Empire State Realty Trust, Inc. (ESRT): Business Model Canvas [Dec-2025 Updated]

You're digging into a real estate giant and need to see past the iconic skyline to the actual mechanics of its profit engine, right? Honestly, after twenty years analyzing these complex structures, I can tell you Empire State Realty Trust, Inc. (ESRT) runs a dual strategy: stabilizing its modernized 7.8 million square foot office and retail space-which still boasts 90.3% Manhattan occupancy-while fueling margins with its world-class Observatory. That tourism piece is no small thing, delivering $26.5 million in Net Operating Income just in Q3 2025, all while they commit to carbon neutrality. To see precisely how they manage the high property taxes, secure key brokerage deals, and aim for that projected $766.6 million total revenue for 2025, check out the full Business Model Canvas I've laid out for you below.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Key Partnerships

You're looking at how Empire State Realty Trust, Inc. (ESRT) builds its moat, and honestly, it's all about who they team up with to keep their prime Manhattan assets running efficiently and attracting top-tier tenants and visitors. These aren't just vendor relationships; they're strategic alliances that drive operational excellence and meet modern demands for sustainability and wellness.

Technology Partners like KODE Labs for Smart Building Operations

ESRT chose KODE Labs' KODE OS as the primary data orchestration and operations software to centralize its portfolio operations. This move was key for their decarbonization journey. They integrated over 30 different systems across 9 buildings, which definitely includes the flagship Empire State Building. This centralization unlocks specific use cases that directly address regulatory and operational needs.

The focus areas for this technology integration are concrete:

• Centralize all BMS (Building Management System) equipment into one user platform.
• Energy tracking, monitoring and optimizing.
• Standardization of event and equipment malfunction alarms.
• Local Law 97 compliance tracking in real time.
• ASHRAE g36 compliance.

While KODE Labs' general platform data shows they've delivered energy savings up to 30% and operational savings up to 50% across various global portfolios, for ESRT, the immediate goal is achieving their Net Zero targets. It's about using data to manage the massive portfolio, which as of September 30, 2025, was approximately 7.8 million rentable square feet of office space. That's a lot of data to wrangle without a unified system.

Brokerage Firms such as Newmark for Large-Scale Leasing and Acquisitions

When it comes to moving significant square footage, the relationship with top-tier brokerage firms is critical. You saw this play out in the late 2025 acquisition of the Scholastic Building. Newmark represented the seller in that $386 million all-cash transaction, showing their deep involvement in major Manhattan deals. ESRT's leasing volume remains a key performance indicator for the office segment.

Here's a look at the recent leasing activity and market context, which shows why these partnerships matter for occupancy and spreads:

Metric	Value/Amount	Date/Period	Context
Manhattan Office Occupancy	90.3%	Q3 2025	Sequential increase of 80 basis points
Commercial Leases Signed (Q3 2025)	87,880 rentable square feet	Q3 2025	Includes 71,859 rentable square feet of Manhattan office leases
Manhattan Office Blended Leasing Spreads	+3.9%	Q3 2025	The 17th consecutive quarter of positive spreads
Scholastic Building Acquisition Price	$386 million	December 2025	Brokerage firm Newmark represented the seller

Nationally, Newmark's data suggests a positive trend among tenants-in-the-market: 69% plan to either maintain or expand their footprints upon renewal. That sentiment helps ESRT push for those positive leasing spreads.

Sustainability Groups like NYSERDA and the Clinton Global Initiative

ESRT's leadership in energy efficiency is heavily supported by state and global initiatives. They were awarded a competitive grant in the first funding round of the Empire Building Challenge, which is a $50 million state initiative spearheaded by the New York State Energy Research and Development Authority (NYSERDA). This partnership is foundational to their aggressive climate goals.

The tangible results from these sustainability efforts, often in collaboration with groups like NYSERDA and supported by the Clinton Global Initiative, are impressive:

• Emissions reduction at the Empire State Building since 2007: 57%.
• Emissions reduction across the commercial portfolio since 2009: 47%.
• Carbon Neutrality maintained since: January 2022.
• Anticipated LL97 fines: None through 2029.
• Net Zero Goal for Empire State Building: 2030.
• Net Zero Goal for 100% of commercial/multifamily portfolio: 2035.

