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Item 2. Management’s Discussion and Analysis

2025-11-05 compared with 2025-08-06 · 67 added, 106 removed, 318 unchanged (35% of the section changed)

2 unchanged sentences

and its consolidated subsidiaries.

This Management’s Discussion and Analysis provides a comparison of our performance for the three and six month periods ended June 30, 2025 with the corresponding three and six month periods ended June 30, 2024 and reviews our financial position as of June 30, 2025.

This Management’s Discussion and Analysis provides a comparison of our performance for the three and nine month periods ended September 30, 2025 with the corresponding three and nine month periods ended September 30, 2024 and reviews our financial position as of September 30, 2025.

The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements and the notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K.

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Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

Highlights for the three months ended June 30, 2025

• Net income attributable to common unitholders of $10.3 million.

Highlights for the three months ended September 30, 2025

• Net income of $13.6 million.

• Core Funds From Operations ("Core FFO") of $61.3 million attributable to common unitholders.

• Signed a total of 87,880 rentable square feet of new, renewal, and expansion leases.

• 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 June 2025.

Results of Operations

The discussion below relates to our results of operations for the three and six months ended June 30, 2025 and 2024, respectively.

Three Months Ended June 30, 2025 Compared to the Three Months Ended June 30, 2024

The discussion below relates to our results of operations for the three and nine months ended September 30, 2025 and 2024, respectively.

Three Months Ended September 30, 2025 Compared to the Three Months Ended September 30, 2024

The following table summarizes the historical results of operations:

Three Months Ended June 30,

Three Months Ended September 30,

2025 2024 Change %

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Rental revenue $ 158,410 $ — $ 158,410 $ 153,117 $ — $ 153,117 $ 5,293 3.5 %

$ 153,540 $ — $ 153,540 $ 152,470 $ — $ 152,470 $ 1,070 0.7 %

Observatory revenue — 36,037 36,037 — 39,382 39,382 (3,345) (8.5) %

Lease termination fees 464 — 464 — — — 464 N/A

Lease termination fees — — — 4,771 — 4,771 (4,771) (100.0) %

Third-party management and other fees 404 — 404 271 — 271 133 49.1 %

408 — 408 376 — 376 32 8.5 %

Other revenues and fees 2,879 — 2,879 2,058 — 2,058 821 39.9 %

2,939 — 2,939 2,573 — 2,573 366 14.2 %

Total revenues 161,693 36,037 197,730 160,217 39,382 199,599 (1,869) (0.9) %

157,351 33,899 191,250 155,419 34,124 189,543 1,707 0.9 %

Operating expenses:

Property operating expenses 46,957 — 46,957 45,954 — 45,954 (1,003) (2.2) %

44,880 — 44,880 41,516 — 41,516 (3,364) (8.1) %

Ground rent expenses 2,331 — 2,331 2,331 — 2,331 — — %

2,332 — 2,332 2,332 — 2,332 — — %

General and administrative expenses 18,743 — 18,743 18,372 — 18,372 (371) (2.0) %

18,685 — 18,685 18,020 — 18,020 (665) (3.7) %

Observatory expenses — 9,510 9,510 — 9,715 9,715 205 2.1 %

— 9,822 9,822 — 8,958 8,958 (864) (9.6) %

Real estate taxes 33,241 — 33,241 31,982 — 31,982 (1,259) (3.9) %

32,607 — 32,607 31,883 — 31,883 (724) (2.3) %

Depreciation and amortization 47,573 42 47,615 45,861 38 45,899 (1,716) (3.7) %

47,760 42 47,802 47,441 32 47,473 (329) (0.7) %

Total operating expenses 148,845 9,552 158,397 144,500 9,753 154,253 (4,144) (2.7) %

146,264 9,864 156,128 141,192 8,990 150,182 (5,946) (4.0) %

Operating income 12,848 26,485 39,333 15,717 29,629 45,346 (6,013) (13.3) %

11,087 24,035 35,122 14,227 25,134 39,361 (4,239) (10.8) %

Intercompany rent revenue (expense) 20,185 (20,185) — 23,461 (23,461) — — — %

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Interest income 992 154 1,146 6,871 89 6,960 (5,814) (83.5) %

