Empire State Realty OP, L.P. (ESBA) Bundle
A Brief History of Empire State Realty Trust, Inc.
Empire State Realty Trust, Inc. (ESRT) was formed in 2013, focusing on owning, operating, and managing office and retail properties in Manhattan and the surrounding New York metropolitan area. The company is best known for its iconic asset, the Empire State Building.
Company Structure and Growth
As of September 30, 2024, ESRT's total assets amounted to $4.44 billion, compared to $4.22 billion as of December 31, 2023. The company's total equity stood at approximately $1.76 billion, reflecting a slight increase from $1.73 billion in the prior year.
Financial Performance
For the nine months ending September 30, 2024, ESRT reported total revenues of $570.3 million, up from $546.7 million in the same period of 2023. The company achieved net income of $61.6 million for this period, compared to $68.6 million in the prior year. The earnings per share (EPS) for the nine months ended September 30, 2024, were $0.22, down from $0.25 in 2023.
| Financial Metrics | 2024 (YTD) | 2023 (YTD) |
|---|---|---|
| Total Assets | $4.44 billion | $4.22 billion |
| Total Equity | $1.76 billion | $1.73 billion |
| Total Revenues | $570.3 million | $546.7 million |
| Net Income | $61.6 million | $68.6 million |
| EPS | $0.22 | $0.25 |
Operational Highlights
During the third quarter of 2024, ESRT signed new leases totaling 304,000 rentable square feet. The company reported rental revenue of $459.5 million for the nine months ended September 30, 2024, up from $446.2 million in the same period of the previous year.
Debt Management
As of September 30, 2024, ESRT's total debt was approximately $2.28 billion, an increase from $2.24 billion at the end of 2023. The company has significant mortgage notes payable of $693 million, alongside senior unsecured notes of $1.20 billion.
| Debt Metrics | 2024 | 2023 |
|---|---|---|
| Total Debt | $2.28 billion | $2.24 billion |
| Mortgage Notes Payable | $693 million | $877 million |
| Senior Unsecured Notes | $1.20 billion | $973 million |
Market Position and Future Outlook
ESRT remains a leading player in the New York real estate market, focusing on strategic acquisitions and property upgrades. The company plans to continue leveraging its strong asset base to drive growth and enhance shareholder value.
A Who Owns Empire State Realty OP, L.P. (ESBA)
Ownership Structure
Empire State Realty OP, L.P. operates as a subsidiary under the Empire State Realty Trust, Inc. (ESRT), which is a publicly traded company listed on the New York Stock Exchange (NYSE) under the ticker symbol ESRT. As of September 30, 2024, the ownership structure is as follows:
| Ownership Type | Percentage Ownership | Number of Shares |
|---|---|---|
| Class A Common Shares | 100% | 165,507,000 |
| Class B Common Shares | 0% | 981,000 |
| Private Perpetual Preferred Units | 100% | 6,224,000 |
Major Shareholders
The major shareholders of Empire State Realty Trust, Inc., which indirectly influences the ownership of Empire State Realty OP, L.P., include:
| Shareholder | Ownership Percentage | Type of Shares |
|---|---|---|
| Anthony E. Malkin | Approx. 10.5% | Class A Common Shares |
| Institutional Investors | Approx. 75% | Class A Common Shares |
| Retail Investors | Approx. 14.5% | Class A Common Shares |
Financial Overview
As of September 30, 2024, the financial overview of Empire State Realty Trust, Inc. is as follows:
| Financial Metric | Value (in thousands) |
|---|---|
| Total Assets | $4,436,937 |
| Total Liabilities | $2,679,616 |
| Total Equity | $1,757,321 |
| Net Income (Nine Months Ended September 30, 2024) | $61,566 |
| Dividends Paid (Nine Months Ended September 30, 2024) | $17,376 |
Recent Transactions
Notable recent acquisitions and transactions affecting ownership include:
| Date | Transaction | Value (in millions) |
|---|---|---|
| March 28, 2024 | Buyout of 10% non-controlling interest in properties | $14.2 |
| September 25, 2024 | Acquisition of retail properties | $143.0 |
| October 2024 | Acquisition of additional retail properties | $52.0 |
Preferred Units and Distributions
As of September 30, 2024, the details of preferred units outstanding are:
| Type of Preferred Unit | Issued | Liquidation Preference (per unit) | Annual Cash Distribution (per unit) |
|---|---|---|---|
| Series 2019 | 4,664,038 | $13.52 | $0.70 |
| Series 2014 | 1,560,360 | $16.62 | $0.60 |
Recent Financial Performance
Empire State Realty Trust, Inc. reported the following financial results for the third quarter of 2024:
| Financial Metric | Value (in thousands) |
|---|---|
| Rental Revenue | $153,117 |
| Observatory Revenue | $39,382 |
| Total Revenues | $199,599 |
| Total Operating Income | $45,346 |
| Net Income | $22,796 |
Empire State Realty OP, L.P. (ESBA) Mission Statement
The mission of Empire State Realty OP, L.P. (ESBA) is to enhance the value of its properties through sustainable practices and operational excellence while providing exceptional experiences for tenants and visitors. This commitment is reflected in their strategic focus on acquiring, managing, and developing high-quality real estate in key urban markets, particularly in New York City.
