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Empire State Realty Trust, Inc.

Empire State Realty Trust, Inc.ESRTEarnings & Financial Report

NYSE · Financials · Real Estate Investment Trusts

Empire State Realty Trust is a leading real estate investment trust that owns, manages, and operates a portfolio of premium commercial, residential, and retail properties primarily in the New York City metropolitan area, including the iconic Empire State Building. It serves corporate tenants, retail partners, and residential occupants, focusing on sustainable property operations and long-term asset value growth.

What changed in Empire State Realty Trust, Inc.'s 10-K — 2023 vs 2024

Top changes in Empire State Realty Trust, Inc.'s 2024 10-K

321 paragraphs added · 379 removed · 259 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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We do not consider the balance of our business to be subject to material seasonal fluctuations. Leasing Trend Fluctuations 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.
We do not consider the balance of our business to be subject to material seasonal fluctuations. 8 Leasing Trend Fluctuations 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.
In addition, we will be subject to U.S. federal income tax at the generally applicable corporate tax rate to the extent that we distribute less than 100% of our net taxable income (including net capital gains) and will be subject to a 4% nondeductible excise tax on the amount by which our distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws.
In addition, we will be subject to U.S. federal income tax at the generally applicable corporate tax rate to the extent that we distribute less than 100% of our net taxable income (including net capital gains) and will be subject to a 4% nondeductible excise tax on the 7 amount by which our distributions in any calendar year are less than a minimum amount specified under U.S. federal income tax laws.
For more information about our segments, refer to “Financial Statements - Note 13 Segment Reporting” in this Annual Report on Form 10-K. Rental Revenue We derive revenues primarily from rents, rent escalations, expense reimbursements and other income received from tenants under existing leases at each of our properties.
For more information about our segments, refer to “Financial Statements — Note 13 Segment Reporting” in this Annual Report on Form 10-K. Rental Revenue We derive revenues primarily from rents, rent escalations, tenant expense reimbursements and other income received from tenants under existing leases at each of our properties.
We were organized as a Maryland corporation on July 29, 2011 and commenced operations upon completion of our initial public offering and related formation transactions on October 7, 2013 (the "IPO"). Our operating partnership, Empire State Realty OP, L.P. (the "Operating Partnership"), holds substantially all of our assets and conducts substantially all of our business.
We were organized as a Maryland corporation on July 29, 2011 and commenced operations upon completion of our initial public offering and related formation transactions on October 7, 2013 (the "Offering"). Our operating partnership, Empire State Realty OP, L.P. (the "Operating Partnership"), holds substantially all of our assets and conducts substantially all of our business.
Furthermore, business interruption insurance due to pandemic level or other public health events may not be readily available at commercially acceptable rates. 7 Competition The leasing of real estate is highly competitive in New York City and Stamford, Connecticut where we operate.
Furthermore, business interruption insurance due to pandemic level or other public health events may not be readily available at commercially acceptable rates. Competition The leasing of real estate is highly competitive in New York City and Stamford, Connecticut where we operate.
We have also completed the disposition of non-core assets in our greater New York metropolitan area portfolio, including office assets in Norwalk, CT, White Plains, NY and Harrison, NY, and retail assets in Westport, CT. See ITEM 2. Properties for more information.
We have also completed the disposition of non-core assets in our greater New York metropolitan area portfolio, including office assets in Stamford, CT, Norwalk, CT, White Plains, NY, and Harrison, NY, and retail assets in Westport, CT. See ITEM 2. Properties for more information.
As a result, the certified terrorism coverage provided by ESRT Captive Insurance is eligible for 80% coinsurance provided by the United States Treasury in excess of a statutorily calculated deductible. ESRT Captive Insurance reinsures 100% of its 20% coinsurance for non-NBCR exposures. The 20% coinsurance on NBCR exposures is retained by ESRT Captive Insurance.
As a result, the certified terrorism coverage provided by ESRT Captive Insurance is eligible for 80% coinsurance provided by the United States Treasury in excess of a statutorily calculated deductible. ESRT Captive Insurance 6 reinsures 100% of its 20% coinsurance for non-NBCR exposures. The 20% coinsurance on NBCR exposures is retained by ESRT Captive Insurance.
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.
While certain 5 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.
Tenants seek a compelling value proposition from landlords with a strong balance sheet and low leverage that continue to invest in the improvement of their buildings, and we offer a high-quality experience in high - quality assets at our attractive price point.
Tenants seek a compelling value proposition from landlords with a strong balance sheet and low leverage that invest in the improvement of their buildings, and we offer a high-quality experience in high - quality assets at our attractive price point.
We enhanced health and safety protocols, improved marketing and cross-promotional activities to increase brand awareness, and managed expenses prudently. Our efforts have resulted in strong performance from our Observatory and we experienced continued improvement in Observatory revenue and operating income throughout 2023.
We enhanced health and safety protocols, improved marketing and cross-promotional activities to increase brand awareness, and managed expenses prudently. Our efforts have resulted in strong performance from our Observatory and we experienced continued improvement in Observatory revenue and operating income throughout 2024.
Our properties may contain or develop harmful mold or suffer from other indoor air quality issues, which could lead to liability for adverse health effects or property damage or costs for remediation.
Further, our properties may contain or develop harmful mold or suffer from other indoor air or water quality issues, which could lead to liability for adverse health effects or property damage or costs for remediation.
We have also posted on our website the Audit Committee Charter, Compensation and Human Capital Committee Charter, Finance Committee Charter, Nominating and Corporate Governance Committee Charter, Corporate Governance Guidelines and Code of Business Conduct and Ethics, which govern our directors, officers and employees.
We have also posted on our website the Audit Committee Charter, Compensation Committee Charter, Finance Committee Charter, Nominating and Corporate Governance Committee Charter, Corporate Governance Guidelines and Code of Business Conduct and Ethics, which govern our directors, officers and employees.
We have pioneered certain practices to achieve emissions reduction and energy efficiency, including those described in our Empire Building Playbook, a free guide that we published in partnership with the New York Energy Research Development Authority and the Clinton Global Initiative, for existing commercial buildings to follow our lead and develop a technical and economic pathway to achieve net zero carbon reduction with a proven payback.
We have pioneered 4 certain practices to achieve emissions reduction and energy efficiency, including those described in our Empire Building Playbook, a free guide that we published in partnership with the New York State Energy Research Development Authority and the Clinton Global Initiative, for existing large commercial and multifamily buildings to follow our lead and develop a technical and economic pathway to achieve net zero carbon reduction with a proven payback.
The SEC maintains an Internet site ( http://www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 10
The SEC maintains an Internet site ( http://www.sec.gov ) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 9
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. Human Capital Management As of December 31, 2023, we employed 666 people, of whom approximately 429 are covered by collective bargaining agreements.
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. Human Capital Management As of December 31, 2024, we employed 667 people, of whom approximately 429 are covered by collective bargaining agreements.
Our buildings are fully modernized, well-located near mass transit, well-amenitized, and feature industry leadership in energy efficiency and indoor environmental quality, which helps us to draw consistent leasing volumes through cycles. They also have character.
Our buildings are fully modernized, well-located near mass transit, well-amenitized, and feature industry leadership in energy efficiency and indoor environmental quality, which helps us to draw consistent leasing volumes through cycles.
We are not presently aware of 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.
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.
“Escalations and expense reimbursements” consist of payments made by tenants to us under contractual lease obligations to reimburse a portion of the property operating expenses and real estate taxes incurred at each property.
Tenant expense reimbursements consist of payments made by tenants to us under contractual lease obligations to reimburse a portion of the property operating expenses and real estate taxes incurred at each property.
Additionally, we have entitled land adjacent to one of the Stamford office properties that can support the development of either office or residential per local zoning. Our multifamily portfolio included 727 residential units in New York City.
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.
Seasonality Our Observatory business is subject to tourism trends and weather, and therefore does experience some seasonality. For the year ended December 31, 2023, approximately 17% of our annual Observatory revenue was realized in the first quarter, 26% was realized in the second quarter, 29% was realized in the third quarter, and 28% was realized in the fourth quarter.
Seasonality Our Observatory business is subject to tourism trends and 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 real estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of our commercial and multifamily real estate assets, principally office assets, located in Manhattan. Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building.
Our real estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of our office, retail and multifamily assets principally located in New York City. Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building.
In the current financial environment, we believe our well-positioned balance sheet differentiates us in our efforts to attract brokers and new tenants, who look to partner with financially stable landlords which will invest in their customers and maintain high-quality standards at their assets.
In the current financial environment, we believe our well-positioned balance sheet differentiates us in our efforts to attract brokers and new tenants, who look to partner with financially stable landlords which will invest in their customers and maintain high-quality standards at their assets. Our well-positioned balance sheet has also allowed us to be nimble and recycle and deploy capital.
We offer what we believe to be generally competitive compensation and benefits. To reward and reinforce participation in the Company’s outcomes, we also make equity grants to employees. We regularly review our compensation and benefits against our peers and the industry to remain competitive. 9 We strive to attract, hire and retain diverse candidates who meet our high standards.
To reward and reinforce participation in the Company’s outcomes, we also make equity grants to employees. We regularly review our compensation and benefits against our peers and the industry to remain competitive. We strive to attract, hire and retain candidates who meet our high standards.
Under an exception to this rule, related party rent is treated as qualifying income for purposes of the REIT gross income tests if it is paid by a TRS of the REIT and (i) at least 90% of the leased space in the relevant property is rented to persons other than either TRSs or other related parties of the REIT, and (ii) the amounts paid to the REIT as rent from real property are substantially comparable to the rents paid by unrelated tenants of the REIT for comparable space. 8 Income from admissions to the Empire State Building Observatory, and certain other income generated by the Observatory, would not likely be qualifying income for purposes of the REIT gross income tests.
Under an exception to this rule, related party rent is treated as qualifying income for purposes of the REIT gross income tests if it is paid by a TRS of the REIT and (i) at least 90% of the leased space in the relevant property is rented to persons other than either TRSs or other related parties of the REIT, and (ii) the amounts paid to the REIT as rent from real property are substantially comparable to the rents paid by unrelated tenants of the REIT for comparable space.
We believe our well-positioned balance sheet, access to capital, and expertise in redevelopment gives us significant flexibility to structure and pursue attractive investment opportunities. Since December 2021, we have completed acquisitions of three multifamily properties in Manhattan and a retail asset in the Williamsburg neighborhood of Brooklyn, NY.
We believe our well-positioned balance sheet, access to capital, and expertise in redevelopment gives us significant flexibility to structure and pursue attractive investment opportunities. Since December 2021, we have completed acquisitions of three multifamily properties in Manhattan and a collection of prime retail assets on North 6 th Street in the Williamsburg neighborhood of Brooklyn, NY.
In 2020, we reprogrammed our Observatory business to operate by reservations only, created a new focus on customer experience and reduction of crowds and lines, with an emphasis on growing revenue per visitor, and matched our hours of operation to the reservations demand to manage expenses.
In December 2019, we completed the Observatory’s comprehensive multi-year reimagination and redevelopment. In 2020, we reprogrammed our Observatory business to operate by reservations only, created a new focus on customer experience and reduction of crowds and lines, with an emphasis on growing revenue per visitor, and matched our hours of operation to the reservations demand to manage expenses.
Nine of these office properties are located in midtown Manhattan and encompass approximately 7.6 million rentable square feet, including the Empire State Building. The remaining two office properties encompass approximately 1.1 million rentable square feet and are located in Stamford, Connecticut, with immediate access to mass transportation.
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.
The reduced energy consumption and emissions lower costs for us and our tenants, and we believe creates a competitive advantage for our properties. We believe that higher quality tenants prioritize sustainability, cost reduction, and lower contributions to greenhouse gas emissions. 4 Business Segments Our reportable segments consist of a real estate segment and an Observatory segment.
The reduced energy consumption and emissions lower costs for us and our tenants, and we believe creates a competitive advantage for our properties. Business Segments Our reportable segments consist of a real estate segment and an Observatory segment.
As of December 31, 2023, we owned approximately 60.2% of the aggregate operating partnership units in the Operating Partnership.
As of December 31, 2024, we owned approximately 61.1% of the aggregate operating partnership units in the Operating Partnership.
ITEM 1. BUSINESS Overview Empire State Realty Trust, Inc. (NYSE: ESRT) is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The Company is a recognized leader in energy efficiency and indoor environmental quality.
ITEM 1. BUSINESS Overview Empire State Realty Trust, Inc. (NYSE: ESRT) is 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.
Our well-positioned balance sheet has also allowed us to be nimble and recycle capital as well as repurchase shares. Achieve Sustainability Goals We are recognized as a leader in the real estate industry in sustainability, and we focus on net zero emissions, energy efficiency, water use reduction, indoor environmental quality, and healthy buildings.
Achieve Sustainability Goals We are recognized as a leader in the real estate industry in sustainability, and we focus on net zero emissions, energy efficiency, water use reduction, waste reduction, indoor environmental quality, and healthy buildings.
We self-manage all of our office and retail properties, and we use a third-party property manager to manage our multifamily properties. We proactively manage our office properties and rent rolls to create efficient, modern, pre-built offices that can be rented through several lease cycles and attract high credit-quality tenants. We manage and control operating expenses at all of our properties.
We proactively manage our office properties and rent rolls to create efficient, modern, pre-built offices that can be rented through several lease cycles and attract high credit-quality tenants. We manage and control operating expenses at all of our properties. In addition, we have made energy efficiency retrofitting and sustainability a portfolio-wide initiative driven by economic return.
As of December 31, 2023, our portfolio is comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units. Our office portfolio included 11 properties (including three long-term ground leasehold interests) encompassing approximately 8.6 million rentable square feet.
The Company is a recognized leader in energy efficiency and indoor environmental quality. As of December 31, 2024, our portfolio was comprised of approximately 7.8 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).
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.
The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect. Environmental Matters Our properties are subject to various laws, ordinances and regulations, and we may be liable for the costs of remediating environmental contamination.
We were also selected for inclusion in the Bloomberg Gender Equality Index in 2022 and 2023. Offices Our principal executive offices are located at 111 West 33rd Street, 12th floor, New York, New York 10120. We also have additional regional leasing and property management offices in Manhattan and Stamford, Connecticut.
We believe our public recognition demonstrates the strength of our program. We were Great Place to Work-Certified in both 2023 and 2024. Offices Our principal executive offices are located at 111 West 33rd Street, 12th floor, New York, New York 10120. We also have additional regional leasing and property management offices in Manhattan and Stamford, Connecticut.
ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, the #1 attraction in the U.S. in Tripadvisor’s Travelers’ Choice Awards: Best of the Best for two consecutive years .
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.
We do extensive diligence on our tenants' financial prospects, businesses and business models to determine if we think there is potential to establish long-term relationships in which they will both renew with us and expand over time. Since the Offering, we have completed 277 expansions with existing tenants which total 2.6 million square feet within our portfolio.
Our focus on performance and long-term perspective allows us to concentrate on the ongoing management of our portfolio, while we concurrently seek opportunities for growth in the future. 3 We do extensive diligence on our tenants' financial prospects, businesses and business models to determine if we think there is potential to establish long-term relationships in which they will both renew with us and expand over time.
The quality of our commercial portfolio contributed to a strong leasing year in 2023; we leased 951,000 square feet of space and made meaningful absorption progress with a 130 basis point increase in Manhattan office occupancy and a 250 basis point increase in Manhattan leased rate throughout the year.
The quality of our commercial portfolio contributed to a strong leasing year in 2024; we leased 1,324,824 square feet of space, including "Early Renewals" which are leases signed over two years prior to the lease expiration, and made meaningful absorption progress with a 130 basis point increase to 89.0% in Manhattan office occupancy, excluding storage and broadcasting and a 160 basis point increase to 94.2% in Manhattan leased rate throughout the year.
We invest in employee training, including certain programs which are mandatory for all employees, and other programs which are voluntary and self-directed on platforms provided by the Company.
We invest in employee training, including certain programs which are mandatory for all employees, and other programs which are voluntary and self-directed on platforms provided by the Company. We also regularly assess the performance and potential of our workforce, review our succession plans and create robust developmental action plans to grow our employees and prepare them for internal promotional opportunities.
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. 5 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.
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.
We generally have and expect to continue to maintain good relations with our employees and workforce, including those employees covered by collective bargaining agreements. We believe that our success is realized through the attraction, retention, development, engagement and empowerment of our highly-valued and diverse employees, and we endeavor to set our policies and practices accordingly.
We believe that our success is realized through the attraction, retention, development, engagement and empowerment of our highly-valued employees with a wide range of experiences and perspectives, and we endeavor to set our policies and practices accordingly. We offer what we believe to be generally competitive compensation and benefits.
Our comprehensive building management services and our strong commitment to tenant and broker relationships and satisfaction enable us to negotiate attractive leasing deals, which attracts and retains high credit-quality tenants. We proactively manage our 3 rent roll, foster strong tenant relationships, maintain continuous communication with our tenants, and are responsive to tenant needs.
Since the initial public offering, we have completed 299 expansions with existing tenants which total 3.0 million square feet within our portfolio. Our comprehensive building management services and our strong commitment to tenant and broker relationships and satisfaction enable us to negotiate attractive leasing deals, which attracts and retains high credit-quality tenants.
