EX-99.2 3 d710698dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

 

LOGO


LOGO    Fourth Quarter 2023

 

 

     Page  
Table of Contents   

Summary

  

Supplemental Definitions

     3  

Company Profile

     5  

Condensed Consolidated Balance Sheets

     6  

Condensed Consolidated Statements of Operations

     7  

Highlights

     8  

Selected Property Data

  

Property Summary Net Operating Income

     9  

Same Store Net Operating Income (“NOI”), Initial Cash Rent Contributing to Cash NOI

     10  

Leasing Activity

     11  

Commercial Property Detail

     13  

Portfolio Expirations and Vacates Summary

     14  

Tenant Lease Expirations

     15  

Largest Tenants and Portfolio Tenant Diversification by Industry

     17  

Capital Expenditures and Redevelopment Program

     18  

Observatory Summary

     19  

Financial information

  

FFO, Modified FFO, Core FFO, FAD and EBITDA

     20  

Consolidated Debt Analysis

  

Debt Summary

     21  

Debt Detail

     22  

Debt Maturities

     23  

Ground Leases

     23  

Forward-looking Statements

This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and are including this statement for purposes of complying with those safe harbor provisions. You can identify forward-looking statements by the use of forward-looking terminology such as “aims,” “anticipates,” “approximately,” “believes,” “contemplates,” “continues,” “estimates,” “expects,” “forecasts,” “hope,” “intends,” “may,” “plans,” “seeks,” “should,” “thinks,” “will,” “would” or the negative of these words and phrases or similar words or phrases. For the avoidance of doubt, any projection, guidance, or similar estimation about the future or future results, performance or achievements is a forward-looking statement.

Forward-looking statements are subject to substantial risks and uncertainties, many of which are difficult to predict and are generally beyond our control, and you should not rely on them as predictions of future events. Forward-looking statements 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).

Many important factors could cause our actual results, performance, achievements, and future events to differ materially from those set forth, implied, anticipated, expected, projected, assumed or contemplated in our forward-looking statements, including, among other things: (i) economic, market, political and social impact of, and uncertainty relating to, any catastrophic events, including pandemics, epidemics or other outbreaks of disease, climate-related risks such as natural disasters and extreme weather events, terrorism and other armed hostilities, as well as cybersecurity threats and technology disruptions; (ii) a failure of conditions or performance regarding any event or transaction described herein; (iii) resolution of legal proceedings involving the Company; (iv) reduced demand for office, multifamily or retail space, including as a result of the changes in the use of office space and remote work; (v) changes in our business strategy; (vi) a decline in Observatory visitors due to changes in domestic or international tourism, including due to health crises, geopolitical events, currency exchange rates, and/or competition from other observatories; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors; (ix) declining real estate valuations and impairment charges; (x) termination of our ground leases; (xi) limitations on our ability to pay down, refinance, restructure or extend our indebtedness or borrow additional funds; (xii) decreased rental rates or increased vacancy rates; (xiii) difficulties in executing capital projects or development projects successfully or on the anticipated timeline or budget; (xiv) difficulties in identifying and completing acquisitions; (xv) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvi) our failure to qualify as a REIT; (xvii) incurrence of taxable capital gain on disposition of an asset due to failure of compliance with a 1031 exchange program; and (xviii) failure to achieve sustainability metrics and goals, including as a result of tenant collaboration, and impact of governmental regulation on our sustainability efforts. For a further discussion of these and other factors that could impact the company’s future results, performance, or transactions, see the section entitled “Risk Factors” of our annual report on Form 10-K for the year ended December 31, 2022 and any additional factors that may be contained in any filing we make with the U.S. Securities and Exchange Commission.

While forward-looking statements reflect the company’s good faith beliefs, they do not guarantee future performance. Any forward-looking statement contained in this presentation speaks only as of the date on which it was made, and we assume no obligation to update or revise publicly 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 presentation, 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).

 

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Fourth Quarter 2023

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 write-off 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, we believe 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 believe 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 believe it is 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: loss on early extinguishment of debt, acquisition expenses, severance expenses and IPO litigation expense. The Company believes Core FFO is an important supplemental measure of its operating performance because 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, amortization of debt premiums and above/below market rent revenue, and recurring capital improvements such as second generation leasing commissions, tenant improvements, prebuilts, capital expenditures and furniture, fixtures & equipment. 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”) and Property Cash 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, loss on early extinguishment of debt, impairment charges and loss from derivative financial instruments, 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 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 to investors 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. In some cases, the Company also presents (1) Property Cash NOI, which excludes Observatory NOI and the effects of straight-line rent, fair value lease revenue, and straight-line ground rent expense adjustment, and (2) Property Cash NOI excluding lease termination fees. Property Cash NOI is presented solely as a supplemental disclosure that management believes allows investors to compare NOI performance across periods without taking into account the effect of certain non-cash rental revenues and straight-line ground rent expense adjustment. Similar to depreciation and amortization expense, fair value lease revenues, because of historical cost accounting, may distort operating performance measures at the property level. Additionally, presenting NOI excluding the impact of straight-line rent and straight-line ground rent expense adjustment provides investors with an alternative view of operating performance at the property level that more closely reflects net cash generated in the portfolio. Presenting Property Cash NOI excluding lease termination fees provides investors with additional information that allows them to compare operating performance between periods without taking into account termination fees, which can distort the results for any given period because they generally represent multiple months or years of a tenant’s rental obligations that are paid in a lump sum in connection with a negotiated early termination of the tenant’s lease and are not reflective of the core ongoing operating performance of the Company’s portfolio. However, the usefulness of NOI, Property Cash NOI, and Property Cash NOI excluding lease termination fees 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 and Property Cash NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI and Property Cash NOI are measurements of the operating performance of our properties but do not measure our performance as a whole. These metrics therefore are not substitutes for net income as computed in accordance with GAAP. These measures should be analyzed in conjunction with net income computed in accordance with GAAP. Other companies may use different methods for calculating NOI, Property Cash NOI or similarly titled measures and, accordingly, our measures may not be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

Same Store

In the Company’s analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were owned by the Company throughout each period presented. The Company refers to properties acquired prior to the beginning of the earliest period presented and owned by the Company through the end of the latest period presented as “Same Store.” Same Store therefore excludes properties acquired after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired for that property to be included in Same Store. The Company’s definition of Same Store also excludes properties held-for-sale or those which we otherwise expect to dispose of in the subsequent quarter and our multifamily properties. For mixed-use properties, all same store property NOI is represented in the property category that comprises the majority of that mixed-use property’s NOI.

 

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Fourth Quarter 2023

Supplemental Definitions

 

 

EBITDA and Adjusted 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. For adjusted EBITDA, we add back impairment charges and gain on disposition of property.

Net Debt to Adjusted EBITDA

We compute Net Debt to Adjusted EBITDA as the Company’s pro-rata share of gross debt less cash and cash equivalents divided by the Company’s pro-rata share of trailing twelve months Adjusted EBITDA. The Company believes that the presentation of Net Debt to Adjusted EBITDA provides useful information to investors because the Company reviews Net Debt to Adjusted EBITDA as part of the management of its overall financial flexibility, capital structure and leverage based on its percentage ownership interest in all of its assets.