Tourism Aggregators like New York CityPASS for Observatory Ticket Distribution

The Empire State Building Observatory is a high-margin revenue stream, generating $26.5 million in Net Operating Income (NOI) just in the third quarter of 2025. Partnerships with tourism aggregators are key to driving volume through this attraction.

The relationship with New York CityPASS is a clear example of this distribution strategy. The CityPASS offers a significant discount, saving visitors up to 42% at the Empire State Building, bundled with access to 4 more top NYC attractions. This bundling helps secure volume even when ticket prices fluctuate. To underscore its appeal, 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.

Health and Wellness Partners like Delos and the Mayo Clinic for IEQ Standards

ESRT's focus on Indoor Environmental Quality (IEQ) standards leverages research from collaborations like the WELL Living Lab, which is a partnership between Delos and the Mayo Clinic. This lab uses human-centered research to understand how indoor environments affect health. The resulting WELL Building Standard is a globally recognized benchmark.

The scale of adoption for these wellness standards shows the market penetration of this partnership's output:

• WELL Building Standard project registrations globally: Over 4,100 projects.
• Geographic reach of registrations: 59 countries.
• Total square footage covered by WELL registrations: More than 530 million square feet.
• Organizations using the Mayo Clinic-invented Well-Being Index: More than 800.

If you're looking at the data on the Well-Being Index, it has been used to track distress in over 1,000 organizations, providing a real-world feedback loop for IEQ strategies.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Key Activities

The core operations of Empire State Realty Trust, Inc. (ESRT) revolve around intensive management and strategic growth within its premier New York City-focused real estate portfolio.

Leasing and Managing the Commercial Portfolio

Empire State Realty Trust, Inc. (ESRT) is actively engaged in leasing and managing a substantial portfolio concentrated in high-barrier-to-entry markets.

Portfolio Component	Size as of September 30, 2025	Occupancy/Leased Rate (Q3 2025)
Office Space	7.8 million rentable square feet	Manhattan Office Occupancy: 90.3%
Retail Space	0.8 million rentable square feet	Total Commercial Portfolio Occupancy: 90.0%
Multifamily Units	743 residential units	Manhattan Office Leased Rate: 93.1%

The firm executes leasing across these spaces, signing 87,880 rentable square feet of commercial leases in the third quarter of 2025, with an average lease duration of 8.1 years for those executed in Q3 2025. The Manhattan office portfolio achieved blended leasing spreads of +3.9% in Q3 2025, marking the 17th consecutive quarter of positive spreads. Empire State Realty Trust, Inc. (ESRT) reported having 150,000 square feet of leases currently in negotiation as of late 2025.

Operating the Empire State Building Observatory

Operating the Empire State Building Observatory Experience is a key activity, providing a high-margin revenue stream that counterbalances traditional leasing cycles. The attraction is recognized as the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards.

• Net Operating Income (NOI) for the Observatory in Q3 2025 was $26.5 million.
• Full-year 2025 Observatory NOI guidance is maintained in the range of $90 million to $94 million.

Executing Strategic Acquisitions

Strategic capital recycling includes executing acquisitions to enhance the portfolio quality. In late 2025, Empire State Realty Trust, Inc. (ESRT) agreed to acquire the Scholastic Building at 555-557 Broadway in SoHo for $386 million in an all-cash transaction expected to close in December 2025.

This property adds significant square footage and embedded growth potential:

• Total size is approximately 368,000 square feet of office and 28,000 square feet of prime retail.
• The property is approximately 70% leased, including a 15-year lease for 222,000 square feet with Scholastic.
• It includes a unique, available block of over 110,000 square feet of office space.

Implementing Deep Energy Retrofits and Maintaining Carbon Neutrality

A recognized activity is the commitment to energy efficiency and environmental quality, which supports premium leasing. Empire State Realty Trust, Inc. (ESRT) achieved Carbon Neutrality as of 2022 for its commercial portfolio.

