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Item 7. Management’s Discussion and Analysis

2026-03-02 compared with 2025-02-28 · 105 added, 126 removed, 249 unchanged (48% of the section changed)

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FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act.

We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions.

You can identify forward-looking statements by the use of forward-looking terminology such as “aims," "anticipates," "approximately," "believes," "contemplates," "continues," "estimates," "expects," "forecasts," "hope," "intends," "may," "plans," "seeks," "should," "thinks," "will," "would" or the negative of these words and phrases or similar words or phrases.

In particular, statements pertaining to our capital resources, portfolio performance, dividend policy and results of operations contain forward-looking statements.

Likewise, all of our statements regarding anticipated growth in our portfolio from operations, acquisitions and anticipated market conditions, demographics and results of operations are forward-looking statements.

Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control, and you should not rely on them as predictions of future events.

Forward-looking statements depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them.

We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

Many important factors could cause actual results, performance, achievements, and future events to differ materially from those set forth, implied, anticipated, expected, projected, assumed or contemplated in the forward-looking statements, including, among other things:

(i) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, climate-related risks such as natural disasters and extreme weather events, terrorism and other armed hostilities, as well as cybersecurity threats and technology disruptions;

(ii) a failure of conditions or performance regarding any event or transaction described herein;

(iii) resolution of legal proceedings involving the Company;

(iv) reduced demand for office, multifamily or retail space, including as a result of the changes in the use of office space and remote work;

(v) changes in our business strategy;

(vi) a decline in Observatory visitors due to changes in domestic or international tourism, including due to health crises, geopolitical events, currency exchange rates, and/or competition from other observatories;

(vii) defaults on, early terminations of, or non-renewal of, leases by tenants;

(viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors;

(ix) declining real estate valuations and impairment charges;

(x) termination of our ground leases;

(xi) limitations on our ability to pay down, refinance, restructure or extend our indebtedness or borrow additional funds;

(xii) decreased rental rates or increased vacancy rates;

(xiii) difficulties in executing capital projects or development projects successfully or on the anticipated timeline or budget;

(xiv) difficulties in identifying and completing acquisitions;

(xv) impact of changes in governmental regulations, tax laws and rates and similar matters;

(xvi) our failure to qualify as a REIT;

(xvii) incurrence of taxable capital gain on disposition of an asset due to failure of compliance with a 1031 exchange program;

(xviii) our disclosure controls and internal control over financial reporting, including any material weakness;

and (xix) failure to achieve sustainability metrics and goals, including as a result of tenant collaboration, and impact of governmental regulation on our sustainability efforts.

For a further discussion of these and other factors that could impact the Company's future results, performance or transactions, see the section entitled “Risk Factors” of this Annual Report on Form 10-K.

While forward-looking statements reflect the Company's good faith beliefs, they do not guarantee future performance.

Any forward-looking statement speaks only as of the date on which it was made, and we assume no obligation to update or revise publicly any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this Annual Report on Form 10-K, except as required by applicable law.

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).

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act.

We intend these forward-looking statements to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Forward-looking statements are not historical facts and can generally be identified by words such as “anticipate,” “believe,” “expect,” “intend,” “plan,” “project,” “estimate,” “may,” “will,” “should,” “would,” and similar expressions.

Forward-looking statements are based on our current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied.

These risks and uncertainties include, among others:

economic and market conditions (including the impact of catastrophic events, pandemics, extreme weather, terrorism, armed hostilities, cybersecurity threats and other technology disruptions);

increased costs due to tariffs or other economic factors;

changes in the New York City office, retail and tourism markets (including changes in the use of office space and remote work);

leasing activity, tenant defaults, early terminations and renewals, occupancy levels and rental rates;

performance of the Observatory (including tourism levels, currency and geopolitical impacts, weather and competition);

interest rate volatility and capital markets conditions, including our ability to refinance, restructure or extend indebtedness;

real estate valuation declines and potential impairment charges;

our ability to execute capital projects and complete acquisitions on acceptable terms;

risks relating to governmental regulation, environmental and climate-related requirements (including Local Law 97), and our ability to achieve sustainability goals and metrics;

risks relating to our ground leases;

our ability to maintain our qualification as a REIT;

potential taxable gain arising from transactions structured to qualify under Section 1031;

legal proceedings;

and risks relating to our disclosure controls and internal control over financial reporting.

For a discussion of these and other factors, see "Item 1A.

Risk Factors" in this report.

Any forward-looking statement speaks only as of the date of this report.

