Empire State Realty OP, L.P. 10-Q

ITEM 1. FINANCIAL STATEMENTS Empire State Realty OP, L.P. Condensed Consolidated Balance Sheets (amounts in thousands, except per unit amounts) June 30, 2025 December 31, 2024 ASSETS (unaudited) Commercial real estate properties, at cost: Land $ 397,666 $ 386,423 Development costs 8,187 8,187 Building and improvements 3,498,097 3,392,043 3,903,950 3,786,653 Less: accumulated depreciation ( 1,341,144 ) ( 1,274,193 ) Commercial real estate properties, net 2,562,806 2,512,460 Contract asset — 170,419 Cash and cash equivalents 94,643 385,465 Restricted cash 42,084 43,837 Tenant and other receivables 28,124 31,427 Deferred rent receivables 255,272 247,754 Prepaid expenses and other assets 85,083 101,852 Deferred costs, net 181,694 183,987 Acquired below-market ground leases, net 309,495 313,410 Right of use assets 28,070 28,197 Goodwill 491,479 491,479 Total assets $ 4,078,750 $ 4,510,287 LIABILITIES AND CAPITAL Liabilities: Mortgage notes payable, net $ 691,440 $ 692,176 Senior unsecured notes, net 1,097,355 1,197,061 Unsecured term loan facilities, net 268,883 268,731 Unsecured revolving credit facility — 120,000 Debt associated with property in receivership — 177,667 Accrued interest associated with property in receivership — 5,433 Accounts payable and accrued expenses 104,315 132,016 Acquired below-market leases, net 17,081 19,497 Ground lease liabilities 28,070 28,197 Deferred revenue and other liabilities 55,343 62,639 Tenants’ security deposits 27,015 24,908 Total liabilities 2,289,502 2,728,325 Commitments and contingencies Capital: Private perpetual preferred units: Series 2019 Private perpetual preferred units, $ 13.52 liquidation preference, 4,664 issued and outstanding in 2025 and 2024 21,936 21,936 Series 2014 Private perpetual preferred units, $ 16.62 liquidation preference, 1,560 issued and outstanding in 2025 and 2024 8,004 8,004 Series PR operating partnership units: ESRT partner's capital ( 2,786 and 2,742 general partner operating partnership units and 166,490 and 164,641 limited partner operating partnership units outstanding in 2025 and 2024, respectively) 1,038,209 1,030,696 Limited partners' interests ( 85,067 and 81,605 limited partner operating partnership units outstanding in 2025 and 2024, respectively) 712,079 711,904 Series ES operating partnership units ( 17,483 and 18,181 limited partner operating partnership units outstanding in 2025 and 2024, respectively) 6,812 7,126 Series 60 operating partnership units ( 4,460 and 4,589 limited partner operating partnership units outstanding in 2025 and 2024, respectively) 1,383 1,436 Series 250 operating partnership units ( 2,298 and 2,393 limited partner operating partnership units outstanding in 2025 and 2024, respectively) 825 860 Total Empire State Realty OP, L.P.'s capital 1,789,248 1,781,962 Non-controlling interest in other partnerships — — Total capital 1,789,248 1,781,962 Total liabilities and capital $ 4,078,750 $ 4,510,287 The accompanying notes are an integral part of these consolidated financial statements 2 Empire State Realty OP, L.P. Condensed Consolidated Statements of Operations (unaudited) Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands, except per unit amounts) 2025 2024 2025 2024 Revenues: Rental revenue $ 153,540 $ 152,470 $ 308,082 $ 306,352 Observatory revenue 33,899 34,124 57,060 58,720 Lease termination fees 464 — 464 — Third-party management and other fees 408 376 839 641 Other revenue and fees 2,939 2,573 4,871 5,009 Total revenues 191,250 189,543 371,316 370,722 Operating expenses: Property operating expenses 44,880 41,516 89,940 86,576 Ground rent expenses 2,332 2,332 4,663 4,663 General and administrative expenses 18,685 18,020 35,625 33,992 Observatory expenses 9,822 8,958 17,940 17,389 Real estate taxes 32,607 31,883 65,657 64,124 Depreciation and amortization 47,802 47,473 96,581 93,554 Total operating expenses 156,128 150,182 310,406 300,298 Total operating income 35,122 39,361 60,910 70,424 Other income (expense): Interest income 1,867 5,092 5,653 9,270 Interest expense ( 25,126 ) ( 25,323 ) ( 52,064 ) ( 50,451 ) Interest expense associated with property in receivership — ( 628 ) ( 647 ) ( 628 ) Loss on early extinguishment of debt — — — ( 553 ) Gain on disposition of property — 10,803 13,170 10,803 Income before income taxes 11,863 29,305 27,022 38,865 Income tax (expense) benefit ( 478 ) ( 750 ) 141 ( 95 ) Net income 11,385 28,555 27,163 38,770 Private perpetual preferred unit distributions ( 1,051 ) ( 1,051 ) ( 2,101 ) ( 2,101 ) Net income attributable to non-controlling interests in other partnerships — — — ( 4 ) Net income attributable to common unitholders $ 10,334 $ 27,504 $ 25,062 $ 36,665 Total weighted average units: Basic 266,899 264,676 266,985 264,619 Diluted 269,951 268,716 269,739 268,105 Earnings per unit attributable to common unitholders: Basic $ 0.04 $ 0.10 $ 0.09 $ 0.14 Diluted $ 0.04 $ 0.10 $ 0.09 $ 0.14 Dividends per unit $ 0.035 $ 0.035 $ 0.070 $ 0.070 The accompanying notes are an integral part of these consolidated financial statements 3 Empire State Realty OP, L.P. Condensed Consolidated Statements of Comprehensive Income (unaudited) Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 Net income $ 11,385 $ 28,555 $ 27,163 $ 38,770 Other comprehensive income (loss): Unrealized gain (loss) on valuation of interest rate swap agreements ( 1,472 ) 2,853 ( 5,588 ) 11,051 Amount reclassified into interest expense ( 484 ) ( 667 ) ( 1,533 ) ( 2,991 ) Other comprehensive income (loss) ( 1,956 ) 2,186 ( 7,121 ) 8,060 Comprehensive income 9,429 30,741 20,042 46,830 Net income attributable to non-controlling interests in other partnerships — — — ( 4 ) Other comprehensive income attributable to non-controlling interest in other partnerships — — — — Comprehensive income attributable to OP unitholders $ 9,429 $ 30,741 $ 20,042 $ 46,826 The accompanying notes are an integral part of these consolidated financial statements 4 Empire State Realty OP, L.P. Condensed Consolidated Statements of Capital For The Three Months Ended June 30, 2025 and 2024 (unaudited) Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners General Partner Limited Partners (amounts in thousands) Private Perpetual Preferred Units Private Perpetual Preferred Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Non-controlling Interest in Other Partnerships Total Capital Balance at March 31, 2025 6,224 $ 29,940 168,070 $ 1,032,060 85,866 $ 714,575 17,869 $ 7,017 4,562 $ 1,430 2,365 $ 853 $ — $ 1,785,875 Conversion of operating partnership units to ESRT Partner's Capital — — 1,539 8,401 ( 984 ) ( 8,192 ) ( 386 ) ( 152 ) ( 102 ) ( 33 ) ( 67 ) ( 24 ) — — Repurchases of common units — — ( 310 ) ( 2,148 ) — — — — — — — — — ( 2,148 ) Equity compensation — — ( 23 ) 534 185 6,364 — — — — — — — 6,898 Distributions — ( 1,051 ) — ( 5,919 ) — ( 2,985 ) — ( 614 ) — ( 157 ) — ( 80 ) — ( 10,806 ) Net income — 1,051 — 6,519 — 2,853 — 692 — 176 — 94 — 11,385 Other comprehensive loss — — — ( 1,238 ) — ( 536 ) — ( 131 ) — ( 33 ) — ( 18 ) — ( 1,956 ) Balance at June 30, 2025 6,224 $ 29,940 169,276 $ 1,038,209 85,067 $ 712,079 17,483 $ 6,812 4,460 $ 1,383 2,298 $ 825 $ — $ 1,789,248 Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners General Partner Limited Partners (amounts in thousands) Private Perpetual Preferred Units Private Perpetual Preferred Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Non-controlling Interest in Other Partnerships Total Capital Balance at March 31, 2024 6,224 $ 29,940 164,798 $ 996,122 82,266 $ 692,575 19,387 $ 4,722 4,991 $ 863 2,573 $ 512 $ — $ 1,724,734 Conversion of operating partnership units to ESRT Partner's Capital — — 697 1,966 ( 220 ) ( 1,849 ) ( 339 ) ( 89 ) ( 102 ) ( 20 ) ( 36 ) ( 8 ) — — Repurchases of common units — — — — — — — — — — — — — — Equity compensation — — ( 30 ) 541 192 5,847 — — — — — — — 6,388 Distributions — ( 1,051 ) — ( 5,787 ) — ( 2,878 ) — ( 670 ) — ( 172 ) — ( 89 ) — ( 10,647 ) Net income — 1,051 — 17,071 — 7,636 — 1,999 — 523 — 275 — 28,555 Other comprehensive income — — — 1,366 — 602 — 154 — 42 — 22 — 2,186 Balance at June 30, 2024 6,224 $ 29,940 165,465 $ 1,011,279 82,238 $ 701,933 19,048 $ 6,116 4,889 $ 1,236 2,537 $ 712 $ — $ 1,751,216 5 Empire State Realty OP, L.P. Condensed Consolidated Statements of Capital For The Six Months Ended June 30, 2025 and 2024 (unaudited) Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners General Partner Limited Partners (amounts in thousands) Private Perpetual Preferred Units Private Perpetual Preferred Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Non-controlling Interest in Other Partnerships Total Capital Balance at December 31, 2024 6,224 $ 29,940 167,383 $ 1,030,696 81,605 $ 711,904 18,181 $ 7,126 4,589 $ 1,436 2,393 $ 860 $ — $ 1,781,962 Conversion of operating partnership units to ESRT Partner's Capital — — 2,072 9,986 ( 1,150 ) ( 9,637 ) ( 698 ) ( 274 ) ( 129 ) ( 41 ) ( 95 ) ( 34 ) — — Repurchases of common units — — ( 310 ) ( 2,148 ) — — — — — — — — — ( 2,148 ) Equity compensation — — 131 207 4,612 10,774 — — — — — — — 10,981 Distributions — ( 2,101 ) — ( 11,799 ) — ( 5,967 ) — ( 1,242 ) — ( 317 ) — ( 163 ) — ( 21,589 ) Net income — 2,101 — 15,739 — 6,992 — 1,679 — 426 — 226 — 27,163 Other comprehensive loss — — — ( 4,472 ) — ( 1,987 ) — ( 477 ) — ( 121 ) — ( 64 ) — ( 7,121 ) Balance at June 30, 2025 6,224 $ 29,940 169,276 $ 1,038,209 85,067 $ 712,079 17,483 $ 6,812 4,460 $ 1,383 2,298 $ 