Empire State Realty OP, L.P. is the principal operating partnership through which Empire State Realty Trust, Inc. conducts much of its real-estate business. The entity is structured as a real estate investment operating partnership and is controlled by Empire State Realty Trust, a New York City-focused office and retail real ...Empire State Realty OP, L.P. is the principal operating partnership through which Empire State Realty Trust, Inc. conducts much of its real-estate business. The entity is structured as a real estate investment operating partnership and is controlled by Empire State Realty Trust, a New York City-focused office and retail real estate investment trust. Its activities include owning, leasing, managing, operating, acquiring, redeveloping, and repositioning commercial properties. The portfolio is concentrated in Manhattan and the greater New York metropolitan area, where the company benefits from deep tenant demand, transportation access, a large corporate ecosystem, and the prestige associated with landmark assets such as the Empire State Building.
The company’s products are not manufactured goods; its primary products are leasable office suites, retail space, building services, tenant amenities, and related real-estate experiences. Properties are marketed to businesses across sectors and may include traditional office tenants, retail operators, hospitality-oriented users, and other commercial occupants. Value creation depends on occupancy, rental rates, lease renewals, tenant retention, redevelopment, operating efficiency, and the quality of amenities and services provided to occupants. The company has emphasized modernization, indoor environmental quality, energy efficiency, sustainability, and technology-enabled building operations as ways to improve asset competitiveness and reduce long-term operating costs.
As a property owner and operator, its cost structure is driven by property taxes, utilities, repairs and maintenance, insurance, payroll, security, cleaning, building improvements, leasing commissions, tenant improvements, interest expense, and capital expenditures. Unlike a manufacturing business, it does not have a conventional bill of materials, or BOM. Its equivalent investment requirements include construction materials, mechanical and electrical systems, elevators, energy-management systems, tenant build-outs, furniture and fixtures in common areas, and ongoing maintenance contracts. Capital allocation is therefore focused on preserving and upgrading buildings, improving energy performance, and supporting leasing activity.
The supplied trailing information indicates approximately 642 full-time employees, revenue of roughly $4.59 per share, operating cash flow of about $1.73 per share, and free cash flow of approximately $0.90 per share. The business shows substantial real-estate leverage, with debt-to-assets of about 52.1% and debt-to-equity of approximately 2.14. Its reported interest coverage is relatively limited, highlighting sensitivity to borrowing costs and refinancing conditions. The company also faces office-sector challenges, including hybrid work, tenant downsizing, elevated interest rates, property valuation pressure, and competition from newer buildings. Its objectives are to maintain high-quality and well-leased properties, improve occupancy and rental economics, manage debt prudently, invest selectively in modernization and sustainability, preserve liquidity, and generate durable cash flow and distributions for stakeholders. Anthony E. Malkin is the key executive associated with the organization and has led the related Empire State Realty enterprise since 2013, following involvement with predecessor entities beginning in 1989.
YoYYoY means Year-over-Year. It compares the latest annual value with the previous annual value to show long-term trend strength.
QoQQoQ means Quarter-over-Quarter. It compares the latest quarter with the immediately previous quarter to show short-term momentum changes.
RevenueThe total money that came through the front door from selling things, before paying a single bill. Think of it as the grand total of every credit card swipe from customers. (YoY compares this year to last year's performance, while QoQ compares the current three months to the previous three).
$768.3M
+0.0%
+3.5%
Net IncomeThe absolute bottom line. If the company paid every single supplier, employee, banker, and tax collector, this is the actual money left in their pocket at the end of the day.
$47.6M
-37.5%
-1420.7%
Gross MarginThe basic markup. If they sell a $100 pair of sneakers, this percentage tells you how much of that price tag is profit right after paying for the rubber and shoelaces, but before paying for things like store rent or TV commercials.
+1.8%
-96.7%
+177.3%
Operating MarginThe 'day job' efficiency score. Out of every dollar a customer spends, this shows how many cents the company keeps after making the product AND paying for all the everyday corporate overhead (like salaries, marketing, and keeping the lights on).
+17.7%
-14.6%
-10.1%
Net MarginThe final take-home percentage. When you strip away every conceivable cost, tax, and interest payment, this is the exact number of cents the company truly gets to keep from every dollar in sales.
+6.2%
-37.5%
-1376.6%
Free Cash FlowThe holy grail of corporate cash. It's the spendable, physical money left over after the business pays for its daily operations AND buys the big, expensive upgrades (like new factories or servers) it needs to survive. This is the 'free' money they can use to pay dividends or buy back stock.
$50.6M
-42.5%
-45.3%
FCF MarginThe ultimate cash conversion rate. It shows how good the company is at turning regular sales directly into cold, hard, spendable cash. A high percentage means the business is an absolute cash-printing machine.
+6.6%
-42.6%
-47.1%
Debt / EquityThe financial risk gauge. It compares how much of the company's empire was built using borrowed money (loans) versus the owners' own money (shareholders). A high number means they are heavily leveraged and playing a riskier game; a low number means they are playing it safe.
230.1%
+63.8%
—
Current RatioThe 12-month survival check. It simply compares the cash they have right now (plus things they can quickly turn into cash) against the immediate bills they absolutely must pay this year. A score above 1 means they have enough in the wallet to cover the upcoming bills without panicking.
6.48x
+306.1%
+18.8%
Total AssetsThe absolute size of the company's empire. It bundles together absolutely everything of value they own—from the cash in the register and the inventory in the warehouse, to the software patents in the vault and the factories on the ground.
Operator: Greetings, and welcome to the Empire State Realty Trust Second Quarter 2026 Earnings Call.[Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce Susanne Lieu, SVP, Chief Counsel, Real Estate. Thank you. You may begin.
Susanne Lieu: Good afternoon. Welcome to Empire State Realty Trust's Second Quarter 2026 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. During today's call, management's prepared remarks and responses to questions may include forward-looking statements within the meaning of applicable securities laws. These statements reflect management's current views and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. 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 Tony Malkin, our Chairman and Chief Executive Officer.
Anthony Malkin: Good afternoon, everyone. Yesterday, we reported ESRT's second quarter results. We delivered strong performance across the property portfolio, which represents approximately 80% of our NOI. Office leasing accelerated from the first quarter as we converted our pipeline into executed leases. Our retail portfolio is highly leased, and our multifamily properties delivered solid growth. We remain active on transactions. During the quarter, we completed the once-in-a-lifetime opportunity to acquire the land under 111 West 33rd Street and 1400 Broadway and executed on the sale of 250 West 57th Street, the proceeds from which we swapped into the prior purchase of 130 Mercer. Against excellent leasing in our property portfolio, the Empire State Building observation deck weighed on performance. In our press release, we gave an updated FFO range under an assumption there is no improvement to current visitation levels, and it utilizes $55 million of NOI for the observation deck for full year 2026. I'll spend a few minutes on our Observation Deck business, then get to our strong leasing. During our first quarter call, we called out softer visitation amidst today's geopolitical environment and K-shaped consumer economy and …