Sell Tickets to the Empire State Building Observatory The Empire State Building offers panoramic views of New York and neighboring states from its world-famous 86th and 102nd floor observatories. In December 2019, we completed the Observatory’s comprehensive multi-year reimagination and redevelopment.
We pass on cost savings achieved by such improvements to our tenants through lower utility costs and reduced operating expense escalations. Sell Tickets to the Empire State Building Observatory The Empire State Building offers panoramic views of New York and neighboring states from its world-famous 86th and 102nd floor observatories.
We believe the success of our long-term tenant relationships improves our operating results over time by reducing leasing, marketing and tenant improvement costs, as well as tenant turnover. We regularly monitor our properties, perform routine preventive maintenance, and implement capital improvement programs in connection with property redevelopment and life cycle replacement of equipment and systems to protect our investments.
We regularly monitor our properties, perform routine preventive maintenance, and implement capital improvement programs in connection with property redevelopment and life cycle replacement of equipment and systems to protect our investments. We self-manage all of our office and retail properties, and we use a third-party property manager to manage our multifamily properties.
We believe that our consistent, open dialogue with our tenants and brokers enables us to maximize our results. Our focus on performance and long-term perspective allows us to concentrate on the ongoing management of our portfolio, while we concurrently seek opportunities for growth in the future.
We believe that our consistent, open dialogue with our tenants and brokers enables us to maximize our results.
We had approximately 2.6 million visitors in 2023 as compared to 0.5 million in 2020, 0.8 million in 2021 and 2.2 million in 2022. Additionally, the Empire State Building Observatory was ranked the # 1 attraction in the United States in Tripadvisor's Travelers’ Choice Awards: Best of the Best for two consecutive years.
We had approximately 2.6 million visitors in 2024 and 2023 as compared to 2.2 million in 2022 and 0.8 million in 2021.
We are not presently aware of any material liabilities related to building conditions, including any instances of material non-compliance with asbestos requirements or any material liabilities related to asbestos.
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. See "Risk Factors — We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease and/or sell real estate" for more information.
We are diversified and we believe we benefit from New York City’s rebound from our office, Observatory, retail, and multifamily exposure in the city. We have a dedicated investment function to identify potential investment opportunities, which includes our Chief Investment Officer and a full acquisitions team.
Enhance Shareholder Value We enhance shareholder value primarily through the execution of our priorities to lease space, sell tickets to the Observatory, manage our balance sheet, and achieve our sustainability goals. We are diversified and we believe we benefit from New York City’s rebound from our office, Observatory, retail, and multifamily exposure in the city.
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In addition, we have made energy efficiency retrofitting and sustainability a portfolio-wide initiative driven by economic return. We pass on cost savings achieved by such improvements to our tenants through lower utility costs and reduced operating expense escalations. We believe these initiatives make our properties more desirable to a broader tenant base than the properties of our competitors.
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We proactively manage our rent roll, foster strong tenant relationships, maintain continuous communication with our tenants, and are responsive to tenant needs. We believe the success of our long-term tenant relationships improves our operating results over time by reducing tenant turnover and associated costs.
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Enhance Shareholder Value We enhance shareholder value primarily through the execution of our capital allocation strategy, maintenance of our balance sheet flexibility and enhanced transparency and disclosure. As it relates to capital allocation strategy, we (i) opportunistically recycle our capital, (ii) make selective, value-enhancing acquisitions and (iii) reinvest in our own shares through share repurchases.
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Additionally, the Empire State Building Observatory 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.
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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.
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See "Risk Factors — We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease and/or sell real estate" for more information.
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These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence or release of such materials, and the liability may be joint and several.
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See "Risk Factors — We may incur significant costs to comply with environmental laws, for example New York City’s Local Law 97" for more information. As the owner or operator of real property, we may also incur liability based on various building conditions.
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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.
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See "Risk Factors — We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease and/or sell real estate" for more information.
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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.
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Income from admissions to the Empire State Building Observatory, and certain other income generated by the Observatory, would not likely be qualifying income for purposes of the REIT gross income tests.
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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.
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We generally have and expect to continue to maintain good relations with our employees and workforce, including those employees covered by collective bargaining agreements.
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Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination.
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Releases from these properties could impact our properties.
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Our property situated at 500 Mamaroneck Avenue in Harrison, New York was the subject of a voluntary remedial action work cleanup plan under an agreement with the New York State Department of Environmental Conservation, but we sold this property in April 2023 and the obligations have been transferred to the buyer.
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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.
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Moreover, changes in laws could increase the potential costs of compliance with such laws and regulations or increase liability for noncompliance. This may result in significant unanticipated expenditures. 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.
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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.
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In particular, as the owner of large commercial 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 building establishes annual limits for greenhouse gas emissions, requires yearly emissions reports beginning in May 2025, and imposes penalties for emissions above such limits.
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Based upon our present understanding of the law and calculations related thereto, we expect to pay no fine on any building in our commercial portfolio in the 2024-2029 first period of enforcement. As the owner or operator of real property, we may also incur liability based on various building conditions.
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For example, environmental site assessments and investigations 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 those we acquire or operate in the future contain, may contain, or may have contained ACM.
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Refer to “Financial Statements - Note 9 Commitments and Contingencies - Asset Retirement Obligations” in this Annual Report on Form 10-K. 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.
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These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during maintenance, redevelopment or demolition of a building, potentially resulting in substantial costs. 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.
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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.
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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.
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As a result, the presence of significant mold or 6 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 contaminants from the affected property or increase indoor ventilation.
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In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs. We are not presently aware of any material adverse indoor air quality issues at our properties.
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We also regularly assess the performance and potential of our diverse workforce, review our succession plans and create robust developmental action plans to grow our employees and prepare them for internal promotional opportunities. We believe our public recognition demonstrates the strength of our program. As of February 2023, we are Great Place to Work-Certified.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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In addition, if a like-kind exchange was later to be determined to be taxable, we may be required to amend our tax returns for the applicable year in question, including any information reports we sent our shareholders. We could also be subject to significant indemnity obligations if the applicable property was subject to a tax protection agreement.
In addition, if a like-kind exchange was later determined to be taxable, we may be required to amend our tax returns for the applicable year in question, including any information reports we sent our shareholders. We could also be subject to significant indemnity obligations if the applicable property was subject to a tax protection agreement.
High mortgage rates and/or unavailability of mortgage debt may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions we can make. If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties.
High mortgage rates and/or unavailability of mortgage debt may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our net income and the amount of cash distributions. If mortgage debt is unavailable at reasonable rates, we may not be able to finance the purchase of properties.
These obligations may restrict our ability to engage in a strategic transaction, require us to maintain more or different debt, and/or inhibit our disposing of a property that we might judge to be otherwise be in the best interest of the securityholders.
These obligations may restrict our ability to engage in a strategic transaction, require us to maintain more or different debt, and/or inhibit our disposing of a property that we might judge to otherwise be in the best interest of the securityholders.
Our failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of our Class A common stock and traded OP units. Changes in market conditions could adversely affect the market price of our Class A Common Stock and traded OP Units.
Our failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of our Class A common stock and traded OP units. Changes in market conditions could adversely affect the market price of our Common Stock and traded OP Units.
Although we monitor the aggregate value of the securities of such TRSs and intend to conduct our affairs so that such securities will represent less than 20% of the value of our total assets, and such securities taken together with other non-qualifying assets will represent less than 25% of the value of our total assets, at the end of each calendar quarter, there can be no assurance that we will be able to comply with the TRS limitations in all market conditions. 21 Our state and local taxes could increase due to property tax rate changes, reassessment and/or changes in state and local tax laws, which could materially and adversely affect us.
Although we monitor the aggregate value of the securities of such TRSs and intend to conduct our affairs so that such securities will represent less than 20% of the value of our total assets, and such securities taken together with other non-qualifying assets will represent less than 25% of the value of our total assets, at the end of each calendar quarter, there can be no assurance that we will be able to comply with the TRS limitations in all market conditions. 20 Our state and local taxes could increase due to property tax rate changes, reassessment and/or changes in state and local tax laws, which could materially and adversely affect us.
In the future we may acquire properties through tax deferred contribution transactions in exchange for partnership interests in our operating partnership, which may result in dilution to securityholders, reduction of tax depreciation we could deduct over the tax life of the acquired properties (as compared with an acquisition paid in cash), and requirements to protect the contributors’ tax deferral through restrictions on our disposition of the acquired properties and/or maintenance and allocation of partnership debt to the contributors to maintain their tax bases.
In the future we may acquire properties through tax deferred contribution transactions in exchange for partnership 13 interests in our operating partnership, which may result in dilution to securityholders, reduction of tax depreciation we could deduct over the tax life of the acquired properties (as compared with an acquisition paid in cash), and requirements to protect the contributors’ tax deferral through restrictions on our disposition of the acquired properties and/or maintenance and allocation of partnership debt to the contributors to maintain their tax bases.
If the terms of the renewal or re-leasing are less favorable than current terms, or we fail to re-lease such spaces at all, our business, results of operations, cash flow and financial condition will be negatively affected. The short-term nature of multifamily leases exposes us more quickly to the effects of declining market rents, potentially making our revenue more volatile.
If the terms of the renewal or re-leasing are less favorable than current terms, or we fail to re-lease such spaces at all, our business, results of operations, cash flow and financial condition will be negatively affected. 11 The short-term nature of multifamily leases exposes us more quickly to the effects of declining market rents, potentially making our revenue more volatile.
Any future health or other economic crises, geopolitical 13 events (including global hostilities) or currency exchange rate fluctuations could negatively impact tourist trends and visitor demand for our Observatory, which could have a material adverse effect on our business, results of operations, cash flow and financial condition. We are also susceptible to reductions in visitor demand due to adverse weather.
Any future health or other economic crises, geopolitical events (including global hostilities) or currency exchange rate fluctuations could negatively impact tourist trends and visitor demand for our Observatory, which could have a material adverse effect on our business, results of operations, cash flow and financial condition. We are also susceptible to reductions in visitor demand due to adverse weather.
Our charter also provides that no person can directly or indirectly own shares of our capital stock to the extent such ownership would result in us owning (directly or indirectly) an interest in one of our tenants if the income derived by us from such tenant would reasonably be expected to equal or exceed the lesser of 1% of our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income tests.
Our charter also provides that no person can directly or indirectly own shares of our capital stock to the extent such ownership would result in us 22 owning (directly or indirectly) an interest in one of our tenants if the income derived by us from such tenant would reasonably be expected to equal or exceed the lesser of 1% of our gross income or an amount that would cause us to fail to satisfy any of the REIT gross income tests.
Development subjects us to risks beyond our control, which could have a material adverse effect on our financial condition, including, without limitation, the availability and pricing of financing; availability and timing of zoning and other approvals; occupancy rates and rents; construction costs and delays, whether due to weather, labor conditions, material shortages or otherwise, and timely lease-up.
Development subjects us to risks beyond our control, which could have a material adverse effect on our financial condition, including, without limitation, the availability and pricing of financing; availability and timing of zoning and other approvals; occupancy rates and rents; construction costs and delays, whether due to weather, labor conditions, material shortages, tariffs or otherwise, and timely lease-up.
In the future, 16 we may be unable to obtain insurance with insurers that satisfy the rating requirements in our agreements, which could give rise to a default under such agreements and/or impair our ability to refinance. We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease and/or sell real estate.
In the future, we may be unable to obtain insurance with insurers that satisfy the rating requirements in our agreements, which could give rise to a default under such agreements and/or impair our ability to refinance. We may incur significant costs to comply with environmental laws, and environmental contamination may impair our ability to lease and/or sell real estate.
Our access to third-party sources of capital depends, in part, on general economic and market conditions, including the cost and availability of credit, government action or inaction and its effect on the state of the capital markets, the market’s perception of our growth potential, as well as our then current financial condition.
Additionally, our access to third-party sources of capital depends, in part, on general economic and market conditions, including the cost and availability of credit, government action or inaction and its effect on the state of the capital markets, the market’s perception of our growth potential, as well as our then current financial condition.
We intend to make distributions to holders of shares of our common stock and holders of operating partnership units. All dividends and distributions will be made at the discretion of our board and will depend on our earnings, financial condition, maintenance of REIT qualification and other factors as our board may deem relevant from time to time.
We intend to make distributions to holders of our common stock and holders of operating partnership units. All dividends and distributions will be made at the discretion of our board and will depend on our earnings, financial condition, maintenance of REIT qualification and other factors as our board may deem relevant from time to time.
Refer to Part I, ITEM 1, “Business – Our Tax Status” for more information. In order to satisfy the gross income or asset tests applicable to REITs under the Code, we may be required to forego investments that we otherwise would make or liquidate otherwise attractive investments.
Refer to Part I, ITEM 1, “Business – Our Tax 19 Status” for more information. In order to satisfy the gross income or asset tests applicable to REITs under the Code, we may be required to forego investments that we otherwise would make or liquidate otherwise attractive investments.
Foreclosures could also trigger our obligations under tax protection agreements with certain legacy investors to indemnify them for certain taxes upon sale of specific properties where they had embedded phantom taxable income (or the failure to maintain certain levels of indebtedness).
Foreclosures could also trigger our obligations under tax protection agreements with certain legacy investors to indemnify them 14 for certain taxes upon sale of specific properties where they had embedded phantom taxable income (or the failure to maintain certain levels of indebtedness).
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.
Some of our properties have been or 15 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.
This significant voting influence over certain matters may have the effect of delaying, preventing or deterring a change of control of our Company, or could deprive holders of our Class A common stock of an opportunity to receive a premium for their Class A common stock as part of a sale of our Company.
This significant voting influence over certain matters may have the effect of delaying, preventing or deterring a change of control of 21 our Company, or could deprive holders of our Class A common stock of an opportunity to receive a premium for their Class A common stock as part of a sale of our Company.
The market value of our common stock is based on a number of factors, including, but not limited to, the market’s perception of the current and future value of our assets, our growth potential and our current and potential future earnings and distributions. 24 The future exercise of registration rights may adversely affect the market price of our common stock.
The market value of our common stock is based on a number of factors, including, but not limited to, the market’s perception of the current and future value of our assets, our growth potential and our current and potential future earnings and distributions. The future exercise of registration rights may adversely affect the market price of our common stock.
In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins. In addition, our cost of labor and materials has and may in the future further increase.
In a highly inflationary environment, we may be unable to raise rental rates at or above the rate of inflation, which could reduce our profit margins. In addition, our cost of labor and materials has and may in the future increase.
If we were to fail to qualify, gain realized by a foreign investor (other than a “qualified shareholder,” a “qualified foreign pension fund” or a “qualified controlled entity”) on a sale of our common stock would be subject to FIRPTA unless (a) our common stock was traded on an established securities market and the foreign investor did not at any time during a specific testing period directly or indirectly own more than 10% of the value of our outstanding common stock, or (b) another exemption from FIRPTA were applicable.
If we were to fail to qualify, gains realized by a foreign investor (other than a “qualified shareholder,” a “qualified foreign pension fund” or a “qualified controlled entity”) on a sale of our common stock would be subject to FIRPTA unless (a) our common stock was traded on an established securities market and the foreign investor did not at any time during a specific testing period directly or indirectly own more than 10% of the value of our outstanding common stock, or (b) another exemption from FIRPTA were applicable.
Future issuances of debt or equity securities or preferred units may be dilutive to current securityholders and may materially adversely affect the market price of our traded securities. In the future, we may issue debt or equity securities or make other borrowings.
Future issuances of debt or equity securities or preferred units may be dilutive to current securityholders and may materially adversely affect the market price of our traded securities. We may issue debt or equity securities or make other borrowings.
Malkin has the ability to influence the outcome of matters presented to our securityholders, including the election of our board and approval of significant corporate transactions, 22 including business combinations, consolidations and mergers and the determination of our day-to-day corporate and management policies.
Malkin has the ability to influence the outcome of matters presented to our securityholders, including the election of our board and approval of significant corporate transactions, including business combinations, consolidations and mergers and the determination of our day-to-day corporate and management policies.
Our failure to maintain satisfactory labor relations could materially and adversely affect us. As of December 31, 2023, we have collective bargaining agreements that cover 429 employees, or 64% of our workforce, that service our portfolio. Our inability to negotiate acceptable renewals as existing agreements expire could result in strikes or work stoppages and disrupt our operations.
Our failure to maintain satisfactory labor relations could materially and adversely affect us. As of December 31, 2024, we have collective bargaining agreements that cover 429 employees, or 64% of our workforce, that service our portfolio. Our inability to negotiate acceptable renewals as existing agreements expire could result in strikes or work stoppages and disrupt our operations.
During 2020, 2021, 2022 and 2023, visitor volume was 0.5 million, 0.8 million, 2.2 million and 2.6 million, respectively, compared to 3.5 million in 2019.
During 2020, 2021, 2022, 2023 and 2024, visitor volume was 0.5 million, 0.8 million, 2.2 million, 2.6 million, and 2.6 million, respectively, compared to 3.5 million in 2019.
If we place mortgage debt on properties, we may be unable to refinance the properties when the loans become due at comparable terms. This may result in reduced cash flows and hinder our ability to make distributions, and to raise more capital by issuing more stock or by borrowing more money.
If we place mortgage debt on properties, we may be unable to refinance the properties when the loans become due at comparable terms, which may result in reduced cash flows and hinder our ability to make distributions, and to raise more capital by issuing stock or borrowing money.
