Overview
- ESRT took a $166.11 million non‑cash impairment tied to the Empire State Building observatory, which reduced second‑quarter funds from operations to $57 million and produced a year‑over‑year loss.
- The observatory’s net income roughly halved to $12.4 million and visitor totals fell by about 28.5 percent to 450,000, driving the company to lower 2026 core FFO guidance to $0.75–$0.79 per share.
- ESRT said the drop in visitors was driven largely by fewer international tourists and a 45 percent decline in customers using bundled third‑party sightseeing passes that once supplied much of its traffic.
- The company stressed that its office business remains strong, reporting its 20th straight quarter of positive leasing spreads, 363,968 rentable square feet signed, and a 94.9 percent commercial portfolio occupancy.
- To preserve optionality ESRT completed asset deals and balance‑sheet moves, including a $275 million disposition, $110 million of land purchases and a $245 million delayed‑draw term loan, and is re‑evaluating observatory strategy and marketing.