825 $ — $ 1,789,248 Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners General Partner Limited Partners (amounts in thousands) Private Perpetual Preferred Units Private Perpetual Preferred Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Non-controlling Interest in Other Partnerships Total Capital Balance at December 31, 2023 6,224 $ 29,940 163,046 $ 985,518 80,189 $ 694,512 19,947 $ 4,427 5,144 $ 779 2,619 $ 462 $ 15,407 $ 1,731,045 Conversion of operating partnership units to ESRT Partner's Capital — — 2,263 9,098 ( 1,027 ) ( 8,830 ) ( 899 ) ( 210 ) ( 255 ) ( 42 ) ( 82 ) ( 16 ) — — Repurchases of common units — — — — — — — — — — — — — — Acquisition of non-controlling interests in other partnerships — — — 114 — — — — — — — — ( 15,411 ) ( 15,297 ) Equity compensation — — 156 281 3,076 9,556 — — — — — — — 9,837 Distributions — ( 2,101 ) — ( 11,552 ) — ( 5,671 ) — ( 1,349 ) — ( 347 ) — ( 179 ) — ( 21,199 ) Net income — 2,101 — 22,732 — 10,192 — 2,677 — 697 — 367 4 38,770 Other comprehensive income — — — 5,088 — 2,174 — 571 — 149 — 78 — 8,060 Balance at June 30, 2024 6,224 $ 29,940 165,465 $ 1,011,279 82,238 $ 701,933 19,048 $ 6,116 4,889 $ 1,236 2,537 $ 712 $ — $ 1,751,216 The accompanying notes are an integral part of these consolidated financial statements 6 Empire State Realty OP, L.P. Condensed Consolidated Statements of Cash Flows (unaudited) Six Months Ended June 30, (amounts in thousands) 2025 2024 Cash Flows From Operating Activities Net income $ 27,163 $ 38,770 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 96,581 93,554 Gain on disposition of property ( 13,170 ) ( 10,803 ) Amortization of non-cash items within interest expense 4,339 4,289 Amortization of acquired above- and below-market leases, net ( 1,638 ) ( 1,027 ) Amortization of acquired below-market ground leases 3,916 3,916 Straight-lining of rental revenue ( 9,031 ) ( 4,961 ) Equity based compensation 11,880 9,837 Loss on early extinguishment of debt — 553 Increase (decrease) in cash flows due to changes in operating assets and liabilities: Security deposits 2,107 ( 9,639 ) Tenant and other receivables 3,303 3,648 Deferred costs ( 14,794 ) ( 14,377 ) Prepaid expenses and other assets 8,324 ( 7,163 ) Accounts payable and accrued expenses ( 3,336 ) 4,328 Deferred revenue and other liabilities ( 5,783 ) ( 2,875 ) Net cash provided by operating activities 109,861 108,050 Cash Flows From Investing Activities Additions to building and improvements ( 123,869 ) ( 96,517 ) Acquisition of real estate property ( 31,701 ) — Acquisition of non-controlling interests in other partnerships — ( 14,226 ) Reduction of cash from derecognition of assets — ( 12,876 ) Post-closing costs from a prior period sale of property — ( 4,034 ) Development costs — ( 9 ) Net cash used in investing activities ( 155,570 ) ( 127,662 ) The accompanying notes are an integral part of these consolidated financial statements 7 Empire State Realty OP, L.P. Condensed Consolidated Statements of Cash Flows (continued) (unaudited) Six Months Ended June 30, (amounts in thousands) 2025 2024 Cash Flows From Financing Activities Proceeds from unsecured senior notes — 225,000 Repayment of unsecured senior notes ( 100,000 ) — Proceeds from unsecured revolving credit facility — 120,000 Repayment of unsecured revolving credit facility ( 120,000 ) — Proceeds from unsecured term loan — 95,000 Repayment of unsecured term loan — ( 215,000 ) Repayment of mortgage notes payable ( 1,796 ) ( 2,961 ) Deferred financing costs ( 434 ) ( 11,636 ) Repurchases of common units ( 2,148 ) — Taxes paid on withholding shares ( 899 ) — Private perpetual preferred unit distributions ( 2,101 ) ( 2,101 ) Distributions ( 19,488 ) ( 19,098 ) Net cash (used in) provided by financing activities ( 246,866 ) 189,204 Net (decrease) increase in cash and cash equivalents and restricted cash ( 292,575 ) 169,592 Cash and cash equivalents and restricted cash—beginning of period 429,302 406,956 Cash and cash equivalents and restricted cash—end of period $ 136,727 $ 576,548 Reconciliation of Cash and Cash Equivalents and Restricted Cash: Cash and cash equivalents at beginning of period $ 385,465 $ 346,620 Restricted cash at beginning of period 43,837 60,336 Cash and cash equivalents and restricted cash at beginning of period $ 429,302 $ 406,956 Cash and cash equivalents at end of period $ 94,643 $ 535,533 Restricted cash at end of period 42,084 41,015 Cash and cash equivalents and restricted cash at end of period $ 136,727 $ 576,548 Supplemental disclosures of cash flow information: Cash paid for interest $ 47,422 $ 43,392 Cash paid for income taxes $ 1,933 $ 1,260 Non-cash investing and financing activities: Building and improvements included in accounts payable and accrued expenses $ 51,560 $ 48,510 Write-off of fully depreciated assets 16,309 5,359 Derivative instruments at fair values included in prepaid expenses and other assets 4,205 16,239 Contract asset ( 171,003 ) 166,955 Derecognition of debt associated with property in receivership 177,667 — Derecognition of commercial real estate and other assets, net — ( 144,241 ) Accrued interest associated with property in receivership 6,080 1,589 Conversion of operating partnership units to ESRT partner's capital 9,986 9,098 The accompanying notes are an integral part of these consolidated financial statements 8 Empire State Realty OP, L.P. Notes to Condensed Consolidated Financial Statements (unaudited) 1. Description of Business and Organization As used in these condensed consolidated financial statements, unless the context otherwise requires, “we,” “us,” “our,” and the “Company,” mean Empire State Realty OP, L.P. and its consolidated subsidiaries. Empire State Realty OP, L.P. (the "Operating Partnership") is the entity through which Empire State Realty Trust, Inc. (NYSE: ESRT), 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, conducts all of its business and owns (either directly or through subsidiaries) substantially all of its assets. ESRT’s flagship Empire State Building, the “World's Most Famous Building,” features its iconic Observatory. The Company is a recognized leader in energy efficiency and indoor environmental quality. As of June 30, 2025, 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 743 residential units. Our office portfolio included 10 properties (including three long-term ground leasehold interests). 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. 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 743 residential units in New York City. We were organized as a Delaware limited partnership on November 28, 2011, and commenced operations upon completion of the initial public offering of ESRT’s Class A common stock and related formation transactions on October 7, 2013 (the "Offering"). ESRT's Class A common stock, par value $ 0.01 per share, is listed on the New York Stock Exchange under the symbol "ESRT." ESRT, as the sole general partner in our Company, has responsibility and discretion in the management and control of our Company, and our limited partners, in such capacity, have no authority to transact business for, or participate in the management activities, of our Company. As of June 30, 2025, ESRT owned approximately 60.8 % of our operating partnership units. 2. Summary of Significant Accounting Policies There have been no material changes to the summary of significant accounting policies included in the "Summary of Significant Accounting Policies" section in our Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”). Basis of Quarterly Presentation and Principles of Consolidation The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"), for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments and eliminations (including intercompany balances and transactions), consisting of normal recurring adjustments, considered necessary for the fair presentation of the financial statements have been included. The results of operations for the periods presented are not necessarily indicative of the results that may be expected for the corresponding full years. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the financial statements for the year ended December 31, 2024 contained in our Annual Report. Our Observatory business is subject to tourism trends and the 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 multifamily business experiences some seasonality based on general market trends in New York City – the winter months (November through January) are slower in terms of lease activity. We seek to mitigate this by staggering lease terms such that lease expirations are matched with seasonal demand. We do not consider the balance of our business to be subject to material seasonal fluctuations. 9 We consolidate entities in which we have a controlling financial interest. 