8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 26, 2017

EMPIRE STATE REALTY TRUST, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-36105	37-1645259
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

EMPIRE STATE REALTY OP, L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-36106	45-4685158
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

111 West 33rd Street, 12th Floor New York, New York	10120
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (212) 687-8700

n/a

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02. Results of Operations and Financial Condition.

On July 26, 2017, Empire State Realty Trust, Inc. (the “Company” or “we”) issued a press release announcing its financial results for the second quarter 2017. The press release referred to certain supplemental information that is available on the Company’s website. The press release and the supplemental information are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.

The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein.

Item 7.01. Regulation FD Disclosure

As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the second quarter 2017 and made available on its website certain supplemental information relating thereto.

The information in Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release announcing financial results for the second quarter 2017
99.2	Supplemental report

Non-GAAP Supplemental Financial Measures

Funds From Operations (“FFO”)

We compute FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment writedowns of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of

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deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized non-GAAP financial measure for REITs that we believe, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITs. In addition, FFO is useful to investors as it captures features particular to real estate performance by recognizing that real estate has generally appreciated over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. We present FFO because we consider it an important supplemental measure of our operating performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results of operations, the utility of FFO as a measure of performance is limited. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Modified Funds From Operations (“Modified FFO”)

Modified FFO adds back an adjustment for any above or below-market ground lease amortization to traditionally defined FFO. We consider this a useful supplemental measure in evaluating our operating performance due to the non-cash accounting treatment under GAAP, which stems from the third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we consider it an important supplemental measure of our operating performance in that it adds back the non-cash amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

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Core Funds From Operations (“Core FFO”)

Core FFO adds back to Modified FFO the following items: acquisition expenses, deferred financing costs write-offs, prepayment penalties and acquisition break-up fee. The Company presents Core FFO because it considers it an important supplemental measure of its operating performance in that it excludes non-recurring items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.

Core Funds Available for Distribution (“Core FAD”)

In addition to Core FFO, we present Core FAD by (i) adding to Core FFO non-real estate depreciation and amortization, the amortization of deferred financing costs, amortization of debt discounts and non-cash compensation expense and (ii) deducting straight line rent, recurring second generation leasing commissions, tenant improvements, prebuilts, capital expenditures, furniture, fixtures & equipment purchases, amortization of debt premiums and above/below market rent revenue. Core FAD is presented solely as a supplemental disclosure that management believes provides useful information regarding our ability to fund our dividends. Core FAD does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FAD is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. There can be no assurance that Core FAD presented by us is comparable to similarly titled measures of other REITs.

Net Operating Income (“NOI”)

NOI is a non-GAAP financial measure of performance. NOI is used by our management to evaluate and compare the performance of our properties and to determine trends in earnings and to compute the fair value of our properties as it is not affected by: (i) the cost of funds of the property owner, (ii) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (iii) acquisition expenses and break-up fee, or (iv) general and administrative expenses and other gains and losses that are specific to the property owner. The cost of funds is eliminated from NOI because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our

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office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly-timed purchases or sales. We believe that eliminating these costs from net income is useful because the resulting measure captures the actual revenue, generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with. Other companies may use different methods for calculating NOI or similarly titled measures and, accordingly, our NOI may not be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

EBITDA

We compute EBITDA as net income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.

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SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EMPIRE STATE REALTY TRUST, INC.
	(Registrant)
Date: July 26, 2017	By:	/s/ David A. Karp
		Name: David A. Karp
		Title: Executive Vice President and Chief Financial Officer

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EMPIRE STATE REALTY OP, L.P.
	(Registrant)
	By:	Empire State Realty Trust, Inc., as general partner
Date: July 26, 2017	By:	/s/ David A. Karp
		Name: David A. Karp
		Title: Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

EMPIRE STATE REALTY TRUST ANNOUNCES SECOND QUARTER 2017 RESULTS

- Earnings of $0.10 Per Fully Diluted Share -

- Core FFO of $0.25 Per Fully Diluted Share -

- Leased 329,866 Square Feet of Office and Retail Space -

New York, New York, July 26, 2017 - Empire State Realty Trust, Inc. (NYSE: ESRT) (the “Company”), a real estate investment trust with office and retail properties in Manhattan and the greater New York metropolitan area, today reported its operational and financial results for the second quarter of 2017.

“We are pleased with our strong second quarter results. Core FFO increased 13.1% from the second quarter of 2016. We continue to consolidate, redevelop and re-lease space to larger, higher credit quality tenants at materially higher rents and create value. During the quarter, we leased over 329,000 square feet which resulted in attractive spreads on both new Manhattan office and total portfolio leases of 49.9% and 31.0%, respectively. We continue to deliver on the embedded, de-risked growth within our portfolio. Prospective tenants are attracted to our modernized spaces within well-located, amenity-rich office buildings,” stated John B. Kessler, Empire State Realty Trust’s President and Chief Operating Officer.

“Year-to-date, Observatory revenue grew 3.6% and Observatory net operating income grew 5.5%, as compared with the first half of 2016, driven by improved revenue mix despite unfavorable weather conditions. We further strengthened our balance sheet through the successful refinancing of our 2017 mortgage maturities which lowered our interest expense and meaningfully extended our maturities. We are happy to have the liquidity, strength, and flexibility of our balance sheet to fund future growth opportunities and create long-term value for our shareholders,” added Kessler.

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Second Quarter Highlights

• Achieved net income attributable to the Company of $0.10 per fully diluted share and Core Funds From Operations (“Core FFO”) of $0.25 per fully diluted share, which includes additional share issuance in August 2016.

• Occupancy and leased percentages at June 30, 2017:

• Total portfolio was 89.2% occupied; including signed leases not commenced (“SLNC”), the total portfolio was 91.3% leased.

• Manhattan office portfolio (excluding the retail component of these properties) was 88.3% occupied; including SLNC, the Manhattan office portfolio was 90.7% leased.

• Retail portfolio was 95.9% occupied; including SLNC, the retail portfolio was 96.0% leased.

• Empire State Building was 92.1% occupied; including SLNC, was 92.4% leased.

• Signed 51 leases, representing 329,866 rentable square feet across the total portfolio, achieving a portfolio-wide 31.0% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.

• Signed 26 new leases representing 208,594 rentable square feet for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 49.9% in mark-to-market rent over previous fully escalated rents.

• The Empire State Building Observatory revenue for the second quarter 2017 grew 6.9% to $34.0 million from $31.8 million in the second quarter 2016.

• Declared a dividend in the amount of $0.105 per share.

Financial Results for the Second Quarter 2017

Net income attributable to common stockholders was $16.6 million, or $0.10 per fully diluted share, compared to $11.1 million, or $0.09 per fully diluted share, in the second quarter of 2016.

Core FFO was $73.2 million, or $0.25 per fully diluted share, compared to $64.8 million, or $0.24 per fully diluted share, in the second quarter of 2016.

Modified FFO was $73.2 million, or $0.25 per fully diluted share, compared to $64.8 million, or $0.24 per fully diluted share, in the second quarter of 2016.

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FFO was $71.3 million, or $0.24 per fully diluted share, compared to $62.8 million, or $0.24 per fully diluted share, in the second quarter of 2016.

A reconciliation of net income to FFO, Modified FFO and Core FFO is provided in the tables accompanying this press release.

Financial Results for the Six Months Ended June 30, 2017

Net income attributable to common stockholders was $26.6 million, or $0.17 per fully diluted share, compared to $18.5 million, or $0.15 per fully diluted share, in the six months ended June 30, 2016.

Core FFO was $134.5 million, or $0.45 per fully diluted share, compared to $122.9 million, or $0.46 per fully diluted share, in the six months ended June 30, 2016.

Modified FFO was $134.5 million, or $0.45 per fully diluted share, compared to $122.3 million, or $0.46 per fully diluted share, in the six months ended June 30, 2016.

FFO was $130.6 million, or $0.44 per fully diluted share, compared to $118.3 million, or $0.44 per fully diluted share, in the six months ended June 30, 2016.

Portfolio Operations

As of June 30, 2017, the Company’s total portfolio contained 10.1 million rentable square feet of office and retail space. The Company’s occupancy levels fluctuate in certain periods due to the timing lag that exists between the date of tenants’ move out and the date of Company’s completion of redevelopment work for new leases to commence. As of June 30, 2017, the Company’s portfolio was occupied and leased as follows. Leased percentages include signed leases not commenced.

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	June 30, 2017			March 31, 2017			June 30, 2016
Percent occupied:
Total portfolio		89.2	%		88.8	%		86.6	%
Total office		88.7	%		88.3	%		86.9	%
Manhattan office		88.3	%		87.8	%		84.9	%
Empire State Building		92.1	%		91.5	%		88.7	%
Retail		95.9	%		94.4	%		83.6	%
Percent leased:
Total portfolio		91.3	%		89.5	%		89.4	%
Total office		90.9	%		89.2	%		89.6	%
Manhattan office		90.7	%		88.6	%		88.4	%
Empire State Building		92.4	%		91.7	%		90.7	%
Retail		96.0	%		94.5	%		86.0	%

Leasing

For the three months ended June 30, 2017, the Company signed 51 new, renewal, and expansion leases within the total portfolio, comprising 329,866 rentable square feet with an average starting rental rate of $54.39 per rentable square foot, representing an increase of 31.0% over the previous fully escalated rent.

On a blended basis, the 46 new, renewal, and expansion office leases signed within the total portfolio during the quarter had an average starting rental rate of $55.22 per rentable square foot, representing an increase of 36.0% over the previous fully escalated rent.

On a blended basis, the five new and renewal retail leases signed within the total portfolio during the quarter had a starting rental rate of $40.66 per rentable square foot, representing a decrease of 15.5% over the previous fully escalated rent, primarily due to two parking garage lease renewals.

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Leases Signed in the Second Quarter 2017 for the Manhattan Office Portfolio

• 26 new leases, comprising 208,594 rentable square feet, with an average starting rental rate of $60.11 per rentable square foot, representing an increase of 49.9% over the previous fully escalated rent, and

• 14 renewal leases, comprising 42,447 rentable square feet, with an average starting rental rate of $58.07 per rentable square foot, representing an increase of 5.7% over the previous fully escalated rent.

