Empire State Realty Trust (NYSE:ESRT) outlined continued leasing momentum, recent portfolio recycling activity, and its 2026 outlook during its fourth-quarter and full-year 2025 earnings call. Management emphasized that the company has completed a multi-year transition to a 100% New York City portfolio while maintaining what it described as a strong, flexible balance sheet.
2025 results and platform priorities
Chairman and CEO Tony Malkin said the company delivered full-year 2025 core FFO of $0.87 per diluted share, reflecting performance across its office, retail, multifamily, and Observatory businesses. For the fourth quarter, core FFO was $0.23 per diluted share.
Leasing performance and occupancy trends
Chief Revenue Officer and Co-Head of Real Estate Ryan Kass said ESRT grew total portfolio occupancy to 90.3% at year-end 2025, up 170 basis points year-over-year. The company’s office portfolio ended the year 93.5% leased, which Kass said was its 12th consecutive quarter above 90%.
In the fourth quarter, ESRT signed over 458,000 square feet of new and renewal leases and posted 6.4% positive mark-to-market lease spreads in its Manhattan office portfolio. Kass highlighted several notable leases signed during the quarter, including:
- 10-year, 46,000-square-foot early renewal with TJ Maxx at 350 West 57th Street
- 7-year, 42,000-square-foot early renewal with Nespresso at 111 West 33rd Street
- 16-year, 36,000-square-foot expansion with Burlington at 1400 Broadway
- 16-year, 15,000-square-foot retail lease with LinkedIn at the Empire State Building, bringing LinkedIn’s total footprint there to 540,000 square feet
Average lease duration for new leases executed in the quarter was 11.6 years, Kass said. He also noted ESRT completed approximately 274,000 square feet of early renewals during 2025, extending lease expirations proactively. Looking to early 2026, management said it had just over 170,000 square feet of leases in the pipeline anticipated to close in the first and second quarters.
Portfolio recycling and balance sheet updates
President Christina Chiu said ESRT has recycled out of suburban commercial assets over the past five years and redeployed capital into prime New York City properties, completing more than $1 billion of acquisitions. She said the company executed $417 million of all-cash acquisitions in 2025—comprised of 130 Mercer and 86-90 North 6th Street—and completed the disposition of Metro Center in Stamford, Connecticut.
Chiu described the December acquisition of 130 Mercer for $386 million as an all-cash purchase that provides “significant optionality” on the asset’s long-term capital structure. The 396,000-square-foot office and retail property is located in SoHo between Prince and Spring Streets. Chiu said the property generated a mid-5% initial cash yield at 70% occupancy, supported by a 15-year office lease with Scholastic and fully leased street retail with approximately eight years of remaining term in what she called a “Triple A location” anchored by Sephora and Capital One. She said the company expects growth toward a ~8% stabilized yield through leasing a three-floor vacant office block of more than 110,000 square feet.
On North 6th Street in Williamsburg, Chiu said ESRT closed on 86-90 North 6th Street in June 2025 and later announced a long-term lease with a “high-quality retail tenant.” ESRT now controls four key street corner locations along the corridor, and total acquisitions on North 6th Street through year-end 2025 were approximately $250 million, she said.
In the fourth quarter, ESRT completed financings aggregating $420 million—a $175 million unsecured notes issuance and a $245 million term loan recast—resulting in no unaddressed debt maturities until March 2027, according to management. Chiu said the company’s pro forma leverage stood at 6.3x net debt to adjusted EBITDA, and that all 2026 maturities had been addressed.
Management also discussed share repurchases. Chiu said ESRT repurchased $6 million of shares in the fourth quarter at an average price of $6.73 and $8 million during full-year 2025 at an average price of $6.78. Since 2020, ESRT has repurchased approximately $302 million of shares in aggregate.
During Q&A, management provided additional detail on the Metro Center disposition, saying the sale price was in the mid-$60 million range and, after credits and adjustments, was “right around the debt balance,” with an NOI cap rate around 7%.