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. For variable interest entities ("VIE"), we consolidate the entity if we are deemed to have a variable interest in the entity and through that interest we are deemed the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. As of June 30, 2025, we had a variable interest in and are deemed to be the primary beneficiary of the intermediary entity that holds title to the North 6 th Street Collection assets acquired in June 2025, and as a result is consolidated in the financial statements of the Operating Partnership. We will assess the accounting treatment for each investment we may have in the future. This assessment will include a review of each entity’s organizational agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we will review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity’s economic performance and benefit. In situations where we or our partner could approve, among other things, the annual budget, or leases that cover more than a nominal amount of space relative to the total rentable space at each property, we would not consolidate the investment as we consider these to be substantive participation rights that result in shared power of the activities that would most significantly impact the performance and benefit of such joint venture investment. A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Non-controlling interests are required to be presented as a separate component of equity in the condensed consolidated balance sheets and in the condensed consolidated statements of operations by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests. Accounting Estimates The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to use estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Significant items subject to such estimates and assumptions include allocation of the purchase price of acquired real estate properties among tangible and intangible assets, determination of the useful life of real estate properties and other long-lived assets, valuation and impairment analysis of commercial real estate properties, goodwill, right-of-use assets and other long-lived and indefinite-lived assets, estimate of tenant expense reimbursements, valuation of the allowance for doubtful accounts, and valuation of derivative instruments, ground lease liabilities, senior unsecured notes, mortgage notes payable, unsecured revolving credit and term loan facilities, and equity-based compensation. These estimates are prepared using management’s best judgment, after considering past, current, and expected events and economic conditions. Actual results could differ from those estimates. 3. Acquisitions and Dispositions Property Acquisitions In June 2025, we closed on the acquisition of two retail properties on North 6 th Street in Williamsburg, Brooklyn for an aggregate purchase price of $ 31.0 million. 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 an aggregate purchase price of $ 195.0 million. 10 The following table summarizes the purchase price allocations of these acquisitions (amounts in thousands): Intangibles Property Date Acquired Land Building and Improvements Assets Liabilities Total The North 6th Street Collection (1) 6/30/2025 $ 11,243 $ 20,458 $ — $ — $ 31,701 The North 6 th Street Collection (2) September 2024-October 2024 44,924 146,826 10,984 ( 9,664 ) 193,070 (1) Includes two retail properties on North 6 th Street in Williamsburg, Brooklyn. Includes capitalized transaction costs of $ 0.7 million. (2) Includes nine retail properties on North 6 th Street in Williamsburg, Brooklyn. Includes capitalized transaction costs of $( 1.9 ) million, net of certain closing credits. In March 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. As there was no change in control, we accounted for this acquisition as an equity transaction in accordance with Accounting Standards Codification 810-10 and no gain or loss was recognized. Property Dispositions The following table summarizes properties disposed of during the six and twelve months ended June 30, 2025 and December 31, 2024, respectively (amounts in thousands): Property Date of Disposal Sales Price (1) Gain on Disposition (2) First Stamford Place, Stamford, Connecticut 5/22/2024 $ 165,807 $ 26,472 (1) We transferred First Stamford Place, which was encumbered by mortgage and other debt obligations of $ 165.8 million back to the lender in a consensual foreclosure and recognized non-cash gain upon the disposition. (2) Gain on disposition includes $ 13.2 million and $ 13.3 million for the three months ended March 31, 2025 and the year ended December 31, 2024, respectively. In April 2024, we worked with the First Stamford Place mortgage lender to structure a consensual foreclosure. On May 22, 2024, a receiver was appointed and we ended our management and control of the property. In connection with this, we removed the related assets and property liabilities from our condensed consolidated balance sheet and recognized a gain in the condensed consolidated statements of operations of $ 13.3 million for the twelve months ended December 31, 2024. We also recorded a contract asset of $ 170.4 million that represented the consideration not yet received for the senior mortgage obligation, including applicable accrued interest, we expected to be released upon the final resolution of the foreclosure process on First Stamford Place. On February 5, 2025, the consensual foreclosure of First Stamford Place was completed and we were released of the senior mortgage obligation and derecognized the related contract asset. In connection with the completion of the consensual foreclosure we concluded that we are no longer the primary beneficiary of the entity that holds the First Stamford Place mezzanine debt obligation as we no longer have the power to direct the activities that most significantly impact the VIE's economic performance, nor the right to receive the benefits from the VIE. As a result, the entity was deconsolidated during the three months ended March 31, 2025 and we recognized a gain of $ 13.2 million from the mezzanine debt obligation. The gain is included as a component of gain on disposition of property in the accompanying condensed consolidated statement of operations. 11 4. Deferred Costs, Acquired Lease Intangibles and Goodwill Deferred costs, net, consisted of the following: (amounts in thousands) June 30, 2025 December 31, 2024 Deferred leasing costs $ 224,592 $ 230,836 Acquired in-place lease value, acquired deferred leasing costs and deferred acquisition costs 137,329 137,580 Acquired above-market leases 19,589 19,636 Total deferred costs, excluding deferred financing costs 381,510 388,052 Less: accumulated amortization ( 208,099 ) ( 212,972 ) Total deferred costs, net, excluding net deferred financing costs 173,411 175,080 Deferred financing costs, net, of accumulated amortization of $ 8,841 and $ 7,783 , respectively (See Note 5) 8,283 8,907 Total deferred costs, net $ 181,694 $ 183,987 Acquired below-market ground leases, net, consisted of the following: (amounts in thousands) June 30, 2025 December 31, 2024 Acquired below-market ground leases $ 396,916 $ 396,916 Less: accumulated amortization ( 87,421 ) ( 83,506 ) Acquired below-market ground leases, net $ 309,495 $ 313,410 Acquired below-market leases, net, consisted of the following: (amounts in thousands) June 30, 2025 December 31, 2024 Acquired below-market leases $ ( 56,359 ) $ ( 56,359 ) Less: accumulated amortization 39,278 36,862 Acquired below-market leases, net $ ( 17,081 ) $ ( 19,497 ) The total amortization related to deferred costs and acquired lease intangibles consisted of the following: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 Rental revenue: Amortization of below-market leases, net of above-market leases $ 840 $ 513 $ 1,638 $ 1,027 Depreciation and amortization: Amortization of deferred leasing costs and acquired deferred leasing costs 5,128 5,231 10,497 11,018 Amortization related to acquired in-place lease value 1,415 1,234 2,823 2,520 As of June 30, 2025 and December 31, 2024, we had goodwill of $ 491.5 million. Goodwill was allocated $ 227.5 million to the Observatory reportable segment and $ 264.0 million to the real estate reportable segment. 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. The quantitative analysis used a combination of the discounted cash flow method (a form of the income approach) utilizing Level 3 unobservable inputs and the guideline company method (a form of the market approach). Significant assumptions under the former included revenue and cost projections, weighted average cost of capital, long-term growth rate and income tax considerations while the latter included guideline company enterprise values, revenue multiples, EBITDA multiples and control premium rates. Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine 12 whether impairment had occurred. The quantitative analysis performed concluded the fair value of the reporting unit exceeds its carrying value. We also perform quarterly qualitative assessments and have not identified any events which would indicate, on a more likely than not basis, that the goodwill allocated to the reporting unit was impaired. 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. 