Empire State Realty OP, L.P. (ESBA): Business Model Canvas [Dec-2025 Updated]

You're looking to dissect the operating engine of one of New York's most recognizable real estate entities as of late 2025, and honestly, breaking down a REIT (Real Estate Investment Trust) model can seem dense. But here's the quick math: this business is fundamentally about monetizing prime Manhattan square footage-think 90.3% office occupancy-while simultaneously running a world-class tourist attraction. With $569.05 million in revenue through the first nine months of the year, their canvas reveals a sharp focus on high-touch tenant service, disciplined capital allocation like that recent Broadway buy, and managing significant debt, all centered around that landmark tower. Dive below to see the precise nine building blocks that keep this massive operation running so smoothly.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Key Partnerships

You're looking at the relationships Empire State Realty OP, L.P. (ESBA) relies on to keep its premier New York City assets running and financed. These aren't just casual contacts; these are deep, capital-intensive, and operational dependencies that define the business.

The financing side is a clear example. The partnership with financial institutions is critical for managing the capital structure. As of September 30, 2025, the Operating Partnership had total debt outstanding of approximately $2.3 billion, with a weighted average interest rate sitting at 4.27%, and a weighted average term to maturity of 5.3 years. This structure means the relationship with note purchasers and lenders is stable, with no unaddressed debt maturities until the end of 2026. This debt level translates to a net debt to Adjusted EBITDA ratio of 5.6x for the parent company, Empire State Realty Trust, Inc..

For keeping the office and retail spaces occupied, third-party commercial real estate brokers are essential partners, especially when the portfolio is highly leased. In the third quarter of 2025, ESBA signed leases totaling 87,880 rentable square feet. These brokers help secure the high-quality tenants that drive positive leasing spreads, which hit +3.9% in the Manhattan office portfolio for the 17th consecutive quarter.

Here are some of the specific broker and tenant partnerships identified:

• Third-party broker representation by CBRE on the Rolex lease transaction.
• Third-party broker representation by Lantern for the Tecovas lease.
• In-house leasing team working alongside external brokers for the HOKA deal.
• Notable office tenants like Jencap Group (19,883 square feet renewal/expansion) and Haver Analytics (16,402 square feet renewal).

Capital improvements and maintaining the physical assets require strong ties with construction and engineering firms. While specific ESBA contracts aren't public, the firm operates in a market where major players like Jacobs (with 2024 revenue of $11.5 billion) and AECOM (with a market capitalization around $13.5 billion) are active in the buildings sector. The demand for design-build methods in the industry has seen increases of 11% and 13.4%, reflecting the need for collaborative project delivery for major upgrades.

Technology vendors are partners in achieving the firm's sustainability leadership goals. The industry trend for 2025 shows that deploying interconnected sensors and AI-driven controls can lead to operational savings of 15-30% in energy costs. These partnerships focus on integrating IoT sensors and AI-powered Building Management Systems (BMS) to reduce energy usage and improve occupant comfort.

The retail component relies heavily on securing marquee tenants for prime locations, particularly in the North Sixth Street Collection in Williamsburg, Brooklyn. These partnerships validate the asset class and drive foot traffic. Here's a look at some of the key retail partners:

Finance: draft updated covenant compliance schedule based on Q3 2025 debt figures by next Tuesday.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Key Activities

You're managing a premier, concentrated portfolio in the most competitive real estate market. Here are the core actions Empire State Realty OP, L.P. (ESBA) is focused on, grounded in the latest figures.

Leasing and re-leasing of 7.8 million sq ft of office space

The primary activity involves keeping the office space full and achieving favorable lease terms across the portfolio. As of September 30, 2025, the portfolio contained approximately 7.8 million rentable square feet of office space. You see this activity reflected in the leasing metrics.

Here's a look at the recent leasing performance:

Leasing costs went up sequentially in Q2 2025 because the mix favored new leases over renewals, which is something to watch. Still, the economics are working out with higher rents and longer lease durations.

Property management and maintenance of the NYC portfolio

This activity covers the day-to-day operations that keep the assets running smoothly and attract tenants. The portfolio is heavily weighted toward New York City assets, which require constant attention to maintain top-tier status.

