Empire State Realty at Nareit REITweek: Strategic Resilience in NYC

On Wednesday, June 4, 2025, Empire State Realty Trust (NYSE:ESRT) presented at the Nareit REITweek: 2025 Investor Conference, outlining its strategic resilience in the New York City real estate market. The company highlighted its diversified portfolio and its proactive approach to capital allocation amidst both positive leasing performance and tourism challenges.

Key Takeaways

• Empire State Realty Trust maintains a strong leasing performance with 93% of office and 94% of retail assets leased.
• The company is focused on expanding its retail and multifamily holdings, leveraging its strong balance sheet.
• Despite tourism headwinds, the Empire State Building Observatory remains a key income generator, with strategies in place to mitigate challenges.
• ESRT plans to exit suburban office assets, redirecting capital to New York City investments.
• Management is optimistic about the New York City office market’s resilience and growth potential.

Financial Results

• Office sector: 93% leased, reflecting robust demand.
• Retail sector: 94% leased, with positive trends in rent absorption.
• Multifamily: 99% leased, showcasing strong occupancy.
• Net Debt to EBITDA stands at 5.2x, indicating stable financial health.
• Share buybacks: $2 million repurchased after the first quarter, totaling approximately $300 million since 2020.
• Observatory: Generates 60% of its net operating income in the second half of the year due to seasonal factors.

Operational Updates

• Leasing achievements: 1.3 million square feet leased in 2024, with 230,000 square feet in the first quarter of 2025.
• Suburban asset strategy: Marketing Metro Center for sale, awaiting buyer financing.
• Williamsburg retail: Aiming for a 6% yield, with key developments like the Hermes flagship store.
• Observatory: Facing international demand challenges, but maintaining profitability through strategic initiatives.

Future Outlook

• Growth focus: Increasing retail and multifamily assets in New York City.
• Investment strategy: Actively seeking opportunities across retail, multifamily, and office sectors.
• Capital redeployment: Exiting suburban offices to invest in urban assets.
• Observatory update: Anticipating improved performance in the latter half of the year.
• Leasing goals: Targeting higher lease and occupancy rates by year-end.

Q&A Highlights

• Office leasing: Strong market with no paused deals since "Liberation Day."
• Return to work: New York City’s corporate return is robust, diminishing related concerns.
• Tourism: Revised expectations with a 5% reduction, including a 17% drop in international tourists.
• Cost of capital: Emphasis on cash flow growth and high-return investments.
• Observatory’s role: Comfortable with it contributing 25% of net operating income.

For further details, readers are encouraged to refer to the full transcript of the conference call.

Full transcript - Nareit REITweek: 2025 Investor Conference:

John Kim, Moderator, BMO Capital Markets: Good morning. Thank you for attending this presentation for Empire State Realty Trust. My name is John Kim with BMO Capital Markets. It’s my pleasure to be moderating this presentation. We have Christina Chu, president of the company, and Tom Dorels, Executive Vice President of Real Estate.

I thought we’d just start off with opening remarks and why people should be investing in ESRT today.

Christina Chu, President, Empire State Realty Trust (ESRT): Sure. Thanks, John. Hi, everyone. Christina Chu, President of ESRT and Tom Durels, EVP of Real Estate and I will provide you sort of quick overview on some of the key items. So ESRT is a New York City focused REIT, we own high quality portfolio that’s well diversified across sectors and sources of income that uniquely benefit from live, work, play and visit.

New York City has significantly outperformed other gateway cities in terms of vibrancy and full recovery from COVID and this is now widely recognized. Our portfolio was built to withstand and perform in all cycles. In terms of net operating income, our portfolio mix is approximately 60% office, 25% from the iconic Empire State Building Observatory attraction and just under 20% from New York City retail and multifamily. We’re well leased across each property type. Our New York City office assets are 93% leased, our retail assets are 94% leased, and our multifamily is 99% leased.

All three of these sectors benefit from a backdrop of very limited new supply today which we expect to continue for the for foreseeable future due to the increasing cost of new construction and long development timelines. ESRT’s office portfolio offers a great value proposition that targets the deepest and broadest segment of the office tenant demand in Manhattan and that should play out well in the current environment. Our tenant base is well diversified in terms of both industries type and size and demand for our properties has been solid as demonstrated by leasing performance. We leased 1,300,000 square feet in 2024, picked up nearly 600 basis points of positive lease rate absorption in Manhattan since the end of twenty twenty one to bring our portfolio to 93% leased and first quarter twenty five was our fifteenth consecutive quarter of positive mark to market spreads in our Manhattan portfolio. We continue to have a solid leasing pipeline with prospects for continued rental growth.