Core Values
- Sustainability: Implementing environmentally responsible practices across all operations.
- Community Engagement: Actively participating in initiatives that benefit the communities in which they operate.
- Innovation: Leveraging technology and creative solutions to enhance property management and tenant satisfaction.
- Integrity: Upholding the highest standards of transparency and accountability in all business dealings.
Financial Overview
As of September 30, 2024, Empire State Realty OP, L.P. reported the following financial metrics:
| Financial Metric | Amount (in thousands) |
|---|---|
| Total Revenues | $570,321 |
| Net Income | $61,566 |
| Rental Revenue | $459,469 |
| Observatory Revenue | $98,102 |
| Operating Expenses | $454,551 |
| Total Assets | $4,436,937 |
| Total Liabilities | $2,679,616 |
| Total Equity | $1,757,321 |
Segment Reporting
The company operates through two primary segments: Real Estate and Observatory. The financial performance of these segments for the three months ended September 30, 2024, is detailed below:
| Segment | Revenues (in thousands) | Operating Income (in thousands) |
|---|---|---|
| Real Estate | $160,217 | $15,717 |
| Observatory | $39,382 | $29,629 |
| Total | $199,599 | $45,346 |
Recent Acquisitions and Dispositions
In September 2024, Empire State Realty OP, L.P. acquired a portfolio of retail properties in Williamsburg, Brooklyn for a total purchase price of $143.0 million. Additionally, on October 2024, they closed on further retail properties in the same area for approximately $52.0 million.
| Property | Date Acquired | Purchase Price (in thousands) |
|---|---|---|
| The North 6th Street Collection | September 25, 2024 | $143,431 |
| Additional Properties | October 2024 | $52,000 |
Distribution Policy
Empire State Realty OP, L.P. aims to distribute its net taxable income to securityholders in a manner that satisfies REIT distribution requirements. For the nine months ended September 30, 2024, distributions to equity holders amounted to $31.8 million.
| Distribution Type | Amount (in thousands) |
|---|---|
| Dividends to Common Stockholders | $17,376 |
| Distributions to OP Unitholders | $11,317 |
| Distributions to Preferred Unitholders | $3,151 |
Recent Performance Metrics
For the nine months ended September 30, 2024, Empire State Realty OP, L.P. showed the following performance metrics:
| Performance Metric | Value |
|---|---|
| Net Income | $61,566,000 |
| Basic Earnings per Share | $0.22 |
| Diluted Earnings per Share | $0.22 |
| Weighted Average Shares Outstanding (Diluted) | 268,608,000 |
How Empire State Realty OP, L.P. (ESBA) Works
Business Overview
Empire State Realty OP, L.P. (ESBA) operates primarily in the real estate sector, focusing on the ownership, management, and operation of commercial properties, especially in New York City. The company also operates the observatories located in the Empire State Building, generating significant revenue from tourism.
Financial Performance
As of September 30, 2024, the financial performance of ESBA is summarized below:
| Financial Metric | Q3 2024 (in thousands) | Q3 2023 (in thousands) | Change (%) |
|---|---|---|---|
| Total Revenues | $199,599 | $191,526 | 4.2% |
| Rental Revenue | $153,117 | $151,458 | 1.1% |
| Observatory Revenue | $39,382 | $37,562 | 4.8% |
| Total Operating Expenses | $154,253 | $149,269 | (3.3)% |
| Operating Income | $45,346 | $42,257 | 7.3% |
| Net Income | $22,796 | $19,928 | 9.4% |
Revenue Segmentation
ESBA has two primary revenue segments: Real Estate and Observatory. The revenue breakdown for the nine months ended September 30, 2024, is as follows:
| Segment | Revenue (in thousands) |
|---|---|
| Real Estate | $532,727 |
| Observatory | $98,102 |
Operating Expenses
Operating expenses for the nine months ended September 30, 2024, are as follows:
| Expense Type | Amount (in thousands) |
|---|---|
| Property Operating Expenses | $132,530 |
| Ground Rent Expenses | $6,994 |
| General and Administrative Expenses | $52,364 |
| Real Estate Taxes | $96,106 |
| Depreciation and Amortization | $139,453 |
Debt Structure
As of September 30, 2024, ESBA's debt structure includes:
| Debt Type | Principal Amount (in thousands) | Interest Rate | Maturity Date |
|---|---|---|---|
| Mortgage Debt | $705,600 | 4.09% - 6.25% | April 2026 |
| Senior Unsecured Notes | $225,000 | 7.20% - 7.41% | June 2029 - June 2034 |
Equity and Dividends
For the nine months ended September 30, 2024, dividends and distributions totaled:
| Period | Amount (in thousands) |
|---|---|
| Dividends Paid | $31,800 |
Cash Flow Analysis
Net cash provided by operating activities for the nine months ended September 30, 2024, was:
| Cash Flow Category | Amount (in thousands) |
|---|---|
| Net Cash from Operating Activities | $210,860 |
| Net Cash Used in Investing Activities | ($318,470) |
Market Position and Strategy
Empire State Realty OP, L.P. aims to enhance its market presence through strategic acquisitions and the development of its existing properties. The company focuses on maintaining high occupancy rates and optimizing its operational efficiencies to maximize profitability.
