December 31, 2024, and other risks described in documents subsequently filed by the Company from time to time with the SEC.

While forward-looking statements reflect the Company's good faith beliefs, they do not guarantee future performance. Any forward-looking statement speaks only as of the date on which it was made, and we assume 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 Quarterly Report on Form 10-Q, except as required by applicable law. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

Overview

Highlights for the three months ended March 31, 2025

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

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

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

Results of Operations

The discussion below relates to our results of operations for the three months ended March 31, 2025 and 2024, respectively.

Three Months Ended March 31, 2025 Compared to the Three Months Ended March 31, 2024

The following table summarizes the historical results of operations:


	Three Months Ended March 31,
	2025						2024						Change		%
(amounts in thousands)	Real Estate Segment		Observatory Segment		Total		Real Estate Segment		Observatory Segment		Total
Revenues:
Rental revenue	$	154,542	$	—	$	154,542	$	153,882	$	—	$	153,882	$	660	0.4	%

Observatory revenue	—		23,161		23,161		—		24,596		24,596		(1,435)		(5.8)	%
Lease termination fees	—		—		—		—		—		—		—		—	%
Third-party management and other fees	431		—		431		265		—		265		166		62.6	%
Other revenues and fees	1,932		—		1,932		2,436		—		2,436		(504)		(20.7)	%
Total revenues	156,905		23,161		180,066		156,583		24,596		181,179		(1,113)		(0.6)	%
Operating expenses:
Property operating expenses	45,060		—		45,060		45,060		—		45,060		—		—	%
Ground rent expenses	2,331		—		2,331		2,331		—		2,331		—		—	%
General and administrative expenses	16,940		—		16,940		15,972		—		15,972		(968)		(6.1)	%
Observatory expenses	—		8,118		8,118		—		8,431		8,431		313		3.7	%
Real estate taxes	33,050		—		33,050		32,241		—		32,241		(809)		(2.5)	%


Depreciation and amortization	48,735		44		48,779		46,044		37		46,081		(2,698)		(5.9)	%
Total operating expenses	146,116		8,162		154,278		141,648		8,468		150,116		(4,162)		(2.8)	%
Operating income	10,789		14,999		25,788		14,935		16,128		31,063		(5,275)		(17.0)	%
Intercompany rent revenue (expense)	15,160		(15,160)		—		16,067		(16,067)		—		—		—	%
Other income (expense):
Interest income	3,713		73		3,786		4,140		38		4,178		(392)		(9.4)	%
Interest expense	(26,938)		—		(26,938)		(25,128)		—		(25,128)		(1,810)		(7.2)	%
Interest expense associated with property in receivership	(647)		—		(647)		—		—		—		(647)		N/A
Loss on early extinguishment of debt	—		—		—		(553)		—		(553)		553		100.0	%
Gain on disposition of property	13,170		—		13,170		—		—		—		13,170		N/A
Income before income taxes	15,247		(88)		15,159		9,461		99		9,560		5,599		58.6	%
Income tax (expense) benefit	(206)		825		619		(113)		768		655		(36)		(5.5)	%
Net income	15,041		737		15,778		9,348		867		10,215		5,563		54.5	%
Private perpetual preferred unit distributions	(1,050)		—		(1,050)		(1,050)		—		(1,050)		—		—	%
Net income attributable to non-controlling interests in other partnerships	—		—		—		(4)		—		(4)		4		100.0	%
Net income attributable to common unitholders	$	13,991	$	737	$	14,728	$	8,294	$	867	$	9,161	$	5,567	60.8	%

Real Estate Segment

Rental Revenue

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.

Property Operating Expenses

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.

Interest Expense

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.

Gain on Disposition of Property

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.

Observatory Segment

Observatory Revenue

Observatory revenues were lower due to decreased visitation during the three months ended March 31, 2025 compared to the three months ended March 31, 2024, primarily due to the shift in the timing of the Easter holiday that fell in April during 2025 as compared to March in 2024.