• Same-Store Property Cash Net Operating Income (NOI), excluding lease termination fees, decreased 1.5% year-over-year in Q3 2025.
• Adjusted for non-recurring items, Same-Store Property Cash NOI increased 1.1% year-over-year in Q3 2025.
• Total debt outstanding was approximately $2.1 billion as of September 30, 2025.
• The weighted average interest rate on that debt was 4.34% as of September 30, 2025.

You've got to manage those operating expenses; they were a headwind in Q3 2025.

Operating the Empire State Building Observatory tourist attraction

The Observatory is a major cash flow driver, though it faces its own market dynamics. It contributes a significant portion of the overall NOI.

• The Empire State Building Observatory generated NOI of $26.5 million in the third quarter of 2025.
• For the second quarter of 2025, the Observatory generated NOI of $24.1 million.
• The full-year 2025 Observatory NOI guidance was set between $90-94 million.

Visitation saw a 2.9% year-over-year decrease in Q2 2025, but revenue per visitor went up by 2.3% compared to Q2 2024.

Disciplined capital allocation, including the $386 million Broadway acquisition

This is about strategically deploying capital to enhance the portfolio, often through recycling older assets into prime NYC properties. The recent major move was the Scholastic Building acquisition.

• Empire State Realty OP, L.P. agreed to acquire 555-557 Broadway for $386 million in an all-cash transaction expected to close in December 2025.
• The property is 396,000 SF total, comprising 368,000 SF of office and 28,000 SF of prime retail.
• The property was 70% leased, with the anchor tenant, Scholastic, taking 222,000 square feet on a 15-year lease.
• The retail space is 100% occupied with a weighted average lease term of about 8 years.
• Total liquidity as of September 30, 2025, stood at $0.8 billion.
• The net debt to adjusted EBITDA ratio was 5.6x as of September 30, 2025.
• In October 2025, the company announced the issuance of $175 million of 5-year senior unsecured notes.

That acquisition brings in contractual revenue and a big block of over 110,000 square feet available to market in a prime location.

Sustainability and energy efficiency program management

This activity is about maintaining a leadership position in environmental, social, and governance (ESG) standards, which is a key differentiator for attracting modern tenants.

• Empire State Realty OP, L.P. achieved the highest possible GRESB 5 Star Rating for the sixth consecutive year.
• The GRESB score achieved was 93.

Being a recognized leader in energy efficiency and indoor environmental quality is definitely part of the value proposition.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Key Resources

The most fundamental resource for Empire State Realty OP, L.P. (ESBA) is its real estate assets, anchored by the iconic Empire State Building. This flagship property is not just office space; its Observatory Experience is a major revenue generator, ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards: Best of the Best Things to Do.

The performance of this key asset is tracked closely. For the third quarter of 2025, the Net Operating Income (NOI) from the Observatory was $26.5 million. Management reaffirmed its full-year 2025 guidance for the Observatory NOI to be in the range of $90 million to $94 million.

The broader portfolio provides the scale necessary for operations. As of September 30, 2025, the total rentable square footage across the portfolio is detailed below, showing the concentration in office space, which is the primary business line.

You need to know the company has the cash on hand to manage short-term needs and unexpected capital calls. Empire State Realty OP, L.P. (ESBA)'s parent company reported a strong liquidity position of $0.8 billion as of September 30, 2025. This liquidity is composed of specific components:

• Cash and short-term investments: $157.2 million.
• Available under revolving credit facility: $620 million.

The debt structure is a critical resource for stability, especially in a rising rate environment. The company maintains a heavily fixed-rate debt profile. At September 30, 2025, the total debt outstanding was approximately $2.1 billion, with a weighted average interest rate of 4.34%. Furthermore, the data shows no floating rate debt exposure on that date. This fixed-rate focus helps lock in costs, which is a significant advantage when planning capital expenditures. Also, in October 2025, the company entered an agreement to issue an additional $175 million of senior unsecured notes at a fixed rate of 5.47%.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Value Propositions

You're looking at the core reasons why tenants and visitors choose Empire State Realty OP, L.P. (ESBA)'s properties, which are anchored by the flagship Empire State Building. The value proposition centers on offering a premium, well-managed, and highly sustainable experience in Manhattan's best locations.