Sustainability achievements include:

• Achieved GRESB 5 Star Rating for the sixth consecutive year, with a score of 93 as of September 30, 2025.
• Maintained Platinum recognition for the period 2021-2025.
• The company previously offset electricity with 100% renewable wind energy and offset non-electric usage through preservation supporting 9,000 acres of biodiverse forest.

Proactive Balance Sheet Management and Debt Refinancing

Managing the balance sheet involves disciplined capital structure maintenance. As of September 30, 2025, the company reported total debt outstanding of approximately $2.1 billion and total liquidity of $0.8 billion.

Key metrics reflecting balance sheet health:

• Net debt to adjusted EBITDA ratio stood at 5.6x at September 30, 2025.
• The company reported no floating rate debt exposure as of September 30, 2025.
• In October 2025, Empire State Realty Trust, Inc. (ESRT) entered an agreement to issue $175 million of senior unsecured notes at a fixed rate of 5.47%, maturing in January 2031, with funding scheduled for December 18, 2025.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Key Resources

You're looking at the core assets that make Empire State Realty Trust, Inc. (ESRT) what it is-the tangible and intangible things they absolutely must have to make this business work. Honestly, for a real estate investment trust (REIT) like ESRT, these resources are the foundation of their entire value proposition.

The most obvious, and perhaps most valuable, resource is the iconic Empire State Building. It's more than just steel and glass; it's a global brand. As proof of its enduring appeal, 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. That brand power translates directly to revenue, with the Observatory generating $26.5 million in Net Operating Income (NOI) just in the third quarter of 2025.

Next up is the physical scale of their holdings. Empire State Realty Trust, Inc. owns a portfolio of modernized, well-located NYC assets. As of September 30, 2025, this portfolio breaks down into significant square footage and residential units, which you can see detailed here:

Asset Type	Square Footage (Approx.)	Residential Units
Office Space	7.8 million rentable square feet	N/A
Retail Space	0.8 million rentable square feet	N/A
Multifamily	N/A	743 units

The financial strength supporting these physical assets is a critical resource. You need a solid balance sheet to weather market ups and downs, and Empire State Realty Trust, Inc. maintains a strong position. Their liquidity is substantial, and they keep a conservative debt profile, which is smart in this environment. Here's the quick math on their capital structure as of Q3 2025:

• Strong liquidity totaled approximately $0.8 billion as of September 30, 2025.
• This liquidity included $154 million in cash on hand.
• An additional $620 million was available under their revolving credit facility.
• Total debt outstanding was approximately $2.1 billion.
• The Net Debt to Adjusted EBITDA ratio stood at 5.6x.

Finally, the intangible resource that drives operational excellence is their proprietary approach to property management, specifically around environmental standards. Empire State Realty Trust, Inc. is a recognized leader in energy efficiency and indoor environmental quality, which is a major draw for modern tenants. Their commitment is validated by external metrics; for example, the Company achieved the highest possible GRESB 5-star rating for the sixth consecutive year. That playbook helps them command strong leasing spreads, like the positive mark-to-market spread of 3.9% achieved in the 17th consecutive quarter as of Q3 2025.

Finance: draft 13-week cash view by Friday.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Value Propositions

You're looking at the core reasons why Empire State Realty Trust, Inc. (ESRT) commands its premium in the New York City market, even when other segments face headwinds. The value propositions here are concrete, tied directly to the physical assets and the financial structure supporting them.

The office space itself is a major draw. You're not just buying square footage; you're buying a location with proven tenant demand. As of the third quarter of 2025, the Manhattan office occupancy stood at a strong 90.3%. This high rate, sustained over time, shows that tenants value the quality and location of ESRT's modernized assets. To be fair, the total commercial portfolio occupancy was slightly lower at 90.0% as of September 30, 2025.

ESRT heavily emphasizes the health and environmental quality of its buildings, which is a non-negotiable for many modern corporate tenants. This commitment translates into tangible, third-party verified standards:

• The company is the first in the Americas to maintain portfolio-wide WELL Health-Safety Rating certification since 2020.
• ESRT achieved the U.S. Environmental Protection Agency's ENERGY STAR NextGen certification.
• It earned the highest possible GRESB 5 Star Rating for the fifth consecutive year, ranking first among all listed companies in the Americas.

That's a clear signal of industry-leading standards, not just marketing fluff.