 

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LOGO    Fourth Quarter 2023

 

 

COMPANY PROFILE

 

Empire State Realty Trust, Inc., or the Company, is a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets. The Company is a recognized leader in energy efficiency and indoor environmental quality. ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, the #1 attraction in the U.S. in Tripadvisor’s Travelers’ Choice Awards: Best of the Best for two consecutive years.

BOARD OF DIRECTORS

 

 

Anthony E. Malkin    Chairman and Chief Executive Officer
Thomas J. DeRosa    Director, Chair of the Compensation and Human Capital Committee
Steven J. Gilbert    Director, Lead Independent Director
S. Michael Giliberto    Director, Chair of the Audit Committee
Patricia S. Han    Director
Grant H. Hill    Director
R. Paige Hood    Director, Chair of the Finance Committee
James D. Robinson IV    Director, Chair of the Nominating and Corporate Governance Committee
Christina Van Tassell    Director
Hannah Yang    Director

EXECUTIVE MANAGEMENT

 

 

Anthony E. Malkin    Chairman and Chief Executive Officer
Christina Chiu    President
Thomas P. Durels    Executive Vice President, Real Estate

Steve Horn

  

Executive Vice President, Chief Financial Officer & Chief Accounting Officer

COMPANY INFORMATION

 

 

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

RESEARCH COVERAGE

 

 

Bank of America Merrill Lynch    Camille Bonnel    (416) 369-2140    camille.bonnel@bofa.com
BMO Capital Markets Corp.    John Kim    (212) 885-4115    jp.kim@bmo.com
BTIG    Thomas Catherwood    (212) 738-6140    tcatherwood@btig.com
Citi    Michael Griffin    (212) 816-5871    michael.a.griffin@citi.com
Evercore ISI    Steve Sakwa    (212) 446-9462    steve.sakwa@evercoreisi.com
Green Street Advisors    Dylan Burzinski    (949) 640-8780    dburzinski@greenstreetadvisors.com
KeyBanc Capital Markets    Todd Thomas    (917) 368-2286    tthomas@key.com
Wells Fargo Securities, LLC    Blaine Heck    (443) 263-6529    blaine.heck@wellsfargo.com
Wolfe Research    Andrew Rosivach    (646) 582-9251    arosivach@wolferesearch.com

 

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LOGO   

Fourth Quarter 2023

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

 

 

     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Assets

          

Commercial real estate properties, at cost:

          

Land

   $ 366,357     $ 366,364     $ 361,497     $ 361,497     $ 365,540  

Development costs

     8,178       8,178       8,204       8,178       8,166  

Building and improvements

     3,280,657       3,245,555       3,196,181       3,183,615       3,177,743  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     3,655,192       3,620,097       3,565,882       3,553,290       3,551,449  

Less: accumulated depreciation

     (1,250,062     (1,217,967     (1,180,558     (1,162,923     (1,137,267
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Commercial real estate properties, net

     2,405,130       2,402,130       2,385,324       2,390,367       2,414,182  

Assets held for sale

     —        —        —        35,980       35,538  

Cash and cash equivalents

     346,620       353,999       315,357       272,648       264,434  

Restricted cash

     60,336       66,954       80,451       108,183       50,244  

Tenant and other receivables

     39,836       37,651       32,901       23,879       24,102  

Deferred rent receivables

     255,628       254,233       249,881       238,842       240,188  

Prepaid expenses and other assets

     98,167       82,918       98,986       57,891       98,114  

Deferred costs, net

     172,457       175,488       176,678       182,367       187,570  

Acquired below-market ground leases, net

     321,241       323,199       325,157       327,115       329,073  

Right of use assets

     28,439       28,496       28,554       28,612       28,670  

Goodwill

     491,479       491,479       491,479       491,479       491,479  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,219,333     $ 4,216,547     $ 4,184,768     $ 4,157,363     $ 4,163,594  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Equity

          

Mortgage notes payable, net

   $ 877,388     $ 878,757     $ 880,592     $ 882,142     $ 883,705  

Senior unsecured notes, net

     973,872       973,819       973,768       973,714       973,659  

Unsecured term loan facility, net

     389,286       389,158       389,028       388,901       388,773  

Unsecured revolving credit facility, net

     —        —        —        —        —   

Accounts payable and accrued expenses

     99,756       83,299       71,709       71,605       80,729  

Acquired below-market leases, net

     13,750       14,703       15,280       16,581       17,849  

Ground lease liabilities

     28,439       28,496       28,554       28,612       28,670  

Deferred revenue and other liabilities

     70,298       75,688       73,972       76,769       76,091  

Tenants’ security deposits

     35,499       39,307       40,253       35,111       25,084  

Liabilities related to assets held for sale

     —        —        —        6,862       5,943  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     2,488,288       2,483,227       2,473,156       2,480,297       2,480,503  

Total equity

     1,731,045       1,733,320       1,711,612       1,677,066       1,683,091  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 4,219,333     $ 4,216,547     $ 4,184,768     $ 4,157,363     $ 4,163,594  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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LOGO   

Fourth Quarter 2023

Condensed Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)

 

 

     Three Months Ended  
     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Revenues

          

Rental revenue (1)

   $  151,167     $  151,458     $  154,603     $  140,091     $  145,905  

Observatory revenue

     36,217       37,562       33,433       22,154       32,318  

Third-party management and other fees

     275       268       381       427       336  

Other revenue and fees

     5,223       2,238       2,125       1,950       2,714  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     192,882       191,526       190,542       164,622       181,273  

Operating expenses

          

Property operating expenses

     42,944       42,817       39,519       42,044       39,060  

Ground rent expenses

     2,332       2,331       2,332       2,331       2,332  

General and administrative expenses

     16,144       16,012       16,075       15,708       16,478  

Observatory expenses

     9,282       9,471       8,657       7,855       8,529  

Real estate taxes

     31,809       32,014       31,490       31,788       31,420  

Depreciation and amortization

     49,599       46,624       46,280       47,408       44,500  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     152,110       149,269       144,353       147,134       142,319  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

     40,772       42,257       46,189       17,488       38,954  

Other income (expense)

          

Interest income

     4,740       4,462       3,339       2,595       2,804  

Interest expense

     (25,393     (25,382     (25,405     (25,304     (25,634

Gain (loss) on disposition of property

     (2,497           13,565       15,696       6,818  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     17,622       21,337       37,688       10,475       22,942  

Income tax (expense) benefit

     (1,792     (1,409     (733     1,219       (1,322
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income

     15,830       19,928       36,955       11,694       21,620  

Net (income) loss attributable to noncontrolling interests:

          

Non-controlling interests in the Operating Partnership

     (5,670     (7,207     (14,049     (4,168     (7,947

Non-controlling interests in other partnerships

     1       (111     (1     43       (28

Private perpetual preferred unit distributions

     (1,050     (1,050     (1,051     (1,050     (1,050
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 9,111     $ 11,560     $ 21,854     $ 6,519     $ 12,595  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding

          

Basic

     161,974       161,851       160,028       161,339       161,720  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     267,003       266,073       264,196       265,197       265,370  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share attributable to common stockholders

          

Basic and diluted

   $ 0.06     $ 0.07     $ 0.14     $ 0.04     $ 0.08  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends per share

   $ 0.035     $ 0.035     $ 0.035     $ 0.035     $ 0.035  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note:

(1)

The following table reflects the components of rental revenue.

