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1. Company Snapshot

1.a. Company Description

Empire State Realty OP, L.P. operates as a subsidiary of Empire State Realty Trust, Inc.

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1.b. Last Insights on FISK

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1.c. Company Highlights

2. Empire State Realty Trust's Strong Leasing Momentum and Balance Sheet Management Drive Resilient Performance

Empire State Realty Trust (ESRT) reported core FFO of $0.23 per diluted share for the fourth quarter and $0.87 per diluted share for the full year 2025. 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. The company's leasing team leased nearly 460,000 square feet in the quarter and 1 million square feet for the year, driving occupancy to 90.3%, up 170 basis points year-over-year. The office portfolio is 93.5% leased, marking the 12th consecutive quarter above 90%.

Publication Date: Feb -20

📋 Highlights
  • Full-Year Core FFO Delivered: Achieved $0.87/share in 2025, reflecting consistent performance despite international visitation declines.
  • Leasing Momentum: Secured 1 million sq ft leased in 2025, with 93.5% office portfolio occupancy as of year-end.
  • Portfolio Transformation: Shifted to 100% NYC portfolio via $1 billion in high-quality acquisitions, including Manhattan multifamily and Brooklyn retail.
  • Balance Sheet Strength: Maintained 6.3x net debt/EBITDA leverage, with $420 million in financing and no unaddressed debt maturities until 2027.

Strategic Portfolio Transformation

ESRT's portfolio is now 100% New York City, following the disposition of suburban commercial assets and the acquisition of high-quality real estate, including Manhattan multifamily properties and prime retail on North Sixth Street in Williamsburg, Brooklyn. The company's CFO, Christina Chiu, highlighted that the $1 billion of acquisitions improved cash flow and portfolio quality, citing that the capital recycling activity over the last 5 years will result in an estimated $90 million of cumulative incremental property-level cash flow between 2025 and 2030.

Balance Sheet Management and Outlook

The company maintained a well-positioned and flexible balance sheet, with pro forma net debt to adjusted EBITDA of 6.3x, lower than sector peers. ESRT expects 2026 FFO to range from $0.85 to $0.89 per diluted share, with same-store property cash NOI growth of negative 1.5% to positive 2%. The company anticipates commercial occupancy of 90% to 92% by year-end 2026. With a P/E Ratio of 18.42 and an EV/EBITDA of 9.0, the market appears to be pricing in a moderate growth outlook.

Observatory Performance and Marketing Strategies

The iconic Empire State Building observation deck remains a market leader, with a shift in visitor composition towards more domestic visitors. The company has developed marketing strategies to capture demand around the World Cup, aiming to drive ticket sales and revenue growth. The CEO highlighted several key areas to enhance the guest experience, broaden marketing reach, and drive efficiencies, underscoring the observatory's durability as a high-margin cash flow business.

Valuation and Dividend Yield

With a Dividend Yield of 2.31% and a Free Cash Flow Yield of 7.78%, ESRT offers an attractive income profile. The company's ROE of 7.13% and ROIC of 3.04% indicate a decent return on equity, although the Net Debt / EBITDA ratio of 6.26x warrants monitoring. As the company continues to navigate the market and identify opportunities for capital recycling, its valuation multiples will be closely watched by investors.

3. NewsRoom

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Empire State Realty Trust (ESRT) Q2 2020 Earnings Call Transcript

Aug -01

Source: Yahoo

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Empire State Realty Trust (ESRT) Q2 FFO Top Estimates

Jul -30

Source: Yahoo

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3 Top Small-Cap Stocks to Buy Right Now

Jul -22

Source: Yahoo

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Will office buildings ever be the same? Empire State offers clues

Jun -29

Source: Yahoo

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3 Beaten-Down Stocks I'm Not Giving Up On

Jun -01

Source: Yahoo

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Empire State Realty Trust (ESRT) Catches Eye: Stock Jumps 7.2%

May -27

Source: Yahoo

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New York's Cuomo warns against 'blindly' reopening states

May -02

Source: AOL

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New York's Andrew Cuomo warns against 'blindly' reopening states

May -02

Source: ALJAZEERA

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.67%)

6. Segments

Real Estate

Expected Growth: 3.5%

Growing demand for office spaces in New York metropolitan area, increasing tourism driving foot traffic to the iconic Empire State Building, and strategic acquisitions of 17 other properties drive growth for Empire State Realty OP, L.P.

Observatory

Expected Growth: 4.5%

Growing tourism in New York City, increasing popularity of iconic landmarks, and unique panoramic views drive growth for The Observatory, with a forecast CAGR of 4.5% from 2023 to 2028.

7. Detailed Products

Office Space Leasing

Empire State Realty OP, L.P. offers premium office space leasing services to businesses of all sizes, providing flexible and customizable leasing options to meet the unique needs of each tenant.

Retail Space Leasing

The company provides retail space leasing opportunities in iconic locations, including the Empire State Building, to retailers seeking high-visibility and high-traffic locations.

Observation Deck Tickets

Empire State Realty OP, L.P. operates the iconic Empire State Building's observation decks, offering breathtaking 360-degree views of the city to visitors from around the world.

Broadcasting and Telecommunications Services

The company provides broadcasting and telecommunications services, including antenna and transmission services, to media and telecommunications companies.

Property Management Services

Empire State Realty OP, L.P. offers comprehensive property management services, including maintenance, repairs, and capital improvements, to ensure the optimal operation of its properties.

8. Empire State Realty OP, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Empire State Realty OP, L.P. is medium due to the availability of alternative properties and investment options for tenants and investors.

Bargaining Power Of Customers

The bargaining power of customers for Empire State Realty OP, L.P. is low due to the company's strong brand and limited alternatives for tenants.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Empire State Realty OP, L.P. is medium due to the company's dependence on a few large contractors and suppliers.

Threat Of New Entrants

The threat of new entrants for Empire State Realty OP, L.P. is low due to the high barriers to entry in the real estate industry and the company's established market position.

Intensity Of Rivalry

The intensity of rivalry for Empire State Realty OP, L.P. is high due to the competitive nature of the real estate industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 69.45%
Debt Cost 4.97%
Equity Weight 30.55%
Equity Cost 10.71%
WACC 6.72%
Leverage 227.35%

11. Quality Control: Empire State Realty OP, L.P. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Piedmont Office Realty Trust

A-Score: 5.3/10

Value: 7.5

Growth: 2.3

Quality: 4.8

Yield: 7.0

Momentum: 4.5

Volatility: 6.0

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Brandywine Realty

A-Score: 5.3/10

Value: 7.7

Growth: 1.8

Quality: 4.4

Yield: 10.0

Momentum: 1.5

Volatility: 6.3

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Empire State Realty OP

A-Score: 4.0/10

Value: 5.4

Growth: 4.4

Quality: 4.2

Yield: 4.0

Momentum: 1.5

Volatility: 4.3

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Office Properties Income Trust

A-Score: 3.9/10

Value: 8.2

Growth: 0.8

Quality: 4.0

Yield: 10.0

Momentum: 0.5

Volatility: 0.0

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New York City REIT

A-Score: 3.9/10

Value: 9.8

Growth: 3.3

Quality: 3.2

Yield: 0.0

Momentum: 4.5

Volatility: 2.3

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Creative Media & Community Trust

A-Score: 2.6/10

Value: 10.0

Growth: 0.8

Quality: 3.1

Yield: 2.0

Momentum: 0.0

Volatility: 0.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.03$

Current Price

6.03$

Potential

-0.00%

Expected Cash-Flows