Then there's the Observatory. This is the high-margin engine that doesn't rely on office leasing cycles. For the third quarter of 2025, the Empire State Building Observatory generated Net Operating Income (NOI) of $26.5 million. Management is maintaining its full-year 2025 Observatory NOI guidance in the range of $90-$94 million. This attraction offers a unique, high-margin revenue stream that is relatively low in capital intensity.

The financial structure provides a solid foundation, which is crucial when you consider the debt markets. You're looking at a low-leverage profile compared to many peers. As of September 30, 2025, the Net Debt to Adjusted EBITDA ratio was 5.6x. Furthermore, the balance sheet is insulated from immediate interest rate volatility because ESRT has no floating rate debt exposure. The total liquidity was substantial at $0.8 billion on that date.

Here's a quick look at how the office portfolio's lease quality supports this stability:

Metric	Value	Context/Date
Manhattan Office Occupancy	90.3%	Q3 2025
Total Commercial Portfolio Occupancy	90.0%	Q3 2025
Average Lease Term Signed	10.1 years	Recent activity context
Total Debt Outstanding	$2.1 billion	As of September 30, 2025
Net Debt to Adjusted EBITDA	5.6x	Q3 2025
Floating Rate Debt Exposure	0%	As of Q3 2025

This long-term commitment from tenants is evidenced by the duration of new agreements. While Q1 2025 saw an average lease term of 8.4 years, Q2 2025 leasing activity showed an average lease duration of 9.9 years, and the value you are tracking, the 10.1 year average term, reflects the commitment to locking in tenants for the long haul. That long duration helps smooth out near-term revenue uncertainty.

Finance: draft 13-week cash view by Friday.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Customer Relationships

You're managing a portfolio of iconic assets in a market that never stops moving, so your customer relationships-for both office tenants and millions of annual visitors-have to be rock solid. Empire State Realty Trust, Inc. (ESRT) grounds its strategy on service being its brand, which shows up in concrete operational metrics.

The commitment to a client-first service culture is directly tied to the performance of the leasing team. They manage a massive footprint, which requires dedicated, in-house teams for both leasing and property management to ensure continuity and deep client understanding. This focus on long-term partnership is what drives retention, a key indicator of relationship health.

Metric Category	Detail	Latest Figure (as of late 2025)
Portfolio Size (Office)	Rentable Square Feet Managed	7.8 million square feet (as of September 30, 2025)
Tenant Retention Culture	Consecutive Quarters of Positive Mark-to-Market Lease Spreads (Manhattan Office)	17th consecutive quarter (as of Q3 2025)
Leasing Success (Q3 2025)	Manhattan Office Blended Leasing Spreads	+3.9%
Occupancy Health (Q3 2025)	Manhattan Office Occupancy Rate	90.3%
Portfolio Health (Q3 2025)	Total Commercial Portfolio Occupancy Rate	90.0%
Leasing Activity (Q3 2025)	Rentable Square Feet of Commercial Leases Signed	87,880 square feet
Observatory Contribution (Q3 2025)	Net Operating Income (NOI)	$26.5 million

The partnership aspect extends beyond just rent collection; it involves shared goals on environmental performance. Empire State Realty Trust, Inc. (ESRT) has embedded sustainability mandates directly into its leasing agreements. This isn't just talk; they were recognized for it.

• Green Lease Leader distinction: Platinum status achieved in 2023.
• Portfolio Energy Reduction (since 2009): 51% at the Empire State Building and 41% across the commercial portfolio.
• GRESB Rating: Achieved the top 5 Star Rating for the sixth consecutive year with a score of 93 (as of October 2025).

For the Observatory business, the relationship is transactional but managed for premium experience, which helps offset dips in raw visitor volume. They use tiered access to manage flow and capture higher revenue per guest. For instance, in Q2 2025, while visitation was down year-over-year, revenue per visitor actually increased.

Here's the quick math on the revenue side for the Observatory:

• Q2 2025 Observatory NOI: $24.1 million.
• Q2 2025 Revenue Per Visitor Change: Increased by 2.3% compared to Q2 2024.
• Q2 2025 Visitation Change: Decreased by 2.9% year-over-year.