There have been a lot of questions asked about the Observatory and we continue to believe it serves as an excellent complement to our property portfolio business. It features low CapEx, high operating margins and dynamic pricing with better potential to adjust with inflation. The Empire State Building Observatory is true authentic New York City and has shown immense resiliency over the years through economic cycles, through new competition, and worldwide pandemic. We recognize that we’re in a period of heightened uncertainty around tourism and there could be headwinds in the balance of the year. Our focus is to continue to run the operations well, cultivate our brand, control expenses and be transparent with the market as external factors play out.

Year to date performance has been impacted by poor weather days and headwinds to international demand. International is about 50% of 2024 admissions. The business may ebb and flow in the near term, but has favorable cash flow characteristics and we expect it to remain a positive bottom line contributor. It is important to note that the Observatory earnings are typically weighted towards the second half of the year, which has historically represented 60% of NOI due to seasonality. As mentioned in our 1Q earnings call, we plan to provide further updates regarding our outlook for the Observatory business once we have a full look at the entire first half of the year.

Our retail portfolio is best characterized as a collection of well located high foot traffic retail assets that includes a balance of everyday retail and our growing street retail portfolio on North Sixth Street in Williamsburg where in place rents are well below market. Our retail portfolio is well leased with six and a half years of weighted average lease term and across our portfolio we have a strong roster of high credit quality tenants that are also positioned well in an uncertain environment. Multifamily was added to our portfolio a few years ago and has been a great addition and adds the resiliency of our cash flows. Fundamentals remain strong and as mentioned there’s virtually no new supply, replacement costs remain high and frequent rent resets relative to office allows cash flows from this segment to better adjust with inflation. All of our portfolio is backed by a strong and flexible balance sheet that enables us to weather any environment.

We manage our balance sheet proactively with strong liquidity, no floating rate debt exposure, a well laddered debt maturity schedule, no unaddressed debt maturity until December 2026 and the lowest leverage among all New York City focused REITs at 5.2 times net debt to EBITDA as of quarter end. This positions us well for both leasing as well as capital allocation. Subsequent to 1Q, we did opportunistically repurchase about $2,000,000 of shares. We’ll consider share buybacks as part of our capital allocation strategy with nearly $300,000,000 of share buybacks since 2020. That said buybacks will be measured given the uncertain environment and our focus on operating runway flexibility to be in a position to go on offense when attractive investment opportunities arise.

The transaction environment became more active at the end of last year through early this year, but and we will continue to monitor how that shifts as there’s more uncertainty today. We continue to actively underwrite deals across three sectors where we target retail, multifamily, and office with a focus on New York City and we’ll be prepared to act when those transaction opportunities are attractive and make sense. And lastly, a comment on sustainability. We continue to be industry leaders in sustainability and healthy building performance and partner with our tenants to help them achieve their sustainability objectives. Our sustainability work was never about chasing a trend as we began this work over a decade ago with the deep energy retrofit of the Empire State Building.

We have always been return on investment focus and our projects drive improved financial performance and we’re committed to delivering long term value to our shareholders through continued excellence and results. And with that John, I’ll turn it over to your questions.

John Kim, Moderator, BMO Capital Markets: I don’t have any more questions.

Christina Chu, President, Empire State Realty Trust (ESRT): We’re done, we give time back.

John Kim, Moderator, BMO Capital Markets: You’ve addressed everything, but I guess I’ll follow through on some of them. So you were a pure play office and observatory historically, New York and suburban, now you’re more of a New York City Investor, office, multifamily retail, observatory. Where do you see that mix going to ideally and where do you see the best growth prospects?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, so we’re pleased with our mix. We would be interested in more retail and more multifamily all over time, but as we’ve mentioned, it will really be opportunity dependent. Ultimately we want to deliver returns to our shareholders and cash flow growth over time. So as investment opportunities become available with attractive entry points, that’s what we will be prepared to act, but would definitely be comfortable with the two smaller segments of retail multifamily becoming larger.