Significant Leases Executed During the Second Quarter 2017

• At 111 West 33rd Street, the Company signed a new two full floor office lease, totaling 80,903 rentable square feet, with Gap Inc. for a term of 12.6 years.

• At 1400 Broadway, the Company signed a new office lease, totaling 29,952 rentable square feet, with Renfro Corporation for a term of 16.2 years.

• At One Grand Central Place, the Company signed a new full floor office lease, totaling 17,573 rentable square feet, with iCapital Network for a term of 10.8 years.

Empire State Building

The Company continues to renovate and lease the 2.8 million rentable square foot Empire State Building, its flagship property. In the second quarter 2017, the Company commenced the first phase of a capital project to enhance the experience of office and retail tenants and Observatory visitors. The first phase will move the Observatory entrance to a new, larger, designated entrance at the western side of the Empire State Building on 34th Street which will improve the commercial tenant and office visitor experience and the value of the Empire State Building’s 34^th Street retail. At June 30, 2017, the Empire State Building was 92.1% occupied; including SLNC, the Empire State Building was 92.4% leased.

During the second quarter 2017, the Company signed 10 office leases at the Empire State Building, representing 33,574 rentable square feet in the aggregate.

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Observatory revenue for the second quarter 2017 was $34.0 million, a 6.9% increase from $31.8 million in the second quarter 2016. The Observatory hosted approximately 1,126,000 visitors in the second quarter 2017 compared to 1,124,000 visitors in the second quarter 2016, an increase of 0.2%. A portion of this increase can be attributed to the shift of the Easter weekend to the second quarter in 2017 from the first quarter in 2016. In the second quarter 2017, there were 15 bad weather days compared to 13 bad weather days in the second quarter 2016.

Observatory revenue was $54.9 million for the six months ended June 30, 2017, a 3.6% increase from $53.0 million for the six months ended June 30, 2016. For the six months ended June 30, 2017, the Observatory hosted approximately 1,762,000 visitors, compared to 1,843,000 visitors for the same period in 2016, a decrease of 4.4%. For the six months ended June 30, 2017, there were 37 bad weather days compared to 21 bad weather days in the six months ended June 30, 2016.

Balance Sheet

At June 30, 2017, there was no outstanding balance on the Company’s $1.1 billion unsecured revolving credit facility. The unsecured revolving credit facility has an accordion feature allowing for an additional increase in its maximum aggregate principal balance to $1.25 billion under certain circumstances.

At June 30, 2017, the Company had total debt outstanding of approximately $1.6 billion, with a weighted average interest rate of 3.96% per annum, and a weighted average term to maturity of 6.5 years. As of June 30, 2017, the Company had no debt maturing during the remainder of 2017 and $262.2 million of debt maturing in 2018. As of June 30, 2017, the Company had cash and cash equivalents of $441.0 million. The Company’s consolidated net debt to total market capitalization was approximately 15.5% as of June 30, 2017, and consolidated net debt to EBITDA was 3.3x.

During the second quarter 2017, the Company refinanced $336 million of maturing mortgage debt with a weighted average interest rate of 5.67%. The new mortgage debt of $315 million in the aggregate has a weighted average maturity of 11 years and a weighted average interest rate of 4.44%, after adjusting for the settlement of a $200 million forward starting interest rate swap.

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Dividend

On June 30, 2017, the Company paid a dividend of $0.105 per share for the second quarter 2017 to holders of the Company’s Class A common stock and Class B common stock and to holders of the operating partnership’s Series ES, Series 250 and Series 60 operating partnership units (NYSE Arca: ESBA, FISK and OGCP, respectively) and Series PR operating partnership units. The Company paid a dividend of $0.15 per unit for the second quarter 2017 to holders of the operating partnership’s private perpetual preferred units.

Webcast and Conference Call Details

Empire State Realty Trust, Inc. will host a webcast and conference call, open to the general public, on Thursday, July 27, 2017 at 8:30 am Eastern time.

The webcast will be available in the “Investors” section of the Company’s website at www.empirestaterealtytrust.com. To listen to the live webcast, go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.

The conference call can also be accessed by dialing 1-877-407-3982 for domestic callers or 1-201-493-6780 for international callers. A dial-in replay will be available starting shortly after the call until August 3, 2017, which can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for this dial-in replay is 13666062.

The Supplemental Report will be available prior to the conference call in the “Investors” section of the Company’s website, www.empirestaterealtytrust.com.

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About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous building. Headquartered in New York, New York, the Company’s office and retail portfolio covers 10.1 million rentable square feet, as of June 30, 2017, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.

Forward-Looking Statements

This press release includes “forward looking statements” within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: changes in our industry, the real estate markets, either nationally or in Manhattan or the greater New York metropolitan area; resolution of legal proceedings involving the company; reduced demand for office or retail space; general volatility of the capital and credit markets and the market price of our Class A common stock and our publicly-traded operating partnership units; changes in our business strategy; changes in technology and market competition which affect utilization of our broadcast or other facilities; changes in domestic or international tourism, including geopolitical events and currency exchange rates; defaults on, early terminations of, or non-renewal of, leases by tenants; fluctuations in interest rates; declining real estate valuations and impairment charges; termination or expiration of our ground leases; our failure to obtain or maintain necessary outside financing, including our unsecured revolving credit facility; our leverage; decreased rental rates or increased vacancy rates; our failure to redevelop and reposition properties, or to execute any newly planned capital project, successfully or on the anticipated timeline or at the anticipated costs; difficulties in identifying properties to acquire and completing acquisitions; risks of real estate development (including our Metro Tower development site) and capital projects, including the cost of construction delays and cost overruns; impact of changes in governmental regulations, tax law and rates and similar matters; and our failure to qualify as a real estate investment trust, or REIT. For a

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further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2016, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this press release, except as required by applicable law. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

Contact:

Investors

Empire State Realty Trust Investor Relations

(212) 850-2678

IR@empirestaterealtytrust.com

Media

Sard Verbinnen & Co.

(212) 687-8080

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

(unaudited and amounts in thousands, except per share data)

	Three Months Ended June 30,
	2017			2016
Revenues
Rental revenue	$	120,844		$	112,613
Tenant expense reimbursement		17,569			19,054
Observatory revenue		33,966			31,838
Third-party management and other fees		392			423
Other revenue and fees		4,353			1,887
Total revenues		177,124			165,815
Operating expenses
Property operating expenses		38,529			37,386
Ground rent expenses		2,332			2,330
General and administrative expenses		12,579			12,907
Observatory expenses		7,176			6,895
Real estate taxes		24,542			23,557
Depreciation and amortization		40,532			38,548
Total operating expenses		125,690			121,623
Total operating income		51,434			44,192
Other expenses:
Interest expense		(17,477	)		(17,420	)
Loss from derivative financial instruments		(42	)		—
Income before income taxes		33,915			26,772
Income tax expense		(2,556	)		(2,132	)
Net income		31,359			24,640
Preferred unit distributions		(234	)		(234	)
Net income attributable to non-controlling interests		(14,541	)		(13,317	)
Net income attributable to common stockholders	$	16,584		$	11,089
Total weighted average shares
Basic		157,921			122,502
Diluted		298,398			266,167
Net income per share attributable to common stockholders
Basic	$	0.10		$	0.09
Diluted	$	0.10		$	0.09

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

(unaudited and amounts in thousands, except per share data)

	Six Months Ended June 30,
	2017			2016
Revenues
Rental revenue	$	237,957		$	227,521
Tenant expense reimbursement		33,543			37,174
Observatory revenue		54,906			53,019
Third-party management and other fees		743			968
Other revenue and fees		14,929			4,207
Total revenues		342,078			322,889
Operating expenses
Property operating expenses		80,739			76,490
Ground rent expenses		4,663			4,663
General and administrative expenses		23,667			23,825
Observatory expenses		14,431			14,650
Real estate taxes		49,100			47,082
Acquisition expenses		—			98
Depreciation and amortization		81,378			77,775
Total operating expenses		253,978			244,583
Total operating income		88,100			78,306
Other expenses:
Interest expense		(35,219	)		(35,371	)
Loss from derivative financial instruments		(289	)		—
Income before income taxes		52,592			42,935
Income tax expense		(2,088	)		(1,590	)
Net income		50,504			41,345
Preferred unit distributions		(468	)		(468	)
Net income attributable to non-controlling interests		(23,467	)		(22,360	)
Net income attributable to common stockholders	$	26,569		$	18,517
Total weighted average shares
Basic		157,265			121,640
Diluted		298,180			267,121
Net income per share attributable to common stockholders
Basic	$	0.17		$	0.15
Diluted	$	0.17		$	0.15

11

Empire State Realty Trust, Inc.

Reconciliation of Net Income to Funds From Operations (“FFO”),

Modified Funds From Operations (“Modified FFO”) and Core Funds From Operations (“Core FFO”)

(unaudited and amounts in thousands, except per share data)

	Three Months Ended June 30,
	2017			2016
Net income	$	31,359		$	24,640
Preferred unit distributions		(234	)		(234	)
Real estate depreciation and amortization		40,132			38,386
FFO attributable to common stockholders and non-controlling interests		71,257			62,792
Amortization of below-market ground leases		1,958			1,958
Modified FFO attributable to common stockholders and non-controlling interests		73,215			64,750
Prepayment penalty and deferred financing cost write-off		—			—
Acquisition expenses		—			—
Core FFO attributable to common stockholders and non-controlling interests	$	73,215		$	64,750
Total weighted average shares
Basic		296,388			266,167
Diluted		298,398			266,167
FFO per share
Basic	$	0.24		$	0.24
Diluted	$	0.24		$	0.24
Modified FFO per share
Basic	$	0.25		$	0.24
Diluted	$	0.25		$	0.24
Core FFO per share
Basic	$	0.25		$	0.24
Diluted	$	0.25		$	0.24

12

Empire State Realty Trust, Inc.

