What changed in this filing

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Item 1. Business

2026-03-02 compared with 2025-02-28 · 46 added, 86 removed, 119 unchanged (53% of the section changed)

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(the "Operating Partnership") is the entity through which Empire State Realty Trust, Inc.

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 that was declared the #1 Attraction in the World - and the #1 Attraction in the U.S.

for the third consecutive year – in Tripadvisor’s 2024 Travelers’ Choice Awards:

ESRT), is a NYC-focused real estate investment trust ("REIT") that owns and operates a portfolio of well-leased, top of tier, modernized, amenitized, and well-located office, retail, and multifamily assets.

ESRT’s flagship Empire State Building, the “World's Most Famous Building,” features its iconic Observatory, ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor’s 2025 Travelers’ Choice Awards:

Best of the Best Things to Do.

The Company is a recognized leader in energy efficiency and indoor environmental quality.

As of December 31, 2024, our portfolio was comprised of approximately 7.8 million rentable square feet of office space, 0.8 million rentable square feet of retail space and 732 residential units.

Our office portfolio included 10 properties (including three long-term ground leasehold interests).

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 732 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 "IPO").

As of December 31, 2025, our portfolio was comprised of approximately 7.9 million rentable square feet of office space, 0.8 million rentable square feet of retail space and 743 residential units, which are located in New York City.

Our office portfolio included 10 properties (including three long-term ground leasehold interests), all of which are located in Manhattan.

Additionally, we have entitled land in Stamford, Connecticut that can support the development of either office or residential per local zoning.

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.

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The quality of our commercial portfolio contributed to a strong leasing year in 2025;

we leased 1,324,824 square feet of space, including "Early Renewals" which are leases signed over two years prior to the lease expiration, and made meaningful absorption progress with a 130 basis point increase to 89.0% in Manhattan office occupancy, excluding storage and broadcasting and a 160 basis point increase to 94.2% in Manhattan leased rate throughout the year.

we leased 1,009,009 square feet of space, including "Early Renewals" which are leases signed over two years prior to the lease expiration, and made meaningful absorption progress with a 90 basis point increase to 89.9% in Manhattan office occupancy, excluding properties under redevelopment, storage and broadcasting.

Additionally, we believe our proactive, service-intensive approach to asset and property management helps increase occupancy and rental rates.

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Our comprehensive building management services and our strong commitment to tenant and broker relationships and satisfaction enable us to negotiate attractive leasing deals, which attracts and retains high credit-quality tenants.

We proactively manage our rent roll, foster strong tenant relationships, maintain continuous communication with our tenants, and are responsive to tenant needs.

We proactively

manage our rent roll, foster strong tenant relationships, maintain continuous communication with our tenants, and are responsive to tenant needs.

We believe the success of our long-term tenant relationships improves our operating results over time by reducing tenant turnover and associated costs.

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We enhanced health and safety protocols, improved marketing and cross-promotional activities to increase brand awareness, and managed expenses prudently.

Our efforts have resulted in strong performance from our Observatory and we experienced continued improvement in Observatory revenue and operating income throughout 2024.

We had approximately 2.6 million visitors in 2024 and 2023 as compared to 2.2 million in 2022 and 0.8 million in 2021.

Additionally, the Empire State Building Observatory was declared the #1 Attraction in the World - and the #1 Attraction in the U.S.

for the third consecutive year – in Tripadvisor’s 2024 Travelers’ Choice Awards:

Our efforts resulted in strong performance from our Observatory and we experienced improvement in Observatory revenue and operating income from 2021 through 2024.

In 2025, revenue and operating income declined as a result of reduced international visitation in excess of increased domestic visitation.

We had approximately 2.3 million visitors in 2025, as compared to 2.6 million in 2024 and 2023, 2.2 million in 2022 and 0.8 million in 2021.

We grew revenue per visitor in 2025 compared to 2024 and continued our efforts to enhance the guest experience, broaden our marketing reach and drive operational efficiency.