5. Debt Debt consisted of the following: Principal Balance As of June 30, 2025 (amounts in thousands) June 30, 2025 December 31, 2024 Stated Rate Effective Rate (1) Maturity Date (2) Fixed rate mortgage debt: 10 Union Square $ 50,000 $ 50,000 3.70 % 3.97 % 4/1/2026 1542 Third Avenue 30,000 30,000 4.29 % 4.53 % 5/1/2027 1010 Third Avenue and 77 West 55th Street 33,580 34,048 4.01 % 4.21 % 1/5/2028 Metro Center (3) 71,600 71,600 3.59 % 3.67 % 11/5/2029 250 West 57th Street 180,000 180,000 2.83 % 3.21 % 12/1/2030 1333 Broadway 160,000 160,000 4.21 % 4.29 % 2/5/2033 345 East 94th Street - Series A 43,600 43,600 70 % of SOFR plus 0.95 % 3.56 % 11/1/2030 345 East 94th Street - Series B 6,106 6,490 SOFR plus 2.24 % 3.56 % 11/1/2030 561 10th Avenue - Series A 114,500 114,500 70 % of SOFR plus 1.07 % 3.85 % 11/1/2033 561 10th Avenue - Series B 13,092 14,036 SOFR plus 2.45 % 3.85 % 11/1/2033 Total mortgage debt 702,478 704,274 Senior unsecured notes: (4) Series A — 100,000 — — — Series B 125,000 125,000 4.09 % 4.12 % 3/27/2027 Series C 125,000 125,000 4.18 % 4.21 % 3/27/2030 Series D 115,000 115,000 4.08 % 4.11 % 1/22/2028 Series E 160,000 160,000 4.26 % 4.27 % 3/22/2030 Series F 175,000 175,000 4.44 % 4.45 % 3/22/2033 Series G 100,000 100,000 3.61 % 4.89 % 3/17/2032 Series H 75,000 75,000 3.73 % 5.00 % 3/17/2035 Series I 155,000 155,000 7.20 % 7.39 % 6/17/2029 Series J 45,000 45,000 7.32 % 7.46 % 6/17/2031 Series K 25,000 25,000 7.41 % 7.52 % 6/17/2034 Unsecured term loan facility (4) 175,000 175,000 SOFR plus 1.50 % 4.61 % 12/31/2026 Unsecured term loan facility (3),(4) 95,000 95,000 SOFR plus 1.50 % 5.16 % 3/8/2029 Unsecured revolving credit facility (3),(4) — 120,000 SOFR plus 1.30 % 4.04 % 3/8/2029 Total principal 2,072,478 2,294,274 Deferred financing costs, net ( 9,007 ) ( 10,123 ) Unamortized debt discount ( 5,793 ) ( 6,183 ) Total $ 2,057,678 $ 2,277,968 ______________ (1) The effective rate is the yield as of June 30, 2025 and includes the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements. (2) Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty. (3) Assumes extension options are exercised for the 2029 maturities of the term loan, revolving credit facility and Metro Center mortgage. (4) At June 30, 2025, we were in compliance with all debt covenants. 13 Principal Payments Aggregate required principal payments at June 30, 2025 are as follows (amounts in thousands): Year Amortization Maturities Total 2025 $ 1,868 $ — $ 1,868 2026 3,957 225,000 228,957 2027 4,276 155,000 159,276 2028 3,555 146,091 149,646 2029 3,890 321,600 325,490 Thereafter 14,634 1,192,607 1,207,241 Total $ 32,180 $ 2,040,298 $ 2,072,478 Deferred Financing Costs Deferred financing costs, net, consisted of the following: (amounts in thousands) June 30, 2025 December 31, 2024 Deferred financing costs, included as a component of net debt $ 16,121 $ 36,309 Deferred financings costs, included as a component of net deferred costs (See Note 4) 17,124 16,638 Total deferred financing costs $ 33,245 $ 52,947 Less: accumulated amortization ( 15,955 ) ( 33,970 ) Total deferred financing costs, net $ 17,290 $ 18,977 The total amortization expense related to deferred financing costs consisted of the following: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 Amortization of deferred financing costs $ 1,080 $ 1,050 $ 2,174 $ 2,069 Unsecured Revolving Credit and Term Loan Facilities On May 28, 2025, we entered into a first amendment to our second amended and restated credit agreement, dated March 8, 2024, with Bank of Ameri ca, N.A., as administrative agent and other lenders party thereto, which governs our senior unsecured revolving credit facility and term loan facility (collectively, the “BofA Credit Facilities”). The first amendment amends certain sustainability margin adjustment terms. No other changes were made to the amount of the commitments, the maturity date of the outstanding loans or the covenants. The BofA Credit Facilities are comprised of a $ 620.0 million senior unsecured revolving credit facility (the “Revolving Credit Facility”) and a $ 95.0 million term loan facility (the “BofA Term Loan Facility”). We may request that the BofA Credit Facilities be increased through one or more increases in the Revolving Credit Facility or one or more increases in the BofA Term Loan Facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount under the second amended and restated credit agreement not to exceed $ 1.5 billion. The Revolving Credit Facility matures on March 8, 2029, inclusive of two six-month extension periods. The BofA Term Loan Facility matures on March 8, 2029, inclusive of two twelve-month extension periods. Initial interest rates on the BofA Credit Facilities, which may change based on our leverage levels, are SOFR plus a benchmark adjustment of 10.0 basis points ("adjusted SOFR") plus 130 basis points for any drawn portion of the Revolving Credit Facility and adjusted SOFR plus 150 basis points for the BofA Term Loan Facility. In addition, the BofA Credit Facilities have a sustainability-linked pricing mechanism that reduces the borrowing spread if certain benchmarks are achieved each year. On March 18, 2025, we repaid the $ 120.0 million borrowings previously drawn on the Revolving Credit Facility. As of June 30, 2025 , we had no borrowings under the Revolving Credit Facility and $ 95.0 million under the BofA Term Loan Facility. On March 13, 2024, we entered into a third amendment to our credit agreement dated March 19, 2020, with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, which governs a senior 14 unsecured term loan facility (the “Wells Term Loan Facility”). The Wells Term Loan Facility is in the original principal amount of $ 175.0 million and matures on December 31, 2026. The third amendment provides for, among other things, certain conforming changes to the BofA Credit Facilities agreement, including increases to the capitalization rate for certain of our properties. No other changes were made to the amount of the commitments, the maturity date of the outstanding loans or the covenants. We may request the Wells Term Loan Facility be increased through one or more increases or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $ 225.0 million. As of June 30, 2025 , our borrowings amounted to $ 175.0 million under the Wells Term Loan Facility. The terms of both the BofA Credit Facilities and the Wells Term Loan Facility include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports. Both facilities 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. The agreements governing both facilities also contain 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, invalidity of loan documents, loss of REIT qualification, and occurrence of a change of control. As of June 30, 2025, we were in compliance with these covenants. Senior Unsecured Notes On March 27, 2025, the Series A senior unsecured notes matured and the aggregate principal amount of $ 100.0 million was repaid. The notes had a stated interest rate of 3.93 %. The terms of our 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. 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. The agreements also contain 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 REIT qualification. As of June 30, 2025, we were in compliance with these covenants. 6. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following: (amounts in thousands) June 30, 2025 December 31, 2024 Capital expenditures included in accounts payable and accrued expenses $ 51,560 $ 73,535 Accounts payable and accrued expenses 49,033 54,779 Interest rate swap agreements liability 12 — Accrued interest payable 3,710 3,702 Total accounts payable and accrued expenses $ 104,315 $ 132,016 7. Financial Instruments and Fair Values Derivative Financial Instruments We use derivative financial instruments primarily to manage interest rate risk and such derivatives are not considered speculative. These derivative instruments are typically in the form of interest rate swap and forward agreements, and the primary objective is to minimize interest rate risks associated with investing and financing activities. The counterparties of these arrangements are major financial institutions with which we may also have other financial relationships. We are exposed to credit risk in the event of non-performance by these counterparties; however, we currently do not anticipate that any of the counterparties will fail to meet their obligations. We have agreements with our derivative counterparties that contain a provision where if we either default or are capable of being declared in default on any of our indebtedness, then we could also be declared in default on our derivative obligations. If we had breached any of these provisions, we could have been required to settle our obligations that were in a net 15 liability position under the agreements at their termination value of $ 12 thousand as of June 30, 2025, which includes accrued interest but excludes any adjustment for nonperformance risk. As of June 30, 2025, we were in compliance with these provisions. As of June 30, 2025 and December 31, 2024, we had interest rate swaps and caps with an aggregate notional value of $ 448.0 million and $ 664.0 million, respectively. The notional value does not represent exposure to credit, interest rate or market risks. These interest rate swaps have been designated as cash flow hedges and hedge the variability in future cash flows associated with our existing variable-rate term loan facilities. Interest rate caps not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements. As of June 30, 2025 and 2024, our cash flow hedges are deemed highly effective. A net unrealized loss of $ 2.0 million and $ 7.1 million for the three and six months ended June 30, 2025, and a net unrealized gain of $ 2.2 million and $ 8.1 million for the three and six months ended June 30, 2024, respectively, relating to both active and terminated hedges of interest rate risk, are reflected in the condensed consolidated statements of comprehensive income (loss). Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the debt. We estimate that $ 0.2 million net loss of the current balance held in accumulated other comprehensive income (loss) will be reclassified into interest expense within the next 12 months. Cash payments and receipts related to our cash flow hedges are classified as operating activities and included within our disclosure of cash paid for interest on our condensed consolidated statements of cash flows, consistent with the classification of the hedged interest payments. The table below summarizes the terms of agreements and the fair values of our derivative financial instruments: (amounts in thousands, except percentages) June 30, 2025 December 31, 2024 Derivative Notional Amount Receive Rate Pay Rate Effective Date Expiration Date Asset (1) Liability (2) Asset (1) Liability (2) Interest rate swap $ 36,820 70 % of 1 Month SOFR 2.5000 % December 1, 2021 November 1, 2030 $ — $ ( 12 ) $ 759 $ — Interest rate swap 103,790 70 % of 1 Month SOFR 2.5000 % December 1, 2021 November 1, 2033 502 — 2,825 — Interest rate swap 10,710 70 % of 1 Month SOFR 1.7570 % December 1, 2021 November 1, 2033 490 — 743 — Interest rate swap 13,252 1 Month SOFR 2.2540 % December 1, 2021 November 1, 2030 446 — 754 — Interest rate swap 175,000 SOFR Compound 2.5620 % August 31, 2022 December 31, 2026 2,589 — 4,895 — Interest rate swap — SOFR Compound 2.6260 % August 19, 2022 March 19, 2025 — — 383 — Interest rate swap — SOFR OIS Compound 2.6280 % August 19, 2022 March 19, 2025 — — 382 — Interest rate cap 6,780 70 % of 1 Month SOFR 4.5000 % October 1, 2024 November 1, 2030 19 — 35 — Interest rate cap 6,676 1 Month SOFR 5.5000 % October 1, 2024 November 1, 2030 43 — 81 — Interest rate swap 47,500 1 Month SOFR 3.3090 % March 19, 2025 March 8, 2029 53 — 1,117 — Interest rate swap 47,500 1 Month SOFR 3.3030 % March 19, 2025 March 8, 2029 63 — 1,124 — $ 448,028 $ 4,205 $ ( 12 ) $ 13,098 $ — (1) Included as a component of prepaid expenses and other assets on the condensed consolidated balance sheets. (2) Included as a component of accounts payable and accrued expenses on the condensed consolidated balance sheets. 16 The table below shows the effect of our derivative financial instruments designated as cash flow hedges on accumulated other comprehensive income (loss): Three Months Ended Six Months Ended (amounts in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Amount of (loss) gain recognized in other comprehensive income (loss) $ ( 1,472 ) $ 2,853 $ ( 5,588 ) $ 11,051 Amount of gain reclassified from accumulated other comprehensive income (loss) into interest expense ( 484 ) ( 667 ) ( 1,533 ) ( 2,991 ) The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the condensed consolidated statements of operations: Three Months Ended Six Months Ended (amounts in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Total interest expense presented in the condensed consolidated statements of operations in which the effects of cash flow hedges are recorded $ ( 25,126 ) $ ( 25,323 ) $ ( 52,064 ) $ ( 50,451 ) Amount of gain reclassified from accumulated other comprehensive income (loss) into interest expense 484 667 1,533 2,991 Fair Valuation The estimated fair values at June 30, 2025 and December 31, 2024 were determined by management, using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. The fair value of derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. Although the majority of the inputs used to value our derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with our derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by ourselves and our counterparties. The impact of such credit valuation adjustments, determined based on the fair value of each individual contract, was not significant to the overall valuation. As a result, all our derivatives were classified as Level 2 of the fair value hierarchy. The fair values of our mortgage notes payable, senior unsecured notes (Series A-K), unsecured term loan facilities and unsecured revolving credit facility which are determined using Level 3 inputs are estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made by us. The following tables summarize the carrying and estimated fair values of our financial instruments: June 30, 2025 Estimated Fair Value (amounts in thousands) Carrying Value Total Level 1 Level 2 Level 3 Interest rate swaps and caps included in prepaid expenses and other assets $ 4,205 $ 4,205 $ — $ 4,205 $ — Interest rate swaps included in accounts payable and accrued expenses 12 12 — 12 — Mortgage notes payable 691,440 644,870 — — 644,870 Senior unsecured notes - Series B-K 1,097,355 1,044,459 — — 1,044,459 Unsecured term loan facilities 268,883 270,000 — — 270,000 17 December 31, 2024 Estimated Fair Value (amounts in thousands) Carrying Value Total Level 1 Level 2 Level 3 Interest rate swaps and caps included in prepaid expenses and other assets $ 13,098 $ 13,098 $ — $ 13,098 $ — Mortgage notes payable 692,176 618,378 — — 618,378 Senior unsecured notes - Series A-K 1,197,061 1,116,149 — — 1,116,149 Unsecured term loan facilities 268,731 270,000 — — 270,000 Unsecured revolving credit facility 120,000 120,000 — — 120,000 Disclosure about the fair value of financial instruments is based on pertinent information available to us as of June 30, 2025 and December 31, 2024. Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein. 8. Leases Lessor We lease various spaces to tenants over terms ranging from one to 30 years. Certain leases have termination options for a fee and/or renewal options. The leases provide for base monthly rentals and reimbursements for real estate taxes, escalations linked to the consumer price index or common area maintenance known as operating expense escalation. Tenant expense reimbursements are reflected in our June 30, 2025 and 2024 condensed consolidated statements of operations as rental revenue. Rental revenue includes fixed and variable payments. Fixed payments primarily relate to base rent and variable payments primarily relate to tenant expense reimbursements for certain property operating costs. The components of rental revenue consisted of the following: Three Months Ended Six Months Ended (amounts in thousands) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Fixed payments $ 133,873 $ 136,235 $ 269,829 $ 272,588 Variable payments 19,667 16,235 38,253 33,764 Total rental revenue $ 153,540 $ 152,470 $ 308,082 $ 306,352 As of June 30, 2025, we were entitled to the following future contractual minimum lease payments (excluding tenant expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2054 (amounts in thousands): Remainder of 2025 $ 251,509 2026 484,579 2027 463,653 2028 426,970 2029 363,439 Thereafter 1,759,249 $ 3,749,399 The above future minimum lease payments exclude tenant recoveries and the net accretion of above-market leases and below-market lease intangibles. Some leases are subject to termination options generally upon payment of a termination fee. The preceding table is prepared assuming such options are not exercised. As of June 30, 2025, the future lease payments to be received for signed leases that have not yet commenced was approximately $ 570.1 million. 18 Lessee We determine if an arrangement is a lease at inception. Our operating lease agreements relate to three ground lease assets and are reflected in right-of-use assets and lease liabilities of $ 28.1 million as of June 30, 2025 and right-of-use assets and lease liabilities of $ 28.2 million as of December 31, 2024 in our condensed consolidated balance sheets. Right-of-use assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Right-of-use assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Variable lease payments are excluded from the right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred. The ground leases are due to expire between the years 2050 and 2077, inclusive of extension options, and have no variable payments or residual value guarantees. As our leases do not provide an implicit rate, we determined our incremental borrowing rate based on information available at the date of adoption of Accounting Standards Update No. 2016-02, Leases (Topic 842), in determining the present value of lease payments. The weighted average incremental borrowing rate used to calculate the right-of-use assets and lease liabilities as of June 30, 2025 was 4.5 %. Rent expense for lease payments related to our operating leases is recognized on a straight-line basis over the non-cancellable term of the leases. The weighted average remaining lease term as of June 30, 2025 was 45.0 years. As of June 30, 2025, the following table summarizes our future minimum lease payments discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands): Remainder of 2025 $ 760 2026 1,503 2027 1,482 2028 1,482 2029 1,482 Thereafter 59,283 Total undiscounted lease payments 65,992 Present value discount ( 37,922 ) Ground lease liabilities $ 28,070 9. Commitments and Contingencies Legal Proceedings Except as described below, as of June 30, 2025, we were not involved in any material litigation, nor, to our knowledge, was any material litigation threatened against us or our properties, other than routine litigation arising in the ordinary course of business such as disputes with tenants. We believe that the costs and related liabilities, if any, which may result from such actions will not materially affect our condensed consolidated financial position, operating results or liquidity. Violet Shuker Shasha Trust et al. v. Peter L. Malkin, Anthony E. Malkin et al. As previously disclosed, in October 2014, 12 former investors (the "Claimants") in Empire State Building Associates L.L.C. (“ESBA”), which, prior to the Offering, owned the fee title to the Empire State Building, filed an arbitration with the American Arbitration Association against Peter L. Malkin, Anthony E. Malkin, Thomas N. Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA, (the "Respondent s "). The statement of claim (also filed later in federal court in New York for the expressed purpose of tolling the statute of limitations) alleged breach of fiduciary duty and related claims in connection with the Offering and sought monetary damages and declaratory relief. Claimants had opted out of a prior class action bringing similar claims that were settled with court approval. Respondents filed an answer and counterclaims. In March 2015, the federal court action was stayed on consent of all parties pending the arbitration. Arbitration hearings started in May 2016 and concluded in August 2018. On August 26, 2020, the arbitration panel issued an award that denied all Claimants’ claims with one exception, on which it awarded the Claimants approximately $ 1.2 million, inclusive of seven years of interest through October 2, 2020. This amount was recorded as an Offering litigation expense in the consolidated statements of operations for the year ended December 31, 2020. 19 Respondents believe that such award in favor of the Claimants is entirely without merit and sought to vacate that portion of the award. On July 31, 2023, the New York State court denied the Respondents’ petition to vacate in part and confirmed the award. On January 22, 2024, that court entered judgment in favor of the Claimants (save for one Claimant, whose petition to confirm was granted in a separate proceeding on July 22, 2024) in an amount of approximately $ 1.3 million, inclusive of interest. The Respondents believe those rulings are incorrect and appealed them. On March 13, 2025, the appeals court affirmed. The Respondents have filed a motion for leave to appeal to the New York Court of Appeals. In addition, certain of the Claimants in the federal court action brought to toll the statute of limitations and sought to pursue claims in that case against the Respondents. Respondents believe that any such claims are meritless. The magistrate judge assigned to the action has issued a Report and Recommendation rejecting the Claimants’ claims; on January 30, 2025, the district judge adopted that Report and Recommendation and dismissed the case. Those Claimants have appealed that ruling. Pursuant to indemnification agreements which were made with our directors, executive officers and chairman emeritus as part of our formation transactions, Anthony E. Malkin, Peter L. Malkin and Thomas N. Keltner, Jr. have defense and indemnity rights from us with respect to this arbitration. Unfunded Capital Expenditures At June 30, 2025, we estimate that we will incur approximately $ 103.9 million of capital expenditures (including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements. We expect to fund these capital expenditures with operating cash flow, cash on hand and other borrowings. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs. We expect that these financing requirements will be met in a similar fashion. Concentration of Credit Risk Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents, restricted cash, short-term investments, tenant and other receivables and deferred rent receivables. At June 30, 2025, we held on deposit at various major financial institutions cash and cash equivalents and restricted cash balances in excess of amounts insured by the Federal Deposit Insurance Corporation. Asset Retirement Obligations We are required to accrue costs that we are legally obligated to incur on retirement of our properties which result from acquisition, construction, development and/or normal operation of such properties. Retirement includes sale, abandonment or disposal of a property. Under that standard, a conditional asset retirement obligation represents a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement is conditional on a future event that may or may not be within a company’s control and a liability for a conditional asset retirement obligation must be recorded if the fair value of the obligation can be reasonably estimated. Environmental site assessments and investigations have identified asbestos or asbestos-containing building materials in certain of our properties. As of June 30, 2025, management has no plans to remove or alter these properties in a manner that would trigger federal and other applicable regulations for asbestos removal, and accordingly, the obligations to remove the asbestos or asbestos-containing building materials from these properties have indeterminable settlement dates. As such, we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation. However ongoing asbestos abatement, maintenance programs and other required documentation are carried out as required and related costs are expensed as incurred. Other 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. 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. 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. 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. Environmental laws also may create liens on contaminated sites in favor of the government for damages and 20 costs it incurs to address such contamination. 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. 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. In addition, some of our properties have previously been used by former owners or tenants for commercial or industrial activities, e.g., gas stations and dry cleaners, and a portion of the Metro Tower site is currently used for automobile parking and was formerly leased to a fueling facility that may release petroleum products or other hazardous or toxic substances at such properties or to surrounding properties. 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. 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. Moreover, changes in laws could increase the potential costs of compliance with such laws and regulations or increase liability for noncompliance. 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. 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. 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. In addition, we may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a carbon tax), which could increase our operating costs. In particular, as 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 covered building establishes annual limits for greenhouse gas emissions, requires yearly emissions reports beginning in May 2025 for calendar year 2024 performance, and imposes penalties for emissions above such limits. 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. 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. 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. 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. 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. Our properties may contain or develop harmful mold or suffer from other indoor air quality or water quality issues, which could lead to liability for adverse health effects or property damage or costs for remediation. 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. 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. As a result, the presence of significant mold or 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 or waterborne contaminants from the affected property or increase indoor ventilation or flush and treat water systems. In addition, the presence of significant mold or other airborne or waterborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs. We do not believe we have any material adverse indoor air quality or water quality issues at our properties. As of June 30, 2025, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents. All such maintenance costs are expensed as incurred. However, we cannot be certain that we have identified all environmental liabilities at our properties, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that such environmental liabilities arise. 21 Insurance Coverage We carry insurance coverage on our properties of types and in amounts with deductibles that we believe are in line with coverage customarily obtained by owners of similar properties. 