Reconciliation of Net Income to Funds From Operations (“FFO”),

Modified Funds From Operations (“Modified FFO”) and Core Funds From Operations (“Core FFO”)

(unaudited and amounts in thousands, except per share data)

	Six Months Ended June 30,
	2017			2016
Net income	$	50,504		$	41,345
Preferred unit distributions		(468	)		(468	)
Real estate depreciation and amortization		80,556			77,461
FFO attributable to common stockholders and non-controlling interests		130,592			118,338
Amortization of below-market ground leases		3,916			3,916
Modified FFO attributable to common stockholders and non-controlling interests		134,508			122,254
Prepayment penalty and deferred financing cost write-off		—			552
Acquisition expenses		—			98
Core FFO attributable to common stockholders and non-controlling interests	$	134,508		$	122,904
Total weighted average shares
Basic		296,388			266,151
Diluted		298,180			266,151
FFO per share
Basic	$	0.44		$	0.44
Diluted	$	0.44		$	0.44
Modified FFO per share
Basic	$	0.45		$	0.46
Diluted	$	0.45		$	0.46
Core FFO per share
Basic	$	0.45		$	0.46
Diluted	$	0.45		$	0.46

13

Empire State Realty Trust, Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands)

	June 30, 2017			December 31, 2016
Assets
Commercial real estate properties, at cost	$	2,556,609		$	2,458,629
Less: accumulated depreciation		(605,481	)		(556,546	)
Commercial real estate properties, net		1,951,128			1,902,083
Cash and cash equivalents		440,958			554,371
Restricted cash		68,011			61,514
Tenant and other receivables		23,995			22,542
Deferred rent receivables		165,470			152,074
Prepaid expenses and other assets		54,624			53,749
Deferred costs, net		263,392			277,081
Acquired below market ground leases, net		372,144			376,060
Goodwill		491,479			491,479
Total assets	$	3,831,201		$	3,890,953
Liabilities and equity
Mortgage notes payable, net	$	724,312		$	759,016
Senior unsecured notes, net		592,073			590,388
Unsecured term loan facility, net		263,114			262,927
Unsecured revolving credit facility		—			—
Accounts payable and accrued expenses		136,617			134,064
Acquired below market leases, net		74,083			82,300
Deferred revenue and other liabilities		27,380			32,212
Tenants’ security deposits		49,669			47,183
Total liabilities		1,867,248			1,908,090
Total equity		1,963,953			1,982,863
Total liabilities and equity	$	3,831,201		$	3,890,953

14

EX-99.2

Exhibit 99.2

Second Quarter 2017

Table of Contents	Page
Summary
Company Profile		Page 3
Financial Highlights		Page 4
Selected Property Data
Property Summary		Page 5
Property Detail		Page 10
Tenant Lease Expirations		Page 11
Largest Tenants and Portfolio Tenant Diversification by Industry		Page 14
Capital Expenditures and Redevelopment Program		Page 15
Observatory Summary		Page 16
Financial information
Condensed Consolidated Balance Sheets		Page 17
Condensed Consolidated Statements of Income		Page 18
Core FFO, Modified FFO, FFO, FAD and EBITDA		Page 19
Net Operating Income		Page 20
Consolidated Debt Analysis
Debt Summary		Page 21
Debt Detail		Page 22
Debt Maturities		Page 23
Ground Leases		Page 23
Supplemental Definitions		Page 24
Forward-looking Statements

We make forward-looking statements in this supplemental package within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You should not rely on them as predictions of future events. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections.

You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or similar words or phrases in the positive or negative. In particular, forward looking statements include those pertaining to our capital resources, portfolio performance, dividend policy, results of operations, anticipated growth in our portfolio from operations, acquisitions, and market conditions and demographics.

Forward-looking statements involve numerous risks and uncertainties, many of which are difficult to predict and generally beyond our control. They depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: changes in our industry and markets, either nationally or in Manhattan or the greater New York metropolitan area; resolution of the litigations and arbitration involving our company; reduced demand for office or retail space; general volatility of the capital and credit markets and the market price of our Class A common stock and listed operating partnership units; changes in our business strategy; defaults on, early terminations of, or non-renewal of, leases by tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; litigation; fluctuations in interest rates; increased operating costs; declining real estate valuations and impairment charges; availability, terms and deployment of capital; our failure to obtain necessary outside financing; our expected leverage; decreased rental rates or increased vacancy rates; breach of or the expiration of our ground lease; our failure to generate sufficient cash flows to service our outstanding indebtedness; our failure to redevelop, renovate and reposition properties successfully or on the anticipated timeline or at the anticipated costs; difficulties in identifying properties to acquire and completing acquisitions; risks of real estate acquisitions, dispositions and development (including our Metro Tower development site), including construction delays and cost overruns; our failure to operate acquired properties and operations successfully; our ability to manage our growth effectively; changes in governmental regulations, tax laws and rates and similar matters; estimates relating to our ability to make distributions to our securityholders in the future; our failure to qualify as a REIT; a future terrorist event in the U.S.; environmental uncertainties and risks related to adverse weather conditions and natural disasters; lack or insufficient amounts of insurance; financial market fluctuations; availability of, and our ability to attract and retain, qualified personnel; conflicts of interest affecting our senior management team; competition; changes in real estate and zoning laws and increases in real property tax rates; and our ability to comply with the laws, rules and regulations applicable to companies and, in particular, public companies. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes after the date of this presentation, except as required by applicable law. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2016 and other risks described in documents we subsequently file from time to time with the Securities and Exchange Commission.

Page 2

Second Quarter 2017

COMPANY PROFILE

Empire State Realty Trust, Inc., or the Company, is a leading real estate investment trust (REIT) that owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous building.

BOARD OF DIRECTORS

Anthony E. Malkin	Chairman and Chief Executive Officer
William H. Berkman	Director, Chair of Finance Committee
Leslie D. Biddle	Director
Thomas J. DeRosa	Director
Steven J. Gilbert	Director, Lead Director
S. Michael Giliberto	Director, Chair of Audit Committee
James D. Robinson IV	Director, Chair of Compensation and Nominating/Corporate Governance Committees

EXECUTIVE MANAGEMENT

Anthony E. Malkin	Chairman and Chief Executive Officer
John B. Kessler	President and Chief Operating Officer
Thomas P. Durels	Executive Vice President and Director of Leasing and Operations
David A. Karp	Executive Vice President and Chief Financial Officer
Thomas N. Keltner, Jr.	Executive Vice President, General Counsel and Secretary

COMPANY INFORMATION

Corporate Headquarters	Investor Relations	New York Stock Exchange
111 West 33rd Street, 12th Floor	Greg Faje	Trading Symbol: ESRT
New York, NY 10120	IR@empirestaterealtytrust.com
www.empirestaterealtytrust.com
(212) 687-8700

RESEARCH COVERAGE

Bank of America Merrill Lynch	James Feldman	(646) 855-5808	james.feldman@baml.com
BMO Capital Markets Corp.	John Kim	(212) 885-4115	jp.kim@bmo.com
BTIG	Thomas Catherwood	(212) 738-6140	tcatherwood@btig.com
Evercore ISI	Robert Simone	(212) 446-9459	robert.simone@evercoreisi.com
Goldman Sachs & Co. LLC	Andrew Rosivach	(212) 902-4736	rosivach@gs.com
Green Street Advisors	Jed Reagan	(949) 640-8780	jreagan@greenstreetadvisors.com
KeyBanc Capital Markets	Craig Mailman	(917) 368-2316	cmailman@key.com
Stifel	John Guinee	(443) 224-1307	jwguinee@stifel.com
Wells Fargo Securities, LLC	Blaine Heck	(443) 263-6529	blaine.heck@wellsfargo.com

Page 3

Second Quarter 2017

Financial Highlights

(unaudited and dollars in thousands, except per share amounts)

	Three Months Ended
Selected Items:	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Revenue	$	177,124		$	164,954		$	179,263		$	175,848		$	165,815
Net income	$	31,359		$	19,145		$	33,008		$	32,897		$	24,640
Cash net operating income (1)	$	97,270		$	82,781		$	96,338		$	93,715		$	89,542
Core funds from operations (“Core FFO”) (1)	$	73,215		$	61,293		$	74,158		$	71,938		$	64,750
Core funds available for distribution (“Core FAD”) (1)	$	61,546		$	53,721		$	60,472		$	59,712		$	49,798
Core FFO per share—diluted	$	0.25		$	0.21		$	0.25		$	0.26		$	0.24
Diluted weighted average shares		298,398,000			297,962,000			297,046,000			280,614,000	(2)		266,167,000
Dividends declared and paid per share	$	0.105		$	0.105		$	0.105		$	0.105		$	0.105
Portfolio Statistics:
Number of properties		20			20			20			20			20
Total rentable square footage		10,139,660			10,145,676			10,138,999			10,125,119			10,077,905
Percent occupied (3)		89.2	%		88.8	%		88.1	%		87.9	%		86.6	%
Percent leased (4)		91.3	%		89.5	%		90.2	%		90.3	%		89.4	%
Observatory Metrics:
Number of visitors		1,126,000			636,000			1,068,000			1,340,000			1,124,000
Change in visitors year over year		0.2	%		-11.5	%		12.5	%		1.0	%		-3.5	%
Observatory revenues	$	33,966		$	20,940		$	33,702		$	38,093		$	31,838
Change in revenues year over year		6.9	%		-1.4	%		22.1	%		6.7	%		4.0	%
Ratios:
Consolidated Debt to Total Market Capitalization (5)		20.2	%		20.6	%		21.1	%		20.5	%		24.5	%
Consolidated Net Debt to Total Market Capitalization (5)		15.5	%		14.8	%		14.9	%		14.0	%		24.1	%
Consolidated Debt and Perpetual Preferred Units to
Total Market Capitalization (5)		20.6	%		20.9	%		21.4	%		20.8	%		24.9	%
Consolidated Net Debt and Perpetual Preferred Units to
Total Market Capitalization (5)		15.8	%		15.2	%		15.3	%		14.4	%		24.5	%
Consolidated Debt to EBITDA (6)		4.5	x		4.7	x		4.8	x		4.9	x		5.1	x
Consolidated Net Debt to EBITDA (6)		3.3	x		3.2	x		3.1	x		3.1	x		5.0	x
Interest Coverage Ratio		5.5	x		4.9	x		5.8	x		5.7	x		5.5	x
Core FFO Payout Ratio (7)		43	%		51	%		42	%		44	%		44	%
Core FAD Payout Ratio (8)		51	%		58	%		52	%		53	%		57	%
Class A common stock price at quarter end	$	20.77		$	20.64		$	20.19		$	20.95		$	18.99
Average closing price	$	21.05		$	20.66		$	19.82		$	20.67		$	18.76
Dividends per share - annualized	$	0.42		$	0.42		$	0.42		$	0.42		$	0.42
Dividend yield (9)		2.0	%		2.0	%		2.1	%		2.0	%		2.2	%
Private Perpetual Preferred Units outstanding ($16.62 liquidation value)		1,560,360			1,560,360			1,560,360			1,560,360			1,560,360
Class A common stock		157,493,025			156,689,477			154,744,740			153,828,060			122,781,134
Class B common stock		1,080,475			1,095,114			1,095,737			1,097,584			1,100,089
Operating partnership units		141,844,339			142,583,324			143,252,598			144,173,889			145,607,456
Total common stock and operating partnership units outstanding		300,417,839			300,367,915			299,093,075			299,099,533			269,488,679

Notes:

(1) Represents non-GAAP financial measures. For a discussion on what these metrics represent and why the Company presents them, see page 24 and for a reconciliation of these metrics to net income, see pages 19 and 20.