Any failure to do so will incur substantial entity level tax and/or disqualification as a REIT with the adverse tax consequences and limits on re-qualification described above in this "Risk Factors" section. In addition, our taxable income may exceed our net income as determined by GAAP.
Any failure to do so will incur substantial entity level tax and/or disqualification as a REIT with the adverse tax consequences and limits on re-qualification described above in this section. In addition, our taxable income may exceed our net income as determined by GAAP.
Recent government regulations may materially and adversely affect our broadcast revenue by reducing the demand for broadcast licenses through making more spectrum available for wireless broadband service providers. The impairment of a significant portion of goodwill could negatively affect our results of operations and financial condition.
Government regulations may materially and adversely affect our broadcast revenue by reducing the demand for broadcast licenses by making more spectrum available for wireless broadband service providers. The impairment of a significant portion of goodwill could negatively affect our results of operations and financial condition.
Our balance sheet included goodwill of approximately $491.5 million at December 31, 2023, consisting primarily of goodwill associated with our acquisition of the controlling interest in Empire State Building Company L.L.C. and 501 Seventh Avenue Associates L.L.C.
Our balance sheet included goodwill of approximately $491.5 million at December 31, 2024, consisting primarily of goodwill associated with our acquisition of the controlling interest in Empire State Building Company L.L.C. and 501 Seventh Avenue Associates L.L.C.
Risks Related to our Common Stock and Traded OP Units Our cash available for distribution may not be sufficient to make distributions at expected levels, and the market price of shares of our Class A common stock and traded OP units could be adversely affected by our level of cash distributions.
Risks Related to our Common Stock and Traded OP Units Our cash available for distribution may not be sufficient to make distributions at expected levels, and the market price of shares of our common stock and traded OP units could be adversely affected by our level of cash distributions.
For example, we have entered into such a waiver with QIA, which permits QIA to own up to 15% of the outstanding shares of our Class A common stock and an aggregate amount of Class A common stock equal to a 9.9% fully diluted economic interest in the Company (inclusive of all outstanding common OP units and LTIP units), which currently equals approximately 18.45% of our outstanding Class A common stock, all subject to a supplementary waiver which may adjust the foregoing limits to the extent QIA’s ownership percentage increases solely as a result the Company’s share buybacks.
For example, we have entered into such a waiver with QIA, which permits QIA to own up to 15% of the outstanding shares of our Class A common stock and an aggregate amount of Class A common stock equal to a 9.9% fully diluted economic interest in the Company (inclusive of all outstanding common OP units and LTIP units), which currently equals approximately 17.97% of our outstanding Class A common stock, all subject to a supplementary waiver which may adjust the foregoing limits to the extent QIA’s ownership percentage increases solely as a result the Company’s share buybacks.
Therefore, additional shares of our common stock issuances, directly or through convertible or exchangeable securities (including operating partnership units), warrants or options, will dilute the holdings of our existing common securityholders and such issuances or the perception of such issuances may reduce the market price of shares of our common stock.
Therefore, additional shares of our common stock issuances, directly or through convertible or exchangeable securities (including operating partnership units), will dilute the holdings of our existing common securityholders and such issuances or the perception of such issuances may reduce the market price of shares of our common stock.
New laws and regulations related to data privacy and security pose increasingly complex compliance challenges and costs across multiple jurisdictions, which could negatively impact our business, financial condition and results of operations. 19 The adoption of, or changes, in rent control or rent stabilization regulations and eviction regulations in our markets could have an adverse effect on our operations and property values.
New laws and regulations related to data privacy and security pose increasingly complex compliance challenges and costs across multiple jurisdictions, which could negatively impact our business and financial condition. 18 The adoption of or changes in rent control or rent stabilization regulations and eviction regulations in our markets could have an adverse effect on our operations and property values.
We compete against existing observatories in New York City at the World Trade Center, Rockefeller Center, Hudson Yards, and One Vanderbilt, all of which may divert visitors and negatively impact our revenue.
We compete against other observatories in New York City at the World Trade Center, Rockefeller Center, Hudson Yards, and One Vanderbilt, all of which may divert visitors and negatively impact our revenue.
While we intend to continue to qualify as a “domestically controlled” REIT for purposes of the Foreign Investment in Real Property Tax Act of 1980, we cannot assure that result, as our Class A common stock is publicly traded, QIA (a non-U.S. holder) owns approximately 18.45% of our common stock and other non-U.S. holders may now or in the future hold additional shares.
While we intend to continue to qualify as a “domestically controlled” REIT for purposes of the Foreign Investment in Real Property Tax Act of 1980, we cannot assure that result, as our Class A common stock is publicly traded, QIA (a non-U.S. holder) owns approximately 17.97% of our common stock and other non-U.S. holders may now or in the future hold additional shares.
The concentration of our voting power may adversely affect the ability of new investors to influence our policies. As of December 31, 2023, our Chairman and Chief Executive Officer, Anthony E.
The concentration of our voting power may adversely affect the ability of new investors to influence our policies. As of December 31, 2024 , our Chairman and Chief Executive Officer, Anthony E.
Our change in operations of the Empire State Building Observatory to focus on capacity controls to maximize the customer experience, require reservations to control overcrowding and staffing costs, and our increase of per visitor pricing may cause our future Observatory results to differ from previous Observatory results.
Our change in operations of the Observatory to focus on capacity controls to maximize the customer experience, require reservations to control overcrowding and staffing costs, and our increase of per visitor pricing may cause our future Observatory results to differ from previous Observatory results.
In particular, as 17 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 building establishes annual limits for greenhouse gas emissions, requires yearly emissions reports beginning in May 2025 for full calendar year 2024, and imposes penalties for emissions above such limits.
In particular, as the owner of large covered 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 compliance reports beginning in May 2025 for calendar year 2024 performance, and imposes penalties for emissions above such limits.
Additionally, for fiscal years ended December 31, 2021, 2022 and 2023, we derived revenue of approximately $41.5 million, $106.0 million and $129.4 million, respectively from the Empire State Building’s Observatory operations. Loss of revenue from the Observatory has in the past and may in the future have a material adverse impact on our results of operations and financial condition.
Additionally, for fiscal years ended December 31, 2024, 2023 and 2022, we derived revenue of approximately $136.4 million, $129.4 million and $106.0 million, respectively, from the Empire State Building’s Observatory operations. Loss of revenue from the Observatory has in the past and may in the future have a material adverse impact on our results of operations and financial condition.
We may be unable to renew leases or re-lease vacant space on favorable terms or at all as leases expire. As of December 31, 2023, we had approximately 0.9 million rentable square feet of vacant space in our office and retail properties.
We may be unable to renew leases or re-lease vacant space on favorable terms or at all as leases expire. As of December 31, 2024, we had approximately 0.6 million rentable square feet of vacant space in our office and retail properties.
Upon liquidation, holders of our debt securities, preferred units and other loans and preferred shares will receive a distribution of our available assets before holders of shares of our common stock. We are not required to offer any such additional debt or equity securities to existing securityholders on a preemptive basis.
Upon liquidation, holders of our debt securities and other loans and preferred equity holders will receive a distribution of our available assets before holders of our common stock. We are not required to offer additional debt or equity securities to existing securityholders on a preemptive basis.
In addition, leases representing 5.4% and 6.4% of the square footage of the office and retail properties in our commercial portfolio will expire in 2024 and 2025, respectively. We cannot be assured that leases scheduled to expire will be renewed or that our properties will be re-leased at net effective rental rates at or above the current average.
In addition, leases representing 6.5% and 8.2% of the square footage of the office and retail properties in our commercial portfolio will expire in 2025 and 2026, respectively. We cannot be assured that leases scheduled to expire will be renewed or that our properties will be re-leased at net effective rental rates at or above the current average.
Based upon our present understanding of the law and calculations related thereto, we expect to pay no fine on any building in our commercial portfolio in the 2024-2029 first period of enforcement. Risks Relating to Human Capital Management The departure of any of our key personnel could materially and adversely affect us.
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. Risks Relating to Human Capital Management The departure of any of our key personnel could materially and adversely affect us.
See “Forward-Looking Statements.” Risks Related to Our Business and Properties Risks Relating to Portfolio Concentration Our properties are geographically concentrated in New York and Connecticut, and adverse state or local economic or regulatory developments could have a material adverse effect on our business, results of operations, cash flow and financial condition.
See “Forward-Looking Statements.” Risks Related to Our Business and Properties Risks Relating to Portfolio Concentration Our properties are geographically concentrated in New York and Connecticut, and adverse state or local economic or regulatory developments could have a material adverse effect on our business and financial condition.
Increasing attention to sustainability matters may impact our business. Increasing attention to sustainability matters, including those related to climate change, and increasing societal, investor and legislative pressure on companies to address sustainability matters may result in increased costs, greater litigation risks, negative impacts on our access to capital markets, and damage to our reputation.
Increasing attention to sustainability matters may impact our business. Increasing societal, investor and legislative pressure on companies to address sustainability matters may result in increased costs, greater litigation risks, negative impacts on our access to capital markets, and damage to our reputation.
In addition, our processes and controls may not always align with evolving voluntary standards for identifying, measuring, and reporting sustainability metrics, our interpretation of reporting standards may differ from those of others, and such standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.
In addition, our processes and controls may not always align with evolving standards, our interpretation of reporting standards may differ from those of others, and such standards may change over time, any of which could result in significant revisions to our goals or reported progress in achieving such goals.
Additionally, with increased employer flexibility to work from home, current and prospective residents may be less likely to live in dense urban centers or multifamily housing like the properties we own. If these trends continue, it could impair demand and value at our properties.
Additionally, with increased employer flexibility to work from home, current and prospective residents may be less likely to live in dense urban centers or multifamily housing like the properties we own. These trends have impacted our results of operations since the pandemic. If these trends continue, it could impair demand and value at our properties.
Our revenues declined significantly in 2020, 2021 and 2022, compared to 2019, as a result of the pandemic and government mandated closures and a slow ramp-up in visitor volume after reopening in July 2020, in large part due to travel restrictions.
Our revenues declined significantly in 2020, 2021 and 2022, compared to 2019, as a result of the pandemic and government mandated closures and a slow ramp-up in visitor volume after reopening in July 2020, in large part due to travel restrictions. Our visitor volume has not yet fully returned to 2019 levels.
Our growth depends on external sources of capital that are outside of our control. 15 Because of the distribution requirements to maintain our status as a REIT (See Part I, ITEM 1, “Business - Our Tax Status”), we may not be able to fund future capital needs, including any acquisition financing, from operating cash flow and may need to rely on third-party sources.
Because of the distribution requirements to maintain our status as a REIT (See Part I, ITEM 1, “Business — Our Tax Status”), we may not be able to fund future capital needs, including any acquisition financing, from operating cash flow and may need to rely on third-party sources.
As of December 31, 2023, our five largest tenants together represented approximately 15.9% of our total commercial portfolio’s annualized rent, with our largest tenant leasing an aggregate of 0.5 million rentable square feet of office space at one of our office properties, representing approximately 5.4% of our total commercial portfolio rentable square feet and approximately 6.2% of our total commercial portfolio annualized rent.
As of December 31, 2024, our five largest tenants together represented approximately 16.5% of our total commercial portfolio’s annualized rent, with our largest tenant leasing an aggregate of 0.5 million rentable square feet of office space at one of our office properties, representing approximately 5.4% of our total commercial portfolio rentable square feet and approximately 6.1% of our total commercial portfolio annualized rent.
If we were not able to treat the rent that our operating partnership receives from Observatory TRS as qualifying income for purposes of the REIT gross income tests, we would be required to restructure the manner in which we operate the Observatory, which would likely require us to cede operating control of the Observatory by leasing the Observatory to an affiliate or third-party operator.
If we were not able to treat the rent that our operating partnership receives from Observatory TRS as qualifying income, we would be required to restructure how we operate the Observatory, which would likely require us to cede operating control of the Observatory by leasing the Observatory to an affiliate or third-party operator.
If we were not able to treat the license fees that our operating partnership will receive from the license agreements described above as qualifying income for purposes of the REIT gross income tests, we would be required to enter into the license agreements described above through a TRS, which would cause the license fees to be subject to U.S. federal income tax and accordingly reduce the amount of our cash flow available to be distributed to our securityholders.
If we were not able to treat our broadcast license fees as qualifying income for purposes of the REIT gross income tests, we would be required to enter into the license agreements through a TRS, which would cause the license fees to be subject to U.S. federal income tax and accordingly reduce the amount of our cash flow available to be distributed to our securityholders.
Malkin, together with the Malkin Gro up, has the right to vote 40,859,706 shares of our common stock, which represents approximately 19.3% of the voting power of our outstanding common stock. Consequently, Mr.
Malkin, together with the Malkin Group, has the right to vote 40,859,706 shares of our common stock, which represents approximately 19.0% of the voting power of our outstanding common stock. Consequently, Mr.
Natural disasters and physical climate risk including earthquakes, storms, storm surges, tornados, floods, extreme temperatures, and hurricanes, could cause significant damage or limit access to our properties and the surrounding area. Physical climate risk, including rising sea levels, storm surges, and extreme temperature fluctuations, could adversely impact the coastal metropolitan areas in which we operate.
Our properties are concentrated in the New York metropolitan area. Natural disasters and physical climate risk including earthquakes, storms, storm surges, tornados, floods, extreme temperatures, hurricanes and rising sea levels, could cause significant damage or limit access to our properties and adversely impact the areas in which we operate.
Malkin, may suffer different and more adverse tax consequences than holders of our Class A common stock upon the sale or refinancing of the properties owned by our operating partnership, including disproportionately greater allocations of items of taxable income and gain upon a realization event.
Malkin, may suffer different and more adverse tax consequences than other holders of operating partnership units upon the sale or refinancing of the properties owned by us, including disproportionately greater allocations of items of taxable income and gain upon a realization event.
The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. Therefore, the amount of property taxes we pay in the future may increase substantially from what we have paid in the past.
The real property taxes on our properties may increase as property tax rates change or as our properties are assessed or reassessed by taxing authorities. Therefore, the amount of property taxes we pay in the future may increase substantially from what we have paid in the past, which would materially and adversely affect our financial condition.
Risks Relating to Our Indebtedness and Liquidity Our debt, the cost of our debt and limitations in our loan documents could adversely affect us. As of December 31, 2023, we had total debt outstanding of approximately $2.2 billion inclusive of total mortgages of approximately $877.4 million with no maturity before November 2024.
Risks Relating to Our Indebtedness and Liquidity Our debt, the cost of our debt and limitations in our loan documents could adversely affect us. As of December 31, 2024, we had total debt outstanding of approximately $2.3 billion inclusive of total mortgages of approximately $704.3 million.
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.
In addition, our properties are subject to various federal, state and local environmental and health and safety laws and regulations, and noncompliance 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 or increase liability for noncompliance.
There is no guarantee that our controls or measures to prevent or mitigate such attacks will be successful. A cyberattack could compromise the confidential information of our employees, tenants, residents, customers, and vendors, and disrupt our business operations and relationships. Such a security breach could require us to expend significant resources to remediate any damage that result.
There is no guarantee that our controls or measures to prevent or mitigate such attacks will be successful. A cyberattack could compromise the confidential information of our employees, tenants, residents, customers, and vendors, and disrupt our business operations and relationships.
As a result, we and our securityholders may have limited rights against all such persons, which could limit your recourse in the event of actions not in your best interest.
As a result, we and our securityholders may have limited rights against all such persons, which could limit your recourse in the event of actions not in your best interest. Limits on changes in control may discourage takeover attempts beneficial to securityholders.
Business interruption insurance generally does not include coverage for damages from a pandemic. In addition, our insurance policies include substantial self-insurance and deductibles and co-payments for certain events. See Part I, ITEM 1, “Business – Insurance” for further information.
Our insurance may not be adequate to cover all losses to which we are subject. Business interruption insurance generally does not include coverage for damages from a pandemic. In addition, our insurance policies include substantial self-insurance and deductibles and co-payments for certain events. See Part I, ITEM 1, “Business — Insurance” for further information.
Unfavorable sustainability ratings may lead to negative investor sentiment toward us and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital.
Unfavorable sustainability ratings may lead to negative investor sentiment toward us and to the diversion of investment to other industries, which could have a negative impact on our stock price and our access to and costs of capital. We publicly announced certain energy, emissions, water and waste reduction targets.
It may be more expensive for us to renew our ground leases, to the extent renewal is available at all. We are exposed to risks associated with property development. We have engaged, continue to engage, and may in the future engage in development activities with respect to our properties (including our Metro Tower potential development site).
It may be more expensive for us to renew our ground leases, to the extent renewal is available at all. We are exposed to risks associated with property development. We have engaged, continue to engage, and may in the future engage in development activities with respect to our properties. See Part I, ITEM 1, “Business — Overview” for more information.
Complying with the REIT requirements may cause us to forego and/or liquidate otherwise attractive investments.
Complying with the REIT requirements may cause us to forego and/or liquidate otherwise attractive investments or borrow funds and we may be subject to tax.
In addition, to the extent we are unable to refinance loans, we will have fewer debt guarantee opportunities available to offer under our tax protection agreements, which could trigger our related indemnification obligation.
In addition, to the extent we are unable to refinance loans, we will have fewer debt guarantee opportunities available to offer under our tax protection agreements, which could trigger our indemnification obligation. Our growth depends on external sources of capital that are outside of our control.