Additionally, the Empire State Building Observatory was ranked the #1 Top Attraction in New York City for the fourth consecutive year in Tripadvisor's 2025 Travelers' Choice Awards:

Best of the Best Things to Do.

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We enhance shareholder value primarily through the execution of our priorities to lease space, sell tickets to the Observatory, manage our balance sheet, and achieve our sustainability goals.

We are diversified and we believe we benefit from New York City’s rebound from our office, Observatory, retail, and multifamily exposure in the city.

We are diversified and we believe we benefit from New York City’s strength from our office, Observatory, retail, and multifamily exposure in the city.

We believe our well-positioned balance sheet, access to capital, and expertise in redevelopment gives us significant flexibility to structure and pursue attractive investment opportunities.

Since December 2021, we have completed acquisitions of three multifamily properties in Manhattan and a collection of prime retail assets on North 6 th Street in the Williamsburg neighborhood of Brooklyn, NY.

We have also completed the disposition of non-core assets in our greater New York metropolitan area portfolio, including office assets in Stamford, CT, Norwalk, CT, White Plains, NY, and Harrison, NY, and retail assets in Westport, CT.

Since December 2021, we have completed acquisitions of three multifamily properties in Manhattan, a collection of prime retail assets on North 6 th Street in the Williamsburg neighborhood of Brooklyn, NY and 130 Mercer Street, a high-quality mixed-use asset, with office and retail components, in the SoHo submarket of Manhattan.

We have also completed the disposition of non-core assets in the New York metropolitan area, including office assets in Stamford, CT, Norwalk, CT, White Plains, NY, and Harrison, NY, and retail assets in Westport, CT.

Properties for more information.

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Achieve Sustainability Goals

We are recognized as a leader in the real estate industry in sustainability, and we focus on net zero emissions, energy efficiency, water use reduction, waste reduction, indoor environmental quality, and healthy buildings.

We have pioneered

certain practices to achieve emissions reduction and energy efficiency, including those described in our Empire Building Playbook, a free guide that we published in partnership with the New York State Energy Research Development Authority and the Clinton Global Initiative, for existing large commercial and multifamily buildings to follow our lead and develop a technical and economic pathway to achieve net zero carbon reduction with a proven payback.

We are recognized as a leader in the real estate industry in sustainability, and we focus on energy efficiency, emissions reduction, water use reduction, waste reduction, indoor environmental quality, and healthy buildings.

We have pioneered certain practices to achieve emissions reduction and energy efficiency, including those described in our Empire Building Playbook, a free guide that we published in partnership with the New York State Energy Research Development Authority and the Clinton Global Initiative, for existing large commercial and multifamily buildings to follow our lead and develop a technical

and economic pathway to achieve energy savings with a proven payback.

The reduced energy consumption and emissions lower costs for us and our tenants, and we believe creates a competitive advantage for our properties.

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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.

We have post-closing obligations related to the 69-97 and 103-107 Main Street, Westport, Connecticut properties that we sold in February 2023 to (i) close out a voluntary remediation program at 69-97 Main Street to address residual impacts of prior presence of underground storage tanks and (ii) comply with a consent order issued by the Connecticut Department of Environmental Protection to investigate soil conditions at 103-107 Main Street.

We believe any expenses incurred to close out and comply with the remediation program and consent order, respectively, will be immaterial to the results of our operations.

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, the undeveloped parcel we own adjacent to our recently sold Metro Center asset, 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, 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.

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Certain units in our multifamily properties are designated for lower income households and are therefore subject to supervision and regulation by state and federal governmental authorities which regulate affordable housing rental activities.

See "Risk Factors — Government housing regulations may limit opportunities at the multifamily properties in which we invest, and failure to comply with resident qualification requirements may result in financial penalties or loss of benefits" for more information.

We carry comprehensive liability, fire, extended coverage, earthquake, terrorism and rental loss insurance covering all of our New York City properties and our greater New York metropolitan area properties under a blanket policy.