Modernized, amenitized office space in prime Manhattan locations

Empire State Realty OP, L.P. offers a portfolio that is consistently modernized and amenity-rich, which is resonating strongly with the market. This focus on quality within their existing footprint is a key differentiator, especially given the limited new supply at comparable price points. You see this commitment reflected in the leasing results, which show tenants are willing to commit to these upgraded spaces.

The sheer scale of the office offering is substantial, providing a deep inventory of prime space:

• Approximately 7.8 million rentable square feet of office space as of September 30, 2025.
• The total commercial portfolio also includes 0.8 million rentable square feet of retail space.
• The Manhattan office portfolio has delivered positive mark-to-market leasing spreads for 17 consecutive quarters.

Here's a look at the recent leasing success that underscores the demand for this quality:

Recognized leadership in energy efficiency and indoor environmental quality

You can't talk about Empire State Realty OP, L.P. without highlighting their deep, proven commitment to sustainability, which translates directly into lower operating costs and healthier environments for tenants. This isn't just marketing fluff; it's backed by significant retrofits and top-tier certifications.

The firm has demonstrably reduced energy consumption through groundbreaking work:

• Energy use reduced by 51% at the Empire State Building since 2009.
• Energy use reduced by 41% across the entire commercial portfolio since 2009.
• 100% of the office and multifamily portfolio electricity is offset via Green-e Certified Wind Power Renewable Energy Credits.

Their building certifications are industry-leading, showing you a commitment that goes beyond basic compliance:

They even published the "Empire Building Playbook: An Owner's Guide to Low Carbon Retrofits" to guide others in achieving carbon neutrality, which is a powerful statement of industry leadership.

Iconic landmark status for the Empire State Building office and tourism

The Empire State Building itself is a massive, high-margin value driver, separate from the office leasing business. Its status as a global icon ensures consistent, high-margin cash flow from the Observatory Experience.

The tourism component remains incredibly strong as of late 2025:

• The Empire State Building Observatory was ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards: Best of the Best Things to Do.
• The Observatory generated Net Operating Income (NOI) of $26.5 million in the third quarter of 2025.
• ESBA's flagship property also secured the 2024 International TOBY Earth Award.

This iconic status helps attract top-tier office tenants who want the prestige associated with the address, which helps support those positive leasing spreads you saw earlier. It's a virtuous cycle, really.

High Manhattan office occupancy of 90.3% as of Q3 2025

The occupancy metric is perhaps the clearest indicator of tenant satisfaction and market demand for Empire State Realty OP, L.P.'s product. Hitting this level in the current market is a significant achievement.

Here are the key occupancy figures you need to track:

The Manhattan office occupancy increased by 80 basis points sequentially to reach that 90.3% mark. Management is even holding some of the remaining availability off-market to assemble larger block opportunities, which suggests they are prioritizing high-value, long-term tenants over immediate lease signings for every available square foot. Finance: draft 13-week cash view by Friday.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Customer Relationships

You're looking at how Empire State Realty OP, L.P. (ESBA) manages its connections with the people who pay the rent and those who buy the tickets. It's a dual focus: long-term stability from corporate leases and high-volume, high-touch experience for tourists.

Long-term, direct relationships with major corporate tenants

For the office side, Empire State Realty Trust (ESRT), which manages ESBA's assets, focuses on direct, long-term partnerships. This isn't about quick flips; it's about being the landlord of choice in a market where quality matters more than ever. The commitment to service is their brand, which helps drive tenant retention.

Here's a snapshot of the office relationship health as of late 2025:

The strategy is to keep the best tenants happy with quality spaces. For example, in Q2 2025, they signed 232,108 rentable square feet of leases with an average duration of about 9.9 years. That's a long time to be working together.