10. Capital As of June 30, 2025, there were 168,301,105 shares of Class A common stock, 974,628 shares of Class B common stock and 109,308,532 operating partnership units outstanding. The controlling interest of 60.8 % is owned by ESRT. The other 39.2 % non-controlling interest in the OP is diversified among various limited partners, some of whom include Company directors, senior management and employees. ESRT has two classes of common stock as a means to give its OP Unit holders voting rights in the public company that correspond to their economic interest in the combined entity. A one-time option was created at our formation transactions for any pre-Offering OP Unit holder to exchange one OP Unit out of every 50 OP Units they owned for one ESRT Class B share, and such ESRT Class B share carries 50 votes per share. Stock and Publicly Traded Operating Partnership Unit Repurchase Program ESRT's Board of Directors authorized the repurchase of up to $ 500.0 million of ESRT Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units from January 1, 2024 through December 31, 2025. Under the program, ESRT may purchase ESRT Class A common stock and we may purchase our Series ES, Series 250 and Series 60 operating partnership units in accordance with applicable securities laws from time to time in the open market or in privately negotiated transactions. The timing, manner, price and amount of any repurchases will be determined by ESRT and us at our discretion and will be subject to stock price, availability, trading volume, general market conditions, and applicable securities laws. The authorization does not obligate ESRT or us to acquire any particular amount of securities, and the program may be suspended or discontinued at ESRT's and our discretion without prior notice. The following table summarizes ESRT's repurchases of equity securities in each of the three months ended June 30, 2025 under the repurchase program described above: 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 (in thousands) April 1 - April 30, 2025 310,415 $ 6.92 310,415 $ 497,852 May 1 - May 31, 2025 — $ — — $ 497,852 June 1 - June 30, 2025 — $ — — $ 497,852 Private Perpetual Preferred Units As of June 30, 2025, there were 4,664,038 Series 2019 Preferred Units ("Series 2019 Preferred Units") and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units") outstanding. The Series 2019 Preferred Units have a liquidation preference of $ 13.52 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.70 per unit payable in arrears on a quarterly basis. The Series 2014 Preferred Units which have a liquidation preference of $ 16.62 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.60 per unit payable in arrears on a quarterly basis. Both series are not redeemable at the option of the holders and are redeemable at our option only in the case of specific defined events. Distributions The following is a summary of distribution activity: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 Distributions paid to OP unitholders $ ( 9,755 ) $ ( 9,596 ) $ ( 19,488 ) $ ( 19,098 ) Distributions paid to preferred unitholders ( 1,051 ) ( 1,051 ) ( 2,101 ) ( 2,101 ) 22 Incentive and Share-Based Compensation On May 9, 2024, the Empire State Realty Trust, Inc. Empire State Realty OP, L.P. 2024 Equity Incentive Plan (the “2024 Plan”) was approved by our shareholders. The 2024 Plan provides for grants to directors, employees and consultants of ESRT and the Operating Partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards, and replaced the First Amended and Restated Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. 2019 Equity Incentive Plan ("2019 Plan", and collectively with the 2024 Plan, the "Plans"). The shares of ESRT Class A common stock underlying any awards under the Plans that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan. Shares tendered or held back upon exercise of a stock option or settlement of an award under the Plans to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan. In addition, shares of ESRT Class A common stock repurchased on the open market will not be added back to the shares of ESRT Class A common stock available for issuance under the 2024 Plan. An aggregate of 11.0 million shares of ESRT common stock was authorized for issuance under awards granted pursuant to the 2024 Plan, and as of June 30, 2025 , 6.0 million shares of common stock remain available for future issuance. Long-term incentive plan ("LTIP") units are a special class of partnership interests. Each LTIP unit awarded will be deemed equivalent to an award of one share of ESRT stock under the Plans, reducing the availability for other equity awards on a one -for-one basis. The vesting period for LTIP units, if any, will be determined at the time of issuance. Under the terms of the LTIP units, we will revalue for tax purposes its assets upon the occurrence of certain specified events, and any increase in valuation from the time of one such event to the next such event will be allocated first to the holders of LTIP units to equalize the capital accounts of such holders with the capital accounts of unitholders. Subject to any agreed upon exceptions, once vested and having achieved parity with unitholders, LTIP units are convertible into Series PR operating partnership units on a one -for-one basis. LTIP units subject to time-based vesting, whether vested or not, receive the same per unit distributions as operating partnership units, which equal per share dividends (both regular and special) on our common stock. Market and performance-based LTIPs receive 10 % of such distributions currently, unless and until such LTIP units are earned based on performance, at which time they will receive the accrued and unpaid 90 % and will commence receiving 100 % of such distributions thereafter. In May 2025, we made grants of 185,280 LTIP units to our non-employee directors that are subject to time-based vesting with fair market values of $ 1.3 million. 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 for awards granted to non-named executive officer employees and awards granted before 2025 to named executive officers, which may occur upon grant. An employee is retirement eligible when the employee attains the (i) age of 65 and (ii) the date on which the employee has first completed the requisite years of continuous service with us or our affiliates. Share-based compensation for market-based equity awards and performance-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 three or four years . Additionally, for the performance-based equity awards, we assess, at each reporting period, whether it is probable that the performance conditions will be satisfied. We recognize expense respective to the number of awards we expect to vest at the conclusion of the measurement period. Changes in estimate are accounted for in the period of change through a cumulative catch-up adjustment. Any forfeitures of share-based compensation awards are recognized as they occur. For the market-based LTIP units, the fair value of the awards was estimated using a Monte Carlo Simulation model and discounted for the restriction period during which the LTIP units cannot be redeemed or transferred and the uncertainty regarding if, and when, the book capital account of the LTIP units will equal that of the common units. Our stock price, along with the prices of the comparative indexes, is assumed to follow the Geometric Brownian Motion Process. Geometric Brownian Motion is a common assumption when modeling in financial markets, as it allows the modeled quantity (in this case the stock price) to vary randomly from its current value and take any value greater than zero. The volatilities of the returns on our stock price and the comparative indexes were estimated based on implied volatilities and historical volatilities using an appropriate look-back period. The expected growth rate of the stock prices over the performance period is determined with consideration of the risk-free rate as of the grant date. For LTIP unit awards that are time or performance based, the fair value of the awards was 23 estimated based on the fair value of our stock at the grant date discounted for the restriction period during which the LTIP units cannot be redeemed or transferred and the uncertainty regarding if, and when, the book capital account of the LTIP units will equal that of the common units. For restricted stock awards, the fair value of the awards is based on the market price of ESRT stock at the grant date. LTIP units and ESRT restricted stock issued during the six months ended June 30, 2025 were valued at $ 28.9 million. The weighted average per unit or share fair value was $ 5.89 for grants issued for the six months ended June 30, 2025. The fair value per unit or share granted in 2025 was estimated on the respective dates of grant using the following assumptions: 2025 Expected life 2.0 to 5.3 years Dividend rate 1.7 % Risk-free interest rate 3.9 % - 4.0 % Expected price volatility 35.0 % - 44.0 % No stock options, dividend equivalents, or stock appreciation rights were issued or outstanding during the six months ended June 30, 2025. The following is a summary of ESRT restricted stock and LTIP unit activity for the six months ended June 30, 2025: Restricted Stock Time-based LTIPs Market-based LTIPs Performance-based LTIPs Weighted Average Grant Fair Value Unvested balance at December 31, 2024 612,416 3,615,771 2,629,002 2,078,099 $ 6.87 Vested ( 211,476 ) ( 1,361,704 ) ( 340,736 ) ( 229,162 ) 7.48 Granted 245,616 1,866,961 1,679,320 1,112,709 5.89 Forfeited or unearned ( 27,124 ) — — ( 46,846 ) 7.91 Unvested balance at June 30, 2025 619,432 4,121,028 3,967,586 2,914,800 $ 6.33 The time-based LTIPs and ESRT restricted stock awards granted to non-named executive officers or granted to certain named executive officers before 2025, are treated for accounting purposes as immediately vested upon the later of (i) the date the grantee attains the age of 65 , and (ii) the date on which grantee has first completed the requisite years of continuous service with our Company or its affiliates. For award agreements that qualify, we recognize noncash compensation expense on the grant date for the time-based awards and ratably over the vesting period for the market-based and performance-based awards, and accordingly, we recognized $ 1.6 million and $ 2.7 million for the three and six months ended June 30, 2025, respectively, and $ 1.7 million and $ 2.4 million for the three and six months ended June 30, 2024, respectively. Unrecognized compensation expense was $ 4.7 million at June 30, 2025, which will be recognized over a weighted average period of 1.4 years. For the remainder of the LTIP unit awards, we recognized noncash compensation expense ratably over the vesting period, and accordingly, we recognized noncash compensation expense of $ 5.3 million and $ 9.2 million for the three and six months ended June 30, 2025, respectively, and $ 5.5 million and $ 8.2 million for the three and six months ended June 30, 2024, respectively. Unrecognized compensation expense was $ 42.1 million at June 30, 2025, which will be recognized over a weighted average period of 2.8 years. Earnings Per Unit Earnings per unit is calculated by dividing the net income attributable to common unitholders by the weighted average number of units outstanding during the respective period. Unvested share-based payment awards that contain non-forfeitable rights to dividends, whether paid or unpaid, are accounted for as participating securities. Share-based payment awards are included in the calculation of diluted income using the treasury stock method if dilutive. 