Empire State Realty Trust Announces First Quarter 2026 Results
Key Terms
core ffo financial
net operating income financial
basis points financial
mortgage refinancing financial
senior unsecured notes financial
net debt to adjusted ebitda financial
private placement financial
dividend financial
– Net Income Per Fully Diluted Share of
– Core FFO Per Fully Diluted Share of
– Acquired Prime Retail Asset in Williamsburg for
– Completed
– 2026 Outlook Unchanged –
First Quarter and Recent Highlights
-
Net Income of
$0.01 -
Core Funds From Operations (“Core FFO”) of
$0.20 -
Same-Store Property Cash Net Operating Income (“NOI”), excluding lease termination fees, increased
5.5% year-over-year. The first quarter change was primarily attributed to increases in base rent and tenant reimbursement income, as well as approximately$3.0 million 1.3% . -
The total commercial portfolio was
93.2% leased and88.2% occupied as of March 31, 2026, with occupancy reduced by approximately 140 basis points due to temporary downtime related to the previously disclosed FDIC expiration, which is fully re-leased. - Signed 113,484 rentable square feet of commercial leases, inclusive of 90,687 rentable square feet of office leases, in the first quarter.
-
In the office portfolio, blended leasing spreads were +
6.8% in the first quarter, the 19th consecutive quarter of positive leasing spreads. -
Empire State Building Observatory generated NOI of$10.6 million $3.5 million -
Acquired a newly constructed, currently vacant, prime retail asset located at 41-55 North 6th Street in Williamsburg,
Brooklyn for$46 million -
Closed on a
$53.5 million -
In mid-April, announced the issuance of
$130 million
Property Operations1
As of March 31, 2026, the Company’s property portfolio comprised 7.6 million rentable square feet of office space, 0.8 million rentable square feet of retail space and 743 residential units, which were occupied and leased as shown below.
March 31, 20262,3 |
|
December 31, 20252,3 |
|
March 31, 20252 |
||
Percent occupied: |
||||||
Total commercial portfolio |
|
|
|
|
|
|
Office |
|
|
|
|
|
|
Retail |
|
|
|
|
|
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Percent leased (includes signed leases not commenced): |
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Total commercial portfolio |
|
|
|
|
|
|
Office |
|
|
|
|
|
|
Retail |
|
|
|
|
|
|
Total multifamily portfolio |
|
|
|
|
|
|
1 Excludes approximately 15,000 square feet of retail space under redevelopment related to the June 2025 acquisition of 86-90 North 6th Street, approximately 396,000 square feet of space, comprised of 368,000 square feet of office space and 28,000 square feet of retail space, related to the December 2025 acquisition of 130 Mercer Street, which will be redeveloped, and approximately 22,000 square feet of retail space related to the March 2026 acquisition of 41-55 North 6th Street, which is newly constructed and currently vacant. |
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2 All occupancy and leased percentages exclude broadcasting and storage space. |
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3 Occupancy and leased percentages for March 31, 2026 and December 31, 2025 exclude Metro Center, which was sold during the fourth quarter 2025. |
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Leasing
The tables that follow summarize leasing activity for the first quarter of 2026. During this period, the Company signed 11 leases that totaled 113,484 square feet with an average lease duration of 12.2 years.
Total Portfolio
Total Portfolio |
Leases executed |
|
Square footage executed |
|
Average cash rent psf – leases executed |
|
% of new cash rent over / under previously escalated rents |
|
Office |
9 |
90,687 |
59.46 |
6.8 % |
||||
Retail |
2 |
22,797 |
135.49 |
(1.1) % |
||||
Total Overall |
11 |
113,484 |
74.73 |
3.8 % |
Office Portfolio
Office Portfolio |
Leases executed |
|
Square footage executed |
|
Average cash rent psf – leases executed |
|
% of new cash rent over / under previously escalated rents |
|
New Office |
7 |
83,397 |
58.54 |
5.9 % |
||||
Renewal Office |
2 |
7,290 |
70.00 |
16.3 % |
||||
Total Office |
9 |
90,687 |
59.46 |
6.8 % |
Leasing Activity Highlights
- A 13-year 60,003 square foot new office lease with Steve Madden at 501 Seventh Avenue.
- A 20-year 21,683 square foot renewal retail lease with JP Morgan Chase at One Grand Central Place.
- Subsequent to quarter-end, a 10.5-year 38,084 square foot new full-floor office lease with a financial services tenant at 130 Mercer Street.