(2) The increase reflects the issuance of 29.6 million Class A common shares in a private placement transaction in August 2016.

(3) Based on leases signed and commenced as of end of period.

(4) Represents occupancy and includes signed leases not commenced.

(5) Market capitalization represents the sum of (i) Company’s common stock per share price as of June 30, 2017 multiplied by the total outstanding number of shares of common stock and operating partnership units as of June 30, 2017; (ii) the number of perpetual preferred units at June 30, 2017 multiplied by $16.62 and (iii) our outstanding indebtedness or net indebtedness as of June 30, 2017.

(6) Calculated based on trailing 12 months EBITDA.

(7) Represents the amount of Core FFO paid out in distributions.

(8) Represents the amount of Core FAD paid out in distributions.

(9) Based on the closing price per share of Class A common stock on June 30, 2017.

Page 4

Second Quarter 2017

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended June 30, 2017
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,139,660			8,066,529			1,868,679			204,452
Occupancy (2)		89.2	%		88.7	%		90.5	%		99.4	%
Revenue	$	176,732		$	118,014		$	19,721		$	5,031		$	33,966
Operating expenses		(72,579	)		(55,230	)		(8,425	)		(1,748	)		(7,176	)
Net operating income		104,153			62,784			11,296			3,283			26,790
Straight-line rent		(7,722	)		(7,305	)		(460	)		43			—
Above/below-market rent revenue amortization		(1,119	)		(1,119	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	97,270		$	56,318		$	10,836		$	3,326		$	26,790
Leasing activity
Total leases executed		51			43			6			2
Total square footage executed		329,866			253,495			49,228			27,143
Average rent psf - leases executed	$	54.39		$	60.26		$	32.02		$	34.26
Previously escalated rents psf	$	41.52		$	43.45		$	30.41		$	40.83
Percentage of new rent over previously escalated rents		31.0	%		38.7	%		5.3	%		-16.1	%
Weighted average lease term		9.3 years
Leasing commission costs per square foot	$	17.74		$	21.97		$	5.71		$	—
Tenant improvement costs per square foot		68.24			79.19			49.50			—
Total LC and TI per square foot (3)	$	85.98		$	101.16		$	55.21		$	—
Total Portfolio	Office			Retail			Total
Total square footage executed		300,269			29,597			329,866
Average rent psf - leases executed	$	55.22		$	40.66		$	54.39
Previously escalated rents psf	$	40.61		$	48.13		$	41.52
Percentage of new rent over previously escalated rents		36.0	%		-15.5	%		31.0	%
Manhattan Office Portfolio	Office			Retail			Total
Total square footage executed		251,041			2,454			253,495
Average rent psf—leases executed	$	59.76		$	111.42		$	60.26
Previously escalated rents psf	$	42.61		$	128.87		$	43.45
Percentage of new rent over previously escalated rents		40.3	%		-13.5	%		38.7	%

Page 5

Second Quarter 2017

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended March 31, 2017
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,145,676			8,071,337			1,869,887			204,452
Occupancy (2)		88.8	%		88.1	%		90.7	%		99.4	%
Revenue	$	164,603		$	116,746		$	22,121		$	4,796		$	20,940
Operating expenses		(76,354	)		(59,105	)		(8,300	)		(1,694	)		(7,255	)
Net operating income		88,249			57,641			13,821			3,102			13,685
Straight-line rent		(5,998	)		(6,550	)		467			85			—
Above/below-market rent revenue amortization		(1,428	)		(1,428	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	82,781		$	51,621		$	14,288		$	3,187		$	13,685
Leasing activity
Total leases executed		27			24			3			—
Total square footage executed		200,992			128,179			72,813			—
Average rent psf - leases executed	$	61.33		$	73.04		$	40.71		$	—
Previously escalated rents psf	$	42.58		$	40.84		$	45.66		$	—
Percentage of new rent over previously escalated rents		44.0	%		78.9	%		-10.8	%		—
Weighted average lease term		10.6 years
Leasing commission costs per square foot	$	28.01		$	36.49		$	13.08		$	—
Tenant improvement costs per square foot		48.84			45.02			55.57			—
Total LC and TI per square foot (3)	$	76.85		$	81.51		$	68.65		$	—
Total Portfolio	Office			Retail			Total
Total square footage executed		157,973			43,019			200,992
Average rent psf - leases executed	$	50.81		$	99.96		$	61.33
Previously escalated rents psf	$	47.48		$	24.60		$	42.58
Percentage of new rent over previously escalated rents		7.0	%		306.3	%		44.0	%
Manhattan Office Portfolio	Office			Retail			Total
Total square footage executed		85,160			43,019			128,179
Average rent psf - leases executed	$	59.45		$	99.96		$	73.04
Previously escalated rents psf	$	49.04		$	24.60		$	40.84
Percentage of new rent over previously escalated rents		21.2	%		306.3	%		78.9	%

Page 6

Second Quarter 2017

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended December 31, 2016
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,138,999			8,062,089			1,872,458			204,452
Occupancy (2)		88.1	%		86.7	%		93.0	%		99.4	%
Revenue	$	178,869		$	115,177		$	25,347		$	4,643		$	33,702
Operating expenses		(73,328	)		(55,501	)		(8,165	)		(1,729	)		(7,933	)
Net operating income		105,541			59,676			17,182			2,914			25,769
Straight-line rent		(8,652	)		(10,296	)		1,301			343			—
Above/below-market rent revenue amortization		(2,509	)		(2,509	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	96,338		$	48,829		$	18,483		$	3,257		$	25,769
Leasing activity
Total leases executed		64			54			8			2
Total square footage executed		210,780			125,499			79,145			6,136
Average rent psf - leases executed	$	63.34		$	67.85		$	33.61		$	349.60
Previously escalated rents psf	$	52.02		$	50.63		$	33.79		$	312.18
Percentage of new rent over previously escalated rents		21.8	%		34.0	%		-0.6	%		12.0	%
Weighted average lease term		7.3 years
Leasing commission costs per square foot	$	13.89		$	15.25		$	11.76		$	13.56
Tenant improvement costs per square foot		50.35			45.30			62.25			—
Total LC and TI per square foot (3)	$	64.24		$	60.55		$	74.01		$	13.56
Total Portfolio	Office			Retail			Total
Total square footage executed		199,165			11,615			210,780
Average rent psf - leases executed	$	47.56		$	331.30		$	63.34
Previously escalated rents psf	$	41.57		$	229.54		$	52.02
Percentage of new rent over previously escalated rents		14.4	%		44.3	%		21.8	%
Manhattan Office Portfolio	Office			Retail			Total
Total square footage executed		120,020			5,479			125,499
Average rent psf - leases executed	$	56.76		$	310.81		$	67.85
Previously escalated rents psf	$	46.69		$	137.00		$	50.63
Percentage of new rent over previously escalated rents		21.6	%		126.9	%		34.0	%

Page 7

Second Quarter 2017

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended September 30, 2016
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,125,119			8,055,809			1,864,858			204,452
Occupancy (2)		87.9	%		86.3	%		93.4	%		99.4	%
Revenue	$	175,444		$	113,451		$	19,225		$	4,675		$	38,093
Operating expenses		(72,857	)		(55,612	)		(8,279	)		(1,716	)		(7,250	)
Net operating income		102,587			57,839			10,946			2,959			30,843
Straight-line rent		(9,619	)		(9,914	)		271			24			—
Above/below-market rent revenue amortization		(1,210	)		(1,210	)		—			—			—
Below-market ground lease amortization		1,957			1,957			—			—			—
Cash net operating income	$	93,715		$	48,672		$	11,217		$	2,983		$	30,843
Leasing activity
Total leases executed		51			40			8			3
Total square footage executed		348,770			283,199			59,812			5,759
Average rent psf - leases executed	$	57.61		$	59.16		$	33.44		$	211.43
Previously escalated rents psf	$	44.24		$	42.27		$	34.14		$	237.87
Percentage of new rent over previously escalated rents		30.2	%		40.0	%		-2.0	%		-11.1	%
Weighted average lease term		9.6 years
Leasing commission costs per square foot	$	20.24		$	22.83		$	8.76		$	12.01
Tenant improvement costs per square foot		70.31			79.77			31.63			6.95
Total LC and TI per square foot (3)	$	90.55		$	102.60		$	40.39		$	18.96
Total Portfolio	Office			Retail			Total
Total square footage executed		324,396			24,374			348,770
Average rent psf - leases executed	$	54.12		$	99.07		$	57.61
Previously escalated rents psf	$	38.23		$	122.27		$	44.24
Percentage of new rent over previously escalated rents		41.6	%		-19.0	%		30.2	%
Manhattan Office Portfolio	Office			Retail			Total
Total square footage executed		264,584			18,615			283,199
Average rent psf - leases executed	$	58.80		$	64.30		$	59.16
Previously escalated rents psf	$	39.15		$	86.51		$	42.27
Percentage of new rent over previously escalated rents		50.2	%		-25.7	%		40.0	%