We undertake no obligation to update or revise any forward-looking statement to reflect subsequent events or circumstances, except as required by law.

2025 Highlights

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• Signed a total of 1,009,009 rentable square feet of new, renewal and expansion leases.

• In June 2025, we closed on the acquisition of two retail properties on North 6th Street in Williamsburg, Brooklyn for a purchase price of $31.0 million.

• In December 2025, we closed on the acquisition of 130 Mercer Street, located in the SoHo submarket of Manhattan, for a purchase price of $386.0 million.

Results of Operations

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Observatory revenue — 128,329 128,329 — 136,377 136,377 (8,048) (5.9) %

Lease termination fees 4,771 — 4,771 — — — 4,771 N/A

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

Third-party management and other fees 1,483 — 1,483 1,170 — 1,170 313 26.8 %

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(103,133) — (103,133) (105,239) — (105,239) 2,106 2.0 %

Interest expense associated with property in receivership (4,471) — (4,471) — — — (4,471) N/A

Loss on early extinguishment of debt (553) — (553) — — — (553) N/A

Interest expense associated with property in receivership (647) — (647) (4,471) — (4,471) 3,824 85.5 %

Loss on early extinguishment of debt (97) — (97) (553) — (553) 456 82.5 %

Gain on disposition of properties 35,018 — 35,018 13,302 — 13,302 21,716 163.3 %

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Rental Revenue

The increase in rental revenue was primarily attributable to higher occupancy and higher operating and real estate tax expense escalations driving a $29.6 million increase during the twelve months ended December 31, 2024 compared to the twelve months ended December 31, 2023.

The increases were partially offset by a net $14.2 million decrease in revenue from our recent transaction activity as

disclosed in "Financial Statements - Note 3.

The increase in rental revenue during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily attributable to a $7.6 million increase in tenant reimbursement income and $5.9 million increase due to higher base rent from new or renewed tenants.

The increases were partially offset by a net $1.9 million decrease in revenue from our recent transaction activity as disclosed in "Financial Statements - Note 3.

Acquisitions and Dispositions" in this Annual Report on Form 10-K.

Property Operating Expenses

The increase in property operating expenses was primarily due to higher repair and maintenance costs, cleaning costs, and payroll costs in 2024 relating to increased building utilization and certain local law compliance costs.

The increase in property operating expenses during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily due to higher cleaning-related payroll costs, utilities costs, and repair and maintenance costs in 2025 relating to increased building utilization and certain local law compliance costs.

The increases were partially offset by a net decrease in property operating expenses from our recent transaction activity as disclosed in "Financial Statements - Note 3.

Acquisitions and Dispositions" in this Annual Report on Form 10-K.

Real Estate Taxes

The increase in real estate taxes was primarily attributable to a $4.6 million increase in real estate tax expense due to higher assessed values for multiple properties, partially offset by a net $2.9 million decrease from our recent transaction activity as disclosed in "Financial Statements - Note 3.

The increase in real estate taxes during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was primarily attributable to higher assessed values for multiple properties, partially offset by a net decrease from our recent transaction activity as disclosed in "Financial Statements - Note 3.

Acquisitions and Dispositions" in this Annual Report on Form 10-K.

Depreciation and Amortization

Depreciation and amortization is lower for the year ended December 31, 2024 than for the year ended December 31, 2023 primarily due to disposition activity during the comparative period.

Depreciation and amortization increased during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 primarily due to depreciation on building and tenant improvement assets placed in service as a result of our increase in leasing activity.

The remaining activity relates to our recent transaction activity as disclosed in "Financial Statements - Note 3.

Acquisitions and Dispositions" in this Annual Report on Form 10-K.

Interest Income

The increase in interest income reflects larger cash balances in the year ended December 31, 2024 compared to the year ended December 31, 2023.

Interest Expense

The increase in interest expense reflects interest on new debt instruments in the year ended December 31, 2024, partially offset by the interest expense on debt associated with First Stamford Place being recognized separately as interest expense associated with property in receivership.

The decrease in interest income during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 is primarily due to lower cash balances 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.

See "Financial Statements — Note 5.

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Gain on Sale/Disposition of Property

The gain on disposition activity for the year ended December 31, 2024 relates to the derecognition of assets and certain liabilities in connection with the consensual foreclosure of First Stamford Place in Stamford, Connecticut as disclosed in "Financial Statements - Note 3.

The gain on disposition activity for the year ended December 31, 2025 relates to the disposition of Metro Center in Stamford, Connecticut as disclosed in "Financial Statements - Note 3.