Our efforts to accomplish and accurately report on these goals and objectives present operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material negative impact on us, including on our reputation and stock price.
Our efforts to accomplish and accurately report on these goals and objectives present operational, regulatory, reputational, financial, legal, and other risks, any of which could have a material negative impact on us, including on our reputation and stock price. The standards for tracking, rating, and reporting on sustainability matters have not been harmonized and continue to evolve.
Our five largest tenants represented approximately 15.9% of our total commercial portfolio’s annualized rent as of December 31, 2023.
Our five largest tenants represented approximately 16.5% of our total commercial portfolio’s annualized rent as of December 31, 2024.
For the year ended December 31, 2023, three of our properties together accounted for approximately 53.2% of our portfolio’s rental revenues, with the Empire State Building individually accounting for approximately 29.6%.
For the year ended December 31, 2024, three of our properties together accounted for approximately 55.5% of our portfolio’s rental revenues, with the Empire State Building individually accounting for approximately 31.9%.
As a result, we may be required to borrow funds to pay additional dividends or taxes, and any payment of taxes could cause us to have less cash available to distribute to our shareholders.
In some circumstances, we may be required to pay additional dividends or, in lieu of that, corporate income tax, possibly including interest and penalties. As a result, we may be required to borrow funds to pay additional dividends or taxes, and any payment of taxes could cause us to have less cash available to distribute to our shareholders.
Generally, our multifamily leases are for twelve months or less. If the terms of the renewal or reletting are less favorable than current terms, our business, results of operations, cash flow and financial condition will be negatively affected.
Generally, our multifamily leases are for twelve months or less. If the terms of the renewal or reletting are less favorable than current terms, our business, results of operations, cash flow and financial condition will be negatively affected. Given their short-term lease structure, our multifamily rental revenues are more sensitive to market declines.
The threat or occurrence of a terrorist event, particularly in New York City, may materially and adversely affect the value of our properties and our ability to generate cash flow. The threat or occurrence of a terrorist event may cause people to relocate from New York City and Stamford, Connecticut to less populated, lower-profile areas.
Additionally, the threat or occurrence of a terrorist event may cause people to relocate from New York City and Stamford, Connecticut to less populated, lower-profile areas. This could trigger a decrease in the demand, occupancy and rental rates for, and materially affect the value of, our properties and our cash flow.
Failure to comply with these requirements and restrictions may result in financial penalties or loss of benefits. In addition, we will typically need to obtain the approval of the applicable government agency in order to acquire or dispose of a significant interest in or manage such property. We may not always receive such approval.
In addition, we will typically need to obtain the approval of the applicable government agency in order to acquire or dispose of a significant interest in or manage such property. We may not always receive such approval.
Other members of our senior management team also have strong industry reputations and experience, which aid us in attracting, identifying and taking advantage of opportunities. The loss of the services of one or more members of our senior management team could materially and adversely affect us.
Other members of our senior management team also have strong industry reputations and experience, which aid us in attracting, identifying and taking advantage of opportunities.
Our Chairman and Chief Executive Officer has outside business interests that take his time and attention away from us, which could materially and adversely affect us. Under his employment agreement, Mr.
The loss of the services of one or more members of our senior management team could materially and adversely affect us. 16 Our Chairman and Chief Executive Officer has outside business interests that take his time and attention away from us, which could materially and adversely affect us. Under his employment agreement, Mr.
Given their short-term lease structure, our multifamily rental revenues are more sensitive to market declines. 12 Risks Relating to Our Properties We face various risks related to our ground leases, including those arising from breach, expiration and eminent domain proceedings, and we have no permanent economic interest in the land or improvements at such properties.
Risks Relating to Our Properties We face various risks related to our ground leases, including those arising from breach, expiration and eminent domain proceedings, and we have no permanent economic interest in the land or improvements at such properties.
In particular, the federal government has recently limited the ability of individuals to deduct state and local taxes on their federal tax returns, potentially leading many high-tax states to make significant changes to their own state and local tax laws.
In particular, the federal government has limited the ability of individuals to deduct state and local taxes on their federal tax returns, potentially leading many high-tax states to make significant changes to their own state and local tax laws. If such changes occur, we may be required to pay additional taxes on our assets or income.
For fiscal years ended December 31, 2021, 2022 and 2023, we derived revenues of approximately $41.5 million, $106.0 million and $129.4 million from our Observatory operations.
For fiscal years ended December 31, 2024, 2023 and 2022, we derived revenue of approximately $136.4 million, $129.4 million and $106.0 million, respectively, from the Observatory operations.
In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to sustainability matters, including climate change and transitional and physical climate-related risks. Such ratings are used by some investors to inform their investment and voting decisions.
In addition, certain organizations have developed ratings processes for evaluating companies on their approach to sustainability matters, and such ratings are used by some investors to inform their investment and voting decisions.
For example, environmental site assessments and investigations 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 those we acquire or operate in the future contain, may contain, or may have contained, ACM.
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.
The current federal tax limits on the deductibility of state and local taxes as well as higher individual tax rate proposals may negatively impact demographic trends in high tax states like New York and Connecticut.
The current federal tax limits on the deductibility of state and local taxes as well as higher individual tax rate proposals may negatively impact demographic trends in high tax states like New York and Connecticut. We rely on three properties, in particular the Empire State Building and its Observatory, for a significant portion of our revenue.
In addition to the current economic environment and future volatility in the securities and credit markets, the following market conditions may affect the value of our Class A Common Stock and traded OP units: • the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate-based companies; • our financial performance; and • general stock market conditions.
The following market conditions may affect the value of our Class A Common Stock and traded OP units: the general reputation of REITs and the attractiveness of our equity securities in comparison to other equity securities; our financial performance; and general stock market conditions due to the economic environment or otherwise.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−1 removed7 unchanged
The Audit Committee of the Board oversees our risk management program, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe. Audit Committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity, and reports on our enterprise risk profile on a quarterly basis.
The Audit Committee of our Board oversees our risk management program, which focuses on the most significant risks we face in the short-, intermediate-, and long-term timeframe. Audit Committee meetings include discussions of specific risk areas throughout the year, including, among others, those relating to cybersecurity, and reports on our enterprise risk profile on a quarterly basis.
We have a Managed Security Services provider (MSSP) that provides a 24 x 7 x 365 Security Operations Center (SOC) and works with our information technology (IT) team to employ a variety of monitoring technologies to detect and be alerted to potential cyber threats, as well as establish and implement procedures for the mitigation and remediation of any cybersecurity incidents.
We have a Managed Service Provider (MSP) and Managed Security Services Provider (MSSP) that provide 24 x 7 x 365 Network Operations Center and Security Operations Center (SOC) and works with our information technology (IT) team to employ a variety of monitoring technologies to detect and be alerted to potential cyber threats, as well as establish and implement procedures for the mitigation and remediation of any cybersecurity incidents.
“Risk Factors” for additional description of cybersecurity risks and potential related impacts on the Company. 25 Governance Our Board of Directors oversees our risk management process, including with respect to cybersecurity risks, directly and through its committees.
Refer to the risk factor captioned “Cyberattacks and any failure to comply with related laws could negatively impact us.” in Part I, ITEM 1A. “Risk Factors” for additional description of cybersecurity risks and potential related impacts on the Company. Governance Our Board of Directors oversees our risk management process, including with respect to cybersecurity risks, directly and through its committees.
Our Chief Technology Officer is responsible for leading the assessment and management of cybersecurity risks and reports at least quarterly or more frequently as needed to the Audit Committee on cybersecurity strategy and risks. 26
Our Chief Technology Officer (CTO) is responsible for leading the assessment and management of cybersecurity risks, oversees teams across the Company supporting our cybersecurity policies and procedures around prevention, detection, mitigation and remediation of cybersecurity incidents, and reports at least quarterly to the Audit Committee on cybersecurity strategy and risks.
Removed
Refer to the risk factor captioned “Cyberattacks and any failure to comply with related laws could negatively impact us.” in Part I, ITEM 1A.
Added
Our CTO has over 25 years of experience in cybersecurity and information technology, is the Chair of the Real Estate Board of Cyber Committee, a Board Member of the Real Estate Cyber Consortium and is a Board Member of the Global Cyber Consortium. 24

Item 2. Properties

Properties — owned and leased real estate

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Lease Expirations The following table sets forth new and renewal leases entered into at our properties, the weighted average annualized cash rent per square foot for new and renewal leases executed during the year, the previous weighted average annualized cash rent prior to the renewal or re-leasing of these leases and the percent increase (decrease) in mark-to-market rent.
Lease Expirations The following table sets forth new and renewal leases entered into at our properties, the weighted average annualized cash rent per square foot for new and renewal leases executed during the year, the previous weighted average annualized cash rent prior to the renewal or re-leasing of these leases and the percent increase in mark-to-market rent.
Annualized Rentable Rent per Square Percent Percent Annualized Occupied Number of Property Name Location or Sub-Market Feet (1) Occupied (2) Leased (3) Rent (4) Square Foot (5) Leases (6) Office - Manhattan The Empire State Building Penn Station -Times Sq.
Annualized Rentable Percent Percent Rent per Square Occupied Leased Annualized Occupied Number of Property Name Location or Sub-Market Feet (1) (2),(3) (3),(4) Rent (5) Square Foot (6) Leases (7) Office - Manhattan The Empire State Building Penn Station -Times Sq.
Our tenants represent a broad array of industries as follows: Diversification by Industry Percent (1) Arts and entertainment 3.2 % Broadcast 1.0 % Consumer goods 15.8 % Finance, insurance, real estate 16.9 % Government entity 2.1 % Healthcare 1.8 % Legal services 5.2 % Non-profit 4.2 % Professional services (not including legal services) 9.2 % Retail 18.2 % 28 Technology, media and advertising 18.0 % Others 4.4 % Total 100.0 % (1) Based on annualized rent.
Our tenants represent a broad array of industries as follows: Diversification by Industry Percent (1) Arts and entertainment 3.1 % Broadcast 1.0 % Consumer goods 16.2 % Finance, insurance and real estate 15.0 % Government entity 2.1 % Healthcare 1.7 % Legal services 5.9 % Non-profit 4.8 % Professional services (not including legal services) 9.7 % Retail 19.4 % Technology, media and advertising 18.2 % Others 2.9 % Total 100.0 % (1) Based on annualized rent.
(4) Represents leases that are included in occupancy as of December 31, 2023 and expire on December 31, 2023. (5) Excludes (i) retail space in our Manhattan office properties and (ii) the Empire State Building broadcasting licenses and Observatory operations. (6) Represents a telecom lease with no square footage.
(4) Represents leases that are included in occupancy as of December 31, 2024 and expire on December 31, 2024 . (5) Excludes (i) retail space in our Manhattan office properties and (ii) the Empire State Building broadcasting licenses and Observatory operations. (6) Includes a telecom lease with no square footage.
(7) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 40 years (expiring December 31, 2063). (8) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 54 years (expiring June 10, 2077).
(8) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 39 years (expiring December 31, 2063). (9) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 52 years (expiring June 10, 2077).
(6) Represents the number of leases at each property or on a portfolio basis. If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.
If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.
ITEM 2. PROPERTIES Summary of Office, Retail, and Multifamily Portfolio As of December 31, 2023, our office and retail portfolio was comprised of approximately 8.6 million rentable square feet of office space and 0.7 million rentable square feet of retail space and was approximately 86.3% occupied and 90.6% leased, yielding approximately $536.0 million of annualized rent.
ITEM 2. PROPERTIES Summary of Office, Retail, and Multifamily Portfolio As of December 31, 2024 , our office and retail portfolio was comprised of approximately 7.8 million rentable square feet of office space and 0.8 million rentable square feet of retail space and was approximately 88.6% occupied and 93.5% leased, yielding approximately $544.0 million of annualized rent.
Our real estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of all of our real estate assets other than the 86th and 102nd floor observatories at the Empire State Building, which are operated by our Observatory segment. The tables below present an overview as of December 31, 2023.
Our real estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of all of our real estate assets other than the observatory at the Empire State Building, which is included in our Observatory segment. The tables below present an overview as of December 31, 2024 .
(2) Based on leases signed and commenced as of December 31, 2023. (3) Includes occupied space plus leases signed but not commenced as of December 31, 2023. (4) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes. (5) Represents annualized rent under leases commenced as of December 31, 2023 divided by occupied square feet.
(2) Based on leases signed and commenced as of December 31, 2024 . (3) Percent occupied and percent leased exclude 110,035 rentable square feet of broadcasting and storage space. (4) Includes occupied space plus leases signed but not commenced as of December 31, 2024. (5) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.
(2) Excludes (i) 189,148 rentable square feet across the Company's portfolio attributable to building management use and tenant amenities and (ii) 31 83,190 square feet of space attributable to the Company's Observatory. (3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.
(2) Excludes (i) 195,410 square feet of space across the Company's portfolio attributable to building management use and tenant amenities, (ii) 85,334 square feet of space attributable to the Company's Observatory, and (iii) square footage related to the Company's residential units. (3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.
The following table sets forth information regarding the 20 largest tenants in our commercial portfolio based on annualized rent as of December 31, 2023.
The following tables set forth information regarding the 10 largest office tenants and 10 largest retail tenants in our commercial portfolio based on the respective annualized rent as of December 31, 2024 .
(5) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes. (6) Represents the percentage of annualized rent of the Company's office and retail portfolios in the aggregate.
(4) Represents the percentage of occupied rentable square feet of the Company's retail portfolio. (5) Represents the percentage of annualized rent, including base rent and base rent and current reimbursement for operating expenses and real estate taxes, of the Company's retail portfolio.
Weighted Percent of Average Total Portfolio Percent of Remaining Occupied Rentable Portfolio Lease Lease Square Square Annualized Annualized Tenant Property Expiration (1) Term (2) Feet (3) Feet (4) Rent (5) Rent (6) LinkedIn Empire State Building Aug. 2036 12.7 years 501,409 5.4 % $ 33,465,435 6.2 % Flagstar Bank 1400 Broadway Aug. 2039 15.7 years 313,109 3.3 % 18,285,046 3.4 % Centric Brands Inc.
Top 10 Office Tenants Percent of Occupied Rentable Square Feet (2) Percent of Office Annualized Rent (3) Tenant Property Lease Expiration (1) LinkedIn Empire State Building Mar. 2025 - Aug. 2036 6.7 % 7.4 % Flagstar Bank 1400 Broadway Aug. 2039 4.5 % 4.3 % Centric Brands Inc.
We have 11 office properties and our retail properties are comprised of retail space at the base of our New York City office and multifamily properties, and five standalone retail properties predominantly located in Manhattan. All properties are located in dynamic retail corridors with convenient access to mass transportation, a diverse te nant base and high pedestrian traffic.
All properties are located in dynamic retail corridors with convenient access to mass transportation, a diverse te nant base and high pedestrian traffic.
For tenants with more than two leases, the lease expiration is shown as a range. (2) Represents the weighted average remaining lease term, based on annualized rent. (3) Based on leases signed and commenced as of December 31, 2023. (4) Represents the percentage of rentable square feet of the Company's office and retail portfolios in the aggregate.
For tenants with more than two leases, the lease expiration is shown as a range. (2) Represents the percentage of occupied rentable square feet of the Company's office portfolio. (3) Represents the percentage of annualized rent, including base rent and base rent and current reimbursement for operating expenses and real estate taxes, of the Company's office portfolio.
Tenant Diversification As of December 31, 2023, our office and retail portfolios were leased to a diverse tenant base consisting of approximately 628 leases.
(10) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 26 years (expiring July 31, 2050). Tenant Diversification As of December 31, 2024 , our office and retail portfolios were leased to a diverse tenant base consisting of approximately 580 leases.
Year Ended December 31, 2023 2022 2021 New and renewal leases entered into during the year (square feet) 950,746 1,118,579 1,005,630 Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 65.30 $ 59.42 $ 57.55 Weighted average annualized cash rent per square foot for previous leases $ 61.25 $ 58.58 $ 58.04 Increase (decrease) in mark-to-market rent 6.6 % 1.4 % (0.8) % 29 The following tables set forth a summary schedule of expirations for leases in place as of December 31, 2023 plus available space for each of the ten calendar years beginning with the year ended December 31, 2023 at the office and retail properties in our commercial portfolio.
The following tables set forth a summary schedule of expirations for leases in place as of December 31, 2024 plus available space for each of the ten calendar years beginning with the year ended December 31, 2025 at the office and retail properties in our commercial portfolio.
South 67,001 100.0 % 100.0 % 10,155,485 151.57 4 250 West 57th Street Columbus Circle - West Side 65,526 91.4 % 91.4 % 9,111,860 152.07 7 10 Union Square Union Square 58,006 91.9 % 91.9 % 8,181,304 153.49 10 27 1542 Third Avenue Upper East Side 56,135 100.0 % 100.0 % 2,542,042 45.28 4 1010 Third Avenue Upper East Side 38,235 100.0 % 100.0 % 3,460,188 90.50 2 501 Seventh Avenue Penn Station -Times Sq.