We carry additional all-risk property and business insurance, which includes terrorism insurance, on the Empire State Building through ESRT Captive Insurance Company L.L.C., or ESRT Captive Insurance, our wholly owned captive insurance company.

ESRT Captive Insurance covers terrorism insurance for $1.2 billion in losses in excess of $800 million per occurrence suffered by the Empire State Building, providing us with aggregate terrorism coverage of $2 billion at that property.

ESRT Captive Insurance fully reinsures the 20% coinsurance under the Terrorism Risk Insurance Program Reauthorization Act of 2015 ("TRIPRA") and the difference between the TRIPRA captive deductible and policy deductible of $100,000 for non-Nuclear, Biological, Chemical and Radiological exposures.

We purchased a $50 million limit of Nuclear, Biological, Chemical and Radiological ("NBCR") insurance in excess of a $1.0 million deductible in the commercial insurance market.

ESRT Captive Insurance provides NBCR insurance coverage under TRIPRA with a limit of $1.95 billion in excess of the $50 million policy.

As a result, we remain only liable for the 20% coinsurance under TRIPRA for NBCR exposures within ESRT Captive Insurance, as well as a deductible equal to 20% of ESRT Captive Insurance’s prior year’s premium.

As long as we own ESRT Captive Insurance, we are responsible for ESRT Captive Insurance’s liquidity and capital resources, and ESRT Captive Insurance’s accounts are part of our consolidated financial statements.

If we experience a loss and ESRT Captive Insurance is required to pay under its insurance policy, we would ultimately record the loss to the extent of its required payment.

The policies described above cover certified terrorism losses as defined under the Terrorism Risk Insurance Act of 2002 ("TRIA") and subsequent extensions.

On December 20, 2019, the President of the United States signed into law TRIPRA act of 2019, which extended TRIA through December 31, 2027.

TRIA provides for a system of shared public and private compensation for insured losses resulting from acts of terrorism.

As a result, the certified terrorism coverage provided by ESRT Captive Insurance is eligible for 80% coinsurance provided by the United States Treasury in excess of a statutorily calculated deductible.

ESRT Captive Insurance

reinsures 100% of its 20% coinsurance for non-NBCR exposures.

The 20% coinsurance on NBCR exposures is retained by ESRT Captive Insurance.

Reinsurance contracts do not relieve ESRT Captive Insurance from its primary obligations to its policyholders.

Additionally, failure of the various reinsurers to honor their obligations could result in significant losses to ESRT Captive Insurance.

The reinsurance has been ceded to reinsurers approved by the State of Vermont.

ESRT Captive Insurance continually evaluates the reinsurers’ financial condition by considering published financial stability ratings of the reinsurers and other factors.

There can be no assurance that reinsurance will continue to be available to ESRT Captive Insurance to the same extent and at the same cost.

ESRT Captive Insurance may choose in the future to reevaluate the use of reinsurance to increase or decrease the amounts of risk it cedes.

In addition to insurance held through ESRT Captive Insurance described above, we carry terrorism insurance on all of our properties in an amount and with deductibles which we believe are commercially reasonable.

Our insurance policies include substantial self-insurance portions and significant deductibles and co-payments for certain events, and hurricanes in the United States have affected the availability and price of such insurance.

We may discontinue certain insurance coverage on some or all of our properties in the future if the cost of premiums for any of these policies in our judgment exceeds the value of the coverage discounted for the risk of loss.

Additionally, we do not carry insurance for certain losses, including, but not limited to, losses caused by war.

Furthermore, business interruption insurance due to pandemic level or other public health events may not be readily available at commercially acceptable rates.

The leasing of real estate is highly competitive in New York City and Stamford, Connecticut where we operate.

See "Risk Factors — Government housing regulations may limit opportunities at the multifamily properties in which we invest, and failure to comply with resident qualification requirements or to extend such programs upon expiration may result in financial penalties or loss of benefits" for more information.

We maintain additional property, business interruption and terrorism coverage for the Empire State Building through ESRT Captive Insurance Company L.L.C., our wholly owned captive insurance subsidiary.

