Earnings call transcript: Empire State Realty Q3 2025 beats revenue forecast

Empire State Realty Trust Inc. (ESRT) reported its third-quarter earnings for 2025, surpassing revenue expectations with a total of $197.73 million against a forecast of $192.67 million, resulting in a revenue surprise of 2.63%. The company’s earnings per share (EPS) stood at $0.05. Despite the revenue beat, the stock saw a decline, closing down 5.71% at $7.62, reflecting mixed investor sentiment.

Key Takeaways

• Empire State Realty Trust reported a revenue beat with $197.73 million, exceeding expectations.
• The company’s stock fell by 5.71% following the earnings announcement.
• Manhattan office occupancy increased, reaching 90.3%.
• The company reaffirmed its guidance for the fiscal year 2025.
• A leadership transition was announced with Tom Durels stepping back.

Company Performance

Empire State Realty Trust demonstrated strong performance in Q3 2025, with a notable increase in revenue. The company’s focus on high-quality properties and strategic leasing in New York City has contributed to its robust financial results. The real estate market in New York remains competitive, with Empire State Realty maintaining a strong position due to its diversified tenant base and high occupancy rates.

Financial Highlights

• Revenue: $197.73 million, a 2.63% surprise above forecast.
• Earnings per share: $0.05.
• Core FFO: $0.23 per diluted share.
• Core FAD: Increased to $40.4 million from $11.9 million in Q2.
• Same-store property cash NOI: Increased 1.1% year-over-year.

Earnings vs. Forecast

Empire State Realty Trust’s revenue of $197.73 million surpassed the forecasted $192.67 million, marking a positive surprise of 2.63%. While the EPS was reported at $0.05, the revenue beat highlights the company’s effective leasing strategies and strong market positioning in New York City.

Market Reaction

Despite the positive revenue results, Empire State Realty’s stock declined by 5.71%, closing at $7.62. This movement reflects investor concerns or potential profit-taking after the earnings release. The stock’s performance remains within its 52-week range, with a high of $11.43 and a low of $6.56.

Outlook & Guidance

The company reaffirmed its guidance for the fiscal year 2025, indicating confidence in its strategic plans and market position. Empire State Realty expects strong Q4 net operating income (NOI) growth and continues to explore investment opportunities in New York City’s office, retail, and multifamily sectors.

Executive Commentary

Anthony Malkin, CEO, emphasized, "New York City is the best market in the United States and that makes it one of the best, if not the best markets in the world." Christina, an executive, added, "Our focus remains on driving sustainable cash flow to the bottom line through our high-quality New York City portfolio."

Risks and Challenges

• Potential impact of NYC mayoral election on real estate policies.
• Limited new supply in top-tier buildings may constrain growth.
• Macro-economic pressures affecting tenant demand and rent growth.
• Leadership transition with Tom Durels stepping back may impact strategic initiatives.
• Fluctuations in domestic and international tourism affecting retail revenues.

Q&A

During the earnings call, analysts inquired about the potential impact of the NYC mayoral election, expressing interest in how political changes could affect the real estate market. The company also addressed questions on capital allocation, indicating a balance between acquisitions and share buybacks.

Full transcript - Empire State Realty Trust Inc (ESRT) Q3 2025:

Conference Operator: Greetings and welcome to the Empire State Realty Trust third quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press 0 on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Heather Houston, Senior Vice President, Chief Counsel, and Corporate Secretary. Thank you. You may begin.

Heather Houston, Senior Vice President, Chief Counsel, and Corporate Secretary, Empire State Realty Trust: Good afternoon. Welcome to Empire State Realty Trust third quarter 2025 earnings conference call. In addition to the press release distributed yesterday, a quarterly supplemental package with further detail on our results and our latest investor presentation were posted in the Investors section of the company’s website at esrtreit.com. On today’s call, Management’s prepared remarks and answers to your questions may contain forward-looking statements as defined in applicable securities, including those related to market conditions, property operations, capital expenditures, income, expense, financial results, and proposed transactions and events. As a reminder, forward-looking statements represent Management’s current estimates. They are subject to risks and uncertainties which may cause actual results to differ.