South 67,001 100.0 % 100.0 % 10,381,904 154.95 4 250 West 57th Street Columbus Circle - West Side 63,443 93.2 % 93.2 % 8,571,735 145.04 6 10 Union Square Union Square 57,094 91.8 % 91.8 % 8,290,772 158.25 9 1542 Third Avenue Upper East Side 56,211 95.0 % 95.0 % 2,511,068 47.03 3 1010 Third Avenue Upper East Side 38,235 100.0 % 100.0 % 3,421,053 89.47 2 1359 Broadway Penn Station -Times Sq.
South 29,247 83.0 % 100.0 % 1,668,652 68.73 5 561 10th Avenue (11) Hudson Yards 28,266 100.0 % 100.0 % 2,007,748 71.03 3 77 West 55th Street Midtown 25,388 100.0 % 100.0 % 1,978,407 77.93 3 1400 Broadway (7) Penn Station -Times Sq.
South 29,247 99.4 % 99.4 % 2,221,959 76.40 5 501 Seventh Avenue Penn Station -Times Sq. South 27,213 73.1 % 89.4 % 1,433,160 72.08 6 77 West 55th Street Midtown 25,388 100.0 % 100.0 % 2,083,627 82.07 3 1350 Broadway (10) Penn Station -Times Sq.
Removed
South 2,713,783 84.6 % 91.8 % $ 149,146,291 $ 64.98 144 One Grand Central Place Grand Central 1,241,235 85.2 % 90.7 % 64,495,396 61.01 148 1400 Broadway (7) Penn Station -Times Sq. South 917,281 100.0 % 100.0 % 51,543,523 56.19 20 111 West 33rd Street (8) Penn Station -Times Sq.
Added
We have 10 office properties and our retail properties are comprised of retail space at the base of our New York City office and multifamily properties, four standalone retail properties located in Manhattan and a portfolio of retail assets on North 6th Street (the "North Sixth Street Collection") in Williamsburg, Brooklyn.
Removed
South 639,496 94.2 % 95.7 % 40,779,657 67.68 21 250 West 57th Street Columbus Circle - West Side 472,707 80.6 % 84.5 % 23,990,288 62.98 28 501 Seventh Avenue Penn Station -Times Sq. South 461,209 88.4 % 88.4 % 20,432,035 50.09 19 1359 Broadway Penn Station -Times Sq.
Added
South 2,712,743 92.5 % 95.5 % $ 167,921,372 $ 67.66 150 One Grand Central Place Grand Central 1,231,231 84.9 % 95.2 % 69,263,888 66.39 137 1400 Broadway (8) Penn Station -Times Sq. South 917,281 87.0 % 94.5 % 48,759,260 61.09 18 111 West 33rd Street (9) Penn Station -Times Sq.
Removed
South 456,004 83.5 % 91.4 % 22,376,656 58.75 32 1350 Broadway (9) Penn Station -Times Sq. South 372,599 85.5 % 86.4 % 19,076,631 59.90 50 1333 Broadway Penn Station -Times Sq.
Added
South 639,595 97.6 % 100.0 % 43,427,737 69.53 22 250 West 57th Street Columbus Circle - West Side 474,790 83.5 % 84.8 % 26,300,689 66.45 30 1359 Broadway Penn Station -Times Sq. South 456,567 80.7 % 90.8 % 23,022,570 62.51 29 501 Seventh Avenue Penn Station -Times Sq.
Removed
South 296,349 84.4 % 94.4 % 14,545,148 58.12 13 Office - Manhattan 7,570,663 87.3 % 92.1 % 406,385,625 61.47 475 Office - Greater New York Metropolitan Area First Stamford Place (10) Stamford, CT 781,731 78.7 % 82.3 % 26,691,177 43.38 48 Metro Center Stamford, CT 281,510 70.9 % 70.9 % 10,914,848 54.71 20 Office - Greater New York Metropolitan Area 1,063,241 76.6 % 79.3 % 37,606,025 46.15 68 Total/Weighted Average Office Properties 8,633,904 86.0 % 90.5 % 443,991,650 59.79 543 Retail Properties 112 West 34th Street (8) Penn Station -Times Sq.
Added
South 454,788 90.7 % 90.7 % 22,376,790 54.39 19 1350 Broadway (10) Penn Station -Times Sq. South 384,225 87.4 % 93.9 % 20,143,028 60.15 49 1333 Broadway Penn Station -Times Sq.
Removed
South 93,057 100.0 % 100.0 % 24,825,569 266.78 4 The Empire State Building Penn Station -Times Sq. South 90,670 71.9 % 76.4 % 7,032,389 107.93 10 One Grand Central Place Grand Central 68,733 99.4 % 99.4 % 8,977,805 131.41 12 1333 Broadway Penn Station -Times Sq.
Added
South 296,349 83.4 % 90.0 % 14,653,535 59.27 12 Office - Manhattan 7,567,569 89.0 % 94.2 % 435,868,869 65.00 466 Office - Greater New York Metropolitan Area Metro Center Stamford, CT 282,276 73.2 % 74.9 % 11,727,761 56.76 20 Office - Greater New York Metropolitan Area 282,276 73.2 % 74.9 % 11,727,761 56.76 20 Total/Weighted Average Office Properties 7,849,845 88.4 % 93.5 % 447,596,630 64.76 486 Retail Properties 112 West 34th Street (9) Penn Station -Times Sq.
Removed
South 35,859 50.8 % 59.6 % 1,310,333 71.94 5 1350 Broadway (9) Penn Station -Times Sq. South 30,710 77.8 % 77.8 % 5,962,833 249.70 5 1359 Broadway Penn Station -Times Sq.
Added
South 93,057 100.0 % 100.0 % 25,078,377 269.49 4 The Empire State Building Penn Station -Times Sq.
Removed
South 17,879 78.2 % 78.2 % 1,538,836 110.07 6 298 Mulberry Street (12) NoHo 10,365 100.0 % 100.0 % 1,802,507 173.90 1 Williamsburg Retail (13) Brooklyn 6,538 100.0 % 100.0 % 1,158,422 177.18 3 345 East 94th Street (14) Upper East Side 3,700 100.0 % 100.0 % 263,134 71.12 1 Total/Weighted Average Retail Properties 725,315 90.4 % 92.1 % 91,977,514 140.27 85 Portfolio Total 9,359,219 86.3 % 90.6 % $ 535,969,164 $ 66.32 628 (1) Excludes (i) 189,148 square feet of space across the Company's portfolio attributable to building management use and tenant amenities and (ii) 83,190 square feet of space attributable to the Company's Observatory.
Added
South 88,445 77.4 % 78.7 % 7,856,065 114.72 11 North Sixth Street Collection Williamsburg - Brooklyn 87,880 77.3 % 90.4 % 8,964,050 131.99 15 One Grand Central Place Grand Central 70,810 100.0 % 100.0 % 7,866,157 111.09 12 1333 Broadway Penn Station -Times Sq.
Removed
(9) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 27 years (expiring July 31, 2050). (10) First Stamford Place consists of three buildings. (11) Does not include the square footage related to the 417 residential units at this property.
Added
South 19,511 44.0 % 100.0 % 2,161,613 251.94 4 1400 Broadway (8) Penn Station -Times Sq.
Removed
(12) Does not include the square footage related to the 96 residential units at this property. (13) Does not include the square footage related to the 6 residential units at this property. (14) Does not include the square footage related to the 208 residential units at this property.
Added
South 17,017 82.2 % 82.2 % 1,670,565 119.50 6 561 10th Avenue Hudson Yards 11,822 100.0 % 100.0 % 1,618,301 136.89 2 298 Mulberry Street NoHo 10,365 100.0 % 100.0 % 1,981,708 191.19 1 345 East 94th Street Upper East Side 3,700 100.0 % 100.0 % 254,444 68.77 1 Total/Weighted Average Retail Properties 766,439 90.4 % 94.1 % 96,366,558 139.02 94 Portfolio Total 8,616,284 88.6 % 93.5 % $ 543,963,188 $ 71.52 580 25 (1) Excludes (i) 195,410 square feet of space across the Company's portfolio attributable to building management use and tenant amenities, (ii) 85,334 square feet of space attributable to the Company's Observatory, and (iii) square footage related to the Company's residential units.
Removed
Empire State Building Oct. 2028 4.8 years 221,365 2.4 % 11,952,833 2.2 % PVH Corp. 501 Seventh Avenue Oct. 2028 4.8 years 237,281 2.5 % 11,519,383 2.1 % Sephora 112 West 34th Street Jan. 2029 5.1 years 11,334 0.1 % 10,533,585 2.0 % Target 112 West 34th St., 10 Union Sq.
Added
(6) Represents annualized rent under leases commenced as of December 31, 2024 divided by occupied square feet. (7) Represents the number of leases at each property or on a portfolio basis.
Removed
Jan. 2038 14.1 years 81,340 0.9 % 9,341,224 1.7 % Coty Inc.
Added
Empire State Building Oct. 2028 3.7 % 3.1 % PVH Corp. 501 Seventh Avenue Jan. 2026 - Oct. 2028 3.4 % 3.0 % Institutional Capital Network, Inc. One Grand Central Place Dec. 2041 2.0 % 2.3 % Coty Inc.
Removed
Empire State Building Jan. 2030 6.1 years 156,187 1.7 % 8,497,458 1.6 % Macy's 111 West 33rd Street May 2030 6.4 years 131,117 1.4 % 8,451,562 1.6 % Urban Outfitters 1333 Broadway Sept. 2029 5.8 years 56,730 0.6 % 8,185,595 1.5 % Li & Fung 1359 Broadway, ESB Oct. 2027 - Oct. 2028 4.5 years 149,061 1.6 % 7,954,806 1.5 % Footlocker 112 West 34th Street Sept. 2031 7.8 years 34,192 0.4 % 7,745,828 1.4 % Federal Deposit Insurance Corp.
Added
Empire State Building Jan. 2030 2.3 % 2.0 % Macy's 111 West 33rd Street May 2030 1.9 % 2.0 % Li & Fung 1359 Broadway, ESB Oct. 2027 - Oct. 2028 2.2 % 1.9 % FDIC Empire State Building Dec. 2025 1.7 % 1.7 % Shutterstock, Inc.
Removed
Empire State Building Dec. 2025 2.0 years 119,226 1.3 % 7,578,004 1.4 % HNTB Corporation Empire State Building Feb. 2029 5.2 years 105,143 1.1 % 7,000,733 1.3 % Institutional Capital Network, Inc. One Grand Central Place Feb. 2024 - Oct. 2035 10.6 years 94,331 1.0 % 6,351,680 1.2 % The Michael J.
Added
Empire State Building Apr. 2029 1.6 % 1.7 % 26 Top 10 Retail Tenants Percent of Occupied Rentable Square Feet (4) Percent of Retail Annualized Rent (5) Tenant Property Lease Expiration (1) Sephora USA, Inc. 112 West 34th Street Jan. 2029 1.6 % 11.0 % Target Corporation 112 West 34th St., 10 Union Sq.
Removed
Fox Foundation 111 West 33rd Street Nov. 2029 5.9 years 86,492 0.9 % 6,267,495 1.2 % Shutterstock Empire State Building Apr. 2029 5.3 years 104,386 1.1 % 6,096,096 1.1 % Fragomen 1400 Broadway Feb. 2035 11.2 years 107,680 1.2 % 5,959,656 1.1 % Burlington Merchandising Corp. 1400 Broadway Jan. 2038 14.1 years 102,898 1.1 % 5,932,832 1.1 % ASCAP 250 West 57th Street Aug. 2034 10.7 years 87,943 0.9 % 5,384,628 1.0 % Duane Reade Empire State Building, 1350 Broadway May 2025 - Sept. 2027 2.5 years 39,142 0.4 % 4,941,165 0.9 % Total 2,740,366 29.3 % $ 191,445,044 35.5 % (1) Expiration dates are per lease and do not assume exercise of renewal or extension options.
Added
Jan. 2038 11.7 % 9.8 % URBAN OUTFITTERS 1333 Broadway Sep. 2029 8.2 % 8.7 % Foot Locker, Inc. 112 West 34th Street Sep. 2031 4.9 % 8.1 % The TJX Companies, Inc. 250 West 57th Street Nov. 2030 6.7 % 4.8 % CVS Albany, L.L.C. 298 Mulberry Street Jan. 2030 - Dec. 2040 3.1 % 3.7 % New Cingular Wireless PCS, LLC 250 West 57th Street, ESB, 10 Union Sq.
Removed
The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights.
Added
Jan. 2029 - Apr. 2033 1.3 % 3.4 % JP Morgan Chase Bank One Grand Central Place Dec. 2027 3.1 % 3.2 % The New York City School Construction Authority 1010 Third Avenue Mar. 2039 4.1 % 3.1 % Starbucks 1542 Third Avenue, 1350 Broadway, 1359 Broadway, 10 Union Sq., ESB Jun. 2025 - Oct. 2032 4.7 % 3.0 % (1) Expiration dates are per lease and do not assume exercise of renewal or extension options.
Removed
Office and Retail Portfolio Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 875,777 9.4 % $ — — % $ — Signed leases not commenced 28 402,268 4.3 % — — % — Fourth quarter 2023 (4) 15 143,627 1.5 % 7,522,786 1.4 % 52.38 2024 89 509,671 5.4 % 30,075,202 5.6 % 59.01 2025 85 594,946 6.4 % 40,363,625 7.5 % 67.84 2026 72 628,943 6.7 % 37,384,704 7.0 % 59.44 2027 87 713,569 7.6 % 47,192,095 8.8 % 66.14 2028 63 945,077 10.1 % 52,486,474 9.8 % 55.54 2029 50 981,952 10.5 % 73,521,837 13.7 % 74.87 2030 38 745,546 8.0 % 50,024,340 9.3 % 67.10 2031 23 174,491 1.9 % 20,214,026 3.8 % 115.85 2032 29 368,694 3.9 % 26,223,606 4.9 % 71.13 2033 29 329,711 3.5 % 21,332,708 4.0 % 64.70 Thereafter 48 1,944,947 20.8 % 129,627,759 24.2 % 66.65 Total 656 9,359,219 100.0 % $ 535,969,162 100.0 % $ 66.32 Manhattan Office Properties (5) Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 597,862 7.9 % $ — — % $ — Signed leases not commenced 20 362,213 4.8 % — — % — Fourth quarter 2023 (4) 12 124,643 1.6 % 7,044,490 1.7 % 56.52 2024 76 431,339 5.7 % 25,204,397 6.2 % 58.43 2025 67 495,292 6.5 % 32,205,906 7.9 % 65.02 2026 57 485,929 6.4 % 29,511,170 7.3 % 60.73 2027 71 600,450 7.9 % 36,782,006 9.1 % 61.26 2028 47 854,943 11.3 % 47,465,773 11.7 % 55.52 2029 35 738,291 9.8 % 44,821,337 11.0 % 60.71 2030 27 599,150 7.9 % 37,243,747 9.2 % 62.16 2031 12 86,541 1.1 % 6,076,449 1.5 % 70.21 2032 21 334,698 4.4 % 23,105,190 5.7 % 69.03 2033 15 141,599 1.9 % 8,587,282 2.1 % 60.65 Thereafter 35 1,717,713 22.8 % 108,337,878 26.6 % 63.07 Total 495 7,570,663 100.0 % $ 406,385,625 100.0 % $ 61.47 30 Greater New York Metropolitan Area Office Properties Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 220,593 20.7 % $ — — % $ — Signed leases not commenced 3 27,802 2.5 % — — % — Fourth quarter 2023 (4) 2 2,540 0.2 % 63,701 0.2 % 25.08 2024 7 52,728 5.0 % 2,222,975 5.9 % 42.16 2025 13 76,903 7.2 % 3,597,773 9.6 % 46.78 2026 8 71,784 6.8 % 3,508,404 9.3 % 48.87 2027 10 58,730 5.5 % 2,801,695 7.5 % 47.70 2028 11 84,915 8.0 % 3,735,230 9.9 % 43.99 2029 5 128,271 12.1 % 5,907,668 15.7 % 46.06 2030 4 78,033 7.3 % 3,562,425 9.5 % 45.65 2031 2 16,560 1.6 % 843,885 2.2 % 50.96 2032 (6) 1 — — % 6,180 — % — 2033 3 151,754 14.3 % 7,494,005 19.9 % 49.38 Thereafter 2 92,628 8.8 % 3,862,084 10.3 % 41.69 Total 71 1,063,241 100.0 % $ 37,606,025 100.0 % $ 46.15 Retail Properties Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 57,322 7.9 % $ — — % $ — Signed leases not commenced 5 12,253 1.7 % — — % — Fourth quarter 2023 (4) 1 16,444 2.3 % 414,595 0.5 % 25.21 2024 6 25,604 3.5 % 2,647,830 2.9 % 103.41 2025 5 22,751 3.1 % 4,559,946 5.0 % 200.43 2026 7 71,230 9.8 % 4,365,130 4.7 % 61.28 2027 6 54,389 7.5 % 7,608,394 8.3 % 139.89 2028 5 5,219 0.7 % 1,285,471 1.4 % 246.31 2029 10 115,390 15.9 % 22,792,832 24.8 % 197.53 2030 7 68,363 9.4 % 9,218,168 10.0 % 134.84 2031 9 71,390 9.8 % 13,293,692 14.5 % 186.21 2032 7 33,996 4.7 % 3,112,236 3.4 % 91.55 2033 11 36,358 5.0 % 5,251,421 5.7 % 144.44 Thereafter 11 134,606 18.7 % 17,427,798 18.8 % 129.47 Total 90 725,315 100.0 % $ 91,977,514 100.0 % $ 140.27 (1) If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.