1,715 152 1,867 5,011 81 5,092 (3,225) (63.3) %

Interest expense (25,189) — (25,189) (27,408) — (27,408) 2,219 8.1 %

(25,126) — (25,126) (25,323) — (25,323) 197 0.8 %

Interest expense associated with property in receivership — — — (1,922) — (1,922) 1,922 100.0 %

Gain on disposition of property — — — 1,262 — 1,262 (1,262) (100.0) %

— — — 10,803 — 10,803 (10,803) (100.0) %

Income before income taxes 8,836 6,454 15,290 17,981 6,257 24,238 (8,948) (36.9) %

8,342 3,521 11,863 25,070 4,235 29,305 (17,442) (59.5) %

Income tax expense (317) (1,328) (1,645) (216) (1,226) (1,442) (203) (14.1) %

8,183 3,202 11,385 24,862 3,693 28,555 (17,170) (60.1) %

Net income 8,519 5,126 13,645 17,765 5,031 22,796 (9,151) (40.1) %

Private perpetual preferred unit distributions (1,050) — (1,050) (1,050) — (1,050) — — %

Net income attributable to common unitholders $ 7,469 $ 5,126 $ 12,595 $ 16,715 $ 5,031 $ 21,746 $ (9,151) (42.1) %

$ 7,132 $ 3,202 $ 10,334 $ 23,811 $ 3,693 $ 27,504 $ (17,170) (62.4) %

Real Estate Segment

Rental Revenue

The increase in rental revenue was primarily attributable to higher operating and real estate tax expense escalations driving a $3.8 million increase during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

This was partially offset by the net impact of acquisitions and dispositions made during 2024, which reduced rental revenue by $2.2 million.

The increase in rental revenue during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily attributable to the acquisitions during 2024 and 2025 and higher tenant reimbursement income.

Property Operating Expenses

The increase in property operating expenses was primarily due to higher repair and maintenance costs and cleaning-related payroll costs during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

This was partially offset by the net impact of acquisitions and dispositions made during 2024.

The increase in property operating expenses during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily due to higher repair and maintenance costs and by the increase from acquisitions during 2024 and 2025.

Real Estate Taxes

The increase in real estate taxes during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily due to higher tax rates and property valuations and by the increase from acquisitions during 2024 and 2025.

Interest Income

The decrease in interest income in the three months ended June 30, 2025 is primarily attributable to a decrease in cash and cash equivalents due to the paydown of the $120 million revolving credit facility and the $100 million Series A senior unsecured notes in March 2025, and the acquisition of two retail properties in June 2025 for an aggregate purchase price of $31.0 million.

Gain on Disposition of Property

There is no gain on disposition activity for the three months ended June 30, 2025.

The gain on disposition activity for the three months ended June 30, 2024 relates to the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut in May 2024.

See "Financial Statements - Note 3 Acquisitions and Dispositions" for additional details.

The decrease in interest income during the three months ended September 30, 2025 was primarily attributable to a decrease in cash and cash equivalents due to unlevered property acquisitions during 2024 and 2025, the paydown of the $120.0 million revolving credit facility and the $100.0 million Series A senior unsecured notes in March 2025.

Observatory Segment

Observatory Revenue

Observatory revenues were lower due to lower visitation during the three months ended June 30, 2025 compared to the three months ended June 30, 2024, primarily due to more bad weather days during holiday weekends and lower levels of international tourism in 2025 as compared to 2024.

Observatory Expenses

The increase in Observatory expenses was primarily due to higher marketing expenses during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Six Months Ended June 30, 2025 Compared to the Six Months Ended June 30, 2024

Six Months Ended June 30,

Observatory revenues were lower due to lower visitation during the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to lower levels of international tourism in 2025 as compared to 2024.

