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Empire State Realty Trust Inc (ESRT)
NYSE:ESRT
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Empire State Realty
(NYSE:ESRT)
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Rating:65Neutral
Price Target:
$7.50
▲(3.45% Upside)
Empire State Realty's overall stock score is driven by strong financial performance and positive earnings call sentiment. However, technical indicators suggest bearish momentum, and the valuation appears high, which tempers the overall score. The company's high leverage and challenges in international visitation also present risks that investors should consider.
Positive Factors
Strong Leasing Activity
Strong leasing activity with high occupancy rates in Manhattan offices indicates robust demand and solidifies ESRT's market position, ensuring stable revenue streams.
Sustainability Achievements
Consistent recognition for sustainability enhances ESRT's reputation and aligns with growing investor and tenant focus on environmental responsibility, potentially attracting more business.
Observatory Business Performance
The Observatory's steady performance and revenue growth highlight its resilience as a key asset, contributing significantly to ESRT's diversified income streams.
Negative Factors
High Leverage
High leverage poses financial risks, potentially limiting ESRT's ability to invest in growth opportunities or weather economic downturns, affecting long-term financial stability.
Reduced International Visitation
Decline in international visitors impacts potential revenue growth for the Observatory segment, which may affect overall revenue diversification and growth prospects.
Limited Retail Rent Growth
Weakness in retail rent growth could hinder revenue expansion in this segment, necessitating strategic adjustments to enhance profitability and competitiveness.
Empire State Realty (ESRT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.06B
Dividend Yield2.16%
Average Volume (3M)1.44M
Price to Earnings (P/E)24.2
Beta (1Y)0.87
Revenue Growth0.45%
EPS Growth-24.85%
CountryUS
Employees667
SectorReal Estate
Sector Strength53
IndustryREIT - Diversified
Share Statistics
EPS (TTM)0.12
Shares Outstanding169,221,080
10 Day Avg. Volume1,417,195
30 Day Avg. Volume1,443,681
Financial Highlights & Ratios
PEG Ratio-9.89
Price to Book (P/B)1.65
Price to Sales (P/S)2.23
P/FCF Ratio6.52
Enterprise Value/Market Cap3.20
Enterprise Value/Revenue4.43
Enterprise Value/Gross Profit7.32
Enterprise Value/Ebitda10.07
Forecast
1Y Price Target
$7.45Price Target Upside2.76% Upside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)$785.84M
Empire State Realty Business Overview & Revenue Model
Company DescriptionEmpire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the World's Most Famous Building. Headquartered in New York, New York, the Company's office and retail portfolio covers 10.1 million rentable square feet, as of September 30, 2020, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio. Long the leader in energy efficiency retrofits and Indoor Environmental Quality, Empire State Realty Trust is the first commercial real estate portfolio in the U.S. to achieve the WELL Health-Safety Rating.
How the Company Makes MoneyEmpire State Realty Trust generates revenue primarily through leasing space in its commercial properties. This includes long-term leases with office tenants and retail tenants, which provide a stable and recurring income stream. Additionally, the company may earn revenue from ancillary services, such as parking and event hosting at the Empire State Building. Significant partnerships with businesses and organizations can further enhance its revenue potential, particularly through promotional agreements and tourism-related activities. Furthermore, ESRT benefits from its focus on sustainability, which can lead to cost savings and increased tenant demand for energy-efficient spaces.
Empire State Realty Earnings Call Summary
Earnings Call Date:Feb 17, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 29, 2026
Earnings Call Sentiment Positive
The call reflects a broadly positive operational and strategic outlook driven by sustained leasing momentum, occupancy gains, successful portfolio transformation into a 100% New York City — higher-quality — footprint, strong observatory cash flows, and proactive balance sheet management. Near-term headwinds include an identifiable FDIC-related downtime hit to 2026 FFO and same-store NOI, some cost pressure from taxes and cleaning labor, modestly elevated leverage (6.3x net debt/EBITDA), and weaker international tourism impacting observation deck visitation and license fees. Management provided clear mitigation plans (lease-up at 130 Mercer, capital recycling, cost reductions and ample liquidity) and conservative 2026 guidance that incorporates these factors.Q4-2025 Updates
Positive Updates
Strong Leasing Momentum and Occupancy Gains
Leased nearly 460,000 sq ft in Q4 and approximately 1.0 million sq ft for full year 2025; overall occupancy grew to 90.3% (up 170 bps YoY) and the office portfolio was 93.5% leased with 12 consecutive quarters above 90%.