 

     Three Months Ended  
     December 31,
2023
     September 30,
2023
     June 30,
2023
     March 31,
2023
     December 31,
2022
 

Rental Revenue

              

Base rent

   $  134,467      $ 133,228      $  138,808      $  124,782      $ 131,745  

Billed tenant expense reimbursement

     16,700        18,230        15,795        15,309        14,160  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total rental revenue

   $  151,167      $  151,458      $  154,603      $  140,091      $  145,905  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The preceding table of the components of rental revenue is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, securities analysts and other interested parties to evaluate the Company’s performance.

 

Page 7


LOGO   

Fourth Quarter 2023

Highlights

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

 

 

     Three Months Ended  
     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Office and Retail Metrics:

          

Total rentable square footage

     9,359,219       9,361,656       9,356,165       9,637,356       9,661,065  

Percent occupied (1)

     86.3     87.0     86.8     86.7     85.2

Percent leased (2)

     90.6     90.5     90.3     89.4     88.6

Same Store Property Cash Net Operating Income (NOI):

          

Manhattan office portfolio

   $ 66,897     $ 61,985     $ 62,800     $ 58,227     $ 61,913  

Greater New York office portfolio

     5,206       3,982       4,291       3,121       3,731  

Retail portfolio

     1,791       1,752       1,609       512       753  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Same Store Property Cash NOI

   $ 73,894     $ 67,719     $ 68,700     $ 61,860     $ 66,397  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Multifamily Metrics:

          

Multifamily Cash NOI (4)

   $ 4,032     $ 4,837     $ 3,756     $ 3,499     $ 2,848  

Total number of units

     727       727       721       721       721  

Percent occupied

     98.1     97.1     97.4     97.2     96.3

Observatory Metrics:

          

Observatory NOI

   $ 26,935     $ 28,091     $ 24,776     $ 14,299     $ 23,789  

Number of visitors (3)

     711,000       743,000       666,000       443,000       660,000  

Change in visitors year-over-year

     7.7     8.2     16.2     64.7     83.3
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratios at ESRT pro-rata share: (4)

          

Debt to Total Market Capitalization (5)

     45.2     49.7     51.4     54.8     54.0

Net Debt to Total Market Capitalization (5)

     41.1     45.4     47.6     51.6     50.9

Debt and Perpetual Preferred Units to Total Market Capitalization (5)

     47.0     51.7     53.5     56.9     56.1

Net Debt and Perpetual Preferred Units to Total Market Capitalization (5)

     43.0     47.6     49.8     53.9     53.1

Debt to Adjusted EBITDA (6)

     6.4x       6.6x       6.7x       6.6x       6.5x  

Net Debt to Adjusted EBITDA (6)

     5.4x       5.5x       5.8x       5.7x       5.7x  

Core FFO Payout Ratio (7)

     14     14     14     20     16

Core FAD Payout Ratio (8)

     35     23     29     83     23

Core FFO per share - diluted

   $ 0.25     $ 0.25     $ 0.26     $ 0.16     $ 0.22  

Diluted weighted average shares

     267,003       266,073       264,196       265,197       265,370  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Class A common stock price at quarter end

   $ 9.69     $ 8.04     $ 7.49     $ 6.49     $ 6.74  

Dividends declared and paid per share

   $ 0.035     $ 0.035     $ 0.035     $ 0.035     $ 0.035  

Dividends per share - annualized

   $ 0.14     $ 0.14     $ 0.14     $ 0.14     $ 0.14  

Dividend yield (9)

     1.4     1.7     1.9     2.2     2.1

Series 2013 Private Perpetual Preferred Units outstanding ($16.62 liquidation value)

     1,560       1,560       1,560       1,560       1,560  

Series 2019 Private Perpetual Preferred Units outstanding ($13.52 liquidation value)

     4,664       4,664       4,664       4,664       4,664  

Class A common stock

     162,062       161,346       159,843       160,340       160,140  

Class B common stock (10)

     984       987       988       989       990  

Operating partnership units

     107,900       108,618       110,087       110,618       109,905  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total common stock and operating partnership units outstanding (11)

     270,946       270,951       270,918       271,947       271,035  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

(1)

Based on leases signed and commenced as of end of period.

(2)

Represents occupancy and includes signed leases not commenced.

(3)

Reflects the number of visitors who pass through the turnstile, excluding visitors who make a second visit on the same ticket at no additional charge.

(4)

Calculated to include ESRT’s pro-rata 90% share of NOI, debt, interest, EBITDA and FFO at its joint venture properties.

(5)

Market capitalization represents the sum of (i) Company’s common stock per share price as of December 31, 2023 multiplied by the total outstanding number of shares of common stock and operating partnership units as of December 31, 2023; (ii) the number of Series 2014 perpetual preferred units at December 31, 2023 multiplied by $16.62, (iii) the number of Series 2019 perpetual preferred units at December 31, 2023 multiplied by $13.52, and (iv) our outstanding indebtedness as of December 31, 2023.

(6)

Calculated based on trailing 12 months Adjusted EBITDA.

(7)

Represents the amount of Core FFO paid out in distributions.

(8)

Beginning in the three months ended December 31, 2023, we have eliminated a deduction of other non-recurring capital improvements from Core FFO to arrive at Core FAD and the related Core FAD Payout Ratio. We made this modification above to the calculation of Core FAD Payout Ratio for the other periods presented; in our previous supplemental reports prior to this change, the Core FAD Payout Ratios were 27%, 33%, 97%, and 23% for the three months ended September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

(9)

Based on the closing price per share of Class A common stock on December 31, 2023.

(10)

We have two classes of common stock as a means to give our OP Unit holders voting rights in the public company that correspond to their economic interest in the combined entity. A one-time option was created at our formation transactions for any pre-IPO OP Unit holder to exchange one OP Unit out of every 50 OP Units they owned for one Class B share, and such Class B share carries 50 votes to the extent such holder continues to hold 49 OP units for every Class B share.

(11)

Represents fully diluted common stock and operating partnership units as it includes unvested restricted stock and unvested LTIP units.