Balance Sheet
The Company had
The Company closed on a
Portfolio Transaction Activity
The Company acquired a newly constructed, prime retail asset located at 41-55 North 6th Street in Williamsburg,
Dividend
On March 31, 2026, the Company paid a quarterly dividend of
On March 31, 2026, the Company paid a quarterly preferred dividend of
2026 Earnings Outlook
The Company provides 2026 guidance and key assumptions, as summarized in the table below. The Company’s guidance does not include the impact of any significant future lease termination fee income or any unannounced acquisition, disposition or other capital markets activity.
Key Assumptions |
2026 Guidance |
2025 Actual
|
Comments |
Earnings |
|
|
|
Core FFO Per Fully Diluted Share |
|
|
|
Property Assumptions |
|
|
|
Commercial Occupancy at year-end |
|
|
|
SS Property Cash NOI (excluding lease termination fees) |
- |
+ |
|
Observatory Drivers |
|
|
|
Observatory NOI |
|
|
|
Net Income (Loss) Attributable to Common Stockholders and the Operating Partnership |
Low |
|
High |
|
|
|
|
||
Add: |
||||
Impairment Charge |
0.00 |
|
0.00 |
|
Real Estate Depreciation & Amortization |
0.65 |
|
0.65 |
|
Less: |
|
|
|
|
Private Perpetual Distributions |
0.02 |
|
0.02 |
|
Gain on Disposal of Real Estate, net |
0.00 |
|
0.00 |
|
FFO Attributable to Common Stockholders and the Operating Partnership |
|
|
|
|
Add: |
|
|
|
|
Amortization of Below Market Ground Lease |
0.03 |
|
0.03 |
|
Core FFO Attributable to Common Stockholders and the Operating Partnership |
|
|
|
The estimates set forth above may be subject to fluctuations as a result of several factors, including continued impacts of changes in the use of office space and remote work on our business and our market, performance of the Observatory (including tourism levels, currency and geopolitical impacts, weather and competition), our ability to complete planned capital improvements in line with budget, costs of integration of completed acquisitions, costs associated with future acquisitions or other transactions, straight-line rent adjustments and the amortization of above and below-market leases. There can be no assurance that the Company’s actual results will not differ materially from the estimates set forth above.
Investor Presentation Update
The Company has posted on the “Investors” section of ESRT’s website the latest investor presentation, which contains additional information on its businesses, financial condition and results of operations.
Webcast and Conference Call Details
Empire State Realty Trust, Inc. will host a webcast and conference call, open to the general public, on Thursday, April 30, 2026 at 12:00 pm Eastern time.
The webcast will be available in the “Investors” section of ESRT’s website. To listen to the live broadcast, go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. The conference call can also be accessed by dialing 1-877-407-3982 for domestic callers or 1-201-493-6780 for international callers.
Starting shortly after the call until May 14, 2026, a replay of the webcast will be available on the Company’s website, and a dial-in replay will be available by dialing 1-844-512-2921 for domestic callers or 1-412-3176671 for international callers. The passcode for this dial-in replay is 13759470.
The Supplemental Report and Investor Presentation are additional components of the quarterly earnings announcement and are now available on the “Investors” section of ESRT’s website.
The Company uses, and intends to continue to use, the “Investors” page of its website, which can be found at www.esrtreit.com, as a means to disclose material nonpublic information and to comply with its disclosure obligations under Regulation FD, including, without limitation, through the posting of investor presentations that may include material nonpublic information. Accordingly, investors should monitor the “Investors” page, in addition to following our press releases, SEC filings, public conference calls, presentations and webcasts. The information contained on, or that may be accessed through, our website is not incorporated by reference into, and is not a part of, this document.
About Empire State Realty Trust
Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of well-leased, top of tier, modernized, amenitized, and well-located office, retail, and multifamily assets. ESRT’s flagship
Forward-Looking Statements
This press release includes 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 of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts and can generally be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “estimate,” “may,” “will,” “should,” “would,” and similar expressions.
Forward-looking statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied. These risks and uncertainties include, among others: economic and market conditions (including the impact of catastrophic events, pandemics, extreme weather, terrorism, armed hostilities, cybersecurity threats and other technology disruptions); increased costs due to tariffs or other economic factors; changes in the
Any forward-looking statement speaks only as of the date of this press release. We undertake no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by law.
