Empire State Realty Trust, Inc. Q4 FY2025 earnings call

• Tony Malkin mentioned continued leasing momentum, observation deck execution, balance sheet recycling and outlook for 2026. Delivered full year core FFO of $0.87. Leasing team leased nearly 460,000 square feet in the quarter and 1 million square feet for the year. Addressed management succession with key leadership hires and promotions. Portfolio is 100% New York City. Completed $1 billion of acquisitions and disposed of suburban commercial assets. • Christina Chiu talked about recycling out of lower growth suburban assets into prime NYC assets. Executed $417 million of all cash acquisitions and completed disposition of Metro Center. Pro forma for investment activity, maintained ample liquidity and lower leverage. • Ryan Kass reviewed leasing activity: leased over 1 million square feet in 2025, grew occupancy to 90.3%, 18th consecutive quarter of positive mark-to-market lease spreads in office portfolio. • Stephen Horn discussed fourth quarter and full year core FFO, same-store property cash NOI, Observatory business, 2026 outlook including core FFO range, same-store property cash NOI growth, impact of FDIC vacate, Observatory NOI and G&A expectations.

Full year core FFO was $0.87. In 2025, leased over 1 million square feet and grew occupancy to 90.3%. Office portfolio is 93.5% leased. Observatory business generated approximately $24 million of NOI in the fourth quarter and $90 million for the full year. Revenue per capita increased year-over-year. Same-store property cash NOI, excluding lease termination fees, increased 3.4% year-over-year for the fourth quarter and 60 basis points for the full year. FAD CapEx shrunk by approximately $21 million or 11% year-over-year. The 2026 same-store pool includes multifamily and North Sixth Street retail portfolios. FDIC vacated 119,000 square feet at Empire State Building subsequent to year-end. Observatory NOI expected to be approximately $87 million to $92 million in 2026 with expenses of approximately $10 million per quarter. 2026 G&A expected to aggregate approximately $69 million to $71 million.

• Expect 2026 FFO and same-store cash NOI to be consistent with 2025 results. • Core FFO to range from $0.85 to $0.89 per diluted share. • Same-store property cash NOI growth of negative 1.5% to positive 2%. • Anticipated commercial occupancy of 90% to 92% by year end 2026. • Property operating expenses and real estate taxes to increase by approximately 2% to 4% in aggregate, partially offset by higher tenant reimbursement income. • Observatory NOI expected to be approximately $87 million to $92 million and expenses of approximately $10 million per quarter. • 2026 G&A expected to aggregate approximately $69 million to $71 million.

• Known tenant rollover will impact FFO growth in 2026. • FDIC vacated 119,000 square feet at Empire State Building subsequent to year-end, impacting 2026 core FFO. • Changes in tourism trends, such as decline in international visitation and past program businesses, affecting Observatory revenue. • Potential impact of capital markets volatility, war in Iran, etc., on business. • Disconnect between stock price and underlying private market value of portfolio.

Q: Can you provide more color on the outlook, first quarter pipeline or leasing activity and specific submarkets?

A: Market tenor remains strong, over 170,000 square feet of leases in pipeline closing in first and second quarter.

Q: Sales price of Stanford asset disposed of?

A: Mid-$60 million, around debt balance, NOI around 7% cap rate.

Q: Impact of property tax increase on ability to pass to tenants and push rents?

A: Proof in pudding, market is what it is, pass-throughs on existing leases via tax escalation, higher base year on new leases for real estate taxes.

Q: Impact of AI on leasing decisions?

A: Strong demand for high-quality office space in NYC, AI has been positive for leasing market, more hindered by availability of space to lease than AI impact.

Q: Impact of new mayor's rhetoric/policy on leasing decisions?

A: Has not impacted leasing discussions, demand is high.

Q: Competition for Observatory and economic/tourism outlook for 2026 guide?

A: SL Green's Summit and One World Trade Center have deteriorated, we've pivoted to direct marketing, guide contemplates various outcomes throughout the year.

Q: Occupancy forecast for 2026 and net debt to adjusted EBITDA?

A: 90% to 92% occupancy, net debt to adjusted EBITDA above 6 but we evaluate market based on access to capital, continue to navigate, not a strict limit.

Q: Impact of World Cup on Observatory international visitors?

A: Developed marketing strategies for World Cup, optimistic about co-branding opportunities, costs expensive around that period but best customers fit in.

Q: Disconnect between stock price and underlying private market value of portfolio?

A: Trade at discount to underlying real estate values, focus on things within control, open to capital recycling, asset on market is one where value added, see interest in NYC transaction market.