Nine Months Ended September 30, 2025 Compared to the Nine Months Ended September 30, 2024

Nine Months Ended September 30,

2025 2024 Change %

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Rental revenue $ 466,492 $ — $ 466,492 $ 459,469 $ — $ 459,469 $ 7,023 1.5 %

$ 308,082 $ — $ 308,082 $ 306,352 $ — $ 306,352 $ 1,730 0.6 %

Observatory revenue — 93,097 93,097 — 98,102 98,102 (5,005) (5.1) %

Lease termination fees 464 — 464 — — — 464 N/A

Lease termination fees 464 — 464 4,771 — 4,771 (4,307) (90.3) %

Third-party management and other fees 1,243 — 1,243 912 — 912 331 36.3 %

839 — 839 641 — 641 198 30.9 %

Other revenues and fees 7,750 — 7,750 7,067 — 7,067 683 9.7 %

4,871 — 4,871 5,009 — 5,009 (138) (2.8) %

Total revenues 475,949 93,097 569,046 472,219 98,102 570,321 (1,275) (0.2) %

314,256 57,060 371,316 312,002 58,720 370,722 594 0.2 %

Operating expenses:

Property operating expenses 136,897 — 136,897 132,530 — 132,530 (4,367) (3.3) %

89,940 — 89,940 86,576 — 86,576 (3,364) (3.9) %

Ground rent expenses 6,994 — 6,994 6,994 — 6,994 — — %

4,663 — 4,663 4,663 — 4,663 — — %

General and administrative expenses 54,368 — 54,368 52,364 — 52,364 (2,004) (3.8) %

35,625 — 35,625 33,992 — 33,992 (1,633) (4.8) %

Observatory expenses — 27,450 27,450 — 27,104 27,104 (346) (1.3) %

— 17,940 17,940 — 17,389 17,389 (551) (3.2) %

Real estate taxes 98,898 — 98,898 96,106 — 96,106 (2,792) (2.9) %

65,657 — 65,657 64,124 — 64,124 (1,533) (2.4) %

Depreciation and amortization 144,068 128 144,196 139,346 107 139,453 (4,743) (3.4) %

96,495 86 96,581 93,485 69 93,554 (3,027) (3.2) %

Total operating expenses 441,225 27,578 468,803 427,340 27,211 454,551 (14,252) (3.1) %

292,380 18,026 310,406 282,840 17,458 300,298 (10,108) (3.4) %

Operating income 34,724 65,519 100,243 44,879 70,891 115,770 (15,527) (13.4) %

21,876 39,034 60,910 29,162 41,262 70,424 (9,514) (13.5) %

Intercompany rent revenue (expense) 56,011 (56,011) — 60,508 (60,508) — — — %

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Interest income 6,420 379 6,799 16,022 208 16,230 (9,431) (58.1) %

5,428 225 5,653 9,151 119 9,270 (3,617) (39.0) %

Interest expense (77,253) — (77,253) (77,859) — (77,859) 606 0.8 %

(52,064) — (52,064) (50,451) — (50,451) (1,613) (3.2) %

Interest expense associated with property in receivership (647) — (647) (2,550) — (2,550) 1,903 74.6 %

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Gain on disposition of property 13,170 — 13,170 12,065 — 12,065 1,105 9.2 %

13,170 — 13,170 10,803 — 10,803 2,367 21.9 %

Income before income taxes 32,425 9,887 42,312 52,512 10,591 63,103 (20,791) (32.9) %

23,589 3,433 27,022 34,531 4,334 38,865 (11,843) (30.5) %

Income tax (expense) benefit

(365) 506 141 (321) 226 (95) 236 248.4 %

23,224 3,939 27,163 34,210 4,560 38,770 (11,607) (29.9) %

Income tax expense (682) (822) (1,504) (537) (1,000) (1,537) 33 2.1 %

Net income 31,743 9,065 40,808 51,975 9,591 61,566 (20,758) (33.7) %

Private perpetual preferred unit distributions (3,151) — (3,151) (3,151) — (3,151) — — %

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Net income attributable to common unitholders $ 28,592 $ 9,065 $ 37,657 $ 48,820 $ 9,591 $ 58,411 $ (20,754) (35.5) %

$ 21,123 $ 3,939 $ 25,062 $ 32,105 $ 4,560 $ 36,665 $ (11,603) (31.6) %

Real Estate Segment

Rental Revenue

The increase in rental revenue was primarily attributable to higher operating and real estate tax expense escalations driving a $7.9 million increase during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

This was partially offset by the net impact of acquisitions and dispositions made during 2024, which reduced rental revenue by $6.2 million.