Empire State Realty Trust, Inc. |
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Condensed Consolidated Statements of Operations |
||||||||
(unaudited and amounts in thousands, except per share data) |
||||||||
Three Months Ended March 31, |
||||||||
2026 |
|
2025 |
||||||
Revenues |
||||||||
Rental revenue |
$ |
166,105 |
|
$ |
154,542 |
|
||
Observatory revenue |
|
18,510 |
|
|
23,161 |
|
||
Lease termination fees |
|
1,356 |
|
|
— |
|
||
Third-party management and other fees |
|
277 |
|
|
431 |
|
||
Other revenue and fees |
|
4,077 |
|
|
1,932 |
|
||
Total revenues |
|
190,325 |
|
|
180,066 |
|
||
Operating expenses |
|
|
||||||
Property operating expenses |
|
47,744 |
|
|
45,060 |
|
||
Ground rent expenses |
|
2,331 |
|
|
2,331 |
|
||
General and administrative expenses |
|
18,093 |
|
|
16,940 |
|
||
Observatory expenses |
|
7,868 |
|
|
8,118 |
|
||
Real estate taxes |
|
34,613 |
|
|
33,050 |
|
||
Depreciation and amortization |
|
50,219 |
|
|
48,779 |
|
||
Total operating expenses |
|
160,868 |
|
|
154,278 |
|
||
Total operating income |
|
29,457 |
|
|
25,788 |
|
||
Other income (expense): |
|
|
||||||
Interest income |
|
613 |
|
|
3,786 |
|
||
Interest expense |
|
(28,137 |
) |
|
(26,938 |
) |
||
Interest expense associated with property in receivership |
|
— |
|
|
(647 |
) |
||
Gain on disposition of properties |
|
— |
|
|
13,170 |
|
||
Income before income taxes |
|
1,933 |
|
|
15,159 |
|
||
Income tax benefit |
|
1,062 |
|
|
619 |
|
||
Net income |
|
2,995 |
|
|
15,778 |
|
||
Net income attributable to non-controlling interests: |
|
|
||||||
Non-controlling interest in the Operating Partnership |
|
(710 |
) |
|
(5,508 |
) |
||
Preferred unit distributions |
|
(1,050 |
) |
|
(1,050 |
) |
||
Net income attributable to common stockholders |
$ |
1,235 |
|
$ |
9,220 |
|
||
Total weighted average shares |
|
|
||||||
Basic |
|
170,673 |
|
|
167,181 |
|
||
Diluted |
|
269,348 |
|
|
269,529 |
|
||
Earnings per share attributable to common stockholders |
|
|
||||||
Basic |
$ |
0.01 |
|
$ |
0.06 |
|
||
Diluted |
$ |
0.01 |
|
$ |
0.05 |
|
||
Empire State Realty Trust, Inc. |
||||||||
Reconciliation of Net Income to Funds From Operations (“FFO”), |
||||||||
Modified Funds From Operations (“Modified FFO”) and Core Funds From Operations (“Core FFO”) |
||||||||
(unaudited and amounts in thousands, except per share data) |
||||||||
Three Months Ended March 31, |
||||||||
|
2026 |
|
2025 |
|||||
Net income |
$ |
2,995 |
|
$ |
15,778 |
|
||
Preferred unit distributions |
|
(1,050 |
) |
|
(1,050 |
) |
||
Real estate depreciation and amortization |
|
49,292 |
|
|
47,871 |
|
||
Gain on disposition of properties |
|
— |
|
|
(13,170 |
) |
||
FFO attributable to common stockholders and Operating Partnership units |
|
51,237 |
|
|
49,429 |
|
||
Amortization of below-market ground leases |
|
1,958 |
|
|
1,958 |
|
||
Modified FFO attributable to common stockholders and Operating Partnership units |
|
53,195 |
|
|
51,387 |
|
||
Interest expense associated with property in receivership |
|
— |
|
|
647 |
|
||
Core FFO attributable to common stockholders and Operating Partnership units |
$ |
53,195 |
|
$ |
52,034 |
|
||
Total weighted average shares and Operating Partnership units |
|
|
||||||
Basic |
|
268,792 |
|
|
267,073 |
|
||
Diluted |
|
269,348 |
|
|
269,529 |
|
||
FFO per share |
|
|
||||||
Basic |
$ |
0.19 |
|
$ |
0.19 |
|
||
Diluted |
$ |
0.19 |
|
$ |
0.18 |
|
||
Modified FFO per share |
|
|
||||||
Basic |
$ |
0.20 |
|
$ |
0.19 |
|
||
Diluted |
$ |
0.20 |
|
$ |
0.19 |
|
||
Core FFO per share |
|
|
||||||
Basic |