: From those discussed today.

Heather Houston, Senior Vice President, Chief Counsel, and Corporate Secretary, Empire State Realty Trust: Empire State Realty Trust assumes no obligation to update any forward-looking statement in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements in the Company’s filings with the SEC. During today’s call we will discuss certain non-GAAP financial measures such as FFO, Modified and Core FFO, NOI, Same-Store Property Cash NOI, EBITDA, and Adjusted EBITDA, which we believe are meaningful in evaluating the Company’s performance. The definitions and reconciliations of these measures to the most directly comparable GAAP measures are included in the earnings release and supplemental package, each available on the Company’s website. Now I will turn the call over to Anthony Malkin, our Chairman and Chief Executive Officer.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Thanks, Heather. Good afternoon, everyone. Yesterday we reported ESRT’s third quarter and year-to-date results. We delivered FFO above consensus and reaffirmed our 2025 guidance. Our highly leased portfolio has benefited from strong lease-up executed over the last several years, and 3Q was a slightly lighter quarter for office leasing. Post 3Q close, we signed another 50,000 square feet of leases, and we presently have approximately 150,000 square feet of leases in negotiation. We also delivered our 17th consecutive quarter of positive marks to market. We will discuss our healthy pipeline of leasing activity and completed leasing in October. In this call, Observatory results were consistent with our guidance. ESRT is purpose-built for strength and agility across all cycles.

Our long-term leases, high occupancy, diversified income streams, and flexible balance sheet provide a solid foundation for consistent performance and strategic growth in New York City. The office leasing market remains strong, availability is low at top-tier buildings like ours, and rents continue to rise. There is no new supply at our price point, and many older buildings, properties which are not like our portfolio—modernized, amenitized, well-located, supported by sustainability leadership, and a strong financial position—continue to be taken off the market for conversion to residential. We continue to outperform. Our focus right now is on our little over 500,000 square feet of availability in our Manhattan office portfolio. Some is held off the market for assembly of large contiguous blocks at several properties. We remain focused on our ability to drive occupancy and maximize lease economics at the Observatory.

Revenue per capita continued to increase in the third quarter in the face of reduced budget traveler visitation. More than half of our visitation is domestic. Slide 16 of our latest investor presentation shows that the Observatory remains resilient. Our strong balance sheet gives ESRT the flexibility to act on opportunity, maintain our portfolio at the highest standards, and create durable long-term value for our shareholders. We continue to be leaders in environmental stewardship and healthy building performance, focus on business outcomes, and partner with our tenants to help them achieve their own sustainability goals. Earlier this month, ESRT achieved the highest possible GRESB 5 Star rating for the sixth consecutive year. Hats off to the team for their continued leadership and excellence.

Our entire organization remains laser focused on the company’s five lease space, sell tickets to the Observatory, manage our balance sheet, identify growth opportunities, and achieve our sustainability goals. Last month we announced that Tom Durels, my partner for more than 35 years and our Head of Real Estate, began to transition his role to two Senior Leaders at ESRT. We are deeply grateful to Tom and his impact on our company’s success and culture. Strategy and post-IPO transformation into a modernized, amenitized, sustainable portfolio are all indelible. We have an experienced and capable team to build on the strong foundation that Tom helped to establish. I will now turn the call over to Tom who has a few remarks. Ryan, Steve, and Christina will provide more detail on our progress and outlook for the balance of 2025.

Tom, thanks Tony and thank you for those remarks and good afternoon everyone. I’d like to touch on our recent leadership succession update. We announced in mid-September that after more than 35 years we began the transition of my role at ESRT to Ryan Kass as Chief Revenue Officer and Jackie Renton as Chief Operating Officer, the new co-heads of Real Estate. I’m here in the room today as Ryan covers our leasing update and I continue to work with Christina and Tony and assist Ryan and Jackie in our work to deliver strong results and long-term value for our shareholders. With that I will hand it off to Ryan to discuss our third quarter leasing results and outlook for the balance of the year.