Through a combination of commercial insurance, our captive program and participation in the federal terrorism insurance program (as amended, currently extended through December 31, 2027), we maintain aggregate terrorism coverage of up to $2.0 billion for the Empire State Building, including coverage for certain nuclear, biological, chemical and radiological exposures.

The federal program operates as a backstop for certified acts of terrorism, subject to applicable deductibles and co-insurance.

The captive maintains reinsurance with third-party insurers;

reinsurance does not relieve the captive of its primary obligations, and reinsurer non-performance could result in losses to us.

As long as we own the captive, we are responsible for its liquidity and capital resources, and its accounts are included in our consolidated financial statements.

Our policies include substantial self-insurance components and significant deductibles and co-payments for certain events.

We do not carry insurance for certain losses (including losses caused by war), and business interruption insurance for pandemic-level or other public health events may not be available on commercially acceptable terms.

We may modify or discontinue certain coverage if, in our judgment, the cost of coverage exceeds the value of the coverage relative to the risk of loss.

The leasing of real estate is highly competitive in New York City where we operate.

We compete with numerous acquirers, developers, owners and operators of commercial real estate, many of which own or may seek to acquire or develop properties similar to ours in the same markets in which our properties are located.

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Adverse impacts on domestic and international travel and changes in foreign currency exchange rates may also decrease demand in the future, which could have a material adverse effect on our results of operations, financial condition and ability to make distributions to our securityholders.

If our competitors offer space at rental rates below current market rates, below the rental rates we currently charge our tenants, in better locations within our markets or in higher quality facilities, we may lose potential tenants and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire.

If our competitors offer space at rental rates below current

market rates, below the rental rates we currently charge our tenants, in better locations within our markets or in higher quality facilities, we may lose potential tenants and we may be pressured to reduce our rental rates below those we currently charge in order to retain tenants when our tenants’ leases expire.

ESRT's Tax Status as a REIT

ESRT elected to be subject to tax as a REIT and has operated in a manner that we believe allows it to qualify as a REIT for U.S.

federal income tax purposes commencing with its taxable year ended December 31, 2013.

We believe that ESRT has been organized in conformity with the requirements for qualification and taxation as a REIT under the Internal Revenue Code of 1986, as amended, (the "Code"), and that its intended manner of operation will enable it to continue to meet the requirements for qualification and taxation as a REIT.

So long as ESRT qualifies as a REIT, it generally will not be subject to U.S.

federal income tax on its net taxable income that ESRT distributes to its securityholders.

If ESRT fails to qualify as a REIT in any taxable year and does not qualify for certain statutory relief provisions, ESRT will be subject to U.S.

federal income tax at regular corporate rates and may be precluded from qualifying as a REIT for the subsequent four taxable years following the year during which it lost its REIT qualification.

Even if ESRT qualifies as a REIT, it may be subject to certain U.S.

federal, state and local taxes on its income or property.

In order to qualify as a REIT, ESRT must distribute to its securityholders, on an annual basis, at least 90% of its REIT taxable income, determined without regard to the deduction for distributions paid and excluding net capital gains.

In addition, ESRT will be subject to U.S.

federal income tax at the generally applicable corporate tax rate to the extent that it distributes less than 100% of its net taxable income (including net capital gains) and will be subject to a 4% nondeductible excise tax on the

amount by which its distributions in any calendar year are less than a minimum amount specified under U.S.

federal income tax laws.

In addition, to qualify as a REIT, ESRT must ensure that it meets the REIT gross income tests annually and that at the end of each calendar quarter, at least 75% of the value of its total assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and certain kinds of mortgage-backed securities.

The remainder of its investment in securities (other than government securities, securities of corporations that are treated as Taxable REIT Subsidiaries ("TRSs") and qualified REIT real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.

In addition, in general, no more than 5% of the value of its assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of its total securities can be represented by securities of one or more TRSs.