John Kim, Moderator, BMO Capital Markets: It wasn’t too long ago, there was a lot of discussion about distressed sellers and refinancing issues. Are there any opportunities that you’re seeing in the market today in any of this asset classes?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, look two years ago we were hoping for distress. Our thought was get the basis reset, do what we do well, reposition assets and help generate really strong returns through these opportunities. As it turns out, New York fundamental New York City fundamentals have been quite strong and lenders had been extremely willing to extend and modify and kick the can down the road and turns out that in New York City that worked really really well, right? Nurtured with time and capital, New York City did improve. So towards the end of last year, especially after the CMBS market demonstrated strength through the refinancings of Rockefeller Center and subsequently Spiral and other deals and as banks became more willing to lend and maintain their CRE exposures, more capital came into the market and we started to see core type transactions in the office market.

So I’d say you know if you fast forward, it doesn’t mean all the problems are solved. So there could still be opportunities but it definitely demonstrates that there’s a lot of money that’s interested in a vibrant market like New York City. We think that we should continue to seek those opportunities where the capital stacks may not be in the right spot where we can add value to repositioning and leasing because there’s a ton of capital out there that’s ready to invest, but not an equal amount of capital that’s ready to operate and reposition assets. So we’ll be patient, prudent, disciplined, but we think we can find some of those interesting opportunities.

John Kim, Moderator, BMO Capital Markets: You have one asset right now remaining in the suburban office market Metro Center that’s currently being marketed for sale. Can you talk about the expectations as far as when you’re going to sell it, the buyers out there, what kind of pricing you expect to get?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, we’re in the middle of that process now. Interesting about the suburban markets, there’s a good amount of interest and the key is whether buyers can obtain financing, right? Like that’s sort of the million dollar question across the market which is access to financing. So we’ll see how that plays out. From our perspective, that asset has attractive current financing in place.

So if it’s not the right time to sell now, we can wait. If it turns out we can strike a deal, then from a capital allocation perspective, it allows us an opportunity to redeploy capital from suburban office where we’ve exited almost all except this remaining asset into more New York City, which we believe makes a

John Kim, Moderator, BMO Capital Markets: lot of sense. Tom, can you talk about the office leasing market? I mean since Liberation Day, a lot of the office REITs got hit pretty hard and there’s a perception of businesses slowing down, not growing, shrinking the office footprint or taking longer to make decisions. But I think we’ve heard differently from you and some others. Tell us about the New York office market.

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): Sure, John. The office leasing environment in New York City is incredibly strong. The momentum is strong since the liberation day or over the last two months out of approximately 185,000 square feet of leases that we have in negotiation. We have not had a single deal that was put on pause or pulled back. And I think that that says a lot.

We did 230,000 square feet of leases in the first quarter and the second quarter is shaping up really well. We’re positioned to increase our lease percentage through this year and our occupancy percentage. We have very modest lease expiration and very modest amount of known tenant vacates this year. And so we’re setting up really nicely to improve our occupancy. We’ve increased our rents twice since the start of the year, once at the very beginning and then two months later we went through another round of rental increases.

We do receive less pushback on our rents increases as well as we’ve pulled back on free rent concessions for which we receive less pushback than we have in the past. Our net effective rent has been trending positive. And so overall, New York City is the strongest office market in the country and incredibly resilient. And that’s what we’re seeing today.

John Kim, Moderator, BMO Capital Markets: You mentioned you expect the least rate to go up. You were at 92.5% in the first quarter, it’s going to go up from here?

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): Based upon 185,000 square feet of leases in negotiation and our office space in New York City is 93% leased at the end of the first quarter. And given that we only have for the balance of the year 160,000 square feet of known tenant vacates offset by generally if we’re doing roughly 1,000,000 square feet of leasing per year that includes new and renewal. Yeah, we’re shaped up really well to increase both our lease percentage and our occupancy by year end. Now our occupancy which is dependent upon when those leases actually commence we’ll

John Kim, Moderator, BMO Capital Markets: follow

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): our lease percentage. And so keep an eye on that lease percentage number, which again is trending north and our occupancy will follow.

John Kim, Moderator, BMO Capital Markets: Can you provide some more color on the types of tenants looking for space today by industry and also are there new entrants coming into the markets, have international tenants soften a little bit with trade wars, just some more color on your tenant base.

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): Yeah, well we’ve always attracted tenants in a wide variety of industries and that’s and you see that in the composition of our rent roll and we continue to see that in the inbound inquiries and the leases that we have in negotiation. We have deals underway with tenants in professional services, tech and Tammy, some non for profit, some industrial, some consumer products. And so it’s really broad based and what we do see is tenants are making longer term plans. They the the job market in New York City for office using job market is is is strong. There this is where employees want to live and and work and these companies are making long term plans.