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, including lease-up costs, fund our redevelopment and repositioning programs, acquire properties, make distributions to our securityholders and fulfill other general business needs. Based on the historical experience of our management and our business strategy, in the foreseeable future we anticipate we will generate positive cash flows from operations. In order for ESRT to qualify as a REIT, ESRT is required under the Internal Revenue Code of 1986 to distribute to its stockholders, on an annual basis, at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains. We expect to make quarterly distributions, as required, to our securityholders.

While we may be able to anticipate and plan for certain liquidity needs, there may be unexpected increases in uses of cash that are beyond our control and which would affect our financial condition and results of operations. For example, we may be required to comply with new laws or regulations that cause us to incur unanticipated capital expenditures for our properties, thereby increasing our liquidity needs. Even if there are no material changes to our anticipated liquidity requirements, our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or needed. Our primary sources of liquidity will generally consist of cash on hand, cash generated from our operating activities, debt issuances and unused borrowing capacity under our unsecured revolving credit facility. We expect to meet our short-term liquidity requirements, including distributions, operating expenses, working capital, debt service, and capital expenditures from cash flows from operations, cash on hand, debt issuances, and available borrowing capacity under our unsecured revolving credit facility. The availability of these borrowings is subject to the conditions set forth in the applicable loan agreements. We expect to meet our long-term capital requirements, including acquisitions, redevelopments and capital expenditures through our cash flows from operations, cash on hand, our unsecured revolving credit facility, mortgage financings, debt issuances, common and/or preferred equity issuances and asset sales. Our properties require periodic investments of capital for individual lease related tenant improvement allowances, general capital improvements and costs associated with capital expenditures. Our overall leverage will depend on our mix of investments and the cost of leverage. ESRT's charter does not restrict the amount of leverage that we may use.

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.

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.

Portfolio Transaction Activity

On March 28, 2024, we executed a buyout of the 10% non-controlling interest in two of our multifamily properties located at 561 10th Avenue and 345 East 94th Street in Manhattan for $14.2 million in cash and the assumption of $18.0 million of in-place debt and now own 100% of the ownership interests in these assets.

In September and October 2024, we closed on the acquisition of a portfolio of retail properties on North 6th Street in Williamsburg, Brooklyn for an aggregate purchase price of $195.0 million.

Unsecured Revolving Credit and Term Loan Facilities

In March 2024, we closed a $715.0 million, five-year unsecured credit agreement which consists of a $620.0 million revolver and a $95.0 million term loan facility, each of which mature on March 8, 2029, inclusive of the extension periods. On March 18, 2025, we repaid the $120.0 million borrowings previously drawn on the Revolving Credit Facility. See "Financial Statements - Note 5. Debt" for a summary of our unsecured revolving credit and term loan facilities.

Financial Covenants

As of March 31, 2025, we were in compliance with the following financial covenants related to our unsecured facilities:


Financial Covenant	Required	March 31, 2025		In Compliance
Maximum total leverage	< 60%	32.4	%	Yes
Maximum secured leverage	< 40%	12.1	%	Yes
Minimum fixed charge coverage	> 1.50x	2.9x		Yes
Minimum unencumbered interest coverage	> 1.75x	4.4x		Yes
Maximum unsecured leverage	< 60%	24.2	%	Yes

Mortgage Debt

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

In April 2024, we worked with the First Stamford Place mortgage lender to structure a consensual foreclosure. On May 22, 2024, a receiver was appointed and we ended our management of the property. On February 5, 2025, the consensual foreclosure was completed, title of the property was transferred to the mortgage lender and we were released of our mortgage obligation.

See "Financial Statements - Note 5. Debt" for more information on mortgage debt.

Senior Unsecured Notes

On June 17, 2024, we closed on the issuance and sale of an aggregate $225.0 million principal amount of notes, consisting of (a) $155.0 million aggregate principal amount of 7.20% Series I Green Guaranteed Senior Notes due June 17, 2029, (b) $45.0 million aggregate principal amount of 7.32% Series J Green Guaranteed Senior Notes due June 17, 2031 and (c) $25.0 million aggregate principal amount of 7.41% Series K Green Guaranteed Senior Notes due June 17, 2034.