Acquisitions and Dispositions" in this Annual Report on Form 10-K.

The gain on disposition activity for the year ended December 31, 2023 relates to the dispositions of 500 Mamaroneck in Harrison, New York in April 2023 and 69-97 and 103-107 Main Street in Westport, Connecticut in February 2023.

Observatory Segment

Observatory Revenue

Observatory revenues were higher driven by increased revenue per visitor from pricing increases during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Observatory revenues were lower due to lower visitation during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024, primarily due to lower levels of international tourism in 2025 as compared to 2024.

While observatory revenues declined due to lower levels of international tourism, this was partially offset by an increase in domestic visitation and overall revenue per visitor for the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024.

Observatory Expenses

The increase in O bservatory expenses was driven by increased incremental costs such as labor, marketing and maintenance costs.

The increase in Observatory expenses during the twelve months ended December 31, 2025 compared to the twelve months ended December 31, 2024 was driven by increased costs such as marketing and maintenance costs.

Liquidity and Capital Resources

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Based on the historical experience of our management and our business strategy, in the foreseeable future we anticipate we will generate positive cash flows from operations.

In order for ESRT to qualify as a REIT, ESRT is required under the Code to distribute to its stockholders, on an annual basis, at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains.

In order for ESRT to qualify as a REIT, ESRT is required under the Internal Revenue Code of 1986 to distribute to its stockholders, on an annual basis, at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains.

We expect to make quarterly distributions, as required, to our securityholders.

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Even if there are no material changes to our anticipated liquidity requirements, our sources of liquidity may be fewer than, and the funds available from such sources may be less than, anticipated or needed.

Our primary sources of liquidity will generally consist of cash on hand, cash generated from our operating activities, debt issuances and unused borrowing capacity under our unsecured revolving credit facility.

We expect to meet our short-term liquidity requirements, including distributions, operating expenses, working capital, debt service, and capital expenditures from cash flows from operations, cash on hand, debt issuances, and available borrowing capacity under our unsecured revolving credit facility.

Our primary sources of liquidity will generally consist of cash on hand, cash generated from our operating activities, debt issuances, common and/or preferred equity issuances and unused borrowing capacity under our unsecured revolving credit facility.

preferred issuances and available borrowing capacity under our unsecured revolving credit facility.

The availability of these borrowings is subject to the conditions set forth in the applicable loan agreements.

We expect to meet our long-term capital requirements, including acquisitions, redevelopments and capital expenditures through our cash flows from operations, cash on hand, our unsecured revolving credit facility, mortgage financings, debt issuances, common and/or preferred equity issuances and asset sales.

We expect to meet our long-term capital requirements, including acquisitions, redevelopments, repositioning and capital expenditures through our cash flows from operations, cash on hand, our unsecured revolving credit facility, mortgage financings, debt issuances, common and/or preferred equity issuances and asset sales.

Our properties require periodic investments of capital for individual lease related tenant improvements allowances, general capital improvements and costs associated with capital expenditures.

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At December 31, 2025, we had approximately $2.4 billion of total consolidated indebtedness outstanding, with a weighted average interest rate of 4.48% and a weighted average maturity of 4.8 years.

As of December 31, 2024, excluding debt amortization, we have a debt maturity of $100.0 million in March 2025, $225.0 million in 2026, $155.0 million in 2027, $146.1 million in 2028, $441.6 million in 2029, and $1.2 billion thereafter.

As of December 31, 2024, interest expense obligations and debt amortization from 2025 through 2029 and thereafter amount to $506.0 million and $34.0 million, respectively.

As of December 31, 2025, excluding debt amortization, we have a debt maturity of:

Year Amortization Maturities Total

2026 $ 3,958 $ 50,000 $ 53,958

2027 4,276 155,000 159,276

2028 3,555 146,091 149,646

2029 3,890 395,000 398,890

2030 4,511 508,600 513,111

Thereafter 10,123 1,104,007 1,114,130

Total $ 30,313 $ 2,358,698 $ 2,389,011

As of December 31, 2025, interest expense obligations from 2026 through 2030 and thereafter amounts to approximately $515.4 million.

In connection with our three ground leases (i.e.

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Unsecured Revolving Credit and Term Loan Facilities

In March 2024, we closed on a $715.0 million, five-year unsecured credit agreement which consists of a $620.0 million revolver and a $95.0 million term loan facility, each of which mature on March 8, 2029, inclusive of the extension periods.