 

Page 8


LOGO   

Fourth Quarter 2023

Property Summary - Same Store (1) Net Operating Income (“NOI”) by Quarter

(unaudited and dollars in thousands)

 

 

 

     Twelve Months
Ended
    Three Months Ended  
     December 31,
2023
    December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Same Store Portfolio

            

Revenues

   $ 570,559     $ 146,857     $ 144,331     $ 147,806     $ 131,565     $ 138,097  

Operating expenses

     (284,765     (72,397     (73,074     (68,653     (70,641     (67,132
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     285,794       74,460       71,257       79,153       60,924       70,965  

Straight-line rent

     (18,960     (1,990     (4,900     (11,742     (328     (5,896

Above/below-market rent revenue amortization

     (2,492     (534     (595     (669     (694     (630

Below-market ground lease amortization

     7,831       1,958       1,957       1,958       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI - excluding lease termination fees

   $ 272,173     $ 73,894     $ 67,719     $ 68,700     $ 61,860     $ 66,397  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Percent change over prior year

     2.2     11.3     8.8     1.1     (11.4 )%      (3.3 )% 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property cash NOI

   $ 272,173     $ 73,894     $ 67,719     $ 68,700     $ 61,860     $ 66,397  

Lease termination fees

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 272,173     $ 73,894     $ 67,719     $ 68,700     $ 61,860     $ 66,397  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Manhattan Office(2)

            

Revenues

   $ 517,516     $ 133,207     $ 130,888     $ 133,986     $ 119,435     $ 125,014  

Operating expenses

     (257,353     (65,750     (66,294     (61,601     (63,708     (60,332
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     260,163       67,457       64,594       72,385       55,727       64,682  

Straight-line rent

     (15,593     (1,984     (3,971     (10,874     1,236       (4,097

Above/below-market rent revenue amortization

     (2,492     (534     (595     (669     (694     (630

Below-market ground lease amortization

     7,831       1,958       1,957       1,958       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI - excluding lease termination fees

     249,909       66,897       61,985       62,800       58,227       61,913  

Lease termination fees

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 249,909     $ 66,897     $ 61,985     $ 62,800     $ 58,227     $ 61,913  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Greater New York Metropolitan Area Office

            

Revenues

   $ 40,370     $ 10,064     $ 9,902     $ 10,325     $ 10,079     $ 10,617  

Operating expenses

     (20,917     (4,978     (5,127     (5,384     (5,428     (5,196
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     19,453       5,086       4,775       4,941       4,651       5,421  

Straight-line rent

     (2,853     120       (793     (650     (1,530     (1,690

Above/below-market rent revenue amortization

     —        —        —        —        —        —   

Below-market ground lease amortization

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI - excluding lease termination fees

     16,600       5,206       3,982       4,291       3,121       3,731  

Lease termination fees

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 16,600     $ 5,206     $ 3,982     $ 4,291     $ 3,121     $ 3,731  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Retail

            

Revenues

   $ 12,673     $ 3,586     $ 3,541     $ 3,495     $ 2,051     $ 2,466  

Operating expenses

     (6,495     (1,669     (1,653     (1,668     (1,505     (1,604
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     6,178       1,917       1,888       1,827       546       862  

Straight-line rent

     (514     (126     (136     (218     (34     (109

Above/below-market rent revenue amortization

     —        —        —        —        —        —   

Below-market ground lease amortization

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI - excluding lease termination fees

     5,664       1,791       1,752       1,609       512       753  

Lease termination fees

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 5,664     $ 1,791     $ 1,752     $ 1,609     $ 512     $ 753  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

(1)

Excludes 10 Bank Street, White Plains, NY, 69-97 and 103-107 Main Street, Westport, CT, and 500 Mamaroneck Ave, Harrison, NY, which were sold in December 2022, February 2023, and April 2023, respectively, Williamsburg retail in New York City, NY which was acquired in September 2023, and multifamily properties.

(2)

Includes 498,682 rentable square feet of retail space in the Company’s nine Manhattan office properties.

 

Page 9


LOGO   

Fourth Quarter 2023

Same Store Net Operating Income (“NOI”), Initial Cash Rent Contributing to Cash NOI

(unaudited and dollars in thousands)

 

 

     Twelve Months
Ended
    Three Months Ended  
     December 31,
2023
    December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Reconciliation of Net Income to Cash NOI and Same Store Cash NOI

            

Net income

   $ 84,407     $ 15,830     $ 19,928     $ 36,955     $ 11,694     $ 21,620  

Add:

            

General and administrative expenses

     63,939       16,144       16,012       16,075       15,708       16,478  

Depreciation and amortization

     189,911       49,599       46,624       46,280       47,408       44,500  

Interest expense

     101,484       25,393       25,382       25,405       25,304       25,634  

Income tax expense (benefit)

     2,715       1,792       1,409       733       (1,219     1,322  

Less:

            

(Gain) loss on disposition of property

     (26,764     2,497       —        (13,565     (15,696     (6,818

Third-party management and other fees

     (1,351     (275     (268     (381     (427     (336

Interest income

     (15,136     (4,740     (4,462     (3,339     (2,595     (2,804
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net operating income

     399,205       106,240       104,625       108,163       80,177       99,596  

Straight-line rent

     (19,563     (2,133     (5,015     (11,859     (556     (6,029

Above/below-market rent revenue amortization

     (2,415     (483     (554     (675     (703     (622

Below-market ground lease amortization

     7,831       1,958       1,957       1,958       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cash NOI - including Observatory and lease termination fees

     385,058       105,582       101,013       97,587       80,876       94,903  

Less: Observatory NOI

     (94,101     (26,935     (28,091     (24,776     (14,299     (23,789

Less: cash NOI from non-Same Store properties

     (18,784     (4,753     (5,203     (4,111     (4,717     (4,717
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Same Store property cash NOI - including lease termination fees

     272,173       73,894       67,719       68,700       61,860       66,397  

Less: Lease termination fees

     —        —        —        —        —        —   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Same Store property cash NOI - excluding Observatory and lease termination fees

   $ 272,173     $ 73,894     $ 67,719     $ 68,700     $ 61,860     $ 66,397  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Multifamily NOI(1)

            

Revenues

   $ 32,669     $ 8,345     $ 8,581     $ 8,119     $ 7,624     $ 6,251  

Operating expenses

     (16,218     (4,268     (3,683     (4,254     (4,013     (3,345
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NOI

     16,451       4,077       4,898       3,865       3,611       2,906  

Straight-line rent

     (408     (102     (103     (101     (102     (64

Above/below-market rent revenue amortization

     81       57       42       (8     (10     6  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Cash NOI

   $ 16,124     $ 4,032     $ 4,837     $ 3,756     $ 3,499     $ 2,848  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Initial Cash Rent Contributing to Cash NOI in the Following Years From Burn-off of Free Rent and Signed Leases not Commenced

 

     Square
Feet
     Initial
Annual

Cash Rent
     Initial Cash Rent Contributing to Cash NOI in the
Following Years
 

Expected Cash Commencement

   2024      2025      2026      2027      2028  

First quarter 2024

     314,994      $ 17,360      $ 15,533      $ 15,895      $ 15,443      $ 14,733      $ 11,748  

Second quarter 2024

     192,860        14,241        9,432        14,241        14,241        14,241        14,241  

Third quarter 2024

     41,056        2,672        954        2,672        2,672        2,672        2,672  

Fourth quarter 2024

     81,756        3,577        819        3,577        3,577        3,577        3,516  

First quarter 2025

     36,590        2,491        —         2,251        2,491        2,491        2,491  

Second quarter 2025

     154,756        9,321        —         6,128        9,321        9,321        9,321  

Third quarter 2025

     19,671        1,274        —         587        1,274        1,274        1,274  

Fourth quarter 2025

     21,262        1,318        —         330        1,318        1,318        1,318  

First quarter 2027

     52,116        3,231        —         —         —         3,152        3,231  

First quarter 2028

     25,132        1,785        —         —         —         —         1,784  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     940,193      $ 57,270      $ 26,738      $ 45,681      $ 50,337      $ 52,779      $ 51,596  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     Incremental
Annual
     Initial
Annual
     Initial Cash Rent Contributing to Cash NOI in the
Following Years
 

4Q 2023

   Cash Rent (2)      Cash Rent      2024      2025      2026      2027      2028  

Commenced leases in free rent period

   $ 25,418      $ 29,246      $ 21,871      $ 27,738      $ 27,328      $ 26,619      $ 23,572  

Signed leases not commenced

     25,264        28,024        4,867        17,943        23,009        26,160        28,024  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   $ 50,682      $ 57,270      $ 26,738      $ 45,681      $ 50,337      $ 52,779      $ 51,596  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

(1)

Calculated to include ESRT’s pro-rata 90% share at its joint venture properties.