Positive Mark-to-Market Rent Momentum
Recorded 18 consecutive quarters of positive mark-to-market lease spreads with a Q4 Manhattan office mark-to-market spread of 6.4%; average lease duration for Q4 new leases was 11.6 years.
Resilient Financial Results
Reported full year 2025 core FFO of $0.87 per diluted share and Q4 core FFO of $0.23 per diluted share; 2026 core FFO guidance of $0.85–$0.89 per diluted share.
Observation Deck Performance and Revenue per Capita Growth
Observatory generated approximately $24M of NOI in Q4 and $90M for the full year 2025; revenue per capita increased 6.9% in Q4 and 4.4% for the full year despite weaker international visitation.
Strategic Portfolio Transformation and Acquisitions
Completed transition to a 100% New York City portfolio via ~$1 billion of acquisitions over five years, including $417M of all-cash acquisitions in 2025 (notably 130 Mercer for $386M); suburban commercial assets disposed tax-efficiently.
Capital Recycling, Liquidity and Financing Execution
Completed $420M of financing (including $175M unsecured notes and $245M term loan recast) with no unaddressed maturities until March 2027; pro forma net debt to adjusted EBITDA of 6.3x and ample liquidity cited; repurchased $6M of shares in Q4 ($8M for full year) and $302M repurchased since 2020.
Operational Efficiency and Expense Discipline
FAD CapEx decreased by approximately $21M (11% YoY) and company expects calendar year 2026 G&A of $69M–$71M versus ~$73M in 2025, targeting a 5%–10% run-rate G&A reduction by year-end 2026.
Sustainability Leadership
Achieved highest possible GRESB rating for the sixth consecutive year (score of 93 and an A in public disclosure), and the Empire State Building became the first LEED v5 Platinum certified building in New York State.
Multifamily and Retail Performance
Multifamily occupancy near 98% with revenue growth of ~9% in Q4 and ~10% for the full year; North Sixth Street retail acquisitions (~$250M aggregate) bolster retail presence and expected yields.
Negative Updates
Near-Term FDIC Vacancy Impact on 2026 Results
FDIC vacated 119,000 sq ft subsequent to year-end; management estimates this downtime reduces 2026 core FFO by approximately $0.03 and lowers same-store property NOI growth by ~270 basis points (cash rent commencement expected in H2 2027).
Conservative 2026 Same-Store NOI Guidance
Company guides 2026 same-store property cash NOI growth of -1.5% to +2%; midpoint would be flattish and reflects timing lags between lease expirations and commencements (excluding FDIC downtime midpoint ~3%).
Increased Operating Costs
Operating expenses increased 1.7% (Q4) and 3.4% (full year), driven primarily by higher real estate taxes and cleaning-related labor costs despite offset from higher tenant reimbursement income.
Weaker International Tourism Impacting Observatory Visitation
Observatory saw a decline in visitation from cross-ocean international tourists and a reduction in certain past-program partner activity; guidance includes a $2M net decline in license fee revenue and timing shift of such revenue to Q4.
Leverage Above Target Benchmark
Pro forma net debt to adjusted EBITDA at 6.3x — above the previously cited informal 6x upper-bound target — which could limit flexibility if transaction appetite or market conditions deteriorate.
Market Valuation and Share Price Discount
Company acknowledges trading at a discount to underlying private market values (similar to broader office sector); management has 250 West and other assets available for sale as part of capital recycling to bridge valuation gap.