High-touch tenant service and property management

ESRT explicitly states, "ESRT is not about buildings; It is about service, and our service is our brand". This high-touch approach is critical for maintaining occupancy in the competitive Midtown market. They manage relationships across their entire portfolio, which includes office, retail, and multifamily assets.

The service commitment is operationalized through:

• Prioritizing tenant satisfaction to drive high occupancy.
• Focusing on modernized, energy-efficient spaces.
• Maintaining a culture of professionalism, honesty, and integrity.

The overall commercial portfolio leased percentage was reported at 92.9% as of June 30, 2025.

Digital and in-person experience management for Observatory visitors

The Observatory is a high-volume, transactional customer segment that requires a different relationship style-focused on seamless experience and maximizing per-visitor revenue. The Empire State Building is ranked the No. 1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards.

The financial contribution and recent trends show the dynamic:

Management's strategy for this segment involves digital marketing initiatives and pricing optimization to help manage the relationship despite external pressures like weakening international tourism.

Investor relations for ESBA unit holders and ESRT shareholders

The relationship with unit holders of Empire State Realty OP, L.P. (ESBA) and shareholders of the parent, ESRT, is managed through transparent financial reporting and consistent distributions. This is a relationship built on fiduciary duty and clear communication of performance.

Key figures defining this relationship as of late 2025 include:

• Total Operating Partnership Units Outstanding (as of March 3, 2025): 106,301,828
• Q4 2025 Common Stock Dividend Declared: $0.035 per share, payable December 31, 2025
• Q4 2025 ESBA Series PR Unit Dividend Declared: $0.035 per unit, payable December 31, 2025
• Q4 2025 ESBA Series 2014 Preferred Unit Dividend Declared: $0.15 per unit, payable December 31, 2025

The company's liquidity position, with $0.8 billion of total liquidity as of September 30, 2025, is a key data point used to reassure investors about stability. Finance: draft 13-week cash view by Friday.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Channels

You're looking at how Empire State Realty OP, L.P. gets its product-prime NYC real estate space and world-class visitor experiences-to its customers. It's a mix of direct sales, third-party networks, and digital platforms.

Direct in-house leasing and property management teams

The in-house teams handle the bulk of the commercial real estate transactions, focusing on the 7.8 million rentable square feet of office space and 0.8 million rentable square feet of retail space in the portfolio as of June 30, 2025. This channel is responsible for maintaining high occupancy and driving rent growth through direct negotiation and relationship management. The property management aspect also covers the 743 residential units as of that same date. This team's success is evident in the consistent mark-to-market performance.

Here's a look at the leasing activity channeled through these teams and their brokers:

The Manhattan office portfolio has achieved the 16th consecutive quarter of positive mark-to-market rent spreads in Q2 2025, and the 17th in Q3 2025. That's real traction.

Third-party commercial real estate brokerage networks

While the in-house team drives negotiations, third-party brokers are essential for reaching the broader market and securing specific tenant types. The leasing volume reported reflects activity where brokers likely played a role in bringing the tenant to the table. For example, Q2 2025 saw major deals like a 12-year, 39,237 square foot new lease with Elsberg Baker & Maruri at the Empire State Building, and an 11-year, 25,372 square foot new lease with Mott MacDonald Group at the same location. These deals are the output of the combined channel effort.

Observatory ticketing platforms (online, mobile, and on-site)

The visitor experience relies on multiple access points for tickets, feeding the revenue stream for the iconic attraction. This channel is critical, even with recent guidance adjustments.

• Observatory Net Operating Income (NOI) for Q2 2025 was $24.1 million.
• Observatory NOI for Q3 2025 was $26.5 million.
• Q2 2025 Observatory revenue was $33.9 million.
• Full-year 2025 Observatory NOI guidance is set in the range of $90 million to $94 million.
• Q1 2025 Observatory NOI was $15 million.

The Observatory was ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards: Best of the Best Things to Do. That brand recognition drives on-site and mobile sales.

Investor relations website and financial filings

This channel serves the capital providers-the unitholders of Empire State Realty OP, L.P. (ESBA). Access to timely and accurate financial data is the core value delivered here. The latest financial reports, like the Q3 2025 results released October 30, 2025, are the primary content.