And I think that, ultimately the view is that the tariff thing will settle down and we’ve just seen no slowdown from any of the tenants in the wide variety of industries that I’ve just mentioned.

John Kim, Moderator, BMO Capital Markets: Can you talk about the investment market? We recently saw that five ninety Madison was sold to RXR. It seems like it was pretty competitively bid with multiple different buyers. Was that something that you looked at as an acquisition and just talk about the overall investment market, how competitive this today?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, we look at everything in the market and obviously these are all important data points. I think that transaction clearly demonstrates right, very strong location, it’s a discount to replacement cost even though it’s a very strong valuation cap rate with a five in front of it. So it demonstrates that there is significant demand, we see it on the leasing front, we see it in the vibrancy of New York and now we’re seeing it in the investment market. People are willing to lean in. In terms of what we’ll do, go back to my earlier comments, we’re gonna find ways to generate higher octane returns especially when it’s balance sheet capital and not just from capital recycling where it’s more of a pair trade, but these are all worthwhile data points to assess strength and business plans on how they plan to execute following the acquisition.

It’s a very good sign for New York.

John Kim, Moderator, BMO Capital Markets: Maybe just moving on to Observatory, New York City tourism reduced its expectations for visitors to New York by 5% and that includes a 17% drop on international tourists. Can you just remind us what percentage of visitors to the Observatory are international versus domestic and how do you combat this this headwind?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah. So you know based on 2014, our mix between domestic and international was roughly fifty fifty. That compares to 2019 when it was about two thirds international and the balance coming from domestic. So overall what we said in our first quarter call was we recognize there are some headwinds but we didn’t adjust our NOI guidance just yet. Easter fell into a different period and we also wanted to continue to monitor how all of this plays out.

So after the full two quarters, we’ll provide another update. I would say in terms of ways to combat, we operate the business really well. It’s a number one attraction in The U. S, Three Years in running, number one in the world. The business will continue to work hard to earn those tenant experiences and ratings.

We do have some ability to vary expenses if in fact traffic slows, our expense range is roughly 36 to 40 million, we can come in lower, we can make adjustments to recoup some of that and overall high margin business, no CapEx. So it’ll still be a very strong contributor to the business. We’re talking variations of slowdown. The airline data and the hotel data speak to that trend towards slowing. I would say those have many more factors than just New York in a single attraction, but it’ll be a derivative of that and we’ll continue to monitor.

As a reminder, per my remarks, 40% comes in the first half. So there’s still a long rest of the year where we generate more of it and by then more of the tariff news, geopolitical tension, tourism, a lot more facts, data and reality will shake out.

John Kim, Moderator, BMO Capital Markets: You’ve been able to offset maybe fewer visitors with a higher revenue per visitor. First quarter was up 6%. How much more juice can you squeeze out of lemon? Like how much more pricing power do you have?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah. We exercise pricing power where we can. I don’t think we’ve projected you know continuously more. In fact, our previous comments before Liberation Day and tariffs was that as we get more international travel because that comes more from a wholesale model, the revenue per cap would actually come down but you’d make it up in volume, right. So we’re always working on the business holistically.

If we tilt more towards domestic, maybe overall visitors can come down a little but we’ll be in a higher margin segment within our price points. So those are always going to be toggles. I’d say the benefit of having more attractions is the market now sees there’s been some pretty good pricing power across the board. Customers are willing to spend, but only if you have a top quality experience that’s worthwhile.

John Kim, Moderator, BMO Capital Markets: From recollection, you don’t really spend a lot on marketing and promotion for the Observatory, you have a lot of social media and people just know the asset. Is that something that could change? Would you are you looking to maybe spend some more money to attract?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, our marketing team has done an excellent job to cultivate the brand as well as build a following and we always have our eyes out on how to monetize that whether it’s through observatory ticket sales, better awareness, repeat travel and other vectors to generate revenue. So I think that’s something definite to watch out for in the business.

John Kim, Moderator, BMO Capital Markets: Okay, turning to Williamsburg retail, how was that portfolio that you’ve accumulated over the last couple of years, how’s that performed relative to your expectations? And I think you originally acquired it at a 4% going in yield with expectation to go to six. Tell us how that’s progressing.