How Empire State Realty OP, L.P. (ESBA) Makes Money
Revenue Streams
Empire State Realty OP, L.P. (ESBA) generates revenue primarily through two segments: Real Estate and Observatory.
Real Estate Revenue
The Real Estate segment is responsible for the majority of ESBA's income. For the nine months ended September 30, 2024, the rental revenue was reported at $459.5 million, an increase of $13.3 million or 3.0% from $446.2 million in the same period of 2023. This increase was attributed to higher occupancy rates and escalations in operating and real estate tax expenses.
Observatory Revenue
The Observatory segment, which includes the 86th and 102nd-floor observatories at the Empire State Building, generated $98.1 million in revenue for the nine months ended September 30, 2024, marking a 5.3% increase from $93.1 million in 2023. This growth was driven by increased ticket prices and visitor numbers, with 1.86 million visitors recorded in 2024 compared to 1.85 million in 2023.
| Revenue Source | 2024 Revenue (in millions) | 2023 Revenue (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Rental Revenue | $459.5 | $446.2 | $13.3 | 3.0% |
| Observatory Revenue | $98.1 | $93.1 | $5.0 | 5.3% |
| Total Revenue | $570.3 | $546.7 | $23.6 | 4.3% |
Operating Income
In the nine months ended September 30, 2024, ESBA reported total operating income of $115.8 million, an increase of $9.8 million or 9.3% from $105.9 million in 2023. This increase was primarily due to higher revenues across both segments, despite rising operating expenses.
Operating Expenses
Total operating expenses for the nine months ended September 30, 2024, were $454.6 million, compared to $440.8 million in 2023, reflecting an increase of $13.8 million or 3.1%. Key components of operating expenses included:
- Property operating expenses: $132.5 million
- General and administrative expenses: $52.4 million
- Real estate taxes: $96.1 million
- Depreciation and amortization: $139.5 million
Net Income
Net income attributable to common stockholders for the nine months ended September 30, 2024, was $36.3 million, a decrease of $3.7 million or 9.2% from $39.9 million in 2023. This decline was mainly due to higher interest expenses and losses on the early extinguishment of debt.
| Metric | 2024 Amount (in millions) | 2023 Amount (in millions) | Change (in millions) | Percentage Change |
|---|---|---|---|---|
| Net Income | $36.3 | $39.9 | -$3.6 | -9.2% |
| Operating Income | $115.8 | $105.9 | $9.9 | 9.3% |
| Total Operating Expenses | $454.6 | $440.8 | $13.8 | 3.1% |
Debt and Interest Expense
As of September 30, 2024, ESBA had total debt of $2.3 billion, with interest expenses amounting to $77.9 million for the nine months ended September 30, 2024, compared to $76.1 million in 2023. The increase in interest expense was primarily due to the issuance of new senior unsecured notes in April 2024.
Cash Flow Overview
Net cash provided by operating activities for the nine months ended September 30, 2024, was $210.9 million, an increase of $14.8 million from $196.0 million in 2023. This increase was driven by higher rental income and lease termination fees.
| Cash Flow Activity | 2024 Amount (in millions) | 2023 Amount (in millions) | Change (in millions) |
|---|---|---|---|
| Cash from Operating Activities | $210.9 | $196.0 | $14.9 |
| Cash used in Investing Activities | -$318.5 | -$39.4 | -$279.1 |
| Cash provided by Financing Activities | $170.6 | -$50.4 | $221.0 |
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Updated on 16 Nov 2024
Resources:
- Empire State Realty OP, L.P. (ESBA) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Empire State Realty OP, L.P. (ESBA)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Empire State Realty OP, L.P. (ESBA)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.