The increase in rental revenue was primarily attributable to the increase in operating and real estate tax expense escalations during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

New lease commencements in excess of expirations in the current period also drove an increase in the Company's portfolio.

These increases were partially offset by the net impact from the disposition made during 2024 and the acquisitions made during 2024 and 2025.

Property Operating Expenses

The increase in property operating expenses was primarily due to higher repair and maintenance costs, cleaning-related payroll costs, and utilities during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

This was partially offset by the net impact of acquisitions and dispositions made during 2024.

The increase in property operating expenses was primarily due to higher repair and maintenance costs and cleaning-related payroll costs during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

This was partially offset by the net impact from the disposition made during 2024 and the acquisitions made during 2024 and 2025.

General and Administrative Expenses

The increase in general and administrative expenses was primarily due to higher payroll costs during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

This increase in payroll costs is partially attributable to an acceleration of share based compensation expense as certain executives approach their retirement eligibility date.

The increase in general and administrative expenses was primarily due to recognition of non-cash stock based compensation expense during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Interest Income

Interest Expense

The increase in interest expense was attributable to the June 2024 issuance of Series I-K senior unsecured notes, partially offset by the February 2025 release of the First Stamford Place senior mortgage obligation, and the March 2025 paydown of the $120 million revolving credit facility and the $100 million Series A senior unsecured notes.

The decrease in interest income during the nine months ended September 30, 2025 was primarily attributable to a decrease in cash and cash equivalents due to unlevered property acquisitions during 2024 and 2025, the paydown of the $120.0 million revolving credit facility and the $100.0 million Series A senior unsecured notes in March 2025.

Gain on Disposition of Property

The gain on disposition activity for the six months ended June 30, 2024 and 2025, represents the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut in May 2024, and the subsequent deconsolidation of the mezzanine debt obligation in connection with the completion of the consensual foreclosure in February 2025, respectively.

See "Financial Statements - Note 3 Acquisitions and Dispositions" for additional details.

The gain on disposition activity for the nine months ended September 30, 2024 and 2025, represents the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut in May 2024, and the subsequent deconsolidation of the mezzanine debt obligation in connection with the completion of the consensual foreclosure in February 2025, respectively.

See "Financial Statements - Note 3.

Acquisitions and Dispositions" for additional details.

Observatory Segment

Observatory Revenue

Observatory revenues were lower due to lower visitation during the six months ended June 30, 2025 compared to the six months ended June 30, 2024, primarily due to more bad weather days during holiday weekends and lower levels of international tourism in 2025 as compared to 2024.

Observatory revenues were lower due to lower visitation during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to lower levels of international tourism in 2025 as compared to 2024, in addition to more bad weather days during holiday weekends in the second quarter of 2025 as compared to 2024.

Liquidity and Capital Resources

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ESRT's charter does not restrict the amount of leverage that we may use.

At June 30, 2025, we had $94.6 million available in cash and cash equivalents, and $620.0 million available under our unsecured revolving credit facility.

At June 30, 2025, we had approximately $2.1 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.34% and a weighted average maturity of 5.0 years.

At September 30, 2025, we had $154.1 million available in cash and cash equivalents, and $620.0 million available under our unsecured revolving credit facility.

At September 30, 2025, we had approximately $2.1 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.34% and a weighted average maturity of 4.8 years.

Portfolio Transaction Activity

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Financial Covenants

As of June 30, 2025, we were in compliance with the following financial covenants related to our unsecured facilities:

Financial Covenant Required June 30, 2025 In Compliance

As of September 30, 2025, we were in compliance with the following financial covenants related to our unsecured facilities:

Financial Covenant Required September 30, 2025 In Compliance

Maximum total leverage < 60% 32.1 % Yes

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Mortgage Debt

As of June 30, 2025, mortgage notes payable, net, amounted to $691.4 million.

We have no mortgage debt maturity until April 2026.

As of September 30, 2025, mortgage notes payable, net, amounted to $691.0 million.