Finally, Empire State Realty Trust, Inc. (ESRT) maintains a visible, direct line of communication with the public and potential visitors, reinforcing the brand's connection to the city. This real-time engagement keeps the asset top-of-mind.

• Direct engagement channels include: Facebook, Instagram, TikTok, X, and LinkedIn.
• The iconic tower lights are updated in real-time, serving as a constant, visible communication tool.

If the Q3 2025 Manhattan office occupancy of 90.3% dips below the year-end guidance of 89%, expect the leasing teams to accelerate targeted outreach to existing tenants for renewal conversations by Q4.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Channels

You're looking at how Empire State Realty Trust, Inc. (ESRT) gets its services and properties in front of customers and capital providers as of late 2025. It's a mix of traditional real estate methods and direct-to-tourist sales.

Third-party commercial brokerage networks (e.g., Newmark) for leasing

Leasing activity heavily relies on external networks, though in-house teams are also key, especially for large blocks. For instance, Newmark brokered a 39,237-square-foot lease at the Empire State Building in July 2025. Empire State Realty Trust, Inc. (ESRT) signed 87,880 rentable square feet of commercial leases in the third quarter of 2025, with 71,859 square feet of that being Manhattan office leases. This followed a Q2 2025 where 232,108 square feet was leased across the portfolio. Management noted approximately 150,000 square feet of leases were in negotiation as of the Q3 2025 earnings call. The Manhattan office portfolio occupancy stood at 90.3% as of September 30, 2025.

Here's a look at recent leasing volume and pricing power:

Metric	Q1 2025	Q2 2025	Q3 2025
Total Leases Signed (Sq Ft)	230,548	232,108	87,880
Manhattan Office Mark-to-Market	+10.4%	+12.1%	+3.9%
Portfolio Occupancy (Total Commercial)	87.9% (as of March 31)	89.0% (as of June 30)	90.0% (as of Sept 30)

Direct-to-consumer online ticket sales via esbnyc.com

The Observatory is a major channel for direct revenue. Tickets are sold via esbnyc.com, where prices are listed in United States dollars and are generally non-refundable. For example, an adult ticket for the Main Deck (86th Floor) starts at a certain price, and the ESB & Christmas Spectacular Ticket Bundle started at $176.00 plus a $5.00 booking charge for a limited-time holiday experience. Empire State Realty Trust, Inc. (ESRT) also offers a direct-to-resident perk, where residents of an Empire State Realty Trust, Inc. property get one complimentary ticket to the 86th Floor Observatory using a provided code upon checkout. The Observatory segment generated $26.5 million in Net Operating Income (NOI) for the third quarter of 2025. This is part of the reaffirmed 2025 Observatory NOI guidance of $90-$94 million.

Global travel agencies and third-party ticket platforms (e.g., CityPASS)

Third-party platforms are a significant distribution point for Observatory tickets. For instance, purchasing CityPASS saves up to 42% at the Empire State Building along with 4 other top NYC attractions. The third quarter of 2025 saw a year-over-year decline in Observatory visitors of 10.6%, with 648k visitors compared to 727k the prior year, which management linked to lower demand from the pass program, predominantly international. Still, revenue per capita on the Observatory side increased by 2.7% year-over-year in Q3 2025.

On-site leasing offices and property management teams

The on-site teams manage the 7.8 million rentable square feet of office space, 0.8 million rentable square feet of retail space, and 743 residential units as of September 30, 2025. These teams handle the day-to-day operations and direct tenant interactions that support the leasing efforts. The multifamily platform, managed by these teams, delivered 99% occupancy and 9% year-over-year net rent growth in Q3 2025.

Investor Relations website and quarterly earnings calls for capital markets

Capital markets communication flows through formal channels. The Investor Relations section of esrtreit.com is where the latest investor presentation is posted. The Q3 2025 revenue was reported at $197.73 million, beating consensus by 1.4%. Core Funds From Operations (Core FFO) per share for Q3 2025 was $0.23, with the full-year 2025 guidance reaffirmed at $0.83-$0.86 per share. The balance sheet strength is communicated via metrics like the net debt to adjusted EBITDA ratio, which was 5.6x as of September 30, 2025. Furthermore, Empire State Realty Trust, Inc. (ESRT) announced a $175 million senior unsecured notes private placement in October 2025, priced at 5.47%, scheduled to fund on December 18, 2025.