Added
Year Ended December 31, 2024 (1) 2023 (1) 2022 (1) New and renewal leases entered into during the year (square feet) 1,324,824 981,907 1,223,325 Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 72.12 $ 65.43 $ 61.27 Weighted average annualized cash rent per square foot for previous leases $ 69.66 $ 61.46 $ 59.50 Increase in mark-to-market rent 3.5 % 6.5 % 3.0 % (1) Beginning in 2024, the number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration.
Removed
Portfolio Transaction Activity On February 1, 2023, we closed on the sale of 69-97 and 103-107 Main Street in Westport, Connecticut at a gross asset valuation of $40.0 million. Refer to "Financial Statements - Note 11 Related Party Transactions" in this Annual Report on Form 10-K.
Added
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 twelve months ended December 31, 2023 and December 31, 2022 .
Removed
On April 5, 2023, we closed on the sale of 500 Mamaroneck Avenue in Harrison, New York at a gross asset valuation of $53.0 million.
Added
The information set forth in the table assumes that tenants exercise no renewal options and/or all early termination rights. 27 Office and Retail Portfolio Year of Lease Expiration Number of Leases Expiring (1) Rentable Square Feet Expiring (2) Percent of Portfolio Rentable Square Feet Expiring Annualized Rent (3) Percent of Annualized Rent Annualized Rent Per Rentable Square Foot Available — 592,749 6.9 % $ — — % $ — Signed leases not commenced 30 418,308 4.9 % — — % — Fourth quarter 2024 (4) 12 62,705 0.7 % 3,815,250 0.7 % 60.84 2025 71 561,379 6.5 % 38,059,602 7.0 % 67.80 2026 74 703,062 8.2 % 43,294,762 8.0 % 61.58 2027 88 698,520 8.1 % 47,545,063 8.7 % 68.07 2028 61 860,478 10.0 % 51,645,522 9.5 % 60.02 2029 63 790,481 9.2 % 67,843,206 12.5 % 85.83 2030 54 768,868 8.9 % 56,995,847 10.5 % 74.13 2031 27 205,241 2.4 % 22,456,781 4.1 % 109.42 2032 29 365,291 4.2 % 27,356,096 5.0 % 74.89 2033 33 302,642 3.5 % 22,596,775 4.2 % 74.67 2034 22 331,909 3.9 % 24,662,688 4.5 % 74.31 Thereafter 46 1,954,651 22.6 % 137,691,596 25.3 % 70.44 Total 610 8,616,284 100.0 % $ 543,963,188 100.0 % $ 71.52 Manhattan Office Properties (5) Year of Lease Expiration Number of Leases Expiring (1) Rentable Square Feet Expiring (2) Percent of Portfolio Rentable Square Feet Expiring Annualized Rent (3) Percent of Annualized Rent Annualized Rent Per Rentable Square Foot Available — 476,851 6.3 % $ — — % $ — Signed leases not commenced 23 385,303 5.1 % — — % Fourth quarter 2024 (4) 12 62,705 0.8 % 3,815,250 0.9 % 60.84 2025 64 527,068 7.0 % 35,958,524 8.2 % 68.22 2026 64 602,635 8.0 % 37,033,613 8.5 % 61.45 2027 77 615,168 8.1 % 37,904,393 8.7 % 61.62 2028 55 840,106 11.1 % 49,175,905 11.3 % 58.54 2029 49 643,455 8.5 % 42,161,109 9.7 % 65.52 2030 39 662,664 8.8 % 43,478,449 10.0 % 65.61 2031 17 122,021 1.6 % 8,840,245 2.0 % 72.45 2032 22 326,723 4.3 % 24,101,729 5.5 % 73.77 2033 18 194,949 2.6 % 12,324,950 2.8 % 63.22 2034 16 307,701 4.1 % 21,263,418 4.9 % 69.10 Thereafter 33 1,800,220 23.7 % 119,811,284 27.5 % 66.55 Total 489 7,567,569 100.0 % $ 435,868,869 100.0 % $ 65.00 28 Greater New York Metropolitan Area Office Properties Year of Lease Expiration Number of Leases Expiring (1) Rentable Square Feet Expiring (2) Percent of Portfolio Rentable Square Feet Expiring Annualized Rent (3) Percent of Annualized Rent Annualized Rent Per Rentable Square Foot Available — 70,732 25.1 % $ — — % $ — Signed leases not commenced 1 4,910 1.6 % — — % — Fourth quarter 2024 (4) — — — % — — % — 2025 3 16,474 5.8 % 855,995 7.3 % 51.96 2026 1 23,268 8.2 % 1,418,307 12.1 % 60.96 2027 4 21,546 7.6 % 1,214,965 10.4 % 56.39 2028 2 11,480 4.1 % 647,970 5.5 % 56.44 2029 2 12,183 4.3 % 703,884 6.0 % 57.78 2030 3 29,062 10.3 % 1,787,898 15.2 % 61.52 2031 1 15,030 5.4 % 820,187 7.0 % 54.57 2032 (6) 2 7,281 2.6 % 430,652 3.7 % 59.15 2033 1 63,173 22.4 % 3,480,347 29.7 % 55.09 2034 — — — % — — % — Thereafter 1 7,137 2.6 % 367,556 3.1 % 51.50 Total 21 282,276 100.0 % $ 11,727,761 100.0 % $ 56.76 Retail Properties Year of Lease Expiration Number of Leases Expiring (1) Rentable Square Feet Expiring (2) Percent of Portfolio Rentable Square Feet Expiring Annualized Rent (3) Percent of Annualized Rent Annualized Rent Per Rentable Square Foot Available — 45,166 5.9 % $ — — % $ — Signed leases not commenced 6 28,095 3.7 % — — % — Fourth quarter 2024 (4) — — — % — — % — 2025 4 17,837 2.3 % 1,245,083 1.3 % 69.80 2026 9 77,159 10.1 % 4,842,842 5.0 % 62.76 2027 7 61,806 8.1 % 8,425,705 8.7 % 136.33 2028 4 8,892 1.2 % 1,821,647 1.9 % 204.86 2029 12 134,843 17.6 % 24,978,213 25.9 % 185.24 2030 12 77,142 10.0 % 11,729,500 12.2 % 152.05 2031 9 68,190 8.9 % 12,796,349 13.3 % 187.66 2032 5 31,287 4.1 % 2,823,715 2.9 % 90.25 2033 14 44,520 5.8 % 6,791,478 7.1 % 152.55 2034 6 24,208 3.1 % 3,399,270 3.5 % 140.42 Thereafter 12 147,294 19.2 % 17,512,756 18.2 % 118.90 Total 100 766,439 100.0 % $ 96,366,558 100.0 % $ 139.02 (1) If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.
Removed
On September 14, 2023, we closed on the acquisition of a Williamsburg retail property located on the corner of North 6 th Street and Wythe Avenue in Brooklyn, New York, for a purchase price of $26.4 million. Refer to "Financial Statements - Note 3 Acquisitions and Dispositions" in this Annual Report on Form 10-K.
Added
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 10 th Avenue and 345 East 94 th 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. 29 In September and October 2024, we closed on the acquisition of a portfolio of retail properties on North 6 th Street in Williamsburg, Brooklyn for a purchase price of $195.0 million.
Added
In September 2024, we entered into an agreement to acquire an additional retail asset on North 6 th Street in Williamsburg, Brooklyn for approximately $30.0 million. This acquisition is subject to customary closing conditions. The acquisition is anticipated to close in mid-2025.
Added
Net Operating Income ("NOI") from our office, retail, multifamily, and Observatory operations were approximately 58%, 12%, 5%, and 25% of total NOI, respectively, after the effect of the 2024 acquisitions, annualized based on fourth quarter results, and the removal of First Stamford Place NOI.
Added
See Part II, ITEM 7, "Management's Discussion and Analysis of Financial Condition of Results of Operations — Net Operating Income" for the definition of NOI and a reconciliation to net income, the most directly comparable GAAP measure, to NOI. Refer to "Financial Statements — Note 3 Acquisitions and Dispositions" in this Annual Report on Form 10-K.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

10 edited+1 added−12 removed12 unchanged
Any distributions we pay in the 32 future will depend upon our taxable income, actual results of operations, economic conditions and other factors that could differ materially from our current expectations.
Any distributions we pay in the future will depend upon our taxable income, actual results of operations, economic conditions and other factors that could differ materially from our current expectations.
Our actual results of operations will be affected by a number of factors, including the revenue we receive from our properties, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures. We declared dividends of $0.035 per share for each quarter of 2023, which equates to an annualized rate of $0.14 per share.
Our actual results of operations will be affected by a number of factors, including the revenue we receive from our properties, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures. 30 We declared dividends of $0.035 per share for each quarter of 2024, which equates to an annualized rate of $0.14 per share.
The graph assumes that $100.00 was invested on December 31, 2018 and dividends were reinvested without the payment of any commissions.
The graph assumes that $100.00 was invested on December 31, 2019 and dividends were reinvested without the payment of any commissions.
Repurchases 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 during the period from January 1, 2022 through December 31, 2023.
Repurchases of Equity Securities Stock and Publicly Traded Operating Partnership Unit Repurchase Program Our Board of Directors authorized the repurchase of up to $500.0 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.
Dividends paid in 2023 of $0.14 per share are classified for income tax purposes 89.2% as taxable ordinary dividends eligible for the Section 199A deduction and 10.8% as a return of capital.
Dividends paid in 2024 of $0.14 per share are classified for income tax purposes 100.0% as taxable ordinary dividends eligible for the Section 199A deduction and 0% as a return of capital.
At December 31, 2023, we had used approximately $103.3 million of the authorized repurchase amount for the 2022-2023 period. There were no repurchases of equity securities in the three-month period ended December 31, 2023 under this repurchase program. See "Financial Statements - Note 10 Equity" in this Annual Report on Form 10-K.
As of December 31, 2024, we had $500.0 million remaining of the authorized repurchase amount. 32 There were no repurchases of equity securities during the three-month period ended December 31, 2024 under this repurchase program. See "Financial Statements — Note 10 Equity" in this Annual Report on Form 10-K.
The timing, manner, price and amount of any repurchases will be determined by us 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.
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.
On February 22, 2024, the last sales price for our Class A common stock on the NYSE was $9.96 per share. Holders As of February 22, 2024, we had 570 registered holders of our Class A common stock and 550 registered holders of our Class B common stock.
On February 26, 2025, the last sales price for our Class A common stock on the NYSE was $8.98 per share. Holders As of February 26, 2025, we had 537 registered holders of our Class A common stock and 528 registered holders of our Class B common stock.
There can be no assurance that the performance of our Class A common stock will continue in line with the same or similar trends depicted in the graph below. 33 December 31, 2018 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 Empire State Realty Trust, Inc. $ 100.00 $ 100.92 $ 69.12 $ 66.68 $ 51.47 $ 75.33 S&P 500 Index $ 100.00 $ 131.49 $ 155.68 $ 200.37 $ 164.08 $ 207.21 MSCI US REIT Index $ 100.00 $ 125.84 $ 116.31 $ 166.39 $ 125.61 $ 142.87 FTSE NAREIT Equity REIT Office Index $ 100.00 $ 131.42 $ 107.19 $ 130.77 $ 81.58 $ 83.23 The graph is not deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act regardless of any general statement regarding incorporation by reference in any such filing, and is not otherwise deemed filed under the Securities Act or the Exchange Act.
There can be no assurance that the performance of our Class A common stock will continue in line with the same or similar trends depicted in the graph below. 31 December 31, 2019 December 31, 2020 December 31, 2021 December 31, 2022 December 31, 2023 December 31, 2024 Empire State Realty Trust, Inc. $ 100.00 $ 68.49 $ 66.07 $ 51.00 $ 74.64 $ 80.60 S&P 500 Index $ 100.00 $ 118.40 $ 152.39 $ 124.79 $ 157.59 $ 197.02 MSCI US REIT Index $ 100.00 $ 92.43 $ 132.23 $ 99.82 $ 113.54 $ 123.47 FTSE NAREIT Equity REIT Office Index $ 100.00 $ 81.56 $ 99.51 $ 62.07 $ 63.34 $ 76.95 The graph is not deemed incorporated by reference into any filing made under the Securities Act of 1933, as amended (the "Securities Act"), or the Exchange Act regardless of any general statement regarding incorporation by reference in any such filing and is not otherwise deemed filed under the Securities Act or the Exchange Act.
As of February 22, 2024, we had approximately 574 registered holders of Series PR OP Units, 1,225 registered holders of Series ES OP Units, 357 registered holders of Series 60 OP Units and 279 registered holders of Series 250 OP Units.
As of February 26, 2025, we had approximately 546 registered holders of Series PR OP Units, 766 registered holders of Series ES OP Units, 219 registered holders of Series 60 OP Units and 170 registered holders of Series 250 OP Units.
Removed
Securities Authorized For Issuance Under Equity Compensation Plans On May 16, 2019, our shareholders approved the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2019 Equity Incentive Plan (the “2019 Plan”).
Added
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.
Removed
The 2019 Plan provides for grants to directors, employees and consultants of our Company and operating partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards, including LTIP units.
Removed
An aggregate of approximately 11.0 million shares of our common stock are authorized for issuance under awards granted pursuant to the 2019 Plan.
Removed
Following adoption by our shareholders of the 2019 Plan, we agreed not to issue any new equity awards under the First Amended and Restated Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. 2013 Equity Incentive Plan ("2013 Plan", and collectively with the 2019 Plan, "the Plans"), which we adopted upon our IPO in 2013.
Removed
The shares of Class A common stock underlying any awards under the 2019 Plan and the 2013 Plan that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of Class A common stock available for issuance under the 2019 Plan.
Removed
For a further discussion of the Plans, see "Financial Statements - Note 10 Equity" in this Annual Report on Form 10-K.
Removed
The following table presents certain information about our equity compensation plans as of December 31, 2023: 34 Plan Category Number of securities to be issued upon exercise of outstanding options, warrants and rights Weighted-average exercise price of outstanding options, warrants and rights Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column of this table) Equity compensation plans approved by securityholders (1) N/A N/A 4,162,516 (2) Equity compensation plans not approved by securityholders — — — Total N/A N/A 4,162,516 ______________ (1) These consist of the Empire State Realty Trust, Inc.
Removed
Empire State Realty OP, L.P. 2019 Equity Incentive Plan and the First Amended and Restated Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. 2013 Equity Incentive Plan. (2) The number of securities remaining available for future issuance consists of shares remaining available for issuance under the Empire State Realty Trust, Inc.
Removed
Empire State Realty OP, L.P. 2019 Equity Incentive Plan adjusted for awards that have been forfeited, canceled or otherwise terminated, other than by exercise under the Empire State Realty Trust, Inc.
Removed
Empire State Realty OP, L.P. 2019 Equity Incentive Plan and the First Amended and Restated Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. 2013 Equity Incentive Plan . As of December 31, 2023, we have issued 1,147,005 shares of restricted stock and 15,052,177 LTIP units under the Plans since 2013.
Removed
Upon expiration of this program, the 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 during the period from January 1, 2024 through December 31, 2025.
Removed
There have also been no repurchases of equity securities yet under the new repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

51 edited+19 added−39 removed48 unchanged
Unsecured Revolving Credit and Term Loan Facilities See "Financial Statements - Note 5 Debt" in this Annual Report on Form 10-K for a summary of our unsecured revolving credit and term loan facilities.
See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K for a summary of our unsecured revolving credit and term loan facilities.
While certain aspects of real property do decline in value over time in a manner that is reasonably 42 captured by depreciation and amortization, the value of the properties as a whole have 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.
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 have 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.
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.
Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund 36 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.
The following discussion and analysis should be read in conjunction with our consolidated financial statements as of December 31, 2023 and 2022 and for the years ended December 31, 2023, 2022 and 2021 and the notes related thereto which are included in this Annual Report on Form 10-K.
The following discussion and analysis should be read in conjunction with our consolidated financial statements as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022 and the notes related thereto which are included in this Annual Report on Form 10-K.
We declared dividends of $0.035 per share for each quarter of 2023, which equates to an annualized rate of $0.14 per share. The Board of Directors will continue its regular review of its dividend and capital allocation policies at each Board meeting.
We declared dividends of $0.035 per share for each quarter of 2024, which equates to an annualized rate of $0.14 per share. The Board of Directors will continue its regular review of its dividend and capital allocation policies at each Board meeting.
We performed our annual goodwill testing in October 2023, 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.
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.
Gain on Sale/Disposition of Property The gain on disposition activity for the year ended December 31, 2023 relates to the dispositions of 500 Mamaroneck in Harrison, New York in April 2023 and 69-97 and 103-107 Main Street in Westport, Connecticut in February 2023.
The gain on disposition activity for the year ended December 31, 2023 relates to the dispositions of 500 Mamaroneck in Harrison, New York in April 2023 and 69-97 and 103-107 Main Street in Westport, Connecticut in February 2023.