Rents from real property are generally not qualifying income for purposes of the REIT gross income tests if the rent is treated as “related party rent.” Related party rent generally includes (i) any rent paid by a corporation if the REIT (or any person who owns 10% or more of the stock of the REIT by value) directly or indirectly owns 10% or more of the stock of the corporation by vote or value and (ii) rent paid by a partnership if the REIT (or any person who owns 10% or more of the stock of the REIT by value) directly or indirectly owns an interest of 10% or more in the assets or net profits of the partnership.

Under an exception to this rule, related party rent is treated as qualifying income for purposes of the REIT gross income tests if it is paid by a TRS of the REIT and (i) at least 90% of the leased space in the relevant property is rented to persons other than either TRSs or other related parties of the REIT, and (ii) the amounts paid to the REIT as rent from real property are substantially comparable to the rents paid by unrelated tenants of the REIT for comparable space.

Income from admissions to the Empire State Building Observatory, and certain other income generated by the Observatory, would not likely be qualifying income for purposes of the REIT gross income tests.

ESRT jointly elected with Observatory TRS, which is the current lessee and operator of the Observatory and which is wholly owned by our Company, for Observatory TRS to be treated as a TRS of ESRT's for U.S.

federal income tax purposes.

Observatory TRS leases the Empire State Building Observatory from our Company pursuant to a lease that provides for fixed base rental payments and variable rental payments equal to certain percentages of Observatory TRS’s gross receipts from the operation of the Observatory.

Given the unique nature of the real estate comprising the Observatory, as of the date of such lease, we did not believe that there is any space in the Empire State Building or in the same geographic area as the Empire State Building that is likely to be considered sufficiently comparable to the Observatory for the purpose of applying the exception to related party rent described above.

ESRT has received from the IRS a private letter ruling that the rent that our Company receives from Observatory TRS pursuant to the lease of the Empire State Building Observatory is qualifying income for purposes of the REIT gross income tests so long as such rent reflects the fair market rental value of the Empire State Building Observatory as determined by an appraisal rendered by a qualified third-party appraiser.

In addition, our operating partnership has acquired various license agreements (i) granting certain third-party broadcasters the right to use space on the tower on the top of the Empire State Building for certain broadcasting and other communication purposes and (ii) granting certain third-party vendors the right to operate concession stands in the Observatory.

ESRT has received from the IRS a private letter ruling that the license fees that our Company receives under the license agreements described above constitute qualifying income for purposes of the REIT gross income tests.

ESRT elected to be taxed as a REIT for U.S.

federal income tax purposes and intend to continue to qualify as a REIT.

To maintain ESRT's qualification, ESRT must satisfy ongoing requirements relating to, among other things, the nature and diversification of its assets, the sources of its income, the ownership of its shares and the amount of its distributions to shareholders.

If ESRT qualify as a REIT, it generally will not be subject to U.S.

federal corporate income tax on income that it distributes to its shareholders, although it may be subject to tax on certain income, including income from non-qualifying activities conducted through taxable REIT subsidiaries, undistributed taxable income and certain asset dispositions.

ESRT's qualification as a REIT depends upon its ability to meet the various requirements imposed by the Internal Revenue Code, which are highly technical and complex.

If ESRT fails to qualify as a REIT in any taxable year and do not qualify for certain available relief provisions, it would be subject to U.S.

federal corporate income tax and could be precluded from re-electing REIT status for four taxable years following the year of disqualification.

See “Risk Factors — Risks Related to ESRT's REIT Status.”

Substantially all of our leases provide for separate real estate tax and operating expense escalations.

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We believe our public recognition demonstrates the strength of our program.

We were Great Place to Work-Certified in both 2023 and 2024.

We were Great Place to Work-Certified in 2023, 2024 and 2025.

Our principal executive offices are located at 111 West 33rd Street, 12th floor, New York, New York 10120.

We also have additional regional leasing and property management offices in Manhattan and Stamford, Connecticut.

We also have additional regional leasing and property management offices in Manhattan.

Our current facilities are adequate for our present and future operations, although we may add or eliminate regional offices, depending upon our future operations.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business