Empire State Realty OP, L.P.ESBA
Empire State Realty OP, L.P. Segments Disclosure
Segment Reporting
The Company's operating segments are based on our method of internal reporting and include our office properties, retail portfolio, multifamily portfolio, and the Observatory. These operating segments have been aggregated for reporting into two reportable segments: (1) real estate and (2) Observatory. Our real estate segment includes all activities related to the ownership, management, operation, acquisition, redevelopment, repositioning and disposition of our traditional real estate assets. Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building. These two lines of businesses are managed separately because each business requires different support infrastructures, provides different services and has dissimilar economic characteristics such as investments needed, stream of revenues and marketing strategies. We account for intersegment sales and rents as if the sales or rents were to third parties.
Our Chief Executive Officer, who also serves as our CODM, manages our business, regularly accesses information, and evaluates performance for operating decision-making purposes, including allocation of resources. The CODM uses Net Operating Income ("NOI") to review actual performance and decide whether to invest in capital expenditures, pursue acquisitions and/or dispositions, determine dividend payments, and/or engage in other capital transactions. Our CODM does not evaluate operating segments using asset or liability information.
The following tables provide components of segment net income for each segment:
| Year ended December 31, 2025 | ||||||||||||||||||||||||||
(amounts in thousands) | Real Estate | Observatory | Intersegment Elimination | Total | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Revenue, excluding third-party management and other fees | $ | 638,458 | $ | 128,329 | $ | — | $ | 766,787 | ||||||||||||||||||
| Intercompany rental revenue | 76,306 | — | (76,306) | — | ||||||||||||||||||||||
| Total revenues, excluding third-party management and other fees | 714,764 | 128,329 | (76,306) | 766,787 | ||||||||||||||||||||||
| Segment operating expenses: | ||||||||||||||||||||||||||
| Property operating expenses | 184,714 | — | — | 184,714 | ||||||||||||||||||||||
| Observatory expenses | — | 38,237 | — | 38,237 | ||||||||||||||||||||||
Other segment expenses(1) | 142,066 | 76,306 | (76,306) | 142,066 | ||||||||||||||||||||||
| Total segment operating expenses | 326,780 | 114,543 | (76,306) | 365,017 | ||||||||||||||||||||||
| Net operating income | 387,984 | 13,786 | — | 401,770 | ||||||||||||||||||||||
| Segment assets | $ | 4,199,686 | $ | 269,275 | $ | — | $ | 4,468,961 | ||||||||||||||||||
(1) Other segment expenses in the real estate segment include real estate taxes and ground rent expense and in the Observatory segment includes intercompany rent expense.
| Year ended December 31, 2024 | ||||||||||||||||||||||||||
(amounts in thousands) | Real Estate | Observatory | Intersegment Elimination | Total | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Revenue, excluding third-party management and other fees | $ | 630,376 | $ | 136,377 | $ | — | $ | 766,753 | ||||||||||||||||||
| Intercompany rental revenue | 83,477 | — | (83,477) | — | ||||||||||||||||||||||
| Total revenues, excluding third-party management and other fees | 713,853 | 136,377 | (83,477) | 766,753 | ||||||||||||||||||||||
| Segment operating expenses: | ||||||||||||||||||||||||||
| Property operating expenses | 179,175 | — | — | 179,175 | ||||||||||||||||||||||
| Observatory expenses | — | 36,834 | — | 36,834 | ||||||||||||||||||||||
Other segment expenses(1) | 138,152 | 83,477 | (83,477) | 138,152 | ||||||||||||||||||||||
| Total segment operating expenses | 317,327 | 120,311 | (83,477) | 354,161 | ||||||||||||||||||||||
| Net operating income | 396,526 | 16,066 | — | 412,592 | ||||||||||||||||||||||
| Segment assets | $ | 4,242,953 | $ | 267,334 | $ | — | $ | 4,510,287 | ||||||||||||||||||
(1) Other segment expenses in the real estate segment include real estate taxes and ground rent expense and in the Observatory segment includes intercompany rent expense.
| Year Ended December 31, 2023 | ||||||||||||||||||||||||||
(amounts in thousands) | Real Estate | Observatory | Intersegment Elimination | Total | ||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Revenue, excluding third-party management and other fees | $ | 608,855 | $ | 129,366 | $ | — | $ | 738,221 | ||||||||||||||||||
| Intercompany rental revenue | 80,514 | — | (80,514) | — | ||||||||||||||||||||||
| Total revenues, excluding third-party management and other fees | 689,369 | 129,366 | (80,514) | 738,221 | ||||||||||||||||||||||
| Segment operating expenses: | ||||||||||||||||||||||||||
| Property operating expenses | 167,324 | — | — | 167,324 | ||||||||||||||||||||||
| Observatory expenses | — | 35,265 | — | 35,265 | ||||||||||||||||||||||
Other segment expenses(1) | 136,427 | 80,514 | (80,514) | 136,427 | ||||||||||||||||||||||
| Total segment operating expenses | 303,751 | 115,779 | (80,514) | 339,016 | ||||||||||||||||||||||
| Net operating income | 385,618 | 13,587 | — | 399,205 | ||||||||||||||||||||||
| Segment assets | $ | 3,957,659 | $ | 261,674 | $ | — | $ | 4,219,333 | ||||||||||||||||||
(1) Other segment expenses in the real estate segment include real estate taxes and ground rent expense and in the Observatory segment includes intercompany rent expense.
Below is a reconciliation of Net operating income to Income before income taxes:
| Years Ended December 31, | |||||||||||||||||
| (amounts in thousands) | 2025 | 2024 | 2023 | ||||||||||||||
| Net Operating Income | $ | 401,770 | $ | 412,592 | $ | 399,205 | |||||||||||
| Add: | |||||||||||||||||
| Gain on disposition of properties | 35,018 | 13,302 | 26,764 | ||||||||||||||
| Third-party management and other fees | 1,483 | 1,170 | 1,351 | ||||||||||||||
| Interest income | 8,748 | 21,298 | 15,136 | ||||||||||||||
| Less: | |||||||||||||||||
| General and administrative expenses | (72,842) | (70,234) | (63,939) | ||||||||||||||
| Depreciation and amortization | (194,762) | (184,818) | (189,911) | ||||||||||||||
| Interest expense | (103,133) | (105,239) | (101,484) | ||||||||||||||
| Interest expense associated with property in receivership | (647) | (4,471) | — | ||||||||||||||
| Loss on early extinguishment of debt | (97) | (553) | — | ||||||||||||||
| Income before Income Taxes | $ | 75,538 | $ | 83,047 | $ | 87,122 | |||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 2, 2026 | Showing above |
| 2024 | Feb 28, 2025 | |
| 2023 | Feb 28, 2024 | |
| 2022 | Feb 28, 2023 | |
| 2021 | Feb 25, 2022 | |
| 2020 | Feb 26, 2021 | |
| 2019 | Feb 28, 2020 | |
| 2018 | Feb 28, 2019 | |
| 2017 | Feb 28, 2018 | |
| 2016 | Feb 27, 2017 | |
| 2015 | Feb 26, 2016 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.