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: Ryan, thanks Tom, and good afternoon everyone. In the third quarter, we signed 88,000 square feet of new and renewal leases. Subsequent to quarter end, we signed approximately 50,000 square feet of additional leases and have approximately 150,000 square feet of leases in negotiation. We are excited to announce since quarter end we signed three new leases within our North 6th Street collection. Tourneau leased over 3,700 square feet to open a Rolex store at 86-90 North 6th, an asset we purchased last quarter as a strategic redevelopment opportunity on one of New York City’s most dynamic retail corridors. Our partnership with a global luxury brand like Rolex prior to commencement of our redevelopment work underscores both the quality and success of this location, which anchors Williamsburg as the premier destination for high-end retail and institutional investment. We also signed new leases with Tecovas and Hoka.

Beyond that, we have one space left to lease on North 6th Street, and that is adjacent to Rolex in our 86-90 redevelopment property, and we are confident in more good news when existing leases roll. Manhattan office occupancy increased 80 basis points sequentially to 90.3%, and we remain on track to achieve our year-end commercial occupancy guidance of 89% to 91%. As mentioned, we have 150,000 square feet of leases in negotiation. Tenant demand continues to be diversified, and we are in discussions with prospects from various industries such as finance, professional services, TAMI, consumer products, and others. New York City’s office leasing market is the strongest it has been since 2019, which creates a favorable backdrop for us to execute.

Our Manhattan office portfolio is over 93% leased, our 11th consecutive quarter above 90%, which is a testament to the strength of our leasing platform and strong execution over the last few years. We have slightly over 500,000 square feet of Manhattan office vacancy. As Tony mentioned, in a market with limited supply, we will create large contiguous blocks at several properties to accommodate demand. We remain focused on improved occupancy and rent growth as the market continues to strengthen. In today’s bifurcated market of haves and have-nots, ESRT remains a clear have. Demand is concentrated among top-quality, amenitized, transit-oriented buildings owned by financially strong landlords with proven operational performance. Our best-in-class portfolio has enabled us to push rents, reduce concessions, and extend lease terms.

The third quarter marked our 17th consecutive quarter of positive mark to market lease spreads in our Manhattan office portfolio and underscores the consistent pricing power of our portfolio. We have $46 million in incremental cash revenue from signed leases not commenced and free rent burn off as shown on page 19 of our supplemental that reflects our leasing success. Lastly, our multifamily platform portfolio continues to deliver excellent performance with 99% occupancy and 9% year over year net rent growth. These results reflect strong market fundamentals and our focus on operational excellence. Thank you. I will now turn the call over to Steve.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Thanks, Ryan.

Steve, Financial Executive, Empire State Realty Trust: For the third quarter of 2025, we reported core FFO of $0.23 per diluted share. Same-store property cash NOI excluding lease termination fees increased 1.1% year over year after adjustment for approximately $1.7 million of nonrecurring items recognized in the third quarter of 2024. Adjusted for these nonrecurring items, same-store cash revenue and operating expenses increased 1.3% and 1.5%, respectively, year over year. Operating expenses increased due to the timing of planned repair and maintenance work and higher real estate taxes and were partially offset by higher tenant reimbursement income. As we progress through the balance of 2025, we expect a strong fourth quarter from a year over year cash NOI growth perspective due in large part to a real estate tax abatement we expect to recognize by the end of the year. In our Observatory business, we generated approximately $26.5 million of NOI in the third quarter.

Observatory expenses totaled $9.5 million and revenue per capita increased 2.7% year over year. Core FAD increased to $40.4 million in the third quarter from $11.9 million in the second quarter. This mainly reflects a reduction in Fed CapEx spend from $52 million last quarter to $25 million this quarter. This is consistent with the commentary from our previous earnings call where we conveyed our expectation for CapEx to trend lower in the second half of 2025. With that, I will now turn the call over to Christina.