(2)

Reflects initial annual cash rent less annual cash rent from existing tenant in the space.

 

Page 10


LOGO   

Fourth Quarter 2023

Property Summary - Leasing Activity by Quarter

(unaudited)

 

 

     Three Months Ended  
     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Total Office and Retail Portfolio

          

Total leases executed

     19       21       31       19       29  

Weighted average lease term

     11.1 years       8.6 years       7.9 years       9.1 years       5 years  

Average free rent period

     13.5 months       10.5 months       7.2 months       8.6 months       4.6 months  

Office

          

Total square footage executed

     156,444       245,292       326,150       201,145       142,828  

Average starting cash rent psf - leases executed

   $ 63.40     $ 66.71     $ 64.27     $ 57.11     $ 55.46  

Previously escalated cash rents psf

   $ 59.93     $ 60.28     $ 56.20     $ 54.89     $ 55.10  

Percentage of new cash rent over previously escalated rents

     5.8     10.7     14.4     4.1     0.7

Retail

          

Total square footage executed

     7,452       3,187       10,164       912       1,498  

Average starting cash rent psf - leases executed

   $ 189.20     $ 169.44     $ 122.70     $ 39.47     $ 262.60  

Previously escalated cash rents psf

   $ 288.16     $ 169.31     $ 178.14     $ 65.79     $ 416.07  

Percentage of new cash rent over previously escalated rents

     (34.3 %)      0.1     (31.1 %)      (40.0 %)      (36.9 %) 

Total Office and Retail Portfolio

          

Total square footage executed

     163,896       248,479       336,314       202,057       144,326  

Average starting cash rent psf - leases executed

   $ 69.98     $ 68.03     $ 66.10     $ 57.03     $ 57.66  

Previously escalated cash rents psf

   $ 71.87     $ 61.68     $ 60.03     $ 54.94     $ 58.93  

Percentage of new cash rent over previously escalated rents

     (2.6 %)      10.3     10.1     3.8     (2.2 %) 

Leasing commission costs per square foot

   $ 28.52     $ 19.53     $ 17.34     $ 20.90     $ 13.60  

Tenant improvement costs per square foot

   $ 96.54       91.09       64.40       83.02       41.12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (1)

   $ 125.06     $ 110.62     $ 81.74     $ 103.92     $ 54.72  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     86.3     87.0     86.8     86.7     85.2

Manhattan Office Portfolio

          

Total leases executed

     14       18       25       15       22  

Office - New Leases

          

Total square footage executed

     96,341       78,305       156,949       168,335       75,182  

Average starting cash rent psf - leases executed

   $ 62.26     $ 65.59     $ 66.35     $ 57.42     $ 62.95  

Previously escalated cash rents psf

   $ 59.54     $ 59.89     $ 48.93     $ 54.71     $ 58.78  

Percentage of new cash rent over previously escalated rents

     4.6     9.5     35.6     4.9     7.1

Office - Renewal Leases

          

Total square footage executed

     38,676       157,133       151,361       14,929       17,658  

Average starting cash rent psf - leases executed

   $ 66.23     $ 68.79     $ 62.55     $ 62.44     $ 63.87  

Previously escalated cash rents psf

   $ 60.91     $ 61.68     $ 63.79     $ 63.90     $ 65.80  

Percentage of new cash rent over previously escalated rents

     8.7     11.5     (1.9 %)      (2.3 %)      (2.9 %) 

Total Manhattan Office Portfolio

          

Total square footage executed

     135,017       235,438       308,310       183,264       92,840  

Average starting cash rent psf - leases executed

   $ 63.40     $ 67.73     $ 64.48     $ 57.83     $ 63.12  

Previously escalated cash rents psf

   $ 59.93     $ 61.08     $ 56.23     $ 55.46     $ 60.11  

Percentage of new cash rent over previously escalated rents

     5.8     10.9     14.7     4.3     5.0

Leasing commission costs per square foot

   $ 28.27     $ 18.54     $ 17.02     $ 21.88     $ 15.54  

Tenant improvement costs per square foot

     103.30       93.00       64.58       81.92       48.72  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (1)

   $ 131.57     $ 111.54     $ 81.60     $ 103.80     $ 64.26  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     87.3     87.8     87.6     87.8     86.0

 

Page 11


LOGO   

Fourth Quarter 2023

Property Summary - Leasing Activity by Quarter - (Continued)

(unaudited)

 

 

     Three Months Ended  
     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Greater New York Metropolitan Area Office Portfolio

          

Total leases executed

     2       2       3       3       5  

Total square footage executed

     21,427       9,854       17,840       17,881       49,988  

Average starting cash rent psf - leases executed

     N/A (2)    $ 42.53     $ 50.55     $ 43.98     $ 40.26  

Previously escalated cash rents psf

     N/A (2)    $ 41.00     $ 54.38     $ 44.33     $ 45.15  

Percentage of new cash rent over previously escalated rents

     N/A (2)      3.7     (7.1 %)      (0.8 %)      (10.8 %) 

Leasing commission costs per square foot

   $ 16.38     $ 9.35     $ 16.48     $ 11.86     $ 6.31  

Tenant improvement costs per square foot

     80.55       34.49       81.70       98.47       25.53  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (1)

   $ 96.93     $ 43.84     $ 98.18     $ 110.33     $ 31.84  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     76.6     79.3     79.2     80.6     80.2

Retail Portfolio

          

Total leases executed

     3       1       3       1       2  

Total square footage executed

     7,452       3,187       10,164       912       1,498  

Average starting cash rent psf - leases executed

   $ 189.20     $ 169.44     $ 122.70     $ 39.47     $ 262.60  

Previously escalated cash rents psf

   $ 288.16     $ 169.31     $ 178.14     $ 65.79     $ 416.07  

Percentage of new cash rent over previously escalated rents

     (34.3 %)      0.1     (31.1 %)      (40.0 %)      (36.9 %) 

Leasing commission costs per square foot

   $ 67.66     $ 123.73     $ 28.28     $ —      $ 136.80  

Tenant improvement costs per square foot

     20.18       125.00       28.40       —        90.32  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (1)

   $ 87.84     $ 248.73     $ 56.68     $ —      $ 227.12  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     90.4     90.4     90.7     86.7     86.5

Multifamily Portfolio

          

Percent occupied

     98.1     97.1     97.4     97.2     96.3

Total number of units

     727       727       721       721       721  

Notes:

(1)

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.

(2)

Leases on spaces that have been vacant for more than two years are not included in the calculation of leasing spreads. The average starting cash rent psf for these two leases was $42.06.