In November 2025, we entered into an amended and restated credit agreement with Wells Fargo Bank, National Association, as administrative agent, and the other lenders party thereto, that amends and restates the credit agreement dated March 19, 2020, which governs our senior unsecured term loan credit facility (the “Wells Term Loan Facility”).

The Wells Term Loan Facility is comprised of a $245.0 million senior unsecured term loan facility and matures on January 15, 2031.

In May 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 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.

In March 2024, we closed a $715.0 million, five-year unsecured credit agreement which consists of a $620.0 million revolver and a $95.0 million term loan facility, each of which mature on March 8, 2029, inclusive of the extension periods.

On March 18, 2025, we repaid the $120.0 million borrowings previously drawn on the Revolving Credit Facility.

As of December 31, 2025 , we had $145.0 million borrowings under the Revolving Credit Facility and $95.0 million under the BofA Term Loan Facility.

See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K for a summary of our unsecured revolving credit and term loan facilities.

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As of December 31, 2025, mortgage notes payable, net, amounted to $619.3 million.

We have no mortgage debt maturity until April 2026.

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

In December 2025, we repaid the $71.6 million mortgage debt in connection with the sale of Metro Center, in Stamford, Connecticut.

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

In May 2024, the First Stamford Place property was placed in receivership and accordingly, we reclassified the related debt and applicable accrued interest to debt associated with property under receivership and accrued interest associated with property in receivership, respectively, in our consolidated balance sheet.

As of December 31, 2024, this debt consists of a $164.0 million mortgage loan bearing interest at 4.09% and a $11.9 million loan bearing interest at 6.25%.

In connection with this we recorded a contract asset which represents the amount of obligation we expect to be released upon the final resolution of the foreclosure process on the First Stamford Place property.

Subsequent to year end, in February 2025, title of the property was transferred to the mortgage lender and we were released of our mortgage obligation.

In July 2024, we executed an agreement for the refinance of the mortgage for the Metro Center property that was due to mature in November 2024.

Beginning in November 2024, the new loan balance of $71.6 million is interest-only at an interest rate of 3.59%, with a four-year term plus a one-year extension option.

On May 22, 2024, a receiver was appointed and we ended our management of the property.

On February 5, 2025, the consensual foreclosure was completed, title of the property was transferred to the mortgage lender and we were released of our mortgage obligation.

See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K for more information on mortgage debt.

Senior Unsecured Notes

On June 17, 2024, we closed on the issuance and sale of an aggregate $225.0 million principal amount of notes, consisting of (a) $155.0 million aggregate principal amount of 7.20% Series I Green Guaranteed Senior Notes due June 17, 2029, (b) $45.0 million aggregate principal amount of 7.32% Series J Green Guaranteed Senior Notes due June 17, 2031 and (c) $25.0 million aggregate principal amount of 7.41% Series K Green Guaranteed Senior Notes due June 17, 2034.

In December 2025, we closed on the issuance and sale of $175.0 million aggregate principal amount of 5.47% Series L Notes that mature on January 7, 2031 in a private placement transaction.

In March 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%.

See "Financial Statements — Note 5 Debt" in this Annual Report on Form 10-K for more information on senior unsecured notes.

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Total square feet 856,453 1,300,584 960,192

1,300,584 960,192 1,176,172

Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 70.77 $ 70.07 $ 63.45

Weighted average annualized cash rent per square foot for previous leases 65.27 66.44 57.95

Increase in mark-to-market rent $ 3.63 $ 5.50 $ 2.63

Percentage of new cash rent over previously escalated rents 8.4 % 5.5 % 9.5 %

Leasing commission costs per square foot (5)

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Total square feet 152,556 24,240 21,715

24,240 21,715 47,153

Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 101.51 $ 181.95 $ 148.89

Weighted average annualized cash rent per square foot for previous leases 108.78 241.65 209.88

Decrease in mark-to-market rent $ (59.70) $ (60.99) $ (19.14)

Percentage of new cash rent over previously escalated rents (6.7) % (24.7) % (29.1) %

Leasing commission costs per square foot (5)

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_______________

(1) Excludes an aggregate of 475,744, 498,682, and 499,012 rentable square feet of retail space in our Manhattan office properties in 2024, 2023 and 2022, respectively.

(1) Office activity excludes an aggregate of 475,442, 475,744, and 498,682 rentable square feet of retail space in our office properties in 2025, 2024 and 2023, respectively, that is included in the retail activity for the respective years.

(2) The tables above exclude our multifamily properties.