Observatory performance, competition, and 2026 guidance
Chief Financial Officer Steve Horn said the Observatory generated approximately $24 million of NOI in the fourth quarter and $90 million for the full year. Horn reported expenses of approximately $11 million in the fourth quarter and $38 million for the full year. Revenue per capita increased 6.9% year-over-year in the fourth quarter and 4.4% for the full year.
Malkin said the company delivered “resilient” 2025 bottom-line performance through cost management and pricing execution despite a decline in visitation from cross-ocean international tourists, adding that ESRT has grown domestic demand and is preparing for a return of “budget-conscious international visitors.” He said visitor mix has shifted from roughly two-thirds international historically to more than 50% domestic, with direct retail purchasers increasing and pass program volume—particularly from overseas visitors—declining. He also addressed the competitive landscape, stating that the Edge and One World Trade Center observatories were “very weak” and discounting heavily, while he believed Top of the Rock to be “pretty steady.”
For 2026, Horn said ESRT expects FFO and same-store cash NOI to be consistent with 2025 results, driven primarily by a lag between a vacancy and the commencement of backfill leasing. The company guided to 2026 core FFO of $0.85 to $0.89 per diluted share and same-store property cash NOI growth of -1.5% to +2%. Horn said the same-store pool now includes ESRT’s multifamily and North 6th Street retail portfolios, reflecting the company’s shift to a pure-play New York City portfolio.
Horn said the FDIC vacated 119,000 square feet at the Empire State Building after year-end 2025, and while the space has been “long been backfilled” by LinkedIn at a favorable mark-to-market, the temporary downtime is expected to reduce 2026 core FFO by approximately $0.03 per share and reduce same-store NOI growth by about 270 basis points. Cash rent commencement for the space is expected to begin in the second half of 2027, he said. Excluding this downtime, Horn said the midpoint of adjusted same-store property cash NOI growth guidance would be approximately 3%.
Horn guided to 2026 Observatory NOI of approximately $87 million to $92 million and expenses of approximately $10 million per quarter. He said guidance includes an expected $2 million net decline in license fee revenue from the gift shop operator, tied to the expiration of a COVID-era license amendment that provided fixed payments through 2025; beginning in 2026, fixed payments were reduced and percentage-based thresholds lowered, which management said provides upside tied to a recovery in international visitation. On costs, Horn also said ESRT expects 2026 G&A of approximately $69 million to $71 million, compared to approximately $73 million in 2025, with a goal to reduce run-rate G&A by 5% to 10% by year-end 2026.
During Q&A, management said it is developing marketing strategies to capture demand around the World Cup and sees potential upside from co-branding opportunities, while noting it does not rely on a single event to drive results. Management also said it is open to additional capital recycling within New York City and confirmed an asset has been marketed for sale, describing it as a property where ESRT has “added a bunch of value,” while emphasizing it remains focused on executing within its control.
On sustainability, management reiterated ESRT’s leadership, noting it achieved the highest GRESB rating for the sixth consecutive year with a score of 93 and an “A” in public disclosure, and said the Empire State Building became the first LEED Version 5 Platinum certified building in New York State.
About Empire State Realty Trust (NYSE:ESRT)
Empire State Realty Trust, Inc is a publicly traded real estate investment trust (REIT) focused on the ownership, management and operation of office and retail properties. The company’s portfolio features the iconic Empire State Building in Midtown Manhattan, alongside a diversified collection of commercial assets situated throughout Manhattan, Brooklyn and select markets in Upstate New York. By offering premium office space and street-level retail, Empire State Realty Trust positions itself as a landlord of choice for corporate tenants, retailers and experiential brands seeking high-profile addresses.
Established through a spin-off of assets in early 2013, Empire State Realty Trust consolidated a mix of landmark and Class A properties, creating scale in one of the world’s most competitive real estate markets.
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