ESRT's Offices Fill to 91.9% While Its Observatory Keeps Sinking

Empire State Realty Trust's offices are filling up, but its famous tower's observatory keeps dragging on earnings.

Nina Dale
November 10, 2026

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Good morning. Empire State Realty Trust just posted its strongest office leasing in years, pushing occupancy to 91.9%. The catch is its most famous asset, where observatory income keeps sliding on softer tourism.

🎙️ This Week on No Cap: First Washington Realty CEO Alex Nyhan explains how his grocery-anchored portfolio abated less than 1% of rent through COVID, and why he won’t chase the highest-credit tenant for every box.

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Market Snapshot

Most Active Neighborhood

By Deal Count

Midtown / Bedford-Stuyvesant — Tied at 7 sales each

Properties Sold

All Asset Types

133

Transaction Volume

Sales Activity

$409.4M

Top Office Submarket

Avg Starting Rent

Madison/Fifth Avenue

$177.73 / SF

Manhattan Office Rent

Avg Effective

$69.35 / SF

Office Rent Growth

YoY Change

-3.9%

*Office metrics courtesy of CompStak; data from 7/1/26 – 9/30/26. Sales metrics courtesy of Actovia; NYC properties reported sold during the week of 10/23/26 – 10/29/26.

Split Screen

ESRT's Offices Are Filling Up. Its Tower Isn't.

Empire State Realty Trust is leasing office space at its fastest clip in years, even as its signature tower pulls the other way on Q3 results.

By the numbers: According to Commercial Observer, ESRT signed 189,477 SF in Q3, 170,608 of it office, lifting office occupancy to 91.9% from 89.1% a quarter earlier and 89.7% a year ago.

The deck weighs: The famous observation deck is the outlier. Observatory NOI reached $15.6M in Q3, up from $12.4M in Q2 but still soft after observatory revenue fell 48.5% in Q2, which ESRT ties to weaker international tourism since 2024.

Earnings feel it: Strong leasing did not carry the bottom line. FFO slipped to $51.7M, or 20 cents a share, from $57M in Q2, and revenue eased to $193.1M as the attraction business lagged the office book.

Selling to buy back: President Christina Chiu says ESRT has exited the suburbs and will keep selling in Manhattan, steering proceeds like the $217.5M that Thor Equities paid for 1359 Broadway toward buybacks and debt reduction.

A fix in progress: CEO Anthony Malkin says the tower problem will not be fixed overnight, pointing to new observation chief Andrew Giancamilli, a former FanDuel COO hired Oct. 1 to diversify the customer base and rework the revenue model.

➥ THE TAKEAWAY

Healthy offices, a sick attraction: ESRT's office book looks solid, and management is leaning on buybacks while it reworks the observatory. Watch whether Giancamilli can lift visitation, and how far ESRT's Manhattan selling runs.

Around New York

➥ New York voters passed four CRE-friendly ballot measures, swapping roughly 40 approvals across 18 offices for a single DOB portal and faster sales of city land.

➥ Treasury named 210 NYC opportunity zones in the renewed program, up to 60% of them in Brooklyn and the Bronx, taking effect January 2027.

➥ Manhattan is on pace for its best office leasing year since 2000, with year-to-date volume past 37M SF and asking rents back near $80 per foot.

➥ NYC self-storage supply may rise 21.8% in 2026, but steep costs and tight zoning stall real projects, keeping the 24.6M SF market tight for owners.

➥ AI, tech, finance and law firms drove 70% of this year’s office leasing activity, keeping Class-A space full even as high rates squeeze the housing market.

➥ At Commercial Observer’s forum, NYC office leaders cheered record rents and a hot Class-A market, with AI tenants now 12% of leasing and Lower Manhattan rebounding.

➥ New Jersey is tipping toward an industrial landlords’ market as Q3 deliveries fell 58% and tenant demand nears 80M SF against five buildings underway.