You can see the capital structure context here:

• Total Liquidity (as of Sept 30, 2025): $0.8 billion.
• Cash on Hand (as of Sept 30, 2025): $154 million.
• Available under Revolving Credit Facility (as of Sept 30, 2025): $620 million.
• Total Debt Outstanding (as of Sept 30, 2025): Approximately $2.1 billion.

Finance: draft 13-week cash view by Friday.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Customer Segments

You're looking at the distinct groups Empire State Realty Trust, Inc. (ESRT) serves across its diverse New York City portfolio. It's not just one business; it's several, each with its own set of market dynamics.

The core of the office business targets corporate office tenants seeking high-quality, amenity-rich Manhattan space. As of June 30, 2025, the total commercial portfolio was 89.0% occupied, while the Manhattan office portfolio specifically reached 90.3% occupancy as of the third quarter of 2025. Management is targeting a year-end commercial occupancy rate in the range of 89% to 91% for fiscal year 2025. This segment shows strong pricing power, evidenced by the Manhattan office portfolio achieving its 17th consecutive quarter of positive mark-to-market lease spreads in Q3 2025. The total office space managed is approximately 7.8 million rentable square feet as of June 30, 2025.

Next, you have national and international tourists visiting the Empire State Building. This segment is a major revenue driver, though subject to external pressures. For the quarter ending September 30, 2025, the observatory welcomed 727,000 visitors. Year-to-date through that date, total traffic had fallen by 8%, or 150,000 visitors. The company's full-year 2025 guidance for Observatory Net Operating Income (NOI) was revised to a range of $90 million to $94 million. For context, the Q3 2025 Observatory NOI was $26.5 million.

The retail segment serves retail tenants in prime NYC and Brooklyn locations. This part of the portfolio comprises about 0.8 million rentable square feet as of mid-2025. The leased rate in the retail segment was reported at 90.7% in Q2 2025. A recent example of growth in this segment was the acquisition of a prime retail asset at 86-90 North 6th Street in Williamsburg Brooklyn for a purchase price of $31.0 million in the second quarter of 2025.

Finally, Empire State Realty Trust, Inc. (ESRT) serves multifamily residents in its residential portfolio. This is a smaller, but high-performing segment. As of June 30, 2025, the company held 743 residential units. This portfolio demonstrated robust demand, maintaining 99% occupancy in Q3 2025. Net rent growth for this segment was reported at 9% year-over-year in the third quarter of 2025.

Here's a quick look at the portfolio composition as of mid-2025:

Asset Class	Metric	Latest Reported Figure (2025)
Office Space	Rentable Square Feet (RSF)	7.8 million
Retail Space	Rentable Square Feet (RSF)	0.8 million
Multifamily	Total Units	743
Manhattan Office	Occupancy Rate (Q3 2025)	90.3%
Total Commercial	Occupancy Rate (Q2 2025)	89.0%

The tourist segment's performance is closely watched, especially given the competitive landscape:

• Observatory NOI (Q2 2025): $24.1 million.
• Observatory NOI (Q3 2025): $26.5 million.
• Revised Full-Year 2025 Observatory NOI Guidance: $90 million to $94 million.
• Visitors (Quarter ending Sept 30, 2025): 727,000.
• Year-to-Date Visitor Decline (as of Q3 2025): 8%, or 150,000 visitors.

The multifamily segment provides stability, with its 743 units showing 99% occupancy in Q3 2025.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Cost Structure

You're looking at the core expenses that keep the iconic portfolio of Empire State Realty Trust, Inc. running, especially as operating costs bite into margins. Honestly, the pressure points are clear in the latest figures.

High property operating expenses and real estate taxes, which increased in Q3 2025.

The cost of keeping the lights on and the buildings compliant rose significantly. The third quarter change in Same-Store Property Cash Net Operating Income (NOI) was a decrease of 1.5% year-over-year, which management directly attributed to increases in real estate taxes and property operating expenses. Even when adjusting for non-recurring items, the underlying cost pressure is evident.