On March 27, 2025, the Series A senior unsecured notes matured and the aggregate principal amount of $100.0 million was repaid. The notes had a stated interest rate of 3.93%.

See "Financial Statements - Note 5. Debt" for more information on senior unsecured notes.

Leverage Policies

We expect to employ leverage in our capital structure in amounts determined from time to time by ESRT's Board of Directors. In the evaluation of our level of indebtedness, ESRT's Board of Directors will consider a number of factors including the mix of recourse or non-recourse debt and cross-collateralized debt, mix of fixed or floating rate debt, and cost of leverage. ESRT's charter and bylaws do not limit the amount or percentage of indebtedness that we may incur nor do they restrict the form in which our indebtedness will be taken. ESRT's overall leverage will depend on our mix of investments and the cost of leverage. ESRT's Board of Directors may from time to time modify our leverage policies in light of the then-current economic conditions, access to and relative costs of debt and equity capital, market values of our properties, general market conditions for debt and equity securities, fluctuations in the market price of ESRT's common stock and our traded OP units, growth and acquisition opportunities and other factors.

Capital Expenditures

The following tables summarize our tenant improvement costs, leasing commission costs and our capital expenditures for each of the periods presented (dollars in thousands, except per square foot amounts).

Office Properties(1)(2)


	Three Months Ended March 31,
Total New Leases, Expansions, and Renewals(3)	2025			2024
Number of leases signed(4)	19			24

Total square feet	229,367			367,262
Weighted average annualized cash rent per square foot for new and renewal leases executed during the year	$	66.43		$	64.03
Weighted average annualized cash rent per square foot for previous leases	60.63			61.08
Percentage of new cash rent over previously escalated rents	9.6		%	4.8		%

Leasing commission costs per square foot(5)	$	22.18		$	19.86
Tenant improvement costs per square foot(5)	48.17			65.08
Total leasing commissions and tenant improvement costs per square foot(5)	$	70.35		$	84.94

Retail Properties(2)(6)


	Three Months Ended March 31,
Total New Leases, Expansions, and Renewals(3)	2025			2024
Number of leases signed(4)	1			1

Total square feet	1,181			2,458
Weighted average annualized cash rent per square foot for new and renewal leases executed during the year	$	193.00		$	400.00
Weighted average annualized cash rent per square foot for previous leases	183.74			378.97
Percentage of new cash rent over previously escalated rents	5.0		%	5.5		%

Leasing commission costs per square foot(5)	$	63.04		$	193.06
Tenant improvement costs per square foot(5)	—			50.00
Total leasing commissions and tenant improvement costs per square foot(5)	$	63.04		$	243.06

_______________

(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.

(2)The tables above exclude our multifamily properties.

(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.

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

(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.

(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.


(amounts in thousands)	Three Months Ended March 31,
Total Commercial Portfolio	2025		2024
Capital expenditures (1)	$	8,764	$	20,144

_______________

(1)Includes all capital expenditures, excluding tenant improvements and leasing commission costs.

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.

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.

Distribution Policy

We intend to distribute our net taxable income to our securityholders in a manner intended to satisfy REIT distribution requirements and to avoid U.S. federal income tax liability.

Before we pay any distribution, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and obligations to make payments of principal and interest, if any. However, under some circumstances, we may be required to use cash reserves, incur debt or liquidate assets at rates or times that we regard as unfavorable or make a taxable distribution of our shares in order to satisfy REIT distribution requirements.

Distribution to Equity Holders

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.

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

Cash Flows

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

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:

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

Investing activities. Net cash used in investing activities decreased by $29.2 million to $42.1 million primarily due to the prior year acquisition of non-controlling interests in other partnerships. Also during the current period, there was a $10.9 million decrease in capital expenditures and redevelopment in the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

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."

Net Operating Income

Net operating income ("NOI") is a non-GAAP financial measure of performance. NOI is used by our management to evaluate and compare the performance of our properties and to determine trends in earnings and to compute the fair value of our properties as it is not affected by: (i) the cost of funds of the property owner, (ii) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (iii) acquisition expenses, loss on early extinguishment of debt, impairment charges and loss from derivative financial instruments, or (iv) general and administrative expenses and other gains and losses that are specific to the property owner. The cost of funds is eliminated from NOI because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole has historically increased or decreased as a result of changes in overall

economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly-timed purchases or sales. We believe that eliminating these costs from net income is useful to investors because the resulting measure captures the actual revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness.

NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with GAAP and discussions elsewhere in this Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding the components of net income that are eliminated in the calculation of NOI. Other companies may use different methods for calculating NOI or similarly titled measures and, accordingly, our NOI may not be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to NOI:


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
	(unaudited)
Net income	$	15,778	$	10,215
Add:
General and administrative expenses	16,940		15,972
Depreciation and amortization	48,779		46,081
Interest expense	26,938		25,128
Interest expense associated with property in receivership	647		—
Loss on early extinguishment of debt	—		553
Less:
Income tax benefit	(619)		(655)
Gain on disposition of property	(13,170)		—
Third-party management and other fees	(431)		(265)
Interest income	(3,786)		(4,178)
Net operating income	$	91,076	$	92,851

Other Net Operating Income Data
Straight-line rental revenue	$	5,283	$	3,061
Net increase in rental revenue from the amortization of above-and below-market lease assets and liabilities	$	798	$	514
Amortization of acquired below-market ground leases	$	1,958	$	1,958

Funds from Operations

We present below a discussion of Funds from Operations ("FFO"). We compute FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment write-off of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized non-GAAP financial measure for REITs that we believe, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITs. In addition, we believe FFO is useful to investors as it captures features particular to real estate performance by recognizing that real estate has generally appreciated over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. We present FFO because we consider it an important supplemental measure of our operating performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value

of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results of operations, the utility of FFO as a measure of performance is limited. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Modified Funds From Operations

Modified Funds from Operations ("Modified FFO") adds back an adjustment for any below-market ground lease amortization to traditionally defined FFO. We believe this a useful supplemental measure in evaluating our operating performance due to the non-cash accounting treatment under GAAP, which stems from the third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we believe it is an important supplemental measure of our operating performance in that it adds back the non-cash amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

Core Funds From Operations

Core FFO adds back to Modified FFO the following items: Interest expense associated with property in receivership and loss on early extinguishment of debt. The Company believes Core FFO is an important supplemental measure of its operating performance because it excludes non-recurring items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.

The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO:


	Three Months Ended March 31,
(amounts in thousands)	2025		2024
	(unaudited)
Net income	$	15,778	$	10,215
Non-controlling interests in other partnerships	—		(4)
Private perpetual preferred unit distributions	(1,050)		(1,050)
Real estate depreciation and amortization	47,871		44,857
Gain on disposition of property	(13,170)		—
FFO attributable to common unitholders	49,429		54,018
Amortization of below-market ground leases	1,958		1,958
Modified FFO attributable to common unitholders	51,387		55,976
Interest expense associated with property in receivership	647		—
Loss on early extinguishment of debt	—		553
Core FFO attributable to common unitholders	$	52,034	$	56,529

Weighted average Operating Partnership units
Basic	267,073		264,562
Diluted	269,529		267,494

Factors That May Influence Future Results of Operations

Leasing

Due to the relatively small number of leases that are signed in any particular quarter, one or more larger leases may have a disproportionately positive or negative impact on average rent, tenant improvement and leasing commission costs for that period. As a result, we believe it is more appropriate when analyzing trends in average rent and tenant improvement and leasing commission costs to review

activity over multiple quarters or years. Tenant improvement costs include expenditures for general improvements occurring concurrently with, but that are not directly related to, the cost of installing a new tenant. Leasing commission costs are similarly subject to significant fluctuations depending upon the length of leases being signed and the mix of tenants from quarter to quarter.

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.

Observatory Operations

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.

Observatory revenues and admissions are dependent upon the following: (i) the number of tourists (domestic and international) who come to New York City and visit the Observatory, as well as any related tourism trends; (ii) the prices per admission that can be charged; (iii) seasonal trends affecting the number of visitors to the Observatory; (iv) competition, in particular from other new and existing observatories; and (v) weather trends.