Christina Chu, President, Empire State Realty Trust (ESRT): Mid four is going to six and the delta there will be inclusive of the completion of the Hermes flagship store that’s under development as well as the lease up of one vacant space. And you know we love the assets you know there’s a few reasons for that. When we studied the Williamsburg market we noticed that it was a highly fragmented market, great residential density in recent years when you survey you know who lives there, you know a lot of tech workers, they work at Google, they jump on the L train and then you’re in Williamsburg, right. So it has the makings of you know a lot of activity but unlike Soho, it’s much earlier in the cycle. So there’s still more work to do but there’s also more upside and there’s kind of embedded 25% plus of mark to market potential because rents are all over the map.

So we’ve been really happy with that, but we do only have one vacant space, weighted average lease term is about six years. So as people ask a lot of questions on strength of retailers, we’d go back to at a minimum we think we have a defensive rental price point, right because there’s embedded mark to market upside. And if we do get space back then we get the roll up mark to market upside quicker than the weighted average lease term of six years. So overall you know great presence on the street, really happy with the portfolio, a lot of tenant interest and more recently there have been comps for sales on the street, investment sales that demonstrate the strength in terms of both cap rate metrics as well as per square foot metrics and it was from an institutional buyer And we think that that’s great that more institutional capital us and others coming on the street will bring better tenancies, better credits, better discipline and continue to add to the vibrancy on that area.

John Kim, Moderator, BMO Capital Markets: Can you tell us who the buyer was and the comp as far as pricing?

Christina Chu, President, Empire State Realty Trust (ESRT): I’m going to leave that for you to publish.

John Kim, Moderator, BMO Capital Markets: Help me out. Okay and so is Williamsburg like a one off? I mean are you focused specifically in that submarket or are there other markets that are interesting to you that from a

Christina Chu, President, Empire State Realty Trust (ESRT): recent So Williamsburg was interesting. We, when we went in, as a reminder, we started with one corner at 26,000,000. It was a really good corner on North Sixth Street and it was part of our capital recycling and we said this is a market that we want to enter and look out for. We did not know at the time that we’d be able to accumulate scale so quickly. But now at roughly $250,000,000 and we own the most consecutive square footage in terms of frontage along North Sixth Street which is a prime retail area, we feel pretty good.

So we don’t have this need to bulk up just to get more on the street And at the same time, if something strategic comes along that makes sense, we’d be happy to add to it, we’re very pleased with it. You know, overall, we say New York City, but we would definitely look out for characteristics that I mentioned, right? Demographic trends, added density where we think that we can add value and is additive to our portfolio and the continued theme live, work, play, visit within New York City.

John Kim, Moderator, BMO Capital Markets: Okay and when I look at your retail portfolio overall, for some reason Empire State Building occupancy is a little bit lower than the rest of your portfolio. What’s going on with some of that retail space?

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): It’s really driven by just one vacant retail space of about 18,000 square feet, but the vast majority of that sits below grade. So only about 3,000 square feet is on grade. So that skews that vacancy number quite a bit. We have two active proposals in negotiation on that space right now. We’re gonna be choosy because it’s right at the front door of Empire State Building.

All of the space on 30 Third Street has been leased to predominantly food and beverage, which helps support the 2,800,000 square feet of office space that sits atop the Ground Floor and also provides a nice amenity to our Observatory visitors as well. So this is the last remaining vacant retail space of about 3,000 square feet on grade at the Empire State Building.

John Kim, Moderator, BMO Capital Markets: We know a lot about Fifth Avenue and Madison, the rents really coming back strongly. What about Times Square South and the Penn Station District? How are market trends trending?

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): Yeah, we only have nine vacant stores and we have leases in negotiation on three of them, one signed lease since the end of the fourth quarter and saw the balance of those five spaces we have active proposals in. And as Christina mentioned before, we’re in high traffic pedestrian foot count areas and the side street really provides opportunity to bring in amenities and services for our office tenants that sit above, and then we have quite a bit of activity from food and beverage right now down on both the Union Square, Times Square South on Broadway, and space up on Third Avenue and 80 Sixth Street. And so we’ve got good activity really across the board. Again, quite a bit in food and beverage, some I’ll call it cosmetic beauty type tenants and in Williamsburg that was just discussed on the one vacant store, we’re seeing interest from a variety of both national and international brands.

John Kim, Moderator, BMO Capital Markets: At this point, I’ll just stop if there’s any questions from the audience, feel free to ask.

Tom Durels, Executive Vice President of Real Estate, Empire State Realty Trust (ESRT): The question was what’s the status of return to work? And it’s funny we haven’t been asked that question in quite some time It was prevailing question certainly in 2020 and ’21. It’s really not relevant anymore today because the office tenants are back. Employees want to be back in the office. I think the vast majority of tenants that have adopted some form of of of of hybrid, but with the majority of the work week in in in the office.