Here's a breakdown of the key operating costs reported for the three months ended September 30, 2025 (amounts in thousands):

Expense Category	Q3 2025 Amount (USD)	Q3 2024 Amount (USD)
Total Operating Expenses (GAAP)	$158,397	$154,253
Property operating expenses	$46,957	$45,954
Real estate taxes	$33,241	$31,982
General and administrative expenses	$18,743	$18,372

The year-over-year increase in total operating expenses (GAAP) for Q2 2025 was 4.0%, and for Q2 2025 specifically, operating expenses were up 8.8% year-over-year, showing a clear trend of rising costs.

Significant interest expense on approximately $2.1 billion in total debt.

Servicing the debt load is a major fixed cost. As of September 30, 2025, Empire State Realty Trust, Inc. had total debt outstanding of approximately $2.1 billion. The interest expense for the third quarter of 2025 was ($25,189 thousand), or about $25.19 million. The company reported a weighted average interest rate of 4.34% on that debt as of that date.

Recurring capital expenditures for building modernizations and tenant improvements.

The strategy involves continuous investment to maintain premium status. While the Q3 2025 report noted that expected Capital Expenditures (CapEx) for the full year 2025 were projected to decrease compared to 2024, the focus remains on modernization. The company projects approximately $100 million in cumulative CAPEX savings from 2025 through 2029, which speaks to efficiency in future spending plans.

Marketing and operational costs for the Observatory experience.

The Observatory is a significant cost center, even while generating substantial revenue. For the third quarter of 2025, Observatory expenses totaled $9,510 thousand (or $9.51 million). This operation generated $26.5 million in Net Operating Income (NOI) for the same quarter. Management revised the full-year 2025 Observatory NOI guidance down to a range of $90 million to $94 million.

• Manhattan office occupancy stood at 90.3% at the end of Q3 2025.
• The total commercial portfolio occupancy was 90.0% at the end of Q3 2025.
• The company maintained $0.8 billion of total liquidity as of September 30, 2025, including $620 million available under its revolving credit facility.

Finance: draft 13-week cash view by Friday.

Empire State Realty Trust, Inc. (ESRT) - Canvas Business Model: Revenue Streams

The revenue streams for Empire State Realty Trust, Inc. (ESRT) are anchored by its core real estate holdings, supplemented by the high-margin attraction business at the Empire State Building.

Rental revenue from commercial properties forms the dominant portion of the income. For the third quarter of 2025, this segment accounted for approximately 80.1% of total revenue. With Q3 2025 total revenue reported at $197.73 million, the implied rental revenue for that quarter is approximately $158.38 million (calculated as $197.73 million multiplied by 0.801).

The company's revenue profile for the third quarter of 2025 shows the following key components:

Revenue Component	Metric Type	Amount	Period
Total Revenue	Reported	$197.73 million	Q3 2025
Observatory Net Operating Income (NOI)	NOI	$26.5 million	Q3 2025
Observatory Revenue	Revenue	$33.9 million	Q3 2025
Projected Full-Year Total Revenue	Projection	$766.6 million	FY 2025

Empire State Building Observatory ticket sales provide a significant, albeit volatile, cash flow stream. In the third quarter of 2025, the Observatory generated $26.5 million in Net Operating Income (NOI). The revenue specifically from the Observatory for that same quarter was $33.9 million, with revenue per capita increasing 2.7% year-over-year.

Another component of the top line involves tenant reimbursements for operating expenses and real estate taxes. These reimbursements serve to partially offset rising property costs. For instance, in Q3 2025, higher operating expenses were reported, which were partially offset by higher tenant reimbursement income.

Looking at the full-year outlook, Empire State Realty Trust, Inc. (ESRT) projects its full-year 2025 total revenue to be approximately $766.6 million. The company reaffirmed its 2025 guidance for Observatory NOI to be in the range of $90 million to $94 million.

The revenue streams can be further broken down by the operational segments:

• Commercial Rental Income (Implied from 80.1% of Q3 revenue)
• Observatory Ticket Sales and Related Income
• Tenant Reimbursements for Operating Expenses
• Lease Termination Fees (Non-recurring component)