Company Guidance
ESRT guided to 2026 core FFO of $0.85–$0.89 per diluted share and expects 2026 FFO and same-store property cash NOI to be roughly consistent with 2025, with same-store cash NOI growth of -1.5% to +2% (the midpoint would be ~3% excluding a ~119,000 sq ft FDIC downtime that reduces 2026 core FFO by ~$0.03 and drags same-store NOI growth down ~270 bps); commercial occupancy is expected to finish 2026 at 90%–92% (vs. 90.3% YE‑2025 and an office portfolio 93.5% leased), property operating expenses and real estate taxes are forecast to rise ~2%–4% (partially offset by higher tenant reimbursements), G&A is guided to $69M–$71M (vs. ~$73M in 2025) with a targeted 5%–10% run‑rate reduction by YE‑2026 (savings in place by Q3), and the Observatory is forecast to generate NOI of ~$87M–$92M with expenses of about $10M per quarter (including a ~$2M net decline and timing shift in gift‑shop license fee revenue); cash rent on the FDIC backfill is expected to commence in H2 2027.Empire State Realty Financial Statement Overview
Summary
Empire State Realty demonstrates solid revenue growth and efficient cash flow management, with strong gross profit margins. However, high leverage and declining return on equity present potential financial risks. Overall, the company is on a positive growth trajectory but should monitor its debt levels closely.Income Statement
Empire State Realty shows a strong gross profit margin of 60.63% in TTM, indicating efficient cost management. However, the net profit margin has decreased to 5.81% from 6.77% in the previous year, reflecting a slight decline in profitability. Revenue growth is robust at 22.3% TTM, showcasing a positive growth trajectory. EBIT and EBITDA margins are stable, suggesting consistent operational efficiency.75
Positive
Balance Sheet
The company's debt-to-equity ratio is high at 2.03 TTM, indicating significant leverage, which could pose financial risks. Return on equity has decreased to 4.31% TTM, reflecting reduced profitability for shareholders. The equity ratio stands at 25.46%, showing a moderate level of equity financing relative to total assets.65
Positive
Cash Flow
Empire State Realty's free cash flow growth rate is strong at 14.42% TTM, indicating improved cash generation. The operating cash flow to net income ratio is healthy at 2.52, suggesting strong cash flow relative to earnings. The free cash flow to net income ratio remains stable at 1.0, highlighting efficient cash conversion.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 766.18M | 763.15M | 739.57M | 707.01M | 607.86M | 609.23M |
| Gross Profit | 463.32M | 408.99M | 400.56M | 385.65M | 328.38M | 318.12M |
| EBITDA | 336.88M | 343.53M | 378.52M | 382.86M | 281.43M | 251.05M |
| Net Income | 46.99M | 51.64M | 53.24M | 40.64M | -6.51M | -12.52M |
Balance Sheet | ||||||
| Total Assets | 4.11B | 4.51B | 4.22B | 4.16B | 4.28B | 4.15B |
| Cash, Cash Equivalents and Short-Term Investments | 154.11M | 385.46M | 346.62M | 264.43M | 423.69M | 526.71M |
| Total Debt | 2.09B | 2.48B | 2.27B | 2.27B | 2.34B | 2.17B |
| Total Liabilities | 2.31B | 2.73B | 2.49B | 2.48B | 2.60B | 2.42B |
| Stockholders Equity | 1.04B | 1.03B | 985.52M | 954.38M | 998.13M | 1.06B |
Cash Flow | ||||||
| Free Cash Flow | 79.78M | 260.89M | 232.49M | 84.91M | 117.45M | 39.17M |
| Operating Cash Flow | 265.19M | 260.89M | 232.49M | 211.17M | 212.49M | 182.29M |
| Investing Cash Flow | -266.75M | -397.12M | -77.34M | -230.89M | -212.74M | -143.12M |
| Financing Cash Flow | -270.60M | 158.58M | -62.87M | -140.24M | -93.05M | 257.17M |
Empire State Realty Technical Analysis
Negative
7.25
Price Trends
6.58
Negative
6.93
Negative
7.31
Negative
Market Momentum
-0.06
Positive
40.00
Neutral
27.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ESRT, the sentiment is Negative. The current price of 7.25 is above the 20-day moving average (MA) of 6.56, above the 50-day MA of 6.58, and below the 200-day MA of 7.31, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 40.00 is Neutral, neither overbought nor oversold. The STOCH value of 27.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ESRT.