We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the time of grant. Accounting Standards Update See "Financial Statements - Note 2 Summary of Significant Accounting Policies" in this Annual Report on Form 10-K for information about recently issued and recently adopted accounting standards. 47
We believe that the assumptions and estimates utilized are appropriate based on 43 the information available to management at the time of grant. Accounting Standards Update See "Financial Statements — Note 2 Summary of Significant Accounting Policies" in this Annual Report on Form 10-K for information about recently issued and recently adopted accounting standards. 44
Many important factors could cause actual results and future events to differ materially from those set forth 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, climate-related risks such as natural disasters and extreme weather events, terrorism and other armed hostilities, as well as cybersecurity threats and technology disruptions; (ii) a failure of conditions or performance regarding any event or transaction described herein; (iii) resolution of legal proceedings involving the Company; (iv) reduced demand for office, multifamily or retail space, including as a result of the changes in the use of office space and remote work; (v) changes in our business strategy; (vi) 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; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (ix) declining real estate valuations and impairment charges; (x) termination of our ground leases; (xi) limitations on our ability to pay down, refinance, restructure or extend our indebtedness or borrow additional funds; (xii) decreased rental rates or increased vacancy rates; (xiii) difficulties in executing capital projects or development projects successfully or on the anticipated timeline or budget; (xiv) difficulties in identifying and completing acquisitions; (xv) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvi) our failure to qualify as a REIT; (xvii) incurrence of taxable capital gain on disposition of an asset due to failure of use or compliance with a 1031 exchange program; and (xviii) failure to achieve sustainability metrics and goals, including as a result of tenant collaboration, and impact of governmental regulation on our sustainability efforts.
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, climate-related risks such as natural disasters and extreme weather events, terrorism and other armed hostilities, as well as cybersecurity threats and technology disruptions; (ii) a failure of conditions or performance regarding any event or transaction described herein; (iii) resolution of legal proceedings involving the Company; (iv) reduced demand for office, multifamily or retail space, including as a result of the changes in the use of office space and remote work; (v) changes in our business strategy; (vi) 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; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (ix) declining real estate valuations and impairment charges; (x) termination of our ground leases; (xi) limitations on our ability to pay down, refinance, restructure or extend our indebtedness or borrow additional funds; (xii) decreased rental rates or increased vacancy rates; (xiii) difficulties in executing capital projects or development projects successfully or on the anticipated timeline or budget; (xiv) difficulties in identifying and completing acquisitions; (xv) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvi) our failure to qualify as a REIT; (xvii) incurrence of taxable capital gain on disposition of an asset due to failure of compliance with a 1031 exchange program; (xviii) our disclosure controls and internal control over financial reporting, including any material weakness; and (xix) failure to achieve sustainability metrics and goals, including as a result of tenant collaboration, and impact of governmental regulation on our sustainability efforts.
Our Board of Directors may from time to time modify our leverage policies in light of the then-current economic conditions, 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 our common stock, growth and acquisition opportunities and other factors. See ITEM 1A.
Our 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 our common stock, growth and acquisition opportunities and other factors.
Modified Funds From Operations ("Modified FFO") Modified FFO adds back an adjustment for any above or below-market ground lease amortization to traditionally defined FFO.
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.
Real Estate Taxes The increase in real estate taxes was primarily attributable to a $4.5 million increase in real estate tax expense due to higher assessed values for multiple properties, partially offset by a net $0.5 million decrease from our recent transaction activity as disclosed in "Financial Statements - Note 3.
Real Estate Taxes The increase in real estate taxes was primarily attributable to a $4.6 million increase in real estate tax expense due to higher assessed values for multiple properties, partially offset by a net $2.9 million decrease from our recent transaction activity as disclosed in "Financial Statements - Note 3.
At December 31, 2023, we had approximately $2.2 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 3.9% and a weighted average maturity of 5.4 years.
At December 31, 2024, we had approximately $2.3 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.27% and a weighted average maturity of 5.2 years.
Distribution to Equity Holders Distributions and dividends have been made to equity holders in 2021, 2022 and 2023 as follows (amounts in thousands): 41 Year ended December 31, 2021 32,764 Year ended December 31, 2022 42,786 Year ended December 31, 2023 41,323 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 during the period from January 1, 2022 through December 31, 2023.
Distribution to Equity Holders Distributions and dividends have been made to equity holders in 2022, 2023 and 2024 as follows (amounts in thousands): Year ended December 31, 2022 42,786 Year ended December 31, 2023 41,323 Year ended December 31, 2024 42,490 Stock and Publicly Traded Operating Partnership Unit Repurchase Program Our Board of Directors authorized the repurchase of up to $500.0 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.
"Risk Factors - Risks Relating to Our Indebtedness and Liquidity" in this Annual Report on Form 10-K for more information. At December 31, 2023, we had approximately $346.6 million available in cash and cash equivalents and there was $850.0 million available under our unsecured revolving credit facility.
"Risk Factors — Risks Relating to Our Indebtedness and Liquidity" in this Annual Report on Form 10-K for more information. At December 31, 2024, we had approximately $385.5 million available in cash and cash equivalents and there was $500.0 million available under our unsecured revolving credit facility.
Our 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 (including, but not limited to, recourse or non-recourse debt and cross-collateralized debt). Our overall leverage will depend on our mix of investments and the cost of leverage.
Our 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. Our overall leverage will depend on our mix of investments and the cost of leverage.
Core Funds From Operations ("Core FFO") Core FFO adds back to Modified FFO the following item: 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.
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.
Property Operating Expenses The increase in property operating expenses was primarily due to higher repair and maintenance costs, higher cleaning costs, and higher payroll costs in 2023 relating to increased building utilization.
Property Operating Expenses The increase in property operating expenses was primarily due to higher repair and maintenance costs, cleaning costs, and payroll costs in 2024 relating to increased building utilization and certain local law compliance costs.
Results of Operations Overview The discussion below relates to the financial condition and results of operations for the years ended December 31, 2023 and 2022. For a discussion of our 2021 financial results as compared to our 2022 financial results, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
For a discussion of our 2022 financial results as compared to our 2023 financial results, please see our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
In connection with our three ground leases (i.e. long-term leaseholds of the land and the improvements) at 1350 Broadway, 111 West 33rd Street and 1400 Broadway, we also have contractual rent obligations totaling $68.3 million as of December 31, 2023, of which $7.5 million is due within the next five years.
In connection with our three ground leases (i.e. long-term leaseholds of the land and the improvements) at 1350 Broadway, 111 West 33rd Street and 1400 Broadway, we also have contractual rent obligations totaling $66.8 million as of December 31, 2024, of which $7.5 million is due within the next five years. Portfolio Transaction Activity Refer to Part I. ITEM 2.
Interest Income The increase in interest income reflects higher interest rates on larger cash balances in the year ended December 31, 2023 compared to the year ended December 31, 2022.
Interest Income The increase in interest income reflects larger cash balances in the year ended December 31, 2024 compared to the year ended December 31, 2023.
Observatory Segment Observatory Revenue Observatory revenues were higher driven by increased visitation and revenue per visitor during the year ended December 31, 2023 as compared to the year ended December 31, 2022. Observatory Expenses The increase in O bservatory expenses was driven by increased operating hours, which increased variable costs such as marketing, labor and maintenance costs.
Observatory Segment Observatory Revenue Observatory revenues were higher driven by increased revenue per visitor from pricing increases during the year ended December 31, 2024 as compared to the year ended December 31, 2023. Observatory Expenses The increase in O bservatory expenses was driven by increased incremental costs such as labor, marketing and maintenance costs.
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. We will continue to assess the impairment of the Observatory reporting unit goodwill going forward.
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.
As of December 31, 2023, the tax years ended December 31, 2020 through December 31, 2023 remain open for an audit by the Internal Revenue Service, state or local authorities. 46 Share-Based Compensation 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, which may occur upon grant.
Share-Based Compensation 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, which may occur upon grant.
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 43 residual value to a much greater extent than do other depreciable assets.
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.
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. In particular, statements pertaining to our capital resources, portfolio performance, dividend policy and results of operations contain forward-looking statements.
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.
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.
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.
The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to NOI for the periods presented (amounts in thousands): Years Ended December 31, 2023 2022 2021 Net income (loss) $ 84,407 $ 63,212 $ (13,037) Add: General and administrative expenses 63,939 61,765 55,947 Depreciation and amortization 189,911 216,894 201,806 Interest expense 101,484 101,206 94,394 Loss on early extinguishment of debt — — 214 Income tax expense (benefit) 2,715 1,546 (1,734) Impairment charges — — 7,723 Less: Gain on sale/disposition of properties (26,764) (33,988) — Interest income (15,136) (4,948) (704) Third-party management and other fees (1,351) (1,361) (1,219) Net operating income $ 399,205 $ 404,326 $ 343,390 Other Net Operating Income Data Straight line rental revenue $ 19,563 $ 24,562 $ 21,078 Net increase in rental revenue from the amortization of above and below-market lease assets and liabilities $ 2,416 $ 4,758 $ 5,895 Amortization of acquired below-market ground leases $ 7,831 $ 7,831 $ 7,831 Funds from Operations ("FFO") We present below a discussion of FFO.
The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to NOI: Years Ended December 31, (amounts in thousands) 2024 2023 2022 Net income $ 80,359 $ 84,407 $ 63,212 Add: General and administrative expenses 70,234 63,939 61,765 Depreciation and amortization 184,818 189,911 216,894 Interest expense 105,239 101,484 101,206 Interest expense associated with property in receivership 4,471 — — Loss on early extinguishment of debt 553 — — Income tax expense 2,688 2,715 1,546 Less: Gain on sale/disposition of properties (13,302) (26,764) (33,988) Third-party management and other fees (1,170) (1,351) (1,361) Interest income (21,298) (15,136) (4,948) Net operating income $ 412,592 $ 399,205 $ 404,326 Other Net Operating Income Data Straight-line rental revenue $ 11,283 $ 19,563 $ 24,562 Net increase in rental revenue from the amortization of above- and below-market lease assets and liabilities $ 2,177 $ 2,416 $ 4,758 Amortization of acquired below-market ground leases $ 7,831 $ 7,831 $ 7,831 41 Funds From Operations We present below a discussion of Funds From Operations ("FFO").
The following table summarizes our purchases of equity securities for the year ended December 31, 2023 under the previous repurchase program.
The following table summarizes our purchases of equity securities for the year ended December 31, 2024.
Financial Covenants 39 As of December 31, 2023, we were in compliance with the following financial covenants related to our unsecured facilities: Financial Covenant Required December 31, 2023 In Compliance Maximum total leverage 31.5 % Yes Maximum secured leverage 12.3 % Yes Minimum fixed charge coverage > 1.50x 3.3x Yes Minimum unencumbered interest coverage > 1.75x 5.7x Yes Maximum unsecured leverage 23.4 % Yes Mortgage Debt As of December 31, 2023, mortgage notes payable, net, amounted to $877.4 million.
Financial Covenants As of December 31, 2024 , we were in compliance with the following financial covenants related to our unsecured facilities: Financial Covenant Required December 31, 2024 In Compliance Maximum total leverage 33.2 % Yes Maximum secured leverage 11.7 % Yes Minimum fixed charge coverage > 1.50x 2.8x Yes Minimum unencumbered interest coverage > 1.75x 4.6x Yes Maximum unsecured leverage 25.4 % Yes 37 Mortgage Debt As of December 31, 2024, mortgage notes payable, net, amounted to $692.2 million.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Approximate Dollar Value Available for Future Purchase Year ended December 31, 2023 2,150,857 $ 6.09 2,150,857 $500,000,000 (a) (a) Represents the new board authorization for the January 1, 2024 - December 31, 2025 period.
Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Approximate Dollar Value Available for Future Purchase Year ended December 31, 2024 — $ — — $ 500,000,000 Cash Flows Comparison of Year Ended December 31, 2024 to the Year Ended December 31, 2023 Net cash .
Goodwill Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.
An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.
Includes the Empire State Building broadcasting licenses and Observatory operations. (2) Presents a renewed and expansion lease as one lease signed. (3) 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.
(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.
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. At December 31, 2023, we had used approximately $103.3 million of the authorized repurchase amount for the 2022-2023 period.
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 December 31, 2024, we had $500.0 million remaining of the authorized repurchase amount. There were no repurchases of equity securities during the twelve months ended December 31, 2024.
The following table presents a reconciliation of our net income (loss), the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO for the periods presented (amounts in thousands): 44 Years Ended December 31, 2023 2022 2021 Net income (loss) $ 84,407 $ 63,212 $ (13,037) Non-controlling interests in other partnerships (68) 243 — Private perpetual preferred unit distributions (4,201) (4,201) (4,201) Real estate depreciation and amortization 184,633 210,522 196,360 Impairment charges — — 7,723 Gain on sale/disposition of properties (26,764) (33,988) — Funds from operations attributable to common stockholders and non-controlled interests 238,007 235,788 186,845 Amortization of below-market ground leases 7,831 7,831 7,831 Modified funds from operations attributable to common stockholders and non-controlled interests 245,838 243,619 194,676 Loss on early extinguishment of debt — — 214 Core funds from operations attributable to common stockholders and non-controlled interests $ 245,838 $ 243,619 $ 194,890 Weighted average shares and Operating Partnership units Basic 263,226 268,337 277,420 Diluted 265,633 269,948 277,420 Critical Accounting Estimates Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements, have been prepared in conformity with GAAP and with the rules and regulations of the Securities and Exchange Commission (the "SEC"), represent our assets and liabilities and operating results.
The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO: 42 Years Ended December 31, (amounts in thousands) 2024 2023 2022 Net income $ 80,359 $ 84,407 $ 63,212 Non-controlling interests in other partnerships (4) (68) 243 Private perpetual preferred unit distributions (4,201) (4,201) (4,201) Real estate depreciation and amortization 180,513 184,633 210,522 Gain on sale/disposition of properties (13,302) (26,764) (33,988) Funds from operations attributable to common stockholders and the Operating Partnership 243,365 238,007 235,788 Amortization of below-market ground leases 7,831 7,831 7,831 Modified funds from operations attributable to common stockholders and the Operating Partnership 251,196 245,838 243,619 Interest expense associated with property in receivership 4,471 — — Loss on early extinguishment of debt 553 — — Core funds from operations attributable to common stockholders and the Operating Partnership $ 256,220 $ 245,838 $ 243,619 Weighted average shares and Operating Partnership units Basic 264,706 263,226 268,337 Diluted 269,019 265,633 269,948 Critical Accounting Estimates Goodwill Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired.
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 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.
Acquisitions and Dispositions" in this Annual Report on Form 10-K. Depreciation and Amortization Depreciation and amortization is lower for the year ended December 31, 2023 than for the year ended December 31, 2022 because the latter included accelerated depreciation from the disposition of 383 Main Avenue and depreciation expense on properties that were sold prior to December 31, 2023.
Acquisitions and Dispositions" in this Annual Report on Form 10-K. Depreciation and Amortization Depreciation and amortization is lower for the year ended December 31, 2024 than for the year ended December 31, 2023 primarily due to disposition activity during the comparative period.
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any off-balance sheet arrangements. 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.
We intend to fund the capital improvements through a combination of operating cash flow, cash on hand and borrowings. 39 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.
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).
We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).
As of December 31, 2023, excluding debt amortization, we have a debt maturity of $77.7 million in November 2024, $315.0 million in 2025, $225.0 million in 2026, $319.0 million in 2027 and $1.3 billion thereafter. As of December 31, 2023, interest expense obligations and debt amortization from 2024 through 2028 and thereafter amount to $487.4 million and $51.6 million, respectively.
As of December 31, 2024, excluding debt amortization, we have a debt maturity of $100.0 million in March 2025, $225.0 million in 2026, $155.0 million in 2027, $146.1 million in 2028, $441.6 million in 2029, and $1.2 billion thereafter.
(4) Includes an aggregate of 498,682, 499,012 and 507,276 rentable square feet of retail space in our Manhattan office properties in 2023, 2022 and 2021, respectively. Excludes the Empire State Building broadcasting licenses and Observatory operations. (5) The tables above exclude our multifamily properties.
(6) Includes an aggregate of 475,744, 498,682, and 499,012 rentable square feet of retail space in our Manhattan office properties in 2024, 2023 and 2022, respectively.