(3) Beginning in 2024, the number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration.

Amounts for number of leases signed, total square feet, leasing commission costs per square foot and tenant improvement costs per square foot have been adjusted to include the impact of early renewals for the twelve months ended December 31, 2023 and 2022.

(3) The number of leases signed include "Early Renewals" which are leases signed over two years prior to the lease expiration.

(4) Presents a renewed and expansion lease as one lease signed.

(5) Presents all tenant improvement and leasing commission costs as if they were incurred in the period in which the lease was signed, which may be different than the period in which they were actually paid.

(6) Includes an aggregate of 475,744, 498,682, and 499,012 rentable square feet of retail space in our Manhattan office properties in 2024, 2023 and 2022, respectively.

(amounts in thousands) Years Ended December 31,

Total Commercial Portfolio 2025 2024 2023

2024 2023 2022

Capital expenditures (1) $ 63,944 $ 72,899 $ 55,385

_______________

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

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However, under some circumstances, we may be required to use cash reserves, incur debt or liquidate assets at rates or times that we regard as unfavorable or make a taxable distribution of our shares in order to satisfy REIT distribution requirements.

We declared dividends of $0.035 per share for each quarter of 2024, which equates to an annualized rate of $0.14 per share.

ESRT declared dividends of $0.035 per share for each quarter of 2025, which equates to an annualized rate of $0.14 per share.

The Board of Directors will continue its regular review of its dividend and capital allocation policies at each Board meeting.

Distribution to Equity Holders

Distributions and dividends have been made to equity holders in 2022, 2023 and 2024 as follows (amounts in thousands):

Year ended December 31, 2022 42,786

Year ended December 31, 2023 41,323

Year ended December 31, 2024 42,490

Distributions and dividends have been made to equity holders as follows:

Years Ended December 31,

(amounts in thousands) 2025 2024 2023

Distributions and dividends $ 43,184 $ 42,490 $ 41,323

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.

Upon expiration of this 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 during the period from January 1, 2026 through December 31, 2027.

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.

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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 December 31, 2024, ESRT had $500.0 million remaining of the authorized repurchase amount.

There were no repurchases of equity securities during the twelve months ended December 31, 2024.

As of December 31, 2025, we had $491.9 million remaining of the authorized repurchase amount for the 2024-2025 period.

The following table summarizes our purchases of equity securities for the year ended December 31, 2025.

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

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)

Year ended December 31, 2025 1,198,603 $ 6.78 1,198,603 $ 491,878

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Cash and cash equivalents and restricted cash were $166.5 million and $429.3 million as of December 31, 2025 and 2024, respectively.

The increase was primarily due to new financings in 2024 and changes in working capital less the cash used for the acquisition of a portfolio of retail assets on North 6th Street in Williamsburg, Brooklyn.

The decrease was primarily due to increased acquisition activity in 2025 compared to 2024.

Operating activities .

Net cash provided by operating activities increased by $28.4 million to $260.9 million due to increased Observatory operating income, increased rental revenues in excess of property operating expenses and changes in working capital.

Net cash provided by operating activities decreased by $11.8 million to $249.1 million due to decreased Observatory operating income and interest income, partially offset by increases in working capital.

Investing activities .

Net cash used in investing activities increased by $319.8 million to $397.1 million primarily due to the acquisition of a portfolio of retail assets on North 6th Street in Williamsburg, Brooklyn and capital expenditures.

Net cash used in investing activities increased by $152.9 million to $550.0 million primarily due to $412.0 million of acquisitions in 2025, compared to $193.1 million of acquisitions in 2024.

This increase in cash used in investing activities was partially offset by the net proceeds of $60.5 million from the disposition of Metro Center in 2025.

Financing activities .

Net cash provided by financing activities increased by $221.4 million to $158.6 million primarily due to the funding of senior unsecured notes during the year.

Net cash provided by financing activities decreased by $120.4 million to $38.2 million primarily due $175.0 million funding of Series L senior unsecured notes, $70.0 million increase in the Wells Term Loan Facility, and $25.0 million of net draws on the unsecured revolving credit facility, partially offset by repayments of $100.0 million of Series A senior unsecured notes and 75.3 million of mortgage note payables in 2025, compared to the $225.0 million funding of Series I-K senior unsecured notes in 2024.

Net Operating Income

NOI is a non-GAAP financial measure of performance.

Net Operating Income ("NOI") is a non-GAAP financial measure of performance.