 

Page 12


LOGO   

Fourth Quarter 2023

Commercial Property Detail

(unaudited)

 

 

Property Name

  

Location or Sub-Market

   Rentable
Square Feet
(1)
     Percent
Occupied (2)
    Percent
Leased (3)
    Annualized Rent
(4)
     Annualized
Rent per
Occupied
Square Foot (5)
     Number of
Leases (6)
 
Office - Manhattan                

The Empire State Building

   Penn Station -Times Sq. South      2,713,783        84.6     91.8   $ 149,146,291      $ 64.98        144  

One Grand Central Place

   Grand Central      1,241,235        85.2     90.7     64,495,396        61.01        148  

1400 Broadway (7)

   Penn Station -Times Sq. South      917,281        100.0     100.0     51,543,523        56.19        20  

111 West 33rd Street (8)

   Penn Station -Times Sq. South      639,496        94.2     95.7     40,779,657        67.68        21  

250 West 57th Street

   Columbus Circle - West Side      472,707        80.6     84.5     23,990,288        62.98        28  

501 Seventh Avenue

   Penn Station -Times Sq. South      461,209        88.4     88.4     20,432,035        50.09        19  

1359 Broadway

   Penn Station -Times Sq. South      456,004        83.5     91.4     22,376,656        58.75        32  

1350 Broadway (9)

   Penn Station -Times Sq. South      372,599        85.5     86.4     19,076,631        59.90        50  

1333 Broadway

   Penn Station -Times Sq. South      296,349        84.4     94.4     14,545,148        58.12        13  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Office - Manhattan

     7,570,663        87.3     92.1     406,385,625        61.47        475  
Office - Greater New York Metropolitan Area                

First Stamford Place (10)

   Stamford, CT      781,731        78.7     82.3     26,691,177        43.38        48  

Metro Center

   Stamford, CT      281,510        70.9     70.9     10,914,848        54.71        20  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Office - Greater New York Metropolitan Area

     1,063,241        76.6     79.3     37,606,025        46.15        68  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Total/Weighted Average Office Properties

     8,633,904        86.0     90.5     443,991,650        59.79        543  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 
Retail Properties                

112 West 34th Street (8)

   Penn Station -Times Sq. South      93,057        100.0     100.0     24,825,569        266.78        4  

The Empire State Building

   Penn Station -Times Sq. South      90,670        71.9     76.4     7,032,389        107.93        10  

One Grand Central Place

   Grand Central      68,733        99.4     99.4     8,977,805        131.41        12  

1333 Broadway

   Penn Station -Times Sq. South      67,001        100.0     100.0     10,155,485        151.57        4  

250 West 57th Street

   Columbus Circle - West Side      65,526        91.4     91.4     9,111,860        152.07        7  

10 Union Square

   Union Square      58,006        91.9     91.9     8,181,304        153.49        10  

1542 Third Avenue

   Upper East Side      56,135        100.0     100.0     2,542,042        45.28        4  

1010 Third Avenue

   Upper East Side      38,235        100.0     100.0     3,460,188        90.50        2  

501 Seventh Avenue

   Penn Station -Times Sq. South      35,859        50.8     59.6     1,310,333        71.94        5  

1350 Broadway (9)

   Penn Station -Times Sq. South      30,710        77.8     77.8     5,962,833        249.70        5  

1359 Broadway

   Penn Station -Times Sq. South      29,247        83.0     100.0     1,668,652        68.73        5  

561 10th Avenue

   Hudson Yards      28,266        100.0     100.0     2,007,748        71.03        3  

77 West 55th Street

   Midtown      25,388        100.0     100.0     1,978,407        77.93        3  

1400 Broadway (7)

   Penn Station -Times Sq. South      17,879        78.2     78.2     1,538,836        110.07        6  

298 Mulberry Street

   NoHo      10,365        100.0     100.0     1,802,507        173.90        1  

Williamsburg Retail

   Brooklyn      6,538        100.0     100.0     1,158,422        177.18        3  

345 East 94th Street

   Upper East Side      3,700        100.0     100.0     263,134        71.12        1  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Total/Weighted Average Retail Properties

     725,315        90.4     92.1     91,977,514        140.27        85  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Portfolio Total

        9,359,219        86.3     90.6   $ 535,969,164      $ 66.32        628  
     

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Notes:

(1)

Excludes (i) 189,148 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 83,190 square feet of space attributable to the Company’s Observatory.

(2)

Based on leases signed and commenced as of December 31, 2023.

(3)

Includes occupied space plus leases signed but not commenced as of December 31, 2023.

(4)

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

(5)

Represents annualized rent under leases commenced as of December 31, 2023 divided by occupied square feet.

(6)

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.

(7)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 40 years (expiring December 31, 2063).

(8)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 54 years (expiring May 31, 2077).

(9)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 27 years (expiring July 31, 2050).

(10)

First Stamford Place consists of three buildings.

 

Page 13


LOGO   

Fourth Quarter 2023

Total Portfolio Expirations and Vacates Summary

(unaudited and in square feet)

 

 

     Actual      Forecast (1)  
     Three Months Ended      Three Months Ended               
     December 31,
2023
     March 31,
2024
    June 30,
2024
     September 30,
2024
    December 31,
2024
     Full Year
2024
    Full Year
2025
 

Total Office and Retail Portfolio (2)

                 

Total expirations

     205,619        188,726       114,707        125,180       150,609        579,222       594,946  

Less: broadcasting

     —         (906     —         (511     —         (1,417     —   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Office and retail expirations

     205,619        187,820       114,707        124,669       150,609        577,805       594,946  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Renewals & relocations (3)

     51,704        80,714       34,787        32,024       43,464        190,989       87,685  

New leases (4)

     50,828        25,651       4,115        2,998       6,738        39,502       119,226  

Vacates (5)

     103,087        72,064       72,271        75,649       52,219        272,203       139,521  

Unknown (6)

     —         9,391       3,534        13,998       48,188        75,111       248,514  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Office and Retail Portfolio expirations and vacates

     205,619        187,820       114,707        124,669       150,609        577,805       594,946  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
Manhattan Office Portfolio                  

Total expirations

     186,007        150,009       114,707        103,587       130,047        498,350       495,292  

Less: broadcasting

     —         (906     —         (511     —         (1,417     —   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Office expirations

     186,007        149,103       114,707        103,076       130,047        496,933       495,292  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Renewals & relocations (3)

     34,632        65,235       34,787        21,728       43,464        165,214       57,630  

New leases (4)

     50,828        25,651       4,115        2,998       6,738        39,502       119,226  

Vacates (5)

     100,547        52,347       72,271        64,352       41,690        230,660       106,311  

Unknown (6)

     —         5,870       3,534        13,998       38,155        61,557       212,125  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total expirations and vacates

     186,007        149,103       114,707        103,076       130,047        496,933       495,292  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
Greater New York Metropolitan Area Office Portfolio

 

Office expirations

     3,168        14,017       —         20,689       20,562        55,268       76,903  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Renewals & relocations (3)

     628        8,628       —         9,805       —         18,433       23,777  

New leases (4)

     —         —        —         —        —         —        —   

Vacates (5)

     2,540        2,540       —         10,884       10,529        23,953       16,737  

Unknown (6)

     —         2,849       —         —        10,033        12,882       36,389  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total expirations and vacates

     3,168        14,017       —         20,689       20,562        55,268       76,903  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
Retail Portfolio                  

Retail expirations

     16,444        24,700       —         904       —         25,604       22,751  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Renewals & relocations (3)

     16,444        6,851       —         491       —         7,342       6,278  

New leases (4)

     —         —        —         —        —         —        —   

Vacates (5)

     —         17,177       —         413       —         17,590       16,473  

Unknown (6)

     —         672       —         —        —         672       —   
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total expirations and vacates

     16,444        24,700       —         904       —         25,604       22,751  
  

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

(1)

These forecasts, which are subject to change, are based on management’s current expectations, including, among other things, discussions with and other information provided by tenants as well as management’s analyses of past historical trends.