Our next mortgage debt maturity is for $ 50.0 million in April 2026.

In April 2024, we worked with the First Stamford Place mortgage lender to structure a consensual foreclosure.

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Senior Unsecured Notes

As of September 30, 2025, senior unsecured notes, net, amounted to $1.1 billion.

We have no senior unsecured notes maturing until March 2027.

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.

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The notes had a stated interest rate of 3.93%.

Subsequent to quarter end on October 15, 2025, we entered into the Purchase Agreement in connection with a private placement of the

Series L Notes.

Under the Purchase Agreement, we will issue and sell $175.0 million aggregate principal amount of the Series L Notes.

The sale and purchase of the Series L Notes is scheduled to fund on December 18, 2025, subject to customary closing conditions.

See "Financial Statements - Note 5.

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Office Properties (1)(2)

Six Months Ended June 30,

Nine Months Ended September 30,

Total New Leases, Expansions, and Renewals (3)

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Retail Properties (2)(6)

Six Months Ended June 30,

Nine Months Ended September 30,

Total New Leases, Expansions, and Renewals (3)

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(6) Includes an aggregate of 475,442 and 475,744 rentable square feet of retail space in our Manhattan office properties in 2025 and 2024, respectively.

(amounts in thousands) Six Months Ended June 30,

(amounts in thousands) Nine Months Ended September 30,

Total Commercial Portfolio 2025 2024

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(1) Includes all capital expenditures, excluding tenant improvements and leasing commission costs.

As of June 30, 2025, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $103.9 million for tenant improvements and leasing commissions.

As of September 30, 2025, we expect to incur additional costs relating to obligations under existing lease agreements of approximately $96.8 million for tenant improvements and leasing commissions.

We intend to fund the tenant improvements and leasing commission costs through a combination of operating cash flow, cash on hand and other borrowings.

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Distribution to Equity Holders

Distributions amounting to $21.6 million and $21.2 million have been made to equity holders for the six months ended June 30, 2025 and 2024, respectively.

Distributions amounting to $32.4 million and $31.8 million have been made to equity holders for the nine months ended September 30, 2025 and 2024, respectively.

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

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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.

As of September 30, 2025, ESRT had $497.9 million remaining of the authorized repurchase amount.

There were no repurchases of equity securities during the three months ended September 30, 2025.

See "Financial Statements - Note 10.

Capital." for a summary of ESRT's repurchases of equity securities in each of the three months ended June 30, 2025.

Comparison of Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

Cash and cash equivalents and restricted cash were $136.7 million and $576.5 million as of June 30, 2025 and 2024, respectively.

Comparison of Nine Months Ended September 30, 2025 to the Nine Months Ended September 30, 2024

Cash and cash equivalents and restricted cash were $197.8 million and $469.9 million as of September 30, 2025 and 2024, respectively.

The decrease was primarily the result of the following changes in cash flows:

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Investing activities .

Net cash used in investing activities increased by $27.9 million to $155.6 million primarily due to the acquisition of two retail properties on North 6 th Street in Williamsburg, Brooklyn in June 2025 for a purchase price of $31.7 million, including transaction costs.

Net cash used in investing activities decreased by $130.4 million to $188.1 million primarily due to the $31.7 million acquisition of two retail properties on North 6 th Street in Williamsburg, Brooklyn in June 2025, compared to the $143.4 million acquisition of a portfolio of retail properties on North 6 th Street Williamsburg in September 2024.

Financing activities .

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Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our office or retail properties that result from use of the properties or changes in market conditions.

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 has 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.

Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period.

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We believe that eliminating these costs from net income is useful to investors because the resulting measure captures the actual revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs.

However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs.

NOI may fail to capture significant trends in these components of net income which further limits its usefulness.