Page 8

Second Quarter 2017

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended June 30, 2016
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,077,905			8,009,636			1,863,817			204,452
Occupancy (2)		86.6	%		84.5	%		94.6	%		99.4	%
Revenue	$	165,392		$	108,962		$	20,126		$	4,466		$	31,838
Operating expenses		(70,168	)		(53,429	)		(8,304	)		(1,540	)		(6,895	)
Net operating income		95,224			55,533			11,822			2,926			24,943
Straight-line rent		(6,796	)		(6,869	)		(5	)		78			—
Above/below-market rent revenue amortization		(844	)		(844	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	89,542		$	49,778		$	11,817		$	3,004		$	24,943
Leasing activity
Total leases executed		45			39			5			1
Total square footage executed		176,533			156,745			18,604			1,184
Average rent psf - leases executed	$	59.09		$	59.72		$	33.73		$	375.00
Previously escalated rents psf	$	42.39		$	41.25		$	39.40		$	240.63
Percentage of new rent over previously escalated rents		39.4	%		44.8	%		-14.4	%		55.8	%
Weighted average lease term		7.9 years
Leasing commission costs per square foot	$	17.00		$	17.73		$	3.95		$	124.35
Tenant improvement costs per square foot		55.67			60.29			20.29			—
Total LC and TI per square foot (3)	$	72.67		$	78.02		$	24.24		$	124.35
Total Portfolio	Office			Retail			Total
Total square footage executed		175,349			1,184			176,533
Average rent psf - leases executed	$	56.96		$	375.00		$	59.09
Previously escalated rents psf	$	41.05		$	240.63		$	42.39
Percentage of new rent over previously escalated rents		38.8	%		55.8	%		39.4	%
Manhattan Office Portfolio	Office			Retail			Total
Total square footage executed		156,745			—			156,745
Average rent psf - leases executed	$	59.72		$	—		$	59.72
Previously escalated rents psf	$	41.25		$	—		$	41.25
Percentage of new rent over previously escalated rents		44.8	%		—			44.8	%

Notes:

⁽¹⁾  Includes 495,310 rentable square feet of retail space in the Company’s nine Manhattan office properties.

⁽²⁾  Based on leases signed and commenced as of period end.

⁽³⁾  Presents all tenant improvement and leasing commission costs as if they were incurred in the period in which the lease was signed, which may be different than the period in which they were actually paid.

Page 9

Second Quarter 2017

Property Detail

(unaudited)

Property Name	Location or Sub-Market	Rentable Square Feet (1)		Percent Occupied (2)			Annualized Rent (3)		Annualized Rent per Occupied Square Foot (4)		Number of Leases (5)
Manhattan Office Properties—Office
The Empire State Building (6)	Penn Station - Times Sq. South		2,711,465		92.5	%	$	132,453,792	$	52.81		187
One Grand Central Place	Grand Central		1,240,433		87.8	%		59,747,316		54.86		237
1400 Broadway (8)	Penn Station - Times Sq. South		908,332		86.9	%		36,490,269		46.24		42
111 West 33rd Street (9)	Penn Station - Times Sq. South		640,122		68.7	%		23,297,406		52.99		18
250 West 57th Street	Columbus Circle - West Side		489,256		74.9	%		20,356,821		55.52		92
501 Seventh Avenue	Penn Station - Times Sq. South		459,936		91.4	%		18,047,119		42.91		30
1359 Broadway	Penn Station - Times Sq. South		455,583		97.4	%		22,228,287		50.11		36
1350 Broadway (10)	Penn Station - Times Sq. South		373,463		89.3	%		18,223,887		54.62		65
1333 Broadway	Penn Station - Times Sq. South		292,629		100.0	%		14,163,766		48.40		12
Manhattan Office Properties—Office			7,571,219		88.3	%		345,008,662		51.63		719
Manhattan Office Properties—Retail
The Empire State Building (7)	Penn Station - Times Sq. South		104,240		81.0	%		13,610,438		161.21		14
One Grand Central Place	Grand Central		68,726		100.0	%		7,647,344		111.27		15
1400 Broadway (8)	Penn Station - Times Sq. South		21,674		70.8	%		1,959,460		127.76		7
112 West 34th Street (9)	Penn Station - Times Sq. South		90,132		100.0	%		22,382,376		248.33		4
250 West 57th Street	Columbus Circle - West Side		48,962		100.0	%		8,010,501		163.61		8
501 Seventh Avenue	Penn Station - Times Sq. South		35,558		96.9	%		1,949,440		56.60		9
1359 Broadway	Penn Station - Times Sq. South		27,243		100.0	%		2,171,811		79.72		6
1350 Broadway (10)	Penn Station - Times Sq. South		31,774		100.0	%		6,747,120		212.35		6
1333 Broadway	Penn Station - Times Sq. South		67,001		100.0	%		8,409,157		125.51		4
Manhattan Office Properties—Retail			495,310		94.5	%		72,887,647		155.73		73
Sub-Total/Weighted Average
Manhattan Office Properties—Office and Retail			8,066,529		88.7	%		417,896,310		58.44		792
Greater New York Metropolitan Area Office Properties
First Stamford Place (11)	Stamford, CT		793,796		92.7	%		31,188,883		42.37		56
Metro Center	Stamford, CT		285,258		88.4	%		14,212,781		56.34		28
383 Main Avenue	Norwalk, CT		262,557		91.5	%		7,591,861		31.62		21
500 Mamaroneck Avenue	Harrison, NY		294,670		90.8	%		7,663,169		28.63		35
10 Bank Street	White Plains, NY		232,398		83.9	%		7,214,236		37.00		31
Sub-Total/Weighted Average Greater New York
Metropolitan Area Office Properties			1,868,679		90.5	%		67,870,930		40.13		171
Standalone Retail Properties
10 Union Square	Union Square		58,005		98.0	%		6,256,459		110.11		12
1542 Third Avenue	Upper East Side		56,250		100.0	%		3,812,914		67.79		4
1010 Third Avenue	Upper East Side		44,662		100.0	%		3,539,989		79.26		2
77 West 55th Street	Midtown		24,102		100.0	%		2,721,511		112.92		3
69-97 Main Street	Westport, CT		17,103		100.0	%		2,310,799		135.11		5
103-107 Main Street	Westport, CT		4,330		100.0	%		715,852		165.32		1
Sub-Total/Weighted Average Standalone
Retail Properties			204,452		99.4	%		19,357,523		95.23		27
Portfolio Total			10,139,660		89.2	%	$	505,124,763	$	55.84		990
Total/Weighted Average Office Properties			9,439,898		88.7	%	$	412,879,592	$	49.30		890
Total/Weighted Average Retail Properties			699,762		95.9	%		92,245,171		137.41		100
Portfolio Total			10,139,660		89.2	%	$	505,124,763	$	55.84		990

Notes:

(1) Excludes (i) 154,753 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

(2) Based on leases signed and commenced as of June 30, 2017.

(3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4) Represents annualized rent under leases commenced as of June 30, 2017 divided by occupied square feet.

(5) Represents the number of leases at each property or on a portfolio basis. If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.

(6) Includes 74,291 rentable square feet of space leased by the Company’s broadcasting tenants.

(7) Includes 5,300 rentable square feet of space leased by WDGF North America, a licensee of the Company’s observatory.

(8) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 47 years (expiring December 31, 2063).

(9) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 61 years (expiring May 31, 2077).

(10) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 34 years (expiring July 31, 2050).

(11) First Stamford Place consists of three buildings.

Page 10

Second Quarter 2017

Tenant Lease Expirations

(unaudited)

Total Lease Expirations	Number of Leases Expiring (1)		Rentable Square Feet Expiring (2)		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent (3)		Percent of Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		884,934		8.7	%	$	—		0.0	%	$	—
Signed leases not commenced		20		209,240		2.1	%		—		0.0	%		—
2017		98		359,280		3.5	%		18,570,529		3.7	%		51.69
2018		180		887,717		8.8	%		46,877,446		9.3	%		52.81
2019		134		665,281		6.6	%		33,949,987		6.7	%		51.03
2020		150		952,526		9.4	%		50,830,040		10.1	%		53.36
2021		94		689,541		6.8	%		37,220,037		7.4	%		53.98
2022		83		614,559		6.1	%		36,041,070		7.1	%		58.65
2023		51		540,975		5.3	%		30,345,476		6.0	%		56.09
2024		43		504,866		5.0	%		28,386,470		5.6	%		56.23
2025		41		314,580		3.1	%		23,770,079		4.7	%		75.56
2026		40		948,680		9.4	%		49,735,306		9.8	%		52.43
Thereafter		76		2,567,481		25.2	%		149,398,323		29.6	%		58.19
Total		1,010		10,139,660		100.0	%	$	505,124,763		100.0	%	$	55.84

Notes:

(1) If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(2) Excludes (i) 154,753 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

(3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

Page 11

Second Quarter 2017

Tenant Lease Expirations

(unaudited)