(2)

Any lease on month to month or short-term will re-appear in “Actual” in each period until tenant has vacated or renewed, and thus it would be double counted if periods were cumulated. “Forecast” avoids double counting.

(3)

For forecasted periods, “Renewals & relocations” includes the following: tenants renew their existing leases in all or a portion of their current spaces; tenants which signed renewal leases for a term of less than six months and reappear in forecast periods in 2024; and tenants who move within a building or within the Company’s portfolio.

(4)

For forecasted periods, “New Leases” represents leases that have been signed with a new tenant, a subtenant who signed a direct lease or a tenant who expanded. There may be downtime between the lease expiration and the new lease commencement.

(5)

For forecasted periods, “Vacates” assumes a tenant elects not to renew at the end of their existing lease or exercises an early termination option; leases that the Company decides not to renew at the end of tenants’ existing lease due to anticipated future redevelopment or for other reasons. This also may include early lease terminations.

(6)

For forecasted periods, “Unknown” represents tenants whose intentions are unknown.

 

Page 14


LOGO   

Fourth Quarter 2023

Tenant Lease Expirations

(unaudited)

 

 

                   Percent of                     
            Rentable      Portfolio                  Annualized  
     Number      Square      Rentable            Percent of     Rent Per  
     of Leases      Feet      Square Feet     Annualized      Annualized     Rentable  
     Expiring (1)      Expiring (2)      Expiring     Rent (3)      Rent     Square Foot  

Total Office and Retail Lease Expirations

               

Available

     —         875,777        9.4   $ —         0.0   $ —   

Signed leases not commenced

     28        402,268        4.3     —         0.0     —   

4Q 2023 (4)

     15        143,627        1.5     7,522,786        1.4     52.38  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2023

     15        143,627        1.5     7,522,786        1.4     52.38  

1Q 2024

     21        119,175        1.3     8,359,089        1.6     70.14  

2Q 2024

     13        114,707        1.2     5,798,621        1.1     50.55  

3Q 2024

     17        125,180        1.3     7,181,398        1.3     57.37  

4Q 2024

     38        150,609        1.6     8,736,094        1.6     58.01  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2024

     89        509,671        5.4     30,075,202        5.6     59.01  

2025

     85        594,946        6.4     40,363,625        7.5     67.84  

2026

     72        628,943        6.7     37,384,704        7.0     59.44  

2027

     87        713,569        7.6     47,192,095        8.8     66.14  

2028

     63        945,077        10.1     52,486,474        9.8     55.54  

2029

     50        981,952        10.5     73,521,837        13.7     74.87  

2030

     38        745,546        8.0     50,024,340        9.3     67.10  

2031

     23        174,491        1.9     20,214,026        3.8     115.85  

2032

     29        368,694        3.9     26,223,606        4.9     71.13  

2033

     29        329,711        3.5     21,332,708        4.0     64.70  

Thereafter

     48        1,944,947        20.8     129,627,761        24.2     66.65  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

     656        9,359,219        100.0   $ 535,969,164        100.0   $ 66.32  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
Manhattan Office Properties (5)                

Available

     —         597,862        7.9   $ —         0.0   $ —   

Signed leases not commenced

     20        362,213        4.8     —         0.0  

4Q 2023 (4)

     12        124,643        1.6     7,044,490        1.7     56.52  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2023

     12        124,643        1.6     7,044,490        1.7     56.52  

1Q 2024

     14        82,998        1.1     5,229,107        1.3     63.00  

2Q 2024

     13        114,707        1.5     5,798,621        1.4     50.55  

3Q 2024

     13        103,587        1.4     6,394,857        1.6     61.73  

4Q 2024

     36        130,047        1.7     7,781,812        1.9     59.84  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2024

     76        431,339        5.7     25,204,397        6.2     58.43  

2025

     67        495,292        6.5     32,205,906        7.9     65.02  

2026

     57        485,929        6.4     29,511,170        7.3     60.73  

2027

     71        600,450        7.9     36,782,006        9.1     61.26  

2028

     47        854,943        11.3     47,465,773        11.7     55.52  

2029

     35        738,291        9.8     44,821,337        11.0     60.71  

2030

     27        599,150        7.9     37,243,747        9.2     62.16  

2031

     12        86,541        1.1     6,076,449        1.5     70.21  

2032

     21        334,698        4.4     23,105,190        5.7     69.03  

2033

     15        141,599        1.9     8,587,282        2.1     60.65  

Thereafter

     35        1,717,713        22.8     108,337,878        26.6     63.07  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Manhattan office properties

     495        7,570,663        100.0   $ 406,385,625        100.0   $ 61.47  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

Page 15


LOGO   

Fourth Quarter 2023

Tenant Lease Expirations

(unaudited)

 

 

                   Percent of                     
            Rentable      Portfolio                  Annualized  
     Number      Square      Rentable            Percent of     Rent Per  
     of Leases      Feet      Square Feet     Annualized      Annualized     Rentable  
     Expiring (1)      Expiring (2)      Expiring     Rent (3)      Rent     Square Foot  

Greater New York Metropolitan Area Office Properties

               

Available

     —         220,593        20.7   $ —         0.0   $ —   

Signed leases not commenced

     3        27,802        2.5     —         0.0     —   

4Q 2023 (4)

     2        2,540        0.2     63,701        0.2     25.08  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2023

     2        2,540        0.2     63,701        0.2     25.08  

1Q 2024

     3        11,477        1.1     547,643        1.5     47.72  

2Q 2024

     —         —         0.0     —         0.0     —   

3Q 2024

     2        20,689        1.9     721,050        1.9     34.85  

4Q 2024

     2        20,562        1.9     954,282        2.5     46.41  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2024

     7        52,728        5.0     2,222,975        5.9     42.16  

2025

     13        76,903        7.2     3,597,773        9.6     46.78  

2026

     8        71,784        6.8     3,508,404        9.3     48.87  

2027

     10        58,730        5.5     2,801,695        7.5     47.70  

2028

     11        84,915        8.0     3,735,230        9.9     43.99  

2029

     5        128,271        12.1     5,907,668        15.7     46.06  

2030

     4        78,033        7.3     3,562,425        9.5     45.65  

2031

     2        16,560        1.6     843,885        2.2     50.96  

2032(6)

     1        —         0.0     6,180        0.0     —   

2033

     3        151,754        14.3     7,494,005        19.9     49.38  

Thereafter

     2        92,628        8.8     3,862,084        10.3     41.69  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total greater New York metropolitan area office properties