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The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to NOI:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2025 2024 2025 2024

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Loss on early extinguishment of debt — — — 553

Income tax expense (benefit) 478 750 (141) 95

Income tax expense 1,645 1,442 1,504 1,537

Gain on disposition of property — (1,262) (13,170) (12,065)

4 unchanged sentences

Straight-line rental revenue $ 4,688 $ 2,277 $ 13,719 $ 7,238

Net increase in rental revenue from the amortization of above-and below-market lease assets and liabilities $ 840 $ 513 $ 1,638 $ 1,027

Net increase in amortization of rental revenue from above-and-below-market leases $ 821 $ 476 $ 2,459 $ 1,503

Amortization of acquired below-market ground leases $ 1,957 $ 1,958 $ 5,873 $ 5,874

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The following table presents a reconciliation of our net income, the most directly comparable GAAP measure, to FFO, Modified FFO and Core FFO:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

(amounts in thousands) 2025 2024 2025 2024

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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.

As of June 30, 2025, there were approximately 0.6 million rentable square feet of space in our portfolio available to lease (excluding leases signed but not yet commenced) representing 7.4% of the net rentable square footage of the properties in our commercial portfolio.

As of September 30, 2025, there were approximately 0.9 million rentable square feet of space in our portfolio available to lease (including leases signed but not yet commenced) representing 10.4% of the net rentable square footage of the properties in our commercial portfolio.

In addition, leases representing 2.4% and 6.0% of net rentable square footage of the properties in our commercial portfolio will expire in 2025 and in 2026, respectively.

These leases are expected to represent approximately 2.4% and 5.4%, respectively, of our annualized rent for such periods.

Our revenues and results of operations can be impacted by expiring leases that are not renewed or re-leased or that are renewed or re-

leased at base rental rates equal to, above or below the current average base rental rates.

Our revenues and results of operations can be impacted by expiring leases that are not renewed or re-leased or that are renewed or re-leased at base rental rates equal to, above or below the current average base rental rates.

Further, our revenues and results of operations can also be affected by downtime after space is vacated and the costs we incur to re-lease available space, including payment of leasing commissions, redevelopments and build-to-suit remodeling that may not be borne by the tenant.

Observatory Operations

For the six months ended June 30, 2025, the Observatory hosted 1,057,000 visitors, compared to 1,133,000 visitors for the six months ended June 30, 2024, a decrease of 6.7%.

Observatory revenue for the six months ended June 30, 2025 was $57.1 million, a 2.8% decrease from $58.7 million for the six months ended June 30, 2024.

For the nine months ended September 30, 2025, the Observatory hosted 1,705,000 visitors, compared to 1,860,000 visitors for the nine months ended September 30, 2024, a decrease of 8.3%.

Observatory revenue for the nine months ended September 30, 2025 was $93.1 million, a 5.1% decrease from $98.1 million for the nine months ended September 30, 2024.

Observatory revenues were lower primarily due to lower levels of international visitors in 2025 as compared to 2024.

Observatory revenues and admissions are dependent upon the following:

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We believe the global economy, including the real estate sector, currently navigates an environment of uncertainty around inflation, interest rates, tariffs, economic growth and geopolitical unrest.

There have been concerns about the softening of the office real estate market, amidst refinancing challenges of existing low interest rate loans and associated reduced new loan availability and increased costs of loans and related increased expectations of equity returns.

There have been concerns about the challenges of refinancing existing low interest rate loans at higher rates.

Additionally, the risk of slower global economic growth could impact the number of visitors to the Empire State Building Observatory, as well as our pricing power.

Despite this global economic backdrop, we believe that ESRT is in a good competitive position with diversified drivers of income across office, retail, multifamily and the Empire State Building Observatory.

ESRT’s New York City-focused portfolio is modernized, amenitized, well-located and energy efficient, with indoor environmental quality, competitive rental rates and strong leased percentages.

ESRT’s New York City-focused portfolio is modernized, amenitized, well-located and energy efficient, with high indoor environmental quality, competitive rental rates and strong leased percentages.

In addition to our diversified portfolio, our business is supported by a well-positioned balance sheet, modest leverage and good access to liquidity as set forth herein.

The absence of near term debt maturities provides an added degree of security.

This provides us optionality to execute on capital recycling, acquisitions, and buybacks.

As we navigate these uncertain times, we remain prepared for various challenges and situations.

The absence of unaddressed near term debt maturities provides an added degree of security.

This provides us optionality in capital allocation decisions.

Critical Accounting Estimates

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Item 2. Management’s Discussion and Analysis