Empire State Realty OP - S250 | 10-Q: FY2026 Q1 Revenue: USD 190.33 B

Revenue: As of FY2026 Q1, the actual value is USD 190.33 B.

EPS: As of FY2026 Q1, the actual value is USD 0.01.

EBIT: As of FY2026 Q1, the actual value is USD 56.98 B.

Overall Company Performance

Net income attributable to common unitholders was $1,945 thousand for the three months ended March 31, 2026, marking an -86.8% decrease from $14,728 thousand in the prior year period. Total net income decreased by -81.0% to $2,995 thousand in 2026 from $15,778 thousand in 2025. Core Funds From Operations (Core FFO) attributable to common unitholders increased to $53,195 thousand for the three months ended March 31, 2026, from $52,034 thousand in the same period of 2025. Total revenues increased by 5.7% to $190,325 thousand for the three months ended March 31, 2026, compared to $180,066 thousand in the prior year period. Total operating expenses increased by -4.3% to $160,868 thousand for the three months ended March 31, 2026, from $154,278 thousand in the prior year period. Total operating income increased by 14.2% to $29,457 thousand for the three months ended March 31, 2026, from $25,788 thousand in the prior year period.

Cash Flow

Cash and cash equivalents and restricted cash totaled $106,146 thousand as of March 31, 2026, decreasing by -$60,365 thousand from $237,412 thousand as of March 31, 2025. Net cash provided by operating activities decreased by $14,236 thousand to $68,910 thousand for the three months ended March 31, 2026, compared to $83,146 thousand for the same period in 2025. Net cash used in investing activities increased by -$22,602 thousand to -$64,665 thousand for the three months ended March 31, 2026, from -$42,063 thousand in the prior year period. Net cash used in financing activities decreased by $168,363 thousand to -$64,610 thousand for the three months ended March 31, 2026, from -$232,973 thousand in the prior year period.

Real Estate Segment

Rental revenue increased by 7.5% to $166,105 thousand for the three months ended March 31, 2026, from $154,542 thousand in the prior year period, driven by acquisitions, dispositions, and higher tenant reimbursement income. Property operating expenses increased by -6.0% to $47,744 thousand, mainly due to higher operating payroll costs and utilities. Real estate taxes increased by -4.7% to $34,613 thousand, primarily due to the net impact of acquisitions and dispositions. The Real Estate Segment’s operating income increased by 74.8% to $18,862 thousand for the three months ended March 31, 2026, from $10,789 thousand in the prior year period. The company acquired a retail property in Williamsburg, Brooklyn, for $46,000 thousand in March 2026, and 130 Mercer Street for $386,000 thousand in December 2025. Leasing activity included 113,484 rentable square feet of new, renewal, and expansion leases signed. Office properties saw 9 leases for 90,687 square feet, with a weighted average annualized cash rent per square foot of $59.46, representing a 6.8% increase over previously escalated rents. Retail properties had 2 leases for 22,797 square feet, with a weighted average annualized cash rent per square foot of $135.49, reflecting a -1.1% decrease over previously escalated rents. Capital expenditures for the commercial portfolio were $10,639 thousand for the three months ended March 31, 2026, compared to $8,764 thousand in 2025.

Observatory Segment

Observatory revenue decreased by -20.1% to $18,510 thousand for the three months ended March 31, 2026, from $23,161 thousand in the prior year period, primarily due to lower levels of international tourism. Observatory expenses decreased by 3.1% to $7,868 thousand. The Observatory Segment’s operating income decreased by -29.4% to $10,595 thousand. Visitor numbers decreased by 18.2% to 350,000 visitors for the three months ended March 31, 2026, from 428,000 visitors in the prior year period.

Debt and Liquidity

As of March 31, 2026, total consolidated indebtedness was approximately $2,300,000 thousand, with a weighted average interest rate of 4.54% and a weighted average maturity of 4.8 years. Empire State Realty OP, L.P. had $90,000 thousand borrowed under its Unsecured Revolving Credit Facility, with $530,000 thousand available as of March 31, 2026. Mortgage notes payable, net, amounted to $621,400 thousand, including a new $53,500 thousand mortgage loan at 10 Union Square East closed in March 2026. Senior unsecured notes, net, amounted to $1,300,000 thousand, with a subsequent private placement of $130,000 thousand aggregate principal amount of 5.99% Series M Senior Notes due July 15, 2032, scheduled to fund on July 15, 2026.

Outlook

Empire State Realty OP, L.P. believes it maintains a strong competitive position due to its diversified income drivers across office, retail, multifamily, and the Empire State Building Observatory. The company’s portfolio is modernized, well-located, energy-efficient, and features competitive rental rates and strong leased percentages. This business is supported by a well-positioned balance sheet, modest leverage, and ample access to liquidity, with no unaddressed near-term debt maturities, providing flexibility in capital allocation.