And you can you can get a sense of the tempo by walking around the streets of New York City, trying to get a reservation in a restaurant tonight, and you you’ll have a hard time trying to lease an apartment in New York City, and you’ll need to stay in the line and move quickly. The so so New York City is is back. It’s as vibrant as ever. The stats that are out there, including ourselves, probably about seventy five percent of what it was pre COVID, but I think that reflects that a little bit of flex work environment, but it has not resulted in a reduction in the need for office space. Tenants and employers want to provide their employees the best work environment and so they’re not being stingy, they’re providing ample amenities and quality work environment to attract employees.

And so all that translates to and if if employees are in three days a week and everybody wants their own own seat, well, it translates into basically, you know, not a reduction in in in office space. And so you’re seeing that in the underlying fundamentals that I talked about earlier. There is a dwindling supply of quality product in Manhattan in the better buildings and there’s good momentum in the overall office market.

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, would just add to that, agree with all of Tom’s comments but they’re very specific to a strong market like New York City. Clearly in the country there are some office markets that are not back and you do need to look at return to office trends to find that inflection point. But in New York City because of the resiliency, the strength in the leasing data, the corporate return, the vibrancy you know for all those reasons it’s no longer as relevant. And the other thing just want to mention is you know Fridays are a lighter day right and hasn’t made a difference on leasing, but there’s also a structural reason for that. I think in New York City that makes a lot of sense which is part of the reason why New York City is such a great market to be for office is you hire not just from people living in the city, but easily from New Jersey, from Connecticut, from Westchester, from Long Island, the commuter hubs.

That’s why the buildings around those commuter hubs such as ours do really well. But also when you survey an employee base and say who really cares about having one maybe two days of remote flexibility, by far and large it’s going to be the commuters because those are actual hours. Right? And that’s not a negative thing in New York City, it creates a pool of talent but we have to understand structurally how that fits in and ultimately it’s whether it impacts leasing and it doesn’t right. Leasing is going on with or without the Friday.

John Kim, Moderator, BMO Capital Markets: Any other questions? Think we have time for maybe one more. So your, this may be a tough one, cost of capital, what are you focused on as far as improving your cost of capital going forward?

Christina Chu, President, Empire State Realty Trust (ESRT): Yeah, go back to the comment, Things we can control versus things we can’t. So you can’t control the stock market. The entry price is extremely attractive into ESRT. Now usually you say like what’s wrong, what’s going on at the company and hopefully from our remarks and from our results you could see office leasing doing really well, retail portfolio doing really well, multifamily doing really well. Observatory has some question marks, but it’s still a super positive contributor to the bottom line without CapEx, high margin, great compliment.

So it’s not the business operations. On top of that, we manage our balance sheet really well, right? We’re really you know weather resistant in that we have no unanswered debt maturity until end of twenty six. We continue to have strong liquidity and we’re ready to go on offense. So the actions that we would take, we’ve done some buybacks but we also want to make sure we preserve capital for operating runway, maintaining our portfolio really well, going after leases and going after investment opportunities.

And I think it’s the combination of delivering cash flow growth over time and identifying those investment opportunities where we can show the market those higher octane returns exist. The market moved on a little bit went to core, but we still need to do our part. And when you balance all of those things, it should narrow the gap and in the meantime, investors get a great entry point into the portfolio and shares.

John Kim, Moderator, BMO Capital Markets: Are you comfortable with the observatory being 25% of NOI or is important to reduce that over time?

Christina Chu, President, Empire State Realty Trust (ESRT): I think it got there because it’s performed really well. So if it’s a great performer and maintains its stake, that’s fine, right, it’s a great compliment and as it ebbs and flows, if we’re generating cash flow growth and performance from other parts of the business, that’s great also. Know, I think there’s a lot of question marks on what diversification means but in New York City you know live, work, play, visit is real. Having multiple channels to acts and access to financing is really important. Know getting multifamily also means you get agency financing, right?

And so having that as a component. So back to the Observatory, we love having a compliment to the business. We’re gonna drive the business as far as we can, ticket sales and other sources of revenues and we think it’s a great compliment. So no need to size the business because people are resize the business just because people are distracted by short term tourism trends. I think overall the brand stands on its two feet and we’ll continue to work hard on it.

John Kim, Moderator, BMO Capital Markets: That’s great. Thank you so much and thank you for attending. Thank you.

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