: Thanks, Steve. I’ll touch on the Observatory and our capital allocation strategies before we shift to Q and A. Our iconic Empire State Building Observatory remains a resilient asset and strong contributor to our bottom line cash flow. As Tony mentioned, performance has been consistent with our revised guidance. We continue to see steady domestic demand offset by reduced international visitation. We remain focused on the levers within our control to enhance the guest experience, broaden our marketing reach, and drive operational efficiency. Our unmatched brand position as the authentic New York City experience, anchored by the world’s most iconic building, supports sustained long term growth as global travel patterns normalize.

Our well positioned and flexible balance sheet remains one of our key strengths with ample liquidity, lower leverage for sector peers at 5.6 times net debt to EBITDA, a well laddered maturity schedule, and no unaddressed maturity until the end of 2026. Subsequent to quarter end, we announced the issuance of $175 million of senior unsecured notes in a private placement at a rate of 5.47% that will fund in mid December and mature in 2031. Proceeds will be used for general corporate purposes including potential new investments and repayment of debt. As a reminder, all $250 million of our Williamsburg acquisitions completed in 2023 were executed on an unlevered basis. From a capital allocation standpoint, we continue to actively underwrite new investment opportunities across New York City office, retail, and multifamily.

The market has seen a pickup in transaction activity and investment opportunities, the return of institutional capital, and strong recognition of the strength of New York City underlying property fundamentals. We continue to pursue opportunities where our operating and repositioning expertise can create meaningful value, and our strong liquidity provides the flexibility to act defensively when conditions align. As we look ahead, our focus remains on driving sustainable cash flow to the bottom line through our high quality New York City portfolio that is well diversified across sectors and sources of income that benefit from live, work, play, and visit. Our operating expertise, flexible balance sheet, and high quality assets continue to position us to capitalize on the strength of the Manhattan office market. Over the last several years, we have achieved more than 600 basis points of positive lease absorption across our Manhattan office portfolio.

At the same time, we have tax efficiently recycled out of non core suburban market and invested approximately $675 million into Manhattan multifamily and Williamsburg retail assets to optimize cash flow growth over time through higher rent growth and lower CapEx requirements. We continue to evaluate additional recycling opportunities that are accretive to long term cash flow and seek ways to operate more efficiently. We also continue to evaluate opportunistic share repurchases within our broader capital allocation framework. That concludes our prepared remarks, and with that, I’ll turn the call back to the operator to begin Q and A.

Conference Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press Star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press Star two to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for your question.

Steve, Financial Executive, Empire State Realty Trust: Our.

Conference Operator: First questions come from the line of Regan Sweeney with Evercore ISI. Please proceed with your questions.

Steve, Financial Executive, Empire State Realty Trust: Great, thanks. I was just wondering if you could expand a little bit more on the capital uses side after you now place a private placement in December. Just in terms if there’s any specific acquisition or potential transactions that you’re looking at. Maybe also comment on the general transaction market a little bit more. If there are kind of like pockets within New York that are more attractive than others. If you could talk about cap rates to the extent you can, that would be great. Or just kind of giving a little bit more color just on that bucket in general, that would be very helpful.

: Sure. As we’ve mentioned, we continue to actively underwrite deals in New York City and that would span across office, retail, as well as multifamily. That remains the case and we’re really positioned with good liquidity so that we can move quickly when the right deal comes up. On top of that, we also have a couple of debt maturities early next year, which is why we referenced that within our remarks. You’re asking about cap rates and I think the market has had some transactions that have provided some cap rate evidence, but the reality is not all deals are the same. You see some deals with sort of mid high single digit cap rates, but they’re very bespoke to the transaction. You have other deals that are more situational and cap rates aren’t as relevant of a metric.

You really have to look at those on a per pound basis. Overall, we just want to be well positioned as always to be able to transact and we are actively looking great.