Key balance sheet figures available through this channel as of late 2025:

• Total liquidity as of September 30, 2025, was $0.8 billion.
• This liquidity comprised $154 million of cash and $620 million available under the revolving credit facility.
• Total debt outstanding at September 30, 2025, was approximately $2.1 billion.
• The weighted average interest rate on debt was 4.34% at the end of Q2 2025.
• The company announced the issuance of $175 million of 5-year senior unsecured notes in October 2025.

Finance: draft 13-week cash view by Friday.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Customer Segments

You're looking at the core groups Empire State Realty OP, L.P. (ESBA) serves across its New York City-focused portfolio. This isn't just about square footage; it's about the distinct revenue streams these groups provide, from long-term leases to high-volume ticket sales.

Large corporate office tenants form the backbone of the commercial segment. The Manhattan office portfolio showed strong leasing momentum, with occupancy reaching 90.3% as of September 30, 2025. Management is targeting year-end 2025 office occupancy in the 89% to 91% range. The total commercial portfolio was 90.0% leased in Q3 2025. We see established names continuing their commitment, for example, Gerson Lehrman Group expanded its space at One Grand Central Place to a total of 95,612 square feet.

The high-end and experiential retail tenants in NYC and Brooklyn occupy a smaller, but strategically important, part of the portfolio. As of late 2025, the retail segment comprises approximately 0.8 million rentable square feet. Empire State Realty OP, L.P. (ESBA) recently enhanced this segment by closing on the acquisition of a prime retail asset at 86-90 North 6th Street in Williamsburg, Brooklyn, for a purchase price of $31.0 million. New tenants like HOKA and Tecovas signed on at this Brooklyn location.

Global and domestic tourists visiting the Observatory provide a high-margin, transactional revenue stream. The Empire State Building Observatory was ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards: Best of the Best Things to Do. This segment generated a Net Operating Income (NOI) of $26.5 million in the third quarter of 2025 alone. The full-year 2025 Observatory NOI guidance is projected to be between $90 million and $94 million.

Finally, the residential tenants in the multifamily units offer stable, recurring income. The portfolio includes exactly 743 residential units across its properties as of September 30, 2025. This segment demonstrated excellent performance, maintaining 99% occupancy in the third quarter of 2025 and achieving 9% year-over-year net rent growth.

Here's a quick look at the scale of these customer groups:

The diversification across these four groups is key to the overall stability of Empire State Realty OP, L.P. (ESBA)'s cash flow. For instance, the multifamily segment delivered 9% year-over-year rent growth in Q3 2025, while the office segment continues to see positive mark-to-market spreads.

• Office leasing activity in Q3 2025 included signing 87,880 rentable square feet of commercial leases.
• The company has no floating rate debt exposure, which helps stabilize costs for all customer segments.
• The multifamily portfolio occupancy was 99% in Q3 2025.
• The latest retail acquisition in Brooklyn cost $31.0 million.

Finance: draft 13-week cash view by Friday.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Cost Structure

You're analyzing the cost side of Empire State Realty OP, L.P. (ESBA)'s business as of late 2025, and the numbers show where the real operational drag is. For a real estate investment trust (REIT) like this, the fixed and variable costs associated with owning and operating prime Manhattan assets are massive, and they're only getting bigger.

Property operating expenses, including real estate taxes and utilities, form the largest chunk of the recurring outflow. For the first nine months of fiscal year 2025, Empire State Realty Trust, Inc. (ESRT) reported total Property operating expenses of approximately $136.90 million, all in thousands. On top of that, the burden of Real estate taxes for the same nine-month period hit $98.90 million. This is a significant, non-negotiable cost base for holding trophy assets in New York City. To be fair, management noted that Same-Store Property Cash Net Operating Income (NOI) decreased year-over-year in Q3 2025 primarily due to these increases in real estate taxes and property operating expenses.