$ |
0.20 |
|
$ |
0.19 |
|
||
Diluted |
$ |
0.20 |
|
$ |
0.19 |
|
||
Empire State Realty Trust, Inc. |
||||||||
Reconciliation of Net Income to Cash NOI and Same Store Cash NOI |
||||||||
(unaudited and amounts in thousands) |
||||||||
Three Months Ended March 31, |
||||||||
|
2026 |
|
2025 |
|||||
Net income |
$ |
2,995 |
|
$ |
15,778 |
|
||
Add: |
|
|
||||||
General and administrative expenses |
|
18,093 |
|
|
16,940 |
|
||
Depreciation and amortization |
|
50,219 |
|
|
48,779 |
|
||
Interest expense |
|
28,137 |
|
|
26,938 |
|
||
Interest expense associated with property in receivership |
|
— |
|
|
647 |
|
||
Income tax benefit |
|
(1,062 |
) |
|
(619 |
) |
||
Less: |
|
|
||||||
Gain on disposition of property |
|
— |
|
|
(13,170 |
) |
||
Third-party management and other fees |
|
(277 |
) |
|
(431 |
) |
||
Interest income |
|
(613 |
) |
|
(3,786 |
) |
||
Net operating income |
|
97,492 |
|
|
91,076 |
|
||
Straight-line rent |
|
(7,209 |
) |
|
(5,283 |
) |
||
Above/below-market rent revenue amortization |
|
(670 |
) |
|
(798 |
) |
||
Below-market ground lease amortization |
|
1,958 |
|
|
1,958 |
|
||
Total cash NOI - including Observatory and lease termination fees |
|
91,571 |
|
|
86,953 |
|
||
Less: Observatory NOI |
|
(10,642 |
) |
|
(15,043 |
) |
||
Less: cash NOI from non-Same Store properties |
|
(5,383 |
) |
|
(1,583 |
) |
||
Total Same Store property cash NOI - including lease termination fees |
|
75,546 |
|
|
70,327 |
|
||
Less: Lease termination fees |
|
(1,356 |
) |
|
— |
|
||
Total Same Store property cash NOI - excluding Observatory and lease termination fees |
$ |
74,190 |
|
$ |
70,327 |
|
||
Empire State Realty Trust, Inc. |
||||||||
Condensed Consolidated Balance Sheets |
||||||||
(unaudited and amounts in thousands) |
||||||||
March 31, 2026 |
December 31, 2025 |
|||||||
Assets |
||||||||
Real estate properties, at cost |
$ |
4,267,420 |
|
$ |
4,205,907 |
|
||
Less: accumulated depreciation |
|
(1,400,827 |
) |
|
(1,366,829 |
) |
||
Real estate properties, net |
|
2,866,593 |
|
|
2,839,078 |
|
||
Cash and cash equivalents |
|
68,820 |
|
|
132,657 |
|
||
Restricted cash |
|
37,326 |
|
|
33,854 |
|
||
Tenant and other receivables |
|
23,667 |
|
|
22,063 |
|
||
Deferred rent receivables |
|
261,275 |
|
|
255,270 |
|
||
Prepaid expenses and other assets |
|
62,849 |
|
|
93,355 |
|
||
Deferred costs, net |
|
262,212 |
|
|
267,682 |
|
||
Acquired below market ground leases, net |
|
303,621 |
|
|
305,579 |
|
||
Right of use assets |
|
27,882 |
|
|
27,944 |
|
||
Goodwill |
|
491,479 |
|
|
491,479 |
|
||
Total assets |
$ |
4,405,724 |
|
$ |
4,468,961 |
|
||
Liabilities and equity |
|
|
||||||
Mortgage notes payable, net |
$ |
621,392 |
|
$ |
619,269 |
|
||
Senior unsecured notes, net |
|
1,270,909 |
|
|
1,270,668 |
|
||
Unsecured term loan facility, net |
|
336,972 |
|
|
336,794 |
|
||
Unsecured revolving credit facility |
|
90,000 |
|
|
145,000 |
|
||
Accounts payable and accrued expenses |
|
111,918 |
|
|
120,150 |
|
||
Acquired below market leases, net |
|
37,948 |
|
|
39,767 |
|
||
Ground lease liabilities |
|
27,882 |
|
|
27,944 |
|
||
Deferred revenue and other liabilities |
|
57,601 |
|
|
59,901 |
|
||
Tenants’ security deposits |
|
26,964 |
|
|
27,276 |
|
||
Total liabilities |
|
2,581,586 |
|
|
2,646,769 |
|
||
Total equity |
|
1,824,138 |
|
|
1,822,192 |
|
||
Total liabilities and equity |
$ |
4,405,724 |
|
$ |
4,468,961 |
|
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20260429773743/en/
Investors and Media
(212) 850-2678
IR@esrtreit.com
Source: Empire State Realty Trust, Inc.