NOI is used by our management to evaluate and compare the performance of our properties and to determine trends in earnings and to compute the fair value of our properties as it is not affected by:

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(amounts in thousands) 2025 2024 2023

$ 80,359 $ 84,407 $ 63,212

Net income $ 72,980 $ 80,359 $ 84,407

General and administrative expenses 72,842 70,234 63,939

70,234 63,939 61,765

Depreciation and amortization 194,762 184,818 189,911

184,818 189,911 216,894

Interest expense 103,133 105,239 101,484

105,239 101,484 101,206

Interest expense associated with property in receivership 647 4,471 —

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Income tax expense 2,558 2,688 2,715

2,688 2,715 1,546

Gain on sale/disposition of properties (13,302) (26,764) (33,988)

Gain on disposition of properties (35,018) (13,302) (26,764)

Third-party management and other fees (1,483) (1,170) (1,351)

(1,170) (1,351) (1,361)

Interest income (8,748) (21,298) (15,136)

(21,298) (15,136) (4,948)

Net operating income $ 401,770 $ 412,592 $ 399,205

$ 412,592 $ 399,205 $ 404,326

Other Net Operating Income Data

Straight-line rental revenue $ 18,039 $ 11,283 $ 19,563

$ 11,283 $ 19,563 $ 24,562

Net increase in rental revenue from the amortization of above- and below-market lease assets and liabilities $ 3,196 $ 2,177 $ 2,416

$ 2,177 $ 2,416 $ 4,758

Amortization of acquired below-market ground leases $ 7,831 $ 7,831 $ 7,831

$ 7,831 $ 7,831 $ 7,831

Funds From Operations

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FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

Although FFO is a measure used for

comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Modified Funds From Operations

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There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs.

Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP.

Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

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Core FFO adds back to Modified FFO the following items:

Interest expense associated with property in receivership and loss on early extinguishment of debt.

Interest expense associated with property in receivership, loss on early extinguishment of debt, and IPO litigation expense.

The Company believes Core FFO is an important supplemental measure of its operating performance because it excludes non-recurring items.

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(amounts in thousands) 2025 2024 2023

$ 80,359 $ 84,407 $ 63,212

Net income $ 72,980 $ 80,359 $ 84,407

Non-controlling interests in other partnerships — (4) (68)

Private perpetual preferred unit distributions (4,201) (4,201) (4,201)

(4,201) (4,201) (4,201)

Real estate depreciation and amortization 191,222 180,513 184,633

180,513 184,633 210,522

Gain on sale/disposition of properties (13,302) (26,764) (33,988)

Gain on disposition of properties (35,018) (13,302) (26,764)

Funds from operations attributable to common stockholders and non-controlled interests 224,983 243,365 238,007

243,365 238,007 235,788

Amortization of below-market ground leases 7,831 7,831 7,831

Modified funds from operations attributable to common stockholders and non-controlled interests 232,814 251,196 245,838

251,196 245,838 243,619

Interest expense associated with property in receivership 647 4,471 —

Loss on early extinguishment of debt 97 553 —

IPO litigation expense 632 — —

Core funds from operations attributable to common stockholders and non-controlled interests $ 234,190 $ 256,220 $ 245,838

$ 256,220 $ 245,838 $ 243,619

Weighted average shares and Operating Partnership units

264,706 263,226 268,337

269,019 265,633 269,948

Basic 266,939 264,706 263,226

Diluted 270,040 269,019 265,633

Critical Accounting Estimates

Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired.

An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the

implied fair value of goodwill is less than the carrying amount of that goodwill.

An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.

Non-amortizing intangible assets, such as trade names and trademarks, are subject to an annual impairment test based on fair value and amortizing intangible assets are tested whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

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.

We performed our annual goodwill testing in October 2025 for both the Real Estate and Observatory reportable segments.

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).

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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.

Share-Based Compensation

Share-based compensation for time-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the shorter of (i) the stated vesting period, which is generally three, four or five years, or (ii) the period from the date of grant to the date the employee becomes retirement eligible, which may occur upon grant.

An employee is retirement eligible when the employee attains the (i) age of 65 for awards granted in 2020 and after and age of 60 for awards granted before 2020 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.

The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of ESRT stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve parity with other Operating Partnership units or achieve performance thresholds.

We believe that the assumptions and estimates utilized are appropriate based on the information available to management at the time of grant.

Accounting Standards Update

See "Financial Statements — Note 2 Summary of Significant Accounting Policies" in this Annual Report on Form 10-K for information about recently issued and recently adopted accounting standards.

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 7. Management’s Discussion and Analysis