Year Ended December 31, 2023 Compared to the Year Ended December 31, 2022 The following table summarizes the historical results of operations for the years ended December 31, 2023 and 2022 (amounts in thousands) : Years Ended December 31, 2023 2022 Change % Real Estate Segment Observatory Segment Total Real Estate Segment Observatory Segment Total Revenues: Rental revenue $ 597,319 $ — $ 597,319 $ 591,048 $ — $ 591,048 $ 6,271 1.1 % Observatory revenue — 129,366 129,366 — 105,978 105,978 23,388 22.1 % Lease termination fees — — — 20,032 — 20,032 (20,032) (100.0) % Third-party management and other fees 1,351 — 1,351 1,361 — 1,361 (10) (0.7) % Other revenues and fees 11,536 — 11,536 8,622 — 8,622 2,914 33.8 % Total revenues 610,206 129,366 739,572 621,063 105,978 727,041 12,531 1.7 % Operating expenses: Property operating expenses 167,324 — 167,324 157,935 — 157,935 (9,389) (5.9) % Ground rent expenses 9,326 — 9,326 9,326 — 9,326 — — % General and administrative expenses 63,939 — 63,939 61,765 — 61,765 (2,174) (3.5) % Observatory expenses — 35,265 35,265 — 31,036 31,036 (4,229) (13.6) % Real estate taxes 127,101 — 127,101 123,057 — 123,057 (4,044) (3.3) % Depreciation and amortization 189,762 149 189,911 216,707 187 216,894 26,983 12.4 % Total operating expenses 557,452 35,414 592,866 568,790 31,223 600,013 7,147 1.2 % Operating income 52,754 93,952 146,706 52,273 74,755 127,028 19,678 15.5 % Intercompany rent income (expense) 80,514 (80,514) — 65,005 (65,005) — — — % Other income (expense): Interest income 14,936 200 15,136 4,901 47 4,948 10,188 205.9 % Interest expense (101,484) — (101,484) (101,206) — (101,206) (278) (0.3) % Gain on sale/disposition of properties 26,764 — 26,764 33,988 — 33,988 (7,224) (21.3) % Income before income taxes 73,484 13,638 87,122 54,961 9,797 64,758 22,364 34.5 % Income tax expense (552) (2,163) (2,715) (584) (962) (1,546) (1,169) (75.6) % Net income 72,932 11,475 84,407 54,377 8,835 63,212 21,195 33.5 % Net (income) loss attributable to non-controlling interests: Non-controlling interests in the Operating Partnership (31,094) — (31,094) (22,812) — (22,812) (8,282) (36.3) % Non-controlling interests in other partnerships (68) — (68) 243 — 243 (311) (128.0) % Private perpetual preferred unit distributions (4,201) — (4,201) (4,201) — (4,201) — — % Net income attributable to common shareholders $ 37,569 $ 11,475 $ 49,044 $ 27,607 $ 8,835 $ 36,442 $ 12,602 35.0 % 37 Real Estate Segment Rental Revenue The increase in rental revenue was primarily attributable to a $13.7 million increase in base rent from new or renewed tenants and higher rents and higher tenant escalations, partially offset by a net $7.4 million decrease in revenue from our recent transaction activity as disclosed in "Financial Statements - Note 3.
Year Ended December 31, 2024 Compared to the Year Ended December 31, 2023 The following table summarizes the historical results of operations: Years Ended December 31, 2024 2023 Change % (amounts in thousands) Real Estate Segment Observatory Segment Total Real Estate Segment Observatory Segment Total Revenues: Rental revenue $ 614,596 $ — $ 614,596 $ 597,319 $ — $ 597,319 $ 17,277 2.9 % Observatory revenue — 136,377 136,377 — 129,366 129,366 7,011 5.4 % Lease termination fees 4,771 — 4,771 — — — 4,771 N/A Third-party management and other fees 1,170 — 1,170 1,351 — 1,351 (181) (13.4) % Other revenues and fees 11,009 — 11,009 11,536 — 11,536 (527) (4.6) % Total revenues 631,546 136,377 767,923 610,206 129,366 739,572 28,351 3.8 % Operating expenses: Property operating expenses 179,175 — 179,175 167,324 — 167,324 (11,851) (7.1) % Ground rent expenses 9,326 — 9,326 9,326 — 9,326 — — % General and administrative expenses 70,234 — 70,234 63,939 — 63,939 (6,295) (9.8) % Observatory expenses — 36,834 36,834 — 35,265 35,265 (1,569) (4.4) % Real estate taxes 128,826 — 128,826 127,101 — 127,101 (1,725) (1.4) % Depreciation and amortization 184,667 151 184,818 189,762 149 189,911 5,093 2.7 % Total operating expenses 572,228 36,985 609,213 557,452 35,414 592,866 (16,347) (2.8) % Operating income 59,318 99,392 158,710 52,754 93,952 146,706 12,004 8.2 % Intercompany rent income (expense) 83,477 (83,477) — 80,514 (80,514) — — — % Other income (expense): Interest income 20,853 445 21,298 14,936 200 15,136 6,162 40.7 % Interest expense (105,239) — (105,239) (101,484) — (101,484) (3,755) (3.7) % Interest expense associated with property in receivership (4,471) — (4,471) — — — (4,471) N/A Loss on early extinguishment of debt (553) — (553) — — — (553) N/A Gain on disposition of properties 13,302 — 13,302 26,764 — 26,764 (13,462) (50.3) % Income before income taxes 66,687 16,360 83,047 73,484 13,638 87,122 (4,075) (4.7) % Income tax expense (413) (2,275) (2,688) (552) (2,163) (2,715) 27 1.0 % Net income 66,274 14,085 80,359 72,932 11,475 84,407 (4,048) (4.8) % Net income attributable to non-controlling interests: Non-controlling interests in the Operating Partnership (28,713) — (28,713) (31,094) — (31,094) 2,381 7.7 % Non-controlling interests in other partnerships (4) — (4) (68) — (68) 64 94.1 % Private perpetual preferred unit distributions (4,201) — (4,201) (4,201) — (4,201) — — % Net income attributable to common shareholders $ 33,356 $ 14,085 $ 47,441 $ 37,569 $ 11,475 $ 49,044 $ (1,603) (3.3) % 35 Real Estate Segment Rental Revenue The increase in rental revenue was primarily attributable to higher occupancy and higher operating and real estate tax expense escalations driving a $29.6 million increase during the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023.
Years Ended December 31, 2023 2022 2021 Total Commercial Portfolio Capital expenditures (1) $ 55,385 $ 38,445 $ 24,279 _______________ (1) Includes all capital expenditures, excluding tenant improvements and leasing commission costs. As of December 31, 2023, we expect to incur additional costs relating to obligations under signed new leases of approximately $101.2 million for tenant improvements and leasing commissions.
(amounts in thousands) Years Ended December 31, Total Commercial Portfolio 2024 2023 2022 Capital expenditures (1) $ 72,899 $ 55,385 $ 38,445 _______________ (1) Includes all capital expenditures, excluding tenant improvements and leasing commission costs.
"Risk Factors - Risks Relating to Our Indebtedness and Liquidity" in this Annual Report on Form 10-K for more information. 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).
See ITEM 1A. "Risk Factors — Risks Relating to Our Indebtedness and Liquidity" in this Annual Report on Form 10-K for more information.
Financing activities . Net cash used in financing activities decreased by $80.9 million to $62.9 million primarily due to lower repurchases of common shares in 2023. Net Operating Income Net operating income ("NOI") is a non-GAAP financial measure of performance.
Net cash provided by financing activities increased by $221.4 million to $158.6 million primarily due to the funding of senior unsecured notes during the year. 40 Net Operating Income NOI is a non-GAAP financial measure of performance.
As of December 31, 2023, we were in compliance with the covenants under the outstanding senior unsecured notes. Leverage Policies We expect to employ leverage in our capital structure in amounts determined from time to time by our Board of Directors.
See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K 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 our Board of Directors.
We intend to fund the tenant improvements and leasing commission costs through a combination of operating cash flow, cash on hand and borrowings. Capital expenditures are considered part of both our short-term and long-term liquidity requirements. We intend to fund the capital improvements through a combination of operating cash flow, cash on hand and borrowings.
Capital expenditures are considered part of both our short-term and long-term liquidity requirements.
Office Properties (1)(5) Years Ended December 31, Total New Leases, Expansions, and Renewals 2023 2022 2021 Number of leases signed (2) 82 130 118 Total square feet 929,031 1,071,426 983,182 Leasing commission costs per square foot (3) $ 19.80 $ 18.23 $ 20.14 Tenant improvement costs per square foot (3) 81.86 56.72 66.25 Total leasing commissions and tenant improvement costs per square foot (3) $ 101.66 $ 74.95 $ 86.39 40 Retail Properties (4)(5) Years Ended December 31, Total New Leases, Expansions, and Renewals 2023 2022 2021 Number of leases signed (2) 8 14 11 Total Square Feet 21,715 47,153 22,448 Leasing commission costs per square foot (3) $ 54.62 $ 62.30 $ 57.27 Tenant improvement costs per square foot (3) 38.57 55.13 61.75 Total leasing commissions and tenant improvement costs per square foot (3) $ 93.19 $ 117.43 $ 119.02 _______________ (1) Excludes an aggregate of 498,682, 499,012 and 507,276 rentable square feet of retail space in our Manhattan office properties in 2023, 2022 and 2021, respectively.
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). 38 Office Properties (1)(2) Years Ended December 31, Total New Leases, Expansions, and Renewals (3) 2024 2023 2022 Number of leases signed (4) 102 85 133 Total square feet 1,300,584 960,192 1,176,172 Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 70.07 $ 63.45 $ 58.06 Weighted average annualized cash rent per square foot for previous leases 66.44 57.95 55.43 Increase in mark-to-market rent $ 3.63 $ 5.50 $ 2.63 Leasing commission costs per square foot (5) $ 19.46 $ 19.51 $ 18.49 Tenant improvement costs per square foot (5) 55.98 79.30 51.92 Total leasing commissions and tenant improvement costs per square foot (5) $ 75.44 $ 98.81 $ 70.41 Retail Properties (2)(6) Years Ended December 31, Total New Leases, Expansions, and Renewals (3) 2024 2023 2022 Number of leases signed (4) 9 8 14 Total square feet 24,240 21,715 47,153 Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 181.95 $ 148.89 $ 139.75 Weighted average annualized cash rent per square foot for previous leases 241.65 209.88 158.89 Decrease in mark-to-market rent $ (59.70) $ (60.99) $ (19.14) Leasing commission costs per square foot (5) $ 74.29 $ 54.62 $ 62.30 Tenant improvement costs per square foot (5) 35.87 38.57 55.13 Total leasing commissions and tenant improvement costs per square foot (5) $ 110.16 $ 93.19 $ 117.43 _______________ (1) Excludes an aggregate of 475,744, 498,682, and 499,012 rentable square feet of retail space in our Manhattan office properties in 2024, 2023 and 2022, respectively.
The next mortgage debt maturity is November 2024. See "Financial Statements - Note 5 Debt" in this Annual Report on Form 10-K for more information on mortgage debt. Senior Unsecured Notes The terms of the 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.
See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K for more information on mortgage debt.
On September 14, 2023, we closed on the acquisition of a Williamsburg retail property located on the corner of North 6 th Street and Wythe Avenue in Brooklyn, New York, for a purchase price of $26.4 million. Refer to "Financial Statements - Note 3 Acquisitions and Dispositions" in this Annual Report on Form 10-K.
"Properties - Portfolio Transaction Activity" for a summary of our portfolio transaction activity . Refer to "Financial Statements - Note 3 Acquisitions and Dispositions" in this Annual Report on Form 10-K.
We also had less acquisition activity in the year ended December 31, 2023 as compared with the year ended December 31, 2022. Operating activities . Net cash provided by operating activities increased by $21.3 million to $232.5 million due to increased Observatory operating income and changes in working capital. Investing activities .
Net cash provided by operating activities increased by $28.4 million to $260.9 million due to increased Observatory operating income, increased rental revenues in excess of property operating expenses and changes in working capital. Investing activities .
Removed
Overview 2023 Highlights • Net income attributable to the Company of $49.0 million. • Core FFO of $245.8 million. • Signed a total of 950,746 rentable square feet of new, renewal and expansion leases. • Completed the acquisition of a retail asset located i n Williamsburg, Brooklyn in the third quarter. 36 • Completed the dispositions of retail assets located in Westport, Connecticut in the first quarter, and an office asset located in Harrison, New York in the second quarter.
Added
In particular, statements pertaining to our 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.
Removed
Acquisitions and Dispositions" in this Annual Report on Form 10-K. Other Revenues and Fees The increase in other revenues and fees relates to prior period real estate tax refunds and abatements, and bad debt recovery income during the year ended December 31, 2023.
Added
Overview 2024 Highlights • Net income attributable to common stockholders of $47.4 million. • Core Funds From Operations ("Core FFO") of $256.2 million attributable to common stockholders and the operating partnership. • Signed a total of 1,324,824 rentable square feet of new, renewal and expansion leases. 34 Results of Operations Overview The discussion below relates to the financial condition and results of operations for the years ended December 31, 2024 and 2023.
Removed
The gain on disposition activity for the year ended December 31, 2022 relates to the dispositions of 10 Bank Street in White Plains, New York in December 2022 and 383 Main Avenue in Norwalk, Connecticut in April 2022.
Added
The increases were partially offset by a net $14.2 million decrease in revenue from our recent transaction activity as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Annual Report on Form 10-K.
Removed
Income Taxes 38 The increase in income tax expense was attributable to higher taxable income for the Observatory segment for the year ended December 31, 2023.
Added
Interest Expense The increase in interest expense reflects interest on new debt instruments in the year ended December 31, 2024, partially offset by the interest expense on debt associated with First Stamford Place being recognized separately as interest expense associated with property in receivership. See "Financial Statements — Note 5. Debt" in this Annual Report on Form 10-K.
Removed
Portfolio Transaction Activity On February 1, 2023, we closed on the sale of 69-97 and 103-107 Main Street in Westport, Connecticut at a gross asset valuation of $40.0 million. Refer to "Financial Statements - Note 11 Related Party Transactions" in this Annual Report on Form 10-K.
Added
Gain on Sale/Disposition of Property The gain on disposition activity for the year ended December 31, 2024 relates to the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut as disclosed in "Financial Statements - Note 3. Acquisitions and Dispositions" in this Annual Report on Form 10-K.
Removed
On April 5, 2023, we closed on the sale of 500 Mamaroneck Avenue in Harrison, New York at a gross asset valuation of $53.0 million.
Added
As of December 31, 2024, interest expense obligations and debt amortization from 2025 through 2029 and thereafter amount to $506.0 million and $34.0 million, respectively.
Removed
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.
Added
Unsecured Revolving Credit and Term Loan Facilities In March 2024, we closed on 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.
Removed
The agreement also contains 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 real estate investment trust qualification.
Added
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.
Removed
Although our Board of Directors has not adopted a policy that limits the total amount of indebtedness that we may incur, we anticipate that our Board of Directors will consider a number of factors in evaluating our level of indebtedness from time to time, as well as the amount of such indebtedness that will be either fixed or floating rate.
Added
In May 2024, the First Stamford Place property was placed in receivership and accordingly, we reclassified the related debt and applicable accrued interest to debt associated with property under receivership and accrued interest associated with property in receivership, respectively, in our consolidated balance sheet.
Removed
Upon expiration of this program, the 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 during the period from January 1, 2024 through December 31, 2025.
Added
As of December 31, 2024, this debt consists of a $164.0 million mortgage loan bearing interest at 4.09% and a $11.9 million loan bearing interest at 6.25%.
Removed
As of the date of this filing, we have used $0 of such $500 million authorization. Cash Flows Comparison of Year Ended December 31, 2023 to the Year Ended December 31, 2022 Net cash . Cash and cash equivalents and restricted cash were $407.0 million and $314.7 million as of December 31, 2023 and 2022, respectively.
Added
In connection with this we recorded a contract asset which represents the amount of obligation we expect to be released upon the final resolution of the foreclosure process on the First Stamford Place property. Subsequent to year end, in February 2025, title of the property was transferred to the mortgage lender and we were released of our mortgage obligation.
Removed
The increase was primarily due to net proceeds from the disposition of 500 Mamaroneck in April 2023 and 69-97 and 103-107 Main Street in February 2023 and from less share repurchase activity during the year ended December 31, 2023.
Added
In July 2024, we executed an agreement for the refinance of the mortgage for the Metro Center property that was due to mature in November 2024. Beginning in November 2024, the new loan balance of $71.6 million is interest-only at an interest rate of 3.59%, with a four-year term plus a one-year extension option.
Removed
Net cash used in investing activities decreased by $153.6 million to $77.3 million primarily due to the net proceeds from the disposition of 500 Mamaroneck in April 2023 and 69-97 and 103-107 Main Street in February 2023. We also had less acquisition activity in the year ended December 31, 2023 as compared with the year ended December 31, 2022.
Added
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.
Removed
The consolidated financial statements include our accounts and our partially owned and wholly owned subsidiaries as well as our Operating Partnership and its subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. We consolidate entities in which we have a controlling financial interest.
Added
In the evaluation of our level of indebtedness, our 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.
Removed
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.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

4 edited+0 added−0 removed8 unchanged
As of December 31, 2023, the weighted average interest rate on the $2.2 billion of fixed-rate indebtedness outstanding was 3.9% per annum, each with maturities at various dates through March 17, 2035.
As of December 31, 2024, the weighted average interest rate on the $2.3 billion of fixed-rate indebtedness outstanding was 4.27% per annum, each with maturities at various dates through March 17, 2035.
As of December 31, 2023, the fair value of our outstanding debt was approximately $2.0 billion which was approximately $194.0 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.
As of December 31, 2024, the fair value of our outstanding debt was approximately $2.1 billion which was approximately $153.4 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.
As of December 31, 2023, we have interest rate SOFR swap and cap agreements with an aggregate notional value of $573.2 million and which mature between October 1, 2024 and November 1, 2033.
As of December 31, 2024, we have interest rate SOFR swap and cap agreements with an aggregate notional value of $664.0 million and which mature between March 19, 2025 and November 1, 2033.
These "variable to fixed" interest rate swaps have been designated as cash flow hedges and are deemed highly effective with fair values of $11.8 million that is included in prepaid expenses and other assets and ($0.1 million) that is included in accounts payable and accrued expenses on the consolidated balance sheet as of December 31, 2023.
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 $13.1 million and are included in prepaid expenses and other assets on the consolidated balance sheet as of December 31, 2024.

Other ESRT 10-K year-over-year comparisons