Empire State Realty Trust NYSE: ESRT reported third-quarter 2026 Core FFO of $0.20 per diluted share and raised its full-year Core FFO guidance to between $0.77 and $0.80 per fully diluted share, citing stronger-than-expected year-to-date property portfolio results and capital-markets activity.
Chairman and Chief Executive Officer Tony Malkin said the company’s portfolio delivered strong operating results across office, retail and multifamily properties. ESRT’s commercial portfolio was 95.6% leased at quarter-end, while its Manhattan office portfolio recorded its 21st consecutive quarter of positive mark-to-market rent spreads.
Leasing activity and multifamily performance
Executive Vice President, Co-Head and Chief Revenue Officer Ryan Kass said ESRT leased 189,000 square feet during the third quarter, including more than 130,000 square feet of new leases. Year-to-date leasing totaled 685,000 square feet, including 460,000 square feet of new Manhattan office leases.
Comparable commercial leased occupancy rose to 95.6% from 95% in the second quarter, excluding the recently sold 1359 Broadway property from both periods. Third-quarter office mark-to-market rent spreads were 9.9%, Kass said, while new office leases had an average duration of 9.5 years.
Notable third-quarter agreements included a 29,000-square-foot full-floor lease with Octaura Holdings at 111 West 33rd Street, a 15,000-square-foot expansion by Corgan Associates at the Empire State Building, and a 13,000-square-foot lease with Zenyth Advisors at the Empire State Building. The company had approximately 250,000 square feet of leases in negotiation at the end of the quarter.
ESRT’s multifamily portfolio was approximately 97% occupied, with net rents increasing nearly 6%, according to Kass.
1359 Broadway sale and share repurchases
ESRT completed the sale of 1359 Broadway on Oct. 29 for $217.5 million. President Christina Chiu said the company began repurchasing stock after entering into an agreement to sell the property in August.
From July 30 through Nov. 2, the company repurchased $85.8 million of shares at an average price of $4.56 per share. Chiu said ESRT also plans to use proceeds from the sale to reduce debt while maintaining balance-sheet flexibility.
Including year-to-date repurchases, ESRT has bought back approximately $388 million of common stock since 2020. Chiu said management views the current share price as not reflecting the value of the company’s assets and considers buybacks a strategic component of capital allocation.
During the question-and-answer session, Malkin said transaction volumes remain low and capitalization rates have increased. He said the company would continue to test the market for potential dispositions where appropriate and assess the best use of proceeds, including debt repayment, acquisitions and share repurchases.
On the decision to sell 1359 Broadway, Chiu said the company had executed its business plan for the asset and saw compelling uses for the proceeds. She estimated the transaction’s capitalization rate at roughly 7%, while noting that cap rates vary substantially based on specific assets and tenancy.
Observation deck results and leadership change
The Empire State Building Observation Deck generated approximately $15.6 million of net operating income in the third quarter, down from $26.5 million in the prior-year period. Revenue totaled $26.8 million and expenses were $11.2 million.
Chief Financial Officer Steve Horn said visitation declined about 26% year over year, while revenue per capita, excluding license fees, increased approximately 2%.
Malkin said New York City’s destination-attraction market has changed and that the company sees opportunities to rebuild visitor volumes, improve customer acquisition, enhance the visitor experience and increase monetization of the Empire State Building brand. He cited increased competition, geopolitical changes and the need for more digital and artificial intelligence-driven customer acquisition.
Andy Giancamilli joined ESRT on Oct. 1 as president of the Empire State Building Observation Deck. He oversees operations, marketing, strategy, brand growth and monetization for the observation deck and the Empire State Building brand. Malkin said Giancamilli previously held leadership roles at FanDuel, including chief operating officer.
Malkin said management expects initial opportunities for performance improvement from Giancamilli’s plans to emerge during the 2027 summer high season, though some changes could occur earlier.
NOI, costs and balance sheet
Same-store property cash NOI, excluding lease termination fees, increased 50 basis points year over year. Horn said the gain was primarily driven by higher tenant reimbursement income and insurance recoveries, partly offset by rising operating expenses and an approximately $2 million revenue decline related to the expiration of the previously disclosed FDIC lease.
After adjusting for the FDIC impact and $1.2 million of positive nonrecurring items in the quarter, same-store property cash NOI increased 1.9%.
Horn said ESRT had net debt to adjusted EBITDA of approximately 6.7 times at the end of the quarter and liquidity of $600 million. The company has no unaddressed debt maturities until March 2029.
Third-quarter general and administrative expense was approximately $17 million. Management reiterated its goal of reducing run-rate G&A by approximately 5% to 10% by year-end 2026 and said additional cost initiatives could produce at least a further 2% reduction relative to the year-end 2026 run rate during 2027.
About Empire State Realty Trust (NYSE:ESRT)
Empire State Realty Trust, Inc is a self-managed real estate investment trust that owns, manages, operates, acquires and repositions office, retail and multifamily properties in New York City and the surrounding metropolitan area. Its portfolio is concentrated in Manhattan and includes properties serving businesses, residents, retailers and visitors.
The company's landmark asset is the Empire State Building, which it operates as a mixed-use office, retail and tourist destination. Empire State Realty Trust also manages the building's public observatories, offering visitors views of New York City, and provides leasing and property-management services across its portfolio.
Empire State Realty Trust was formed in 2011 and became a publicly traded company in 2013.
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