Manhattan Office Properties (1)	Number of Leases Expiring (2)		Rentable Square Feet Expiring (3)		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent (4)		Percent of Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		703,974		9.3	%	$	—		0.0	%	$	—
Signed leases not commenced		16		184,292		2.4	%		—		0.0	%		—
2017		85		317,402		4.2	%		15,901,576		4.6	%		50.10
2018		141		649,409		8.6	%		35,592,406		10.3	%		54.81
2019		104		457,470		6.0	%		23,199,197		6.7	%		50.71
2020		114		665,706		8.8	%		35,440,784		10.3	%		53.24
2021		56		444,433		5.9	%		22,914,051		6.6	%		51.56
2022		58		314,479		4.2	%		18,016,202		5.2	%		57.29
2023		37		386,394		5.1	%		20,030,997		5.8	%		51.84
2024		26		296,628		3.9	%		14,758,511		4.3	%		49.75
2025		22		171,378		2.3	%		9,532,295		2.8	%		55.62
2026		29		828,815		10.9	%		43,786,029		12.7	%		52.83
Thereafter		47		2,150,839		28.4	%		105,836,614		30.7	%		49.21
Total Manhattan office properties		735		7,571,219		100.0	%		345,008,662		100.0	%		51.63
Greater New York Metropolitan Area Office Properties
Available		—		153,151		8.2	%	$	—		0.0	%	$	—
Signed leases not commenced		3		24,307		1.3	%		—		0.0	%		—
2017		7		26,756		1.4	%		1,049,541		1.5	%		39.23
2018		34		215,108		11.5	%		8,696,487		12.8	%		40.43
2019		21		175,663		9.4	%		6,253,158		9.2	%		35.60
2020		26		230,508		12.3	%		9,947,150		14.7	%		43.15
2021		31		215,463		11.5	%		9,376,089		13.8	%		43.52
2022		15		237,779		12.7	%		9,214,855		13.6	%		38.75
2023		8		105,944		5.7	%		4,775,640		7.0	%		45.08
2024		6		182,660		9.8	%		8,081,445		11.9	%		44.24
2025		11		105,877		5.7	%		3,531,425		5.2	%		33.35
2026		2		45,361		2.4	%		1,394,281		2.1	%		30.74
Thereafter		10		150,102		8.0	%		5,550,859		8.2	%		36.98
Total greater New York metropolitan area office properties		174		1,868,679		100.0	%		67,870,930		100.0	%		40.13
Retail Properties
Available		—		27,809		4.0	%	$	—		0.0	%	$	—
Signed leases not commenced		1		641		0.1	%		—		0.0	%		—
2017		6		15,122		2.2	%		1,619,412		1.8	%		107.09
2018		5		23,200		3.3	%		2,588,553		2.8	%		111.58
2019		9		32,148		4.6	%		4,497,632		4.9	%		139.90
2020		10		56,312		8.0	%		5,442,106		5.9	%		96.64
2021		7		29,645		4.2	%		4,929,897		5.3	%		166.30
2022		10		62,301		8.9	%		8,810,013		9.6	%		141.41
2023		6		48,637		7.0	%		5,538,839		6.0	%		113.88
2024		11		25,578		3.7	%		5,546,514		6.0	%		216.85
2025		8		37,325		5.3	%		10,706,359		11.6	%		286.84
2026		9		74,504		10.6	%		4,554,996		4.9	%		61.14
Thereafter		19		266,540		38.1	%		38,010,850		41.2	%		142.61
Total retail properties		101		699,762		100.0	%		92,245,171		100.0	%		137.41
Total portfolio lease expirations		1,010		10,139,660		100.0	%	$	505,124,763		100.0	%	$	55.84

Notes:

(1) Excludes (i) retail space in the Company’s Manhattan office properties and (ii) the Empire State Building broadcasting licenses and observatory operations.

(2) If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(3) Excludes (i) 154,753 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

(4) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

Page 12

Second Quarter 2017

Tenant Lease Expirations

(unaudited)

Empire State Building Office (1)	Number of Leases Expiring (2)		Rentable Square Feet Expiring (3)		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent (4) (5)		Percent of Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		195,858		7.2	%	$	—		0.0	%	$	—
Signed leases not commenced		2		7,566		0.3	%		—		0.0	%		—
2017		17		60,066		2.2	%		3,421,170		2.6	%		56.96
2018		20		75,463		2.8	%		4,498,258		3.4	%		59.61
2019		18		67,576		2.5	%		3,552,766		2.7	%		52.57
2020		40		310,885		11.5	%		17,766,451		13.4	%		57.15
2021		18		119,530		4.4	%		6,314,624		4.8	%		52.85
2022		20		84,095		3.1	%		5,394,899		4.1	%		64.15
2023		9		53,057		2.0	%		3,261,282		2.5	%		61.47
2024		9		73,156		2.7	%		4,295,447		3.2	%		58.72
2025		6		57,433		2.1	%		3,012,013		2.3	%		52.44
2026		11		501,453		18.5	%		27,019,799		20.4	%		53.88
Thereafter		19		1,105,327		40.7	%		53,917,083		40.7	%		48.78
Total Empire State Building office		189		2,711,465		100.0	%	$	132,453,792		100.0	%	$	52.81

Empire State Building Broadcasting Licenses and Leases	Annualized Base Rent (6)		Annualized Expense Reimbursements		Annualized Rent (4)		Percent of Annualized Rent
2017	$	3,285,945	$	1,998,679	$	5,284,624		20.1	%
2018		4,744,533		3,021,072		7,765,605		29.6	%
2019		212,240		47,148		259,388		1.0	%
2020		1,579,354		396,487		1,975,841		7.5	%
2021		55,685		106,309		161,994		0.6	%
2022		1,088,769		251,305		1,340,074		5.1	%
2023		82,480		18,772		101,252		0.4	%
2024		44,558		59,257		103,815		0.4	%
2025		1,638,975		214,928		1,853,903		7.1	%
2026		750,000		102,033		852,033		3.2	%
Thereafter		5,740,762		816,676		6,557,438		25.0	%
Total Empire State Building broadcasting licenses and leases	$	19,223,301	$	7,032,666	$	26,255,967		100.0	%

Notes:

(1) Excludes retail space, broadcasting licenses and observatory operations

(2) If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(3) Excludes 25,937 rentable square feet of space attributable to building management use.

(4) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(5) Includes approximately $8.1 million of annualized rent related to physical space occupied by broadcasting tenants for their broadcasting operations. Does not include license fees charged to broadcasting tenants.

(6) Represents license fees for the use of the Empire State Building mast and base rent for physical space occupied by broadcasting tenants.

Page 13

Second Quarter 2017

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

20 Largest Tenants		Property	Lease Expiration (1)	Weighted Average Remaining Lease Term(2)		Total Occupied Square Feet (3)		Percent of Portfolio Rentable Square Feet (4)			Annualized Rent (5)		Percent of Portfolio Annualized Rent (6)
1.	Global Brands Group	ESB, 1333 B’Way, 111 West 33rd	June 2017-Oct. 2028		10.3 years		688,600		6.6	%	$	30,689,239		6.1	%
2.	Coty	ESB	Jan. 2030		12.6 years		312,700		3.0	%		15,404,334		3.0	%
3.	LinkedIn	ESB	Feb. 2026		8.7 years		282,083		2.7	%		14,602,529		2.9	%
4.	Sephora	112 West 34th Street	Jan. 2029		11.6 years		11,334		0.1	%		10,432,766		2.1	%
5.	PVH Corp.	501 Seventh Avenue	Oct. 2028		11.3 years		217,293		2.1	%		9,248,351		1.8	%
6.	Li & Fung	1359 Broadway	Oct. 2021-Oct. 2027		6.8 years		149,436		1.4	%		7,129,167		1.4	%
7.	Federal Deposit Insurance Corp.	ESB	Jan. 2020		2.6 years		121,879		1.2	%		6,807,507		1.3	%
8.	Macy’s	111 West 33rd Street	May 2030		12.9 years		131,117		1.3	%		6,622,229		1.3	%
9.	Urban Outfitters	1333 Broadway	Sept. 2029		12.3 years		56,730		0.5	%		6,594,879		1.3	%
10.	Footlocker	112 West 34th Street	Sept. 2031		14.3 years		34,192		0.3	%		6,214,260		1.2	%
11.	Legg Mason	First Stamford Place	Sept. 2024		7.3 years		137,583		1.3	%		6,205,120		1.2	%
12.	Duane Reade	ESB, 1350 B’Way, 250 West 57th	Feb. 2021-Sept. 2027		7.4 years		47,541		0.5	%		6,203,743		1.2	%
13.	On Deck Capital	1400 Broadway	Dec. 2026		9.5 years		107,800		1.0	%		5,724,530		1.1	%
14.	WDFG North America	ESB	Dec. 2025		8.5 years		5,300		0.1	%		5,511,240		1.1	%
15.	Shutterstock	ESB	Apr. 2029		11.8 years		104,386		1.0	%		5,364,497		1.1	%
16.	Thomson Reuters	Metro Center	Apr. 2018-Apr. 2020		2.3 years		91,921		0.9	%		4,813,400		1.0	%
17.	Kohl’s	1400 Broadway	May 2029		11.9 years		113,032		1.1	%		4,761,866		0.9	%
18.	The Michael J. Fox Foundation	111 West 33rd Street	Nov. 2029		12.4 years		75,959		0.7	%		4,557,540		0.9	%
19.	HNTB Corporation	ESB	Feb. 2026		8.7 years		78,361		0.8	%		4,466,577		0.9	%
20.	Target Corporation	112 West 34th Street	Jan. 2038		20.6 years		43,019		0.4	%		4,300,000		0.9	%
	Total						2,810,266		27.0	%	$	165,653,774		32.7	%

Notes:

(1) Expiration dates are per lease and do not assume exercise of renewal or extension options. For tenants with more than two leases, the lease expiration is shown as a range.

(2) Represents the weighted average lease term, based on annualized rent.

(3) Based on leases signed and commenced as of June 30, 2017.

(4) Represents the percentage of rentable square feet of the Company’s office and retail portfolios in the aggregate.

(5) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(6) Represents the percentage of annualized rent of the Company’s office and retail portfolios in the aggregate.