Outlook

Year to date in 2025, ESRT has benefited from solid leasing activity and Observatory performance.

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.

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.

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 near term debt maturities provides an added degree of security. This provides us optionality to execute on capital recycling, acquisitions, and buybacks. As we navigate these uncertain times, we remain prepared for various challenges and situations.

Critical Accounting Estimates

Refer to our Annual Report for a discussion of our critical accounting estimates. There were no material changes to our critical accounting estimates disclosed in our Annual Report.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our future income, cash flows and fair values relevant to financial instruments are dependent upon prevalent market interest rates. We are exposed to interest rate changes primarily on our unsecured revolving credit facility and debt refinancings. In order to mitigate our interest rate risk, we may borrow at fixed rates or may enter into derivative financial instruments such as interest rate swaps or caps on floating rate financial instruments. We are not subject to foreign currency risk and we do not enter into derivative or interest rate transactions for speculative purposes.

As of March 31, 2025, we have interest rate SOFR swap and cap agreements with an aggregate notional value of $448.5 million and which mature between December 31, 2026 and November 1, 2033. The "variable to fixed" interest rate swaps have been designated as cash flow hedges and are deemed highly effective with fair values in an asset position of $7.0 million and are included in prepaid expenses and other assets on the condensed consolidated balance sheet as of March 31, 2025.

As of March 31, 2025, the weighted average interest rate on the $2.1 billion of fixed-rate indebtedness outstanding was 4.30% per annum, each with maturities at various dates through March 17, 2035.

As of March 31, 2025, the fair value of our outstanding debt was approximately $1.9 billion, which was approximately $125.1 million less than the book value as of such date. Interest risk amounts were determined by considering the impact of hypothetical interest rates on our financial instruments. These analyses do not consider the effect of any change in overall economic activity that could occur in that environment. Further, in the event of a change of that magnitude, we may take actions to further mitigate our exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, these analyses assume no changes in our financial structure.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including ESRT's Chief Executive Officer and its Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of March 31, 2025, the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of ESRT management, including ESRT's Chief Executive Officer and its Chief Financial Officer, regarding the effectiveness of our disclosure controls and procedures at the end of the period covered by this report. Based on the foregoing, ESRT's Chief Executive Officer and its Chief Financial Officer concluded, as of that time, that our disclosure controls were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including ESRT's Chief Executive Officer and its Chief Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

No changes to our internal control over financial reporting that were identified in connection with the evaluation referenced above that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

See “Financial Statements – Note 9 Commitments and Contingencies” for a description of legal proceedings.

ITEM 1A. RISK FACTORS

As of March 31, 2025, there have been no material changes to the risk factors. See the section entitled "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024, and any additional factors that may be contained in any filing we make with the SEC.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Recent Sales of Unregistered Securities

None.

Recent Purchases of Equity Securities

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

Our Board of Directors authorized the repurchase of up to $500 million of our Class A common stock and the Operating Partnership’s Series ES, Series 250 and Series 60 operating partnership units from January 1, 2024 through December 31, 2025. Under the program, we may purchase our Class A common stock and the Operating Partnership’s 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 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 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.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

(a) None.

(b) None.

(c) During the three months ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

ITEM 6. EXHIBITS


Exhibit No.			Description
31.1*			Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*			Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*			Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*			Certification of Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*			XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*			XBRL Taxonomy Extension Schema Document
101.CAL*			XBRL Taxonomy Extension Calculation Document
101.DEF*			XBRL Taxonomy Extension Definitions Document
101.LAB*			XBRL Taxonomy Extension Labels Document
101.PRE*			XBRL Taxonomy Extension Presentation Document
104			Cover Page Interactive Data File (contained in Exhibit 101)
Notes:
* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

EMPIRE STATE REALTY OP, L.P.

By: Empire State Realty Trust, Inc., its general partner


Date:	May 7, 2025	By: /s/ Stephen V. Horn
		Stephen V. Horn
		Executive Vice President, Chief Financial Officer & Chief Accounting Officer
		(Principal Financial and Accounting Officer)