24 Earnings per unit is computed as follows: Three Months Ended Six Months Ended (amounts in thousands, except per unit amounts) June 30, 2025 June 30, 2024 June 30, 2025 June 30, 2024 Numerator: Net income $ 11,385 $ 28,555 $ 27,163 $ 38,770 Private perpetual preferred unit distributions ( 1,051 ) ( 1,051 ) ( 2,101 ) ( 2,101 ) Net income attributable to non-controlling interests in other partnerships — — — ( 4 ) Net income attributable to common unitholders – basic and diluted $ 10,334 $ 27,504 $ 25,062 $ 36,665 Denominator: Weighted average units outstanding – basic 266,899 264,676 266,985 264,619 Effect of dilutive securities: Stock-based compensation plans 3,052 4,040 2,754 3,486 Weighted average units outstanding – diluted 269,951 268,716 269,739 268,105 Earnings per unit: Basic $ 0.04 $ 0.10 $ 0.09 $ 0.14 Diluted $ 0.04 $ 0.10 $ 0.09 $ 0.14 There were zero antidilutive shares and LTIP units for the three and six months ended June 30, 2025 and 2024. 11. Related Party Transactions Supervisory Fee Revenue Since ESRT became a public company, we have earned supervisory fees from entities affiliated with Anthony E. Malkin, our Chairman and Chief Executive Officer. These fees were $ 0.3 million and $ 0.7 million for the three and six months ended June 30, 2025, respectively, and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2024, respectively. These fees are included within third-party management and other fees. Property Management Fee Revenue Since ESRT became a public company, we have earned property management fees from entities affiliated with Anthony E. Malkin. These fees were $ 0.1 million and $ 0.1 million for the three and six months ended June 30, 2025, respectively, and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024, respectively. These fees are included within third-party management and other fees. Other We receive rent generally at the market rental rate for 5,447 square feet of leased space from an entity affiliated with Anthony E. Malkin at one of our properties. Under the lease, the tenant has the right to cancel such lease without special payment on 90 days’ notice. We also have a shared use agreement with such tenant, to occupy a portion of the leased premises as the office location for Peter L. Malkin, our chairman emeritus, utilizing approximately 15 % of the space, for which we pay to such tenant an allocable pro rata share of the cost. We also have agreements with these entities and excluded properties and businesses to provide them with general computer-related support services. Total aggregate revenue was $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2025, respectively, and $ 0.1 million and $ 0.2 million for the three and six months ended June 30, 2024, respectively. One of ESRT's directors, Hannah Yang, is sister to Heela Yang, who is Founder and Chief Executive Officer of Sol de Janeiro USA, a tenant at One Grand Central Place — the lease commenced in April 2025 with a starting annualized rent of $ 3.5 million. Sol de Janeiro is a subsidiary of L’Occitane, a tenant at 111 W. 33 rd Street. 25 12. Segment Reporting The Company's operating segments are based on our method of internal reporting and include our office properties, retail portfolio, multifamily portfolio, and the Observatory. These operating segments have been aggregated for reporting into two reportable segments: (1) real estate and (2) Observatory. Our real estate segment includes all activities related to the ownership, management, operation, acquisition, redevelopment, repositioning and disposition of our traditional real estate assets. Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. These two lines of businesses are managed separately because each business requires different support infrastructures, provides different services and has dissimilar economic characteristics such as investments needed, stream of revenues and marketing strategies. We account for intersegment sales and rents as if the sales or rents were to third parties, that is, at current market prices. Our Chief Executive Officer, who also serves as our CODM, manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. The CODM uses Net Operating Income ("NOI") to review actual performance and decide whether to invest in capital expenditures, pursue acquisitions and/or dispositions, determine dividend payments, and/or engage in other capital transactions. Our CODM does not evaluate operating segments using asset or liability information. The following tables provide components of segment net income for each segment: Three Months Ended June 30, 2025 (amounts in thousands) Real Estate Observatory Intersegment Elimination Total Revenues: Revenue, excluding third-party management and other fees $ 156,943 $ 33,899 $ — $ 190,842 Intercompany rental revenue 20,666 — ( 20,666 ) — Total revenues, excluding third-party management and other fees 177,609 33,899 ( 20,666 ) 190,842 Segment operating expenses: Property operating expenses 44,880 — — 44,880 Observatory expenses — 9,822 — 9,822 Other segment expenses 1 34,939 20,666 ( 20,666 ) 34,939 Total segment operating expenses 79,819 30,488 ( 20,666 ) 89,641 Net operating income $ 97,790 $ 3,411 $ — $ 101,201 Segment assets $ 3,813,645 $ 265,105 $ — $ 4,078,750 (1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense. Three Months Ended June 30, 2024 (amounts in thousands) Real Estate Observatory Intersegment Elimination Total Revenues: Revenue, excluding third-party management and other fees $ 155,043 $ 34,124 $ — $ 189,167 Intercompany rental revenue 20,980 — ( 20,980 ) — Total revenues, excluding third-party management and other fees 176,023 34,124 ( 20,980 ) 189,167 Segment operating expenses: Property operating expenses 41,516 — — 41,516 Observatory expenses — 8,958 — 8,958 Other segment expenses 1 34,215 20,980 ( 20,980 ) 34,215 Total segment operating expenses 75,731 29,938 ( 20,980 ) 84,689 Net operating income $ 100,292 $ 4,186 $ — $ 104,478 Segment assets $ 4,171,251 $ 261,999 $ — $ 4,433,250 (1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense. 26 Six Months Ended June 30, 2025 (amounts in thousands) Real Estate Observatory Intersegment Elimination Total Revenues: Revenue, excluding third-party management and other fees $ 313,417 $ 57,060 $ — $ 370,477 Intercompany rental revenue 35,826 — ( 35,826 ) — Total revenues, excluding third-party management and other fees 349,243 57,060 ( 35,826 ) 370,477 Operating expenses: Property operating expenses 89,940 — — 89,940 Observatory expenses — 17,940 — 17,940 Other segment expenses 1 70,320 35,826 ( 35,826 ) 70,320 Total segment operating expenses 160,260 53,766 ( 35,826 ) 178,200 Net operating income $ 188,983 $ 3,294 $ — $ 192,277 (1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense. Six Months Ended June 30, 2024 (amounts in thousands) Real Estate Observatory Intersegment Elimination Total Revenues: Revenue, excluding third-party management and other fees $ 311,361 $ 58,720 $ — $ 370,081 Intercompany rental revenue 37,047 — ( 37,047 ) — Total revenues, excluding third-party management and other fees 348,408 58,720 ( 37,047 ) 370,081 Operating expenses: Property operating expenses 86,576 — — 86,576 Observatory expenses — 17,389 — 17,389 Other segment expenses 1 68,787 37,047 ( 37,047 ) 68,787 Total segment operating expenses 155,363 54,436 ( 37,047 ) 172,752 Net operating income $ 193,045 $ 4,284 $ — $ 197,329 (1) Other segment expenses include real estate taxes, ground rent expense and intercompany rent expense. Below is a reconciliation of Net income to Net operating income: Three Months Ended June 30, Six Months Ended June 30, (amounts in thousands) 2025 2024 2025 2024 (unaudited) (unaudited) Net income $ 11,385 $ 28,555 $ 27,163 $ 38,770 Add: General and administrative expenses 18,685 18,020 35,625 33,992 Depreciation and amortization 47,802 47,473 96,581 93,554 Interest expense 25,126 25,323 52,064 50,451 Interest expense associated with property in receivership — 628 647 628 Loss on early extinguishment of debt — — — 553 Income tax expense (benefit) 478 750 ( 141 ) 95 Less: Gain on disposition of property — ( 10,803 ) ( 13,170 ) ( 10,803 ) Third-party management and other fees ( 408 ) ( 376 ) ( 839 ) ( 641 ) Interest income ( 1,867 ) ( 5,092 ) ( 5,653 ) ( 9,270 ) Net operating income $ 101,201 $ 104,478 $ 192,277 $ 197,329 27 13. Subsequent Events None. 28