Portfolio Tenant Diversification by Industry (based on annualized rent)

Page 14

Second Quarter 2017

Capital Expenditures and Redevelopment Program

(unaudited)

	Three Months Ended
Capital expenditures	June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016
Tenant improvements - first generation	$	20,557	$	25,254	$	28,575	$	31,959	$	28,593
Tenant improvements - second generation		4,764		2,464		3,122		949		1,113
Leasing commissions - first generation		7,683		2,538		3,077		7,141		3,374
Leasing commissions - second generation		192		1,071		467		388		313
Building improvements - first generation		26,680		19,935		21,800		17,970		24,073
Building improvements - second generation		2,337		30		1,754		2,061		53
Observatory capital project		6,850		—		—		—		—
Total	$	69,063	$	51,292	$	58,795	$	60,468	$	57,519

Tenant space redevelopment by square feet ^{(1) (2)}

• Future redevelopment (Empire State Building)—240,000 square feet

• Future redevelopment (other Manhattan properties)—800,000 square feet

• Redevelopment completed—6,940,000 square feet

Inventory of vacant space ⁽²⁾

• Developed—620,000 square feet, 87%

• Undeveloped—90,000 square feet, 13%

Inventory of undeveloped space ⁽²⁾

• Vacant—90,000 square feet, 8%

• Expires in 2017—100,000 square feet, 10%

• Expires in 2018 and thereafter—850,000 square feet, 82%

Notes:

⁽¹⁾  These estimates are based on the Company’s current budgets and are subject to change.

⁽²⁾  Redevelopment program is for the Manhattan office assets only. Square footage based on market measurement. Developed space includes space that has been demolished and completed asbestos abatement and available for lease up or ready to be prebuilt. Permanent building use spaces, amenity spaces and broadcasting spaces are excluded.

Page 15

Second Quarter 2017

Observatory Summary

(unaudited and in thousands)

			Three Months Ended
Observatory NOI	Twelve Months to Date		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016		June 30, 2016
Observatory revenue	$	126,701	$	33,966	$	20,940	$	33,702	$	38,093	$	31,838
Observatory expenses		29,614		7,176		7,255		7,933		7,250		6,895
NOI		97,087		26,790		13,685		25,769		30,843		24,943
Intercompany rent expense (1)		77,505		20,675		13,378		20,469		22,983		18,488
NOI after intercompany rent	$	19,582	$	6,115	$	307	$	5,300	$	7,860	$	6,455

Note:

⁽¹⁾  The observatory pays a market-based rent payment comprised of fixed and percentage rent to the Empire State Building. Intercompany rent is eliminated upon consolidation.

Annual Observatory Revenues 2012 to 2016

Page 16

Second Quarter 2017

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Assets
Commercial real estate properties, at cost:
Land	$	201,196		$	201,196		$	201,196		$	201,196		$	201,196
Development costs		7,978			7,977			7,951			7,946			7,946
Building and improvements		2,347,435			2,292,363			2,249,482			2,196,864			2,147,050
		2,556,609			2,501,536			2,458,629			2,406,006			2,356,192
Less: accumulated depreciation		(605,481	)		(581,703	)		(556,546	)		(532,406	)		(509,736	)
Commercial real estate properties, net		1,951,128			1,919,833			1,902,083			1,873,600			1,846,456
Cash and cash equivalents		440,958			532,442			554,371			594,297			35,454
Restricted cash		68,011			62,464			61,514			60,752			59,141
Tenant and other receivables, net		23,995			20,580			22,542			19,569			14,521
Deferred rent receivables, net		165,470			158,005			152,074			143,578			133,955
Prepaid expenses and other assets		54,624			36,815			53,749			33,685			47,895
Deferred costs, net		263,392			270,456			277,081			287,591			292,777
Acquired below-market ground leases, net		372,144			374,102			376,060			378,018			379,976
Goodwill		491,479			491,479			491,479			491,479			491,479
Total assets	$	3,831,201		$	3,866,176		$	3,890,953		$	3,882,569		$	3,301,654
Liabilities and Equity
Mortgage notes payable, net	$	724,312		$	754,548		$	759,016		$	763,457		$	767,717
Senior unsecured notes, net		592,073			591,232			590,388			589,546			588,703
Unsecured term loan facility, net		263,114			263,019			262,927			262,830			262,735
Unsecured revolving credit facility		—			—			—			—			40,000
Accounts payable and accrued expenses		136,617			125,910			134,064			154,573			143,296
Acquired below-market leases, net		74,083			78,246			82,300			87,708			91,850
Deferred revenue and other liabilities		27,380			31,097			32,212			24,176			23,019
Tenants’ security deposits		49,669			47,198			47,183			47,440			47,565
Total liabilities		1,867,248			1,891,250			1,908,090			1,929,730			1,964,885
Total equity		1,963,953			1,974,926			1,982,863			1,952,839			1,336,769
Total liabilities and equity	$	3,831,201		$	3,866,176		$	3,890,953		$	3,882,569		$	3,301,654

Page 17

Second Quarter 2017

Condensed Consolidated Statements of Income

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Revenues
Rental revenue	$	120,844		$	117,113		$	117,498		$	115,634		$	112,613
Tenant expense reimbursement		17,569			15,974			17,109			19,176			19,054
Observatory revenue		33,966			20,940			33,702			38,093			31,838
Third party management and other fees		392			351			394			404			423
Other revenue and fees		4,353			10,576			10,560			2,541			1,887
Total revenues		177,124			164,954			179,263			175,848			165,815
Operating expenses
Property operating expenses		38,529			42,210			38,775			38,585			37,386
Ground rent expenses		2,332			2,331			2,332			2,331			2,330
General and administrative expenses		12,579			11,088			13,455			11,798			12,907
Observatory expenses		7,176			7,255			7,933			7,250			6,895
Real estate taxes		24,542			24,558			24,288			24,691			23,557
Depreciation and amortization		40,532			40,846			39,829			37,607			38,548
Total operating expenses		125,690			128,288			126,612			122,262			121,623
Total operating income		51,434			36,666			52,651			53,586			44,192
Other income (expense)
Interest expense		(17,477	)		(17,742	)		(17,837	)		(17,939	)		(17,420	)
Loss from derivative financial instruments		(42	)		(247	)		—			—			—
Income before income taxes		33,915			18,677			34,814			35,647			26,772
Income tax (expense) benefit		(2,556	)		468			(1,806	)		(2,750	)		(2,132	)
Net income		31,359			19,145			33,008			32,897			24,640
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Net income attributable to non-controlling interests		(14,541	)		(8,926	)		(15,808	)		(16,690	)		(13,317	)
Net income attributable to common stockholders	$	16,584		$	9,985		$	16,966		$	15,973		$	11,089
Weighted average common shares outstanding
Basic		157,921			156,493			153,273			136,831			122,502
Diluted		298,398			297,962			297,046			280,614			266,167
Net income per share attributable to common stockholders
Basic and diluted	$	0.10		$	0.06		$	0.11		$	0.12		$	0.09
Dividends per share	$	0.105		$	0.105		$	0.105		$	0.105		$	0.105

Page 18

Second Quarter 2017

Funds from Operations (“FFO”), Modified Funds From Operations (“Modified FFO”), Core Funds from

Operations (“Core FFO”), Core Funds Available for Distribution (“Core FAD”) and EBITDA

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Reconciliation of Net Income to FFO, Modified FFO and Core FFO
Net Income	$	31,359		$	19,145		$	33,008		$	32,897		$	24,640
Preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Real estate depreciation and amortization		40,132			40,424			39,426			37,318			38,386
FFO attributable to common stockholders and non-controlled interests		71,257			59,335			72,200			69,981			62,792
Amortization of below-market ground lease		1,958			1,958			1,958			1,957			1,958
Modified FFO attributable to common stockholders and non-controlled interests		73,215			61,293			74,158			71,938			64,750
Prepayment penalty and deferred financing cost write-off		—			—			—			—			—
Acquisition expenses		—			—			—			—			—
Core FFO attributable to common stockholders and non-controlled interests	$	73,215		$	61,293		$	74,158		$	71,938		$	64,750
Total weighted average shares and Operating Partnership Units
Basic		296,388			296,388			296,084			278,739			266,167
Diluted		298,398			297,962			297,046			280,614			266,167
FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.24		$	0.20		$	0.24		$	0.25		$	0.24
Diluted	$	0.24		$	0.20		$	0.24		$	0.25		$	0.24
Modified FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.21		$	0.25		$	0.26		$	0.24
Diluted	$	0.25		$	0.21		$	0.25		$	0.26		$	0.24
Core FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.21		$	0.25		$	0.26		$	0.24
Diluted	$	0.25		$	0.21		$	0.25		$	0.26		$	0.24
Reconciliation of Core FFO to Core FAD
Core FFO	$	73,215		$	61,293		$	74,158		$	71,938		$	64,750
Add:
Amortization of deferred financing costs		1,331			1,294			1,293			1,291			1,142
Non-real estate depreciation and amortization		400			422			403			289			162
Amortization of non-cash compensation expense		3,813			3,154			2,476			2,604			2,553
Amortization of debt discount		668			668			668			668			668
Deduct:
Straight-line rental revenues		(7,722	)		(5,998	)		(8,652	)		(9,619	)		(6,796	)
Amortization of debt premiums		(1,737	)		(1,737	)		(1,737	)		(1,736	)		(1,737	)
Above/below-market rent revenue amortization		(1,119	)		(1,428	)		(2,509	)		(1,210	)		(844	)
Corporate capital expenditures		(10	)		(382	)		(285	)		(1,115	)		(8,621	)
Tenant improvements—second generation		(4,764	)		(2,464	)		(3,122	)		(949	)		(1,113	)
Building improvements—second generation		(2,337	)		(30	)		(1,754	)		(2,061	)		(53	)
Leasing commissions—second generation		(192	)		(1,071	)		(467	)		(388	)		(313	)
Core FAD	$	61,546		$	53,721		$	60,472		$	59,712		$	49,798
Reconciliation of Net Income to EBITDA
Net income	$	31,359		$	19,145		$	33,008		$	32,897		$	24,640
Interest expense		17,477			17,742			17,837			17,939			17,420
Income tax expense (benefit)		2,556			(468	)		1,806			2,750			2,132
Depreciation and amortization		40,532			40,846			39,829			37,607			38,548
EBITDA	$	91,924		$	77,265		$	92,480		$	91,193		$	82,740

Page 19

Second Quarter 2017

Net Operating Income (“NOI”)

(unaudited and dollars in thousands)