Steve, Financial Executive, Empire State Realty Trust: Thanks.

Conference Operator: Thank you. Our next questions come from the line of Seth Bergey with Citi. Please proceed with your questions.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Hi, thanks for taking the question. I guess, you know, as you think about kind of New York and the mayoral election, it seems like some of the policies are largely kind of aspirational or require state legislative support to pass. Are you concerned about any tenants that may be more directly exposed, changes in rent or anything like that? First of all, as I’ve said so many times, we are incredibly fortunate to be in New York City and New York City is the best market in the United States and that makes it one of the best, if not the best markets in the world. Number two, we very clearly operate on the basis, as I’ve mentioned before, we do policy, not politics. Whoever shows up, whatever administration arrives, that’s the one with which we deal.

That’s where we try to contribute both to policy and do our best work. From a business perspective, we’re always concerned about all developments. At the same time, New York City has been and continues to be a magnet for the job seeking college graduates, folks who want to come and make their careers and live in a vibrant environment. By the way, those are an awful lot of today’s voters. They are the employees. The employers are here because they want those employees. We are very positive on the future of New York City. Outside of that, it’s all speculation. There are certain checks and balances, as you said, and we’ll see what comes. Okay, great. I guess just a second one. As you think about capital allocation, how attractive is buying back stock where your shares are currently trading?

: We think our share price is very attractive. It provides a great entry point for those interested in our portfolio that’s extremely well positioned, well leased, strong operating fundamentals for us as a company. We definitely look at that. As I mentioned, we’ve done $300 million of share buybacks over the years, so clearly a part of our strategic capital allocation. We’ve also mentioned we’re looking at opportunities. I think it’s a balance that you want to find the right deals and be able to act, and you need to have liquidity and capacity for that, and at the same time balance that against share buybacks. Both are definitely on the table. I think with our flexible balance sheet, we have room to do both.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Thank you.

Conference Operator: Thank you. Our next questions come from the line of Blaine Heck with Wells Fargo. Please proceed with your questions.

Steve, Financial Executive, Empire State Realty Trust: Great, thanks.

Tom, all the best in the future. Thanks for your help. Over the years, we’ve seen a recent uptick in layoff headlines for some companies, with Amazon probably being the largest and most recent. Within that context, can you comment on whether you’ve seen any change in trend with respect to expansion versus contraction of space at expiration? More broadly, just how you guys are thinking about the potential rising trend of layoffs as it relates to demand for office space as we head into 2026 and 2027.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: First of all, just to make sure that you’re aware, Tom Durels is not only here, he’s here for the announcement for months to come, several quarters to come, possibly as long as for the full duration of what was announced in our disclosure. You’ll have an opportunity to see him if you’d like to, because we get to see him every day. Second of all, I think it’s very important to note we’ve had over 3.1 million square feet of expansions of existing tenants within our portfolio since our IPO in 2013. We have active discussion, though not actually active discussion, and part of our leasing pipeline consists of existing tenants with intention to expand. We still see good growth, number one. Number two, we serve the fattest, widest component of the office market and that’s the opportunity with Empire State Realty Trust.

We are top of tier in our price range. From our perspective, we do not see anything in the way of contraction. Everybody with whom we speak comes to us because of the quality of our portfolio, and several of them have migrated from what would be thought of as glass and steel buildings. Finally, and most importantly, we still have ongoing expansion within our portfolio from existing tenants. As we look and we go forward, there are all kinds of reasons for which people might not expand or take additional space. We don’t see any of them play out right now. The Amazon announcement, as we might say, they announced people they had already laid off and plans for future layoffs. The word we get from the sources with whom we work, New York City is still the number one desired desk for anyone who works at Amazon.

Steve, Financial Executive, Empire State Realty Trust: Got it. That’s very helpful.