The debt load is substantial, and servicing it is a major fixed cost. As of September 30, 2025, Empire State Realty OP, L.P. had total debt outstanding of approximately $2.1 billion. The cost to carry this debt, reflected in Interest expense for the nine months ended September 30, 2025, was $77.25 million. This debt carried a weighted average interest rate of 4.34% at that date.

Capital expenditures for tenant improvements and building modernization are lumpy but necessary to maintain premium rents. While a full-year figure isn't set, we saw a significant quarterly spend in Q3 2025. The Core Funds Available for Distribution (Core FAD) calculation reflected a drop in capital spending, moving from $52 million in Q2 2025 down to $25 million in Q3 2025, showing how management paces these investments. These funds are used for things like tenant improvement allowances and general building upgrades to keep the portfolio competitive.

Finally, Payroll and administrative costs for management and Observatory staff are tracked separately. For the nine months ended September 30, 2025, General and administrative expenses totaled $54.37 million. This covers the corporate overhead for managing the entire portfolio. Separately, the cost to run the iconic attraction is notable; Observatory expenses for the first nine months of 2025 were $27.45 million.

Here's a quick look at the major expense categories for the nine months ended September 30, 2025 (all amounts in millions USD, unless otherwise noted):

You can see the sheer scale of the fixed costs here. The debt service and property taxes alone are over $176 million for three quarters. That's the baseline you have to cover before you even think about profit.

• Total Debt Outstanding as of 9/30/2025: $2.1 billion.
• Weighted Average Interest Rate on Debt: 4.34%.
• Projected Increase in Operating Expenses/Taxes (2025 Guidance): 2% to 4% year-over-year.
• Total Revenues for 9M 2025: $569.05 million.

Empire State Realty OP, L.P. (ESBA) - Canvas Business Model: Revenue Streams

You're looking at how Empire State Realty OP, L.P. actually brings in the cash to keep the lights on in Manhattan's most famous building and its surrounding portfolio. The revenue streams are quite concentrated, which is typical for a specialized real estate investment trust (REIT) focused on prime New York City assets. Honestly, it boils down to rent checks and ticket sales, but the numbers tell a more detailed story about the mix.

The primary engine remains the real estate portfolio. This is the rental income from office and retail leases that forms the bedrock of the business. For the nine months ended September 30, 2025, the total rental revenue alone hit $466.49 million. This figure reflects the base rent collected across their office, retail, and multifamily spaces, which is the most stable component of their top line.

The second major, and perhaps most visible, revenue driver is the tourism side. The Empire State Building Observatory Net Operating Income (NOI) is guided to be between $90 million and $94 million for 2025. That's the profit after operating costs for the attraction, not the gross revenue, but it's a critical measure of that segment's financial health. Keep in mind, this guidance was revised down from an initial projection, reflecting the near-term pressures in discretionary travel.

We also see revenue coming from the operational side of the leases, which includes tenant recoveries for operating expenses. While not always broken out separately in the top-line summary, these are crucial for maintaining the net operating income of the properties. The Q2 2025 results did note higher tenant reimbursement income helping offset rising property operating expenses, so you know that component is active.

To give you a clear picture of the scale, the total revenue for the nine months ended September 30, 2025, was $569.05 million. This number is a composite of several sources, which I've broken down below for the same nine-month period.

Here is the breakdown of the reported total revenues for the nine months ended September 30, 2025 (amounts in thousands):

Beyond the core revenue streams, Empire State Realty OP, L.P. generates income from other, smaller activities that support the overall financial picture. These are important for context, showing the breadth of their operations:

• The Observatory segment's direct NOI contribution is guided for $90 million to $94 million for the full year 2025.
• Leasing activity also generates non-recurring income, though it's volatile; for the nine months ended September 30, 2025, lease termination fees were $0.46 million.
• The company also collects fees for managing other properties, totaling $1.24 million over the first nine months of 2025.
• The Manhattan office portfolio continues to show positive leasing spreads, with the third quarter of 2025 seeing blended spreads at +3.9%, which drives future rental income growth.

So, you see the structure: the vast majority is rent, a significant chunk is tourism profit, and the rest is fees and one-time items. Finance: draft 13-week cash view by Friday.