	Three Months Ended
	June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016			June 30, 2016
Reconciliation of Net Income to NOI and Cash NOI
Net income	$	31,359		$	19,145		$	33,008		$	32,897		$	24,640
Add:
General and administrative expenses		12,579			11,088			13,455			11,798			12,907
Depreciation and amortization		40,532			40,846			39,829			37,607			38,548
Interest expense		17,477			17,742			17,837			17,939			17,420
Loss from derivative financial instruments		42			247			—			—			—
Income tax expense (benefit)		2,556			(468	)		1,806			2,750			2,132
Less:
Third-party management and other fees		(392	)		(351	)		(394	)		(404	)		(423	)
Net operating income		104,153			88,249			105,541			102,587			95,224
Straight-line rent		(7,722	)		(5,998	)		(8,652	)		(9,619	)		(6,796	)
Above/below-market rent revenue amortization		(1,119	)		(1,428	)		(2,509	)		(1,210	)		(844	)
Below-market ground lease amortization		1,958			1,958			1,958			1,957			1,958
Cash net operating income		97,270			82,781			96,338			93,715			89,542
Less: Observatory net operating income		(26,790	)		(13,685	)		(25,769	)		(30,843	)		(24,943	)
Total portfolio (excluding observatory) cash net operating income	$	70,480		$	69,096		$	70,569		$	62,872		$	64,599

Page 20

Second Quarter 2017

Debt Summary

(unaudited and dollars in thousands)

	June 30, 2017								March 31, 2017
				Weighted Average								Weighted Average
Debt Summary	Balance			Interest Rate			Maturity (Years)		Balance			Interest Rate			Maturity (Years)
Fixed rate mortgage debt	$	725,136			4.78	%		6.6	$	749,672			5.40	%		2.0
Senior unsecured notes		600,000			3.47	%		6.9		600,000			3.47	%		7.1
Total fixed rate debt		1,325,136			4.19	%		6.7		1,349,672			4.54	%		4.3
Unsecured revolving credit facility		—			—			1.6		—			—			1.8
Unsecured term loan facility (1)		265,000			2.82	%		5.2		265,000			2.58	%		5.4
Total variable rate debt		265,000			2.82	%		5.2		265,000			2.58	%		5.4
Total debt		1,590,136			3.96	%		6.5		1,614,672			4.22	%		4.5
Premium/discount		(1,232	)							(163	)
Deferred financing costs, net		(9,405	)							(5,710	)
Total	$	1,579,499							$	1,608,799

Note:

⁽¹⁾  Beginning August 2017, LIBOR is fixed at 2.1485% under a variable to fixed interest rate swap agreement.

Available Capacity	Facility		Outstanding at June 30, 2017		Letters of Credit		Available Capacity
Unsecured revolving credit facility (1)	$	1,100,000	$	—	$	—	$	1,100,000

Covenant Summary	Required			Current Quarter			In Compliance
Maximum Total Leverage(2)		< 60	%		24.2	%		Yes
Maximum Secured Debt		< 40	%		11.0	%		Yes
Minimum Fixed Charge Coverage		> 1.50	x		4.3	x		Yes
Minimum Unencumbered Interest Coverage		> 1.75	x		7.5	x		Yes
Maximum Unsecured Leverage		< 60	%		21.2	%		Yes
Maximum Secured Recourse Indebtedness		< 10	%		0	%		Yes
Minimum Tangible Net Worth	$	1,203,815		$	1,665,856			Yes

Notes:

⁽¹⁾  The unsecured revolving credit facility has an accordion feature allowing for an increase in maximum aggregate principal balance to $1.25 billion under certain circumstances. This facility matures in January 2019 with two additional six-month extension options.

⁽²⁾  Represents the ratio of total indebtedness to total asset value as defined and determined in accordance with the credit facility agreement.

Page 21

Second Quarter 2017

Debt Detail

(unaudited and dollars in thousands)

	Stated Interest Rate (%)			Current Interest Rate (%)			Principal Balance			Maturity Date		Amortization
Fixed rate mortgage debt:
1333 Broadway		6.32	%		6.32	%	$	67,138			1/5/2018		30 years
1400 Broadway (first lien mortgage loan)		6.12	%		6.12	%		67,181			2/5/2018		30 years
1400 Broadway (second lien mortgage loan)		3.35	%		3.35	%		9,281			2/5/2018		30 years
111 West 33rd Street (first lien mortgage loan)		6.01	%		6.01	%		74,662			4/5/2018		30 years
111 West 33rd Street (second lien mortgage loan)		6.56	%		6.56	%		9,440			4/5/2018		30 years
1350 Broadway		5.87	%		5.87	%		37,458			4/5/2018		30 years
Metro Center		3.59	%		3.59	%		94,976			11/5/2024		30 years
10 Union Square		3.70	%		3.70	%		50,000			4/1/2026		Interest only
1542 Third Avenue		4.29	%		4.29	%		30,000			5/1/2027		Interest only
First Stamford Place (1)		4.28	%		4.28	%		180,000			7/1/2027		5 year interest only; 30 years thereafter
1010 Third Avenue and 77 West 55th Street		4.01	%		4.01	%		40,000			1/5/2028		30 years
10 Bank Street		4.23	%		4.23	%		35,000			6/1/2032		25 years
383 Main Avenue		4.44	%		4.44	%		30,000			6/30/2032		5 year interest only; 30 years thereafter
Total mortgage debt								725,136
Unsecured revolving credit facility		LIBOR plus 1.15	%		2.37	%		—			1/23/2019		Interest only
Exchangeable senior unsecured notes		2.63	%		2.63	%		250,000			8/15/2019		Interest only
Unsecured term loan facility		LIBOR plus 1.60	%		2.82	%		265,000			8/24/2022		Interest only
Senior unsecured notes (Series A)		3.93	%		3.93	%		100,000			3/27/2025		Interest only
Senior unsecured notes (Series B)		4.09	%		4.09	%		125,000			3/27/2027		Interest only
Senior unsecured notes (Series C)		4.18	%		4.18	%		125,000			3/27/2030		Interest only
Total / weighted average debt					3.96	%		1,590,136
Premium/discounts								(1,232	)
Deferred financing costs, net								(9,405	)
Total							$	1,579,499

Note:

⁽¹⁾  Represents a $164 million mortgage loan bearing interest of 4.09% and a $16 million loan bearing interest at 6.25%.

Page 22

Second Quarter 2017

Debt Maturities and Ground Lease Commitments

(unaudited and dollars in thousands)

Year	Amortization		Maturities (1)		Total			Percentage of Total Debt			Weighted Average Interest Rate of Maturing Debt
2017	$	3,898	$	—	$	3,898			0.2	%		n/a
2018		4,417		262,210		266,627			16.8	%		6.02	%
2019		3,790		250,000		253,790			16.0	%		2.63	%
2020		3,938		—		3,938			0.2	%		n/a
2021		4,090		—		4,090			0.3	%		n/a
Thereafter		43,310		1,014,483		1,057,793			66.5	%		3.76	%
Total debt	$	63,443	$	1,526,693		1,590,136			100.0	%		3.96	%
Premium/discount						(1,232	)
Deferred financing costs, net						(9,405	)
Total					$	1,579,499

Note:

(1) Assumes no extension options are exercised.

Debt Maturity Profile

Ground Lease Commitments

Year	1350 Broadway		1400 Broadway		111 West 33rd Street		Total
2017	$	54	$	337	$	368	$	759
2018		108		675		735		1,518
2019		108		675		735		1,518
2020		108		675		735		1,518
2021		108		675		735		1,518
Thereafter		2,331		12,150		40,731		55,212
	$	2,817	$	15,187	$	44,039	$	62,043

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Second Quarter 2017

Supplemental Definitions

Funds From Operations (“FFO”)

We compute FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment writedowns of investments in depreciable real estate and investments in in-substance real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to non-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized non-GAAP financial measure for REITs that we believe, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITs. In addition, FFO is useful to investors as it captures features particular to real estate performance by recognizing that real estate has generally appreciated over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. We present FFO because we consider it an important supplemental measure of our operating performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results of operations, the utility of FFO as a measure of its performance is limited. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Modified Funds From Operations (“Modified FFO”)

Modified FFO adds back an adjustment for any above or below-market ground lease amortization to traditionally defined FFO. We consider this a useful supplemental measure in evaluating our operating performance due to the non-cash accounting treatment under GAAP, which stems from the third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we consider it an important supplemental measure of our operating performance in that it adds back the non-cash amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

Core Funds From Operations (“Core FFO”)

Core FFO adds back to Modified FFO the following items: acquisition expenses, deferred financing cost write-off, prepayment penalties, construction severance expenses and acquisition break-up fee. The Company presents Core FFO because it considers it an important supplemental measure of its operating performance in that it excludes non-recurring items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.

Core Funds Available for Distribution (“Core FAD”)

In addition to Core FFO, we present Core FAD by (i) adding to Core FFO non-real estate depreciation and amortization, the amortization of deferred financing costs, amortization of debt discounts and non-cash compensation expenses and (ii) deducting straight line rent, recurring second generation leasing commissions, tenant improvements, prebuilts, capital expenditures, furniture, fixtures & equipment, amortization of debt premiums and above/below market rent revenue. Core FAD is presented solely as a supplemental disclosure that we believe provides useful information regarding our ability to fund our dividends. Core FAD does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FAD is not indicative of cash available to fund ongoing cash needs., including the ability to make cash distributions. There can be no assurance that Core FAD presented by us is comparable to similarly titled measures of other REITs.

Net Operating Income (NOI)

NOI is a non-GAAP financial measure of performance. NOI is used by our management to evaluate and compare the performance of our properties and to determine trends in earnings and to compute the fair value of our properties as it is not affected by; (i) the cost of funds of the property owner, (ii) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (iii) acquisition expenses and break-up fee, or (iv) general and administrative expenses and other gains and losses that are specific to the property owner. The cost of funds is eliminated from net operating income because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed, purchases or sales. We believe that eliminating these costs from net income is useful because the resulting measure captures the actual revenue, generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with GAAP. Other companies may use different methods for calculating NOI or similarly titled measures and, accordingly, our NOI may not-be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

EBITDA

We compute EBITDA as net income plus interest expense, income taxes and depreciation. We present EBITDA because we believe that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.

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