Empire State Realty Risk Analysis
Empire State Realty disclosed 59 risk factors in its most recent earnings report. Empire State Realty reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Empire State Realty Peers Comparison
UnderperformOutperform
Sector (65)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $490.91M | 14.70 | 10.91% | 9.03% | 7.71% | -5.37% | |
65 Neutral | $2.17B | 12.19 | 3.79% | 4.94% | 3.15% | 1.96% | |
65 Neutral | $1.06B | 24.16 | ― | 2.16% | 0.45% | -24.85% | |
61 Neutral | $493.74M | -79.46 | 4.09% | 9.50% | -39.94% | ― | |
59 Neutral | $2.10B | -7.94 | -12.53% | 10.29% | -28.94% | -28.24% | |
57 Neutral | $1.15B | 20.45 | 5.29% | 7.31% | 5.95% | 5.06% | |
55 Neutral | $558.03M | 81.37 | 5.96% | 11.56% | 4.95% | -6.49% |
* Real Estate Sector Average
ESRT
Empire State Realty
6.06
-2.53
-29.45%
GOOD
Gladstone Commercial
12.01
-2.38
-16.53%
OLP
One Liberty Properties
22.92
-0.99
-4.15%
AHH
Armada Hoffler Properties
6.15
-2.36
-27.75%
AAT
American Assets
18.87
-1.73
-8.40%
GNL
Global Net Lease
9.63
3.06
46.49%
Empire State Realty Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Empire State Realty Secures $210M Credit Facility
Neutral
Nov 17, 2025
On November 14, 2025, Empire State Realty OP, L.P. and its general partner, Empire State Realty Trust, Inc., entered into an Amended and Restated Credit Agreement with Wells Fargo Bank and other lenders. This agreement establishes a $210 million senior unsecured term loan credit facility, which can be increased to a maximum of $310 million. The facility will support the working capital needs and general corporate purposes of the Operating Partnership and its subsidiaries. The Credit Facility, which matures on January 15, 2029, includes various financial covenants and the option for extension. The agreement’s terms reflect Empire State Realty’s strategic financial management and may impact its operational flexibility and stakeholder relationships.
The most recent analyst rating on (ESRT) stock is a Hold with a $7.50 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Empire State Realty Reports Q3 2025 Financial Results
Neutral
Oct 29, 2025
Empire State Realty Trust reported its third-quarter 2025 financial results, highlighting a net income of $0.05 per share and core funds from operations of $0.23 per share. The company experienced a slight year-over-year decrease in same-store property cash net operating income due to increased real estate taxes and operating expenses, though these were partially offset by higher tenant reimbursements. Notably, the Manhattan office occupancy increased to 90.3%, and the company signed significant commercial leases, including a 19,883 square foot renewal and expansion with Jencap Group. The Empire State Building Observatory generated $26.5 million in NOI, and the company announced a $175 million issuance of senior unsecured notes. Empire State Realty Trust also achieved the highest GRESB 5 Star Rating for the sixth consecutive year.
The most recent analyst rating on (ESRT) stock is a Hold with a $8.50 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.
Private Placements and Financing
Empire State Realty Enters $175M Note Purchase Agreement
Neutral
Oct 16, 2025
On October 15, 2025, Empire State Realty Trust, Inc. and its subsidiary, Empire State Realty OP, L.P., entered into a Note Purchase Agreement for a private placement of $175 million in Series L Senior Notes due January 7, 2031. The sale is expected to fund on December 18, 2025, and the proceeds will be used to refinance existing debt and for general corporate purposes. The agreement includes financial covenants and customary conditions, and the notes will not be registered under the Securities Act of 1933.
The most recent analyst rating on (ESRT) stock is a Sell with a $8.30 price target. To see the full list of analyst forecasts on Empire State Realty stock, see the ESRT Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.