Empire State Realty Trust, Inc. (NYSE: ESRT) reported its financial results for the third quarter and nine months ended September 30, 2024, showcasing a mixed performance amid a challenging market environment characterized by inflation and rising interest rates.

For the third quarter of 2024, total revenues increased to $199.6 million, up from $191.5 million in the same period of 2023, reflecting a 4.2% rise. This growth was driven by a 1.1% increase in rental revenue from the Real Estate segment, which reached $153.1 million, and a 4.8% rise in Observatory revenue, totaling $39.4 million. For the nine months ended September 30, 2024, total revenues were $570.3 million, compared to $546.7 million in the prior year, marking a 4.3% increase.

Operating income for the third quarter rose to $45.3 million, a 7.3% increase from $42.3 million in Q3 2023. However, net income for the quarter was $22.8 million, up from $19.9 million, while net income for the nine months decreased to $61.6 million from $68.6 million in the previous year. Net income attributable to common stockholders for Q3 2024 was $13.5 million, compared to $11.6 million in Q3 2023.

The company’s cash and cash equivalents increased to $421.9 million as of September 30, 2024, from $354.0 million a year earlier. Total assets rose to $4.4 billion, while total liabilities increased to $2.7 billion, resulting in stockholders' equity of $1.0 billion.

Strategically, Empire State Realty Trust has been active in acquisitions, including a $143.0 million purchase of retail properties in Williamsburg, Brooklyn, in September 2024, with additional acquisitions planned. The company also executed a buyout of a 10% non-controlling interest in two multifamily properties for $14.2 million in cash earlier in the year.

The company faced increased property operating expenses due to higher utilities and payroll costs, alongside rising general and administrative expenses attributed to audit-related costs and non-cash stock-based compensation. Interest income rose due to larger cash balances, while interest expense increased due to new senior unsecured notes issued in April 2024.

As of September 30, 2024, Empire State Realty Trust maintained a solid balance sheet with a total consolidated indebtedness of approximately $2.3 billion and was in compliance with all financial covenants related to its debt agreements. The company is also addressing a material weakness in its internal controls related to IT general controls, implementing remediation plans to enhance its financial reporting reliability.