Tony, switching gears, I think you guys covered the acquisition side, but with respect to dispositions, is there any update to share on Metro Center? Past that, are there any assets in the portfolio or groups of assets in which you think you might have maximized value and could be good funding sources if you were to look at kind of a larger deal on the acquisition side?

: Yeah, we don’t have an additional update on Metro. As we’ve mentioned, we can be flexible on that front. We are looking to sell that asset. If it doesn’t work out, we also have attractive in place debt and can continue. There is still tenant demand in that space and that was really a capital allocation decision for us. As it relates to other capital recycling, as I mentioned, we are definitely open to that. It’s as you stated, if we’ve added value and it’s a quality asset, there could be buyers that are interested in a strong market like New York City. It may make sense for us to dispose of those assets so we can redeploy proceeds into assets where we can add more value. That would span New York City office, retail, and multifamily. Extremely consistent with what we’ve communicated to you.

Now with more activity in the market, it does feel like a better time as compared to 18 to 24 months ago where financing wasn’t as readily available, there weren’t as many deals, institutional capital had some question marks. As we get into a more vibrant market, it does feel like that’s a logical consideration and we’ll keep the market up to.

Steve, Financial Executive, Empire State Realty Trust: Great. Thank you.

Conference Operator: Thank you. Our next questions come from the line of Dylan Burzinski with Green Street. Please proceed with your questions.

Steve, Financial Executive, Empire State Realty Trust: Morning guys. Thanks for taking the question. Tony, you mentioned that your guys’ portfolio caters to the largest subset of demand in New York. Can you kind of just talk about any trends you’re discerning? Are you seeing more activity among some of the larger tenants out there in the market? Are there certain industries that are outpacing? I know obviously, you know, tech leasing has been subdued lately, but are you seeing any sort of green shoots on that front as it relates to demand within that industry?

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: This is Ryan here. One of the advantages that Tony spoke about in our portfolio is diversification. We appeal to everybody. We have a lot of interest from a lot of different sectors. It does range from TAMI, Consumer Products, FIRE, Professional Services. Our job is to assist our tenants with employee recruitment and retention. What we’re seeing is a lot of the conversations right now are driven by tenants looking to upgrade into better quality spaces and also expand their offering.

Steve, Financial Executive, Empire State Realty Trust: That’s helpful. I guess just touching on the net effect of rent environment. I know you guys have noted in the past that you guys have continued to see net effective rent growth across the portfolio. I guess as you look out to 2026, given limited competitive availability that you guys compete with as well as the amount of robust demand in the market, is there potential to see, call it rent spikes in 2026 and 2027? I know one of your peers talked about potentially seeing cumulative rent growth of 25% over the next five years. Just sort of curious your guys’ thoughts on that.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: If you look at what we’ve accomplished over the last five years, we have very much seen rent spikes across our portfolio. As an example, the active negotiations underway at Empire State include rents over long terms in the mid-$90s.

Steve, Financial Executive, Empire State Realty Trust: Over the.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Lives of those leases, and going into the 1990s at One Grand Central Place. From our perspective, we’re very much in that environment. We still think it is a very healthy environment. When it comes to the future, we do at this point still anticipate increased rents due to shortage of available space. When you talk about our competitive set, I think it’s really important to note the buildings which are being taken out of circulation. The important thing to us is that limits our competitive set. Those buildings which will not be reinvested in, will not be modernized, will not be amenitized, will not be made energy efficient for office tenants, means that we are the best house on our block for sure. It also means we’re the most affordable house on the best block.

Number one, from our competitive set, many of which are being taken out of circulation, we’re top of tier. Number two, we do pull from other buildings where either because they may be glass and steel, but they are not modernized and monetized with energy efficiency and sustainability in great locations or just the rent is too darn high, they come to us and we’re a bargain even at our increased rents. Ryan, anything else you want to add there?

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: No, I think you summed it up really well.

Steve, Financial Executive, Empire State Realty Trust: Thanks.

Conference Operator: Thank you. Our next questions come from the line of Regan Sweeney with BMO Capital Markets. Please proceed with your questions.

