Deferred Costs, Acquired Lease Intangibles and Goodwill

12 Months Ended

Dec. 31, 2025

Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]

Deferred Costs, Acquired Lease Intangibles and Goodwill

Deferred costs, net, consisted of the following:


(amounts in thousands)	December 31, 2025		December 31, 2024
Deferred leasing costs	$	227,722	$	230,836
Acquired in-place lease value, acquired deferred leasing costs and deferred acquisition costs	190,570		137,580
Acquired above-market leases	57,569		19,636
Total deferred costs, excluding deferred financing costs	475,861		388,052
Less: accumulated amortization	(214,917)		(212,972)
Total deferred costs, net, excluding net deferred financing costs	260,944		175,080
Deferred financing costs, net of accumulated amortization of $9,900 and $7,783, respectively (See Note 5)	6,738		8,907
Total deferred costs, net	$	267,682	$	183,987

Acquired below-market ground leases, net, consisted of the following:


(amounts in thousands)	December 31, 2025		December 31, 2024
Acquired below-market ground leases	$	396,916	$	396,916
Less: accumulated amortization	(91,337)		(83,506)
Acquired below-market ground leases, net	$	305,579	$	313,410

Acquired below-market leases, net, consisted of the following:


(amounts in thousands)	December 31, 2025		December 31, 2024
Acquired below-market leases	$	(81,539)	$	(56,359)
Less: accumulated amortization	41,772		36,862
Acquired below-market leases, net	$	(39,767)	$	(19,497)

The total amortization related to deferred costs and acquired lease intangibles consisted of the following:


	Year Ended December 31,
(amounts in thousands)	2025		2024		2023
Rental revenue:
Amortization of below-market leases, net of above-market leases	$	3,196	$	2,177	$	2,415
Depreciation and amortization:
Amortization of deferred leasing costs and acquired deferred leasing costs	21,179		22,469		23,612
Amortization related to acquired in-place lease value	5,794		5,196		7,421

The remaining weighted-average amortization periods as of December 31, 2025 are:


			Weighted-average amortization period
Below-market ground leases			41.7 years
Above-market leases			11.7 years
In-place leases and deferred leasing costs			10.5 years
Below-market leases			7.3 years

We expect to recognize amortization expense and rental revenue from the acquired intangible assets and liabilities as follows (amounts in thousands):


For the year ending:	Future Ground Rent Amortization		Future Amortization Expense		Future (Above)/Below-Market Rent Revenue Amortization
2026	$	7,831	$	11,329	$	1,856
2027	7,831		10,472		1,495
2028	7,831		9,692		1,304
2029	7,831		7,586		460
2030	7,831		5,295		465
Thereafter	266,424		34,750		(9,173)
	$	305,579	$	79,124	$	(3,593)

As of December 31, 2025, we had goodwill of $491.5 million. In 2013, we acquired the interests in Empire State Building Company, L.L.C. and 501 Seventh Avenue Associates, L.L.C. for an amount in excess of their net tangible and identified intangible assets and liabilities and as a result we recorded goodwill related to the transaction. Goodwill was allocated $227.5 million to the Observatory operations of the Empire State Building, $250.8 million to Empire State Building, and $13.2 million to 501 Seventh Avenue.

Empire State Realty OP, L.P. 10-K