ESRT Posts Strong Q3 Office Activity, but Empire State Building Visits Remain Low

Empire State Realty Trust (ESRT) had a successful third quarter when it comes to office sales and leasing, but that didn’t do much to offset plummeting visitation numbers at the trust’s eponymous Empire State Building.

ESRT signed 189,477 square feet of leases during the third quarter of 2026, including 170,608 square feet of office leases, according to the real estate investment trust (REIT)’s earnings report released Tuesday. As of Sept. 30, the REIT’s office portfolio was 91.9 percent occupied, compared to 89.1 percent in the second quarter of this year and 89.7 percent during the third quarter of 2025.

Some major office leases signed by ESRT during the third quarter were fintech firm Octaura Holdings’ 28,914-square-foot lease at 111 West 33rd Street. At the Empire State Building, architecture firm Corgan inked a 15,157-square-foot deal and investment firm Zenyth Advisors leased 13,459 square feet.

In August, ESRT also sold its 22-story office building at 1359 Broadway in Manhattan’s Midtown South to Thor Equities for $217.5 million, as Commercial Observer first reported. ESRT is redeploying the proceeds of the sale toward share repurchases and to pay down debt.

“Over the last five years, we have sold out of suburbs, and began to look at Manhattan assets, where we executed the business plan, and look at sales, and will continue to be active,” Christina Chiu, president of ESRT, said during the firm’s Tuesday afternoon earnings call. “The key objective is cash flow per share as well as value per share, so all those items are on the table, including share buybacks.”

The 1359 Broadway sale also came after ESRT sold its 26-story office building at 250 West 57th Street to Namdar Realty Group for roughly $280 million in April.

Despite progress on the office front, visitation numbers at the Empire State Building “continued to be weak,” according to the earnings report. It follows a 48.5 percent revenue drop from the observatory in the second quarter of this year.

The observatory generated net operating income of $15.6 million during the third quarter, a slight increase from $12.4 million in the second quarter. The continued challenges at the observatory coincide with a drop in international tourism following President Donald Trump’s re-election in 2024.

“This problem did not happen overnight, and it will not be fixed overnight,” Anthony Malkin, CEO of ESRT, said on the call. “We know how to run an attraction and get reviews. With new competition, there are changes in the geopolitical environment, K-shaped economy. We recognize the need to reinvent our customer acquisition program. We need to re-examine our experience and focus anew on the monetization of our brand.”

Malkin also pointed to ESRT’s recent hire of Andrew Giancamilli, formerly chief operating officer at predictions portal FanDuel, to oversee the Empire State Building’s observation deck operations as a step in the right direction. Giancamilli started Oct. 1.

“Andy has the right experience and leadership chops for this dynamic environment to diversify our customer base, redefine the revenue model, and translate our strengths into improved operating performance and cash flow,” Malkin said on the call. “We look forward to the future. We’ve got opportunity, and we need to go out and monetize on it.”

ESRT’s funds from operations (FFO) declined during the third quarter to $51.7 million, or 20 cents per diluted share, compared to $57 million, or 21 cents per share, in the second quarter. The third-quarter FFO was also a drop from $59.3 million in the third quarter of 2025.

The REIT reported total revenues of $193.1 million in the third quarter, a slight dip from $196.9 million in the second quarter and $197.7 million in the third quarter of last year, according to the report.

Isabelle Durso can be reached at idurso@commercialobserver.com.