Empire State Realty OP Reports Q1 2025 Financial Results with $15.8M Net Income

Empire State Realty OP, L.P. reported its financial results for the first quarter of 2025, revealing a net income of $15.8 million, or $0.06 per unit, compared to $10.2 million, or $0.03 per unit, in the same period last year. Total revenues for the quarter were $180.1 million, a slight decrease from $181.2 million in the prior year. The decline was primarily attributed to a drop in Observatory revenue, which fell to $23.2 million from $24.6 million, reflecting lower visitor numbers due to the timing of the Easter holiday. Rental revenue, however, increased marginally to $154.5 million from $153.9 million, driven by higher operating and real estate tax expense escalations.

The company experienced a notable increase in operating expenses, which rose to $154.3 million from $150.1 million year-over-year. This increase was largely due to higher general and administrative expenses and depreciation costs. Despite the rise in expenses, operating income decreased to $25.8 million from $31.1 million, reflecting a 17% decline. The company also reported a gain of $13.2 million from the disposition of property related to the consensual foreclosure of First Stamford Place, which contributed positively to the income before taxes.

In terms of strategic developments, Empire State Realty OP completed the acquisition of a retail property portfolio in Williamsburg, Brooklyn, for $195 million in late 2024 and is set to acquire an additional property in the same area for approximately $30 million in mid-2025. The company also executed a buyout of a 10% non-controlling interest in two multifamily properties for $14.2 million, further consolidating its ownership in key assets. As of March 31, 2025, the company had approximately 7.9 million rentable square feet of office space and 732 residential units in its portfolio.

Operationally, the company reported a total of 231,000 square feet in new, renewal, and expansion leases signed during the quarter. The occupancy rate across its commercial portfolio stood at 92.1%, with 0.7 million square feet available for lease. The company’s liquidity position remains strong, with $187.8 million in cash and cash equivalents and $620 million available under its unsecured revolving credit facility. Total consolidated indebtedness was approximately $2.1 billion, with a weighted average interest rate of 4.30%.

Looking ahead, Empire State Realty OP anticipates continued leasing activity and stable performance from its Observatory, despite broader economic uncertainties. The company remains focused on maintaining its competitive position through a diversified portfolio and a well-structured balance sheet, with no near-term debt maturities. The management expressed confidence in navigating potential challenges, including shifts in the office real estate market and visitor trends to the Observatory, while continuing to explore opportunities for capital recycling and acquisitions.