Hey, thank you for the question. I just wanted to dive into the pipeline of 150,000 square feet. Is that really all office or is there also a retail component in that? Can you give the breakdown between the different property types if available?

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: That’s a healthy mix of both office and retail, as well as a mix of new and renewal. Right now what we’re focused on, as Tony spoke about earlier, is the creation of the large blocks of space. We’re 93.1% leased. We have the 150,000 square feet of leases in negotiation. Roughly 20% of our Manhattan office vacancy right now is strategically held off market in connection with the assemblage of those large blocks. That’s really in response to market demand, and we believe it’s going to provide better long term economic results.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: I would add in addition to Ryan’s comment that we don’t have that much retail to lease. The vast bulk of that 150,000 square feet is office and it’s across our portfolio and its price ranges.

Steve, Financial Executive, Empire State Realty Trust: Great.

Just on the rent spreads, obviously the office has done very well, but there’s been a few quarters of weakness in the retail segment. Where are rents really going out today? Is there an opportunity for the Williamsburg portfolio to pick up on that? Also, on multifamily, I know you said there was a 9% rent growth in the quarter, but I noticed in the presentation you removed the bullet on the year over year rent growth. Has there been a change in October or something expected going forward?

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Ryan, why don’t you talk to Williamsburg and then we’ll move things around from there.

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: We’re very excited with what’s happened in Williamsburg this week. We signed three transactions, obviously Tourneau. We’ll be putting Rolex at the redevelopment at 86 North 6th Street. Tecovas, Hoka. We’re left with one vacancy. We leased the Hermès temporary space that will be vacated next year. We’ve been pushing rents there and continue to see an increase in demand from tenants that are walking the street.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Yeah, of course, the great news for us on that, Hermès moves to its permanent new flagship store, and we’ve already got that backfilled.

Ryan Kass, Chief Revenue Officer, Empire State Realty Trust: Correct.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: The 8690 acquisition, that lease to Tourneau Rolex is. That’s terrific for us. It exceeded what we expected to happen and happened much more quickly than we thought it would. That was a direct deal that we did ourselves with no representing broker. We just dealt with the tenant broker. Very grateful to Andrew Greenberg of CBRE for that. When we look at the resi. Christina, maybe you want to comment on that.

: I’m not familiar with the specific bullet that was mentioned, but we continue to see good fundamentals. Happy to take it offline and go through any of the items that you want to, but overall fundamentals remain quite strong.

Steve, Financial Executive, Empire State Realty Trust: Yeah, just to give a bit more details there year over year. Brian already mentioned that net effective rent growth of 9.3%. We have two other factors that play into the success there. Year over year, we had 180 basis points of occupancy pickup, which contributed to about 25% of that rent growth or revenue growth, I should say. We also had a number of units that we held offline that we disclosed as part of a potential 421A program. Those have now all been re-leased, which contributed to about another 15% of that pickup. Really firing on all cylinders on the residential side. Great.

I appreciate the color.

Conference Operator: Thank you. There are no further questions at this time. I would now like to hand the call back over to Anthony Malkin for closing comments.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: Thank you so much. Thanks everybody at ESRT.

Conference Operator: Thank you.

Anthony Malkin, Chairman and Chief Executive Officer, Empire State Realty Trust: We are steadfast in our focus on five strategic priorities: lease space, grow observatory revenue, maintain a strong and flexible balance sheet, pursue disciplined growth, and advance our sustainability leadership. Each of these pillars supports our mission to create lasting value for our shareholders. With our differentiated portfolio, strong financial position, and proven track record of execution, we are well positioned to capitalize on opportunities as they arise and to continue to deliver results with focused discipline and consistency in the quarters ahead. Thanks everyone for your participation in today’s call, and we look forward to the chance to meet with many of you at non-deal roadshows, conferences, and property tours in the months ahead. Onward and upward.

Conference Operator: Thank you. This does now conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.

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