     71        1,063,241        100.0   $ 37,606,025        100.0   $ 46.15  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
               
Retail Properties                

Available

     —         57,322        7.9   $ —         0.0   $ —   

Signed leases not commenced

     5        12,253        1.7     —         0.0     —   

4Q 2023 (4)

     1        16,444        2.3     414,595        0.5     25.21  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2023

     1        16,444        2.3     414,595        0.5     25.21  

1Q 2024

     4        24,700        3.4     2,582,339        2.8     104.55  

2Q 2024

     —         —         0.0     —         0.0     —   

3Q 2024

     2        904        0.1     65,491        0.1     72.45  

4Q 2024

     —         —         0.0     —         0.0     —   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2024

     6        25,604        3.5     2,647,830        2.9     103.41  

2025

     5        22,751        3.1     4,559,946        5.0     200.43  

2026

     7        71,230        9.8     4,365,130        4.7     61.28  

2027

     6        54,389        7.5     7,608,394        8.3     139.89  

2028

     5        5,219        0.7     1,285,471        1.4     246.31  

2029

     10        115,390        15.9     22,792,832        24.8     197.53  

2030

     7        68,363        9.4     9,218,168        10.0     134.84  

2031

     9        71,390        9.8     13,293,692        14.5     186.21  

2032

     7        33,996        4.7     3,112,236        3.4     91.55  

2033

     11        36,358        5.0     5,251,421        5.7     144.44  

Thereafter

     11        134,606        18.7     17,427,798        18.8     129.47  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total retail properties

     90        725,315        100.0   $ 91,977,514        100.0   $ 140.27  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

(1)

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.

(2)

Excludes (i) 189,148 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 83,190 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.

(4)

Represents leases that are included in occupancy as of December 31, 2023 and expire on December 31, 2023.

(5)

Excludes (i) retail space in the Manhattan office and (ii) the Empire State Building broadcasting licenses and Observatory operations.

(6)

Represents a telecom lease with no square footage.

 

Page 16


LOGO   

Fourth Quarter 2023

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

 

 

                Weighted           Percent of              
                Average     Total     Portfolio           Percent of  
                Remaining     Occupied     Rentable           Portfolio  
          Lease     Lease     Square     Square     Annualized     Annualized  

20 Largest Tenants

  

Property

   Expiration (1)     Term(2)     Feet (3)     Feet (4)     Rent (5)     Rent (6)  

1. LinkedIn

   Empire State Building      Aug. 2036       12.7 years       501,409       5.4   $ 33,465,435       6.2

2. Flagstar Bank

   1400 Broadway      Aug. 2039       15.7 years       313,109       3.3     18,285,046       3.4

3. Centric Brands Inc.

   Empire State Building      Oct. 2028       4.8 years       221,365       2.4     11,952,833       2.2

4. PVH Corp.

   501 Seventh Avenue      Oct. 2028       4.8 years       237,281       2.5     11,519,383       2.1

5. Sephora

   112 West 34th Street      Jan. 2029       5.1 years       11,334       0.1     10,533,585       2.0

6. Target

   112 West 34th St., 10 Union Sq.      Jan. 2038       14.1 years       81,340       0.9     9,341,224       1.7

7. Coty Inc.

   Empire State Building      Jan. 2030       6.1 years       156,187       1.7     8,497,458       1.6

8. Macy’s

   111 West 33rd Street      May 2030       6.4 years       131,117       1.4     8,451,562       1.6

9. Urban Outfitters

   1333 Broadway      Sept. 2029       5.8 years       56,730       0.6     8,185,595       1.5

10. Li & Fung

   1359 Broadway, ESB      Oct. 2027 - Oct. 2028       4.5 years       149,061       1.6     7,954,806       1.5

11. Footlocker

   112 West 34th Street      Sept. 2031       7.8 years       34,192       0.4     7,745,828       1.4

12. Federal Deposit Insurance Corp.

   Empire State Building      Dec. 2025       2.0 years       119,226       1.3     7,578,004       1.4

13. HNTB Corporation

   Empire State Building      Feb. 2029       5.2 years       105,143       1.1     7,000,733       1.3

14. Institutional Capital Network, Inc.

   One Grand Central Place      Feb. 2024 - Oct. 2035       10.6 years       94,331       1.0     6,351,680       1.2

15. The Michael J. Fox Foundation

   111 West 33rd Street      Nov. 2029       5.9 years       86,492       0.9     6,267,495       1.2

16. Shutterstock

   Empire State Building      Apr. 2029       5.3 years       104,386       1.1     6,096,096       1.1

17. Fragomen

   1400 Broadway      Feb. 2035       11.2 years       107,680       1.2     5,959,656       1.1

18. Burlington Merchandising Corp.

   1400 Broadway      Jan. 2038       14.1 years       102,898       1.1     5,932,832       1.1

19. ASCAP

   250 West 57th Street      Aug. 2034       10.7 years       87,943       0.9     5,384,628       1.0

20. Duane Reade

   ESB, 1350 Broadway      May 2025 - Sept. 2027       2.5 years       39,142       0.4     4,941,165       0.9
         

 

 

   

 

 

   

 

 

   

 

 

 

Total

            2,740,366       29.3   $ 191,445,044       35.5
         

 

 

   

 

 

   

 

 

   

 

 

 

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 December 31, 2023.

(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)

 

LOGO

 

Page 17


LOGO   

Fourth Quarter 2023

Capital Expenditures and Redevelopment Program and Leasing Opportunity

(unaudited and dollars in thousands)

 

 

 

     Three Months Ended  
Capital expenditures    December 31,
2023
     September 30,
2023
     June 30,
2023
     March 31,
2023
     December 31,
2022
 

Tenant improvements - first generation

   $ —       $ —       $ —       $ —       $ 6,024  

Tenant improvements - second generation

     28,817        18,047        19,823        23,919        8,867  

Leasing commissions - first generation

     125        203        98        —         —   

Leasing commissions - second generation

     5,706        2,319        4,370        4,114        4,721  

Building improvements - first generation

     —         —         —         —         2,530  

Building improvements - second generation

     12,102        7,425        8,879        11,050        5,945  

Non-recurring capital improvements

     4,420        5,226        3,935        1,561        892  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 51,170      $ 33,220      $ 37,105      $ 40,644      $ 28,979  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

Leasing Opportunity - Inventory of Current Vacant Space as of December 31, 2023 (in square feet) (1)

  

Total Portfolio vacant space

      1,278,000  
  

 

 

 

Signed leases not commenced (“SLNC”):

  

Manhattan Office Properties SLNC

     362,000  

Greater New York Office Properties SLNC

     28,000  

Retail Properties SLNC

     12,000  

Greater New York Office Properties

     221,000  

Retail Properties

     57,000  

Manhattan Office Properties

     535,000  

Manhattan Office Properties off market

     20,000  

Manhattan Office Properties other

     43,000  
  

 

 

 

Total

     1,278,000  
  

 

 

 

Notes:

 

(1)

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

 

Page 18


LOGO   

Fourth Quarter 2023

Observatory Summary

(unaudited and dollars in thousands)

 

 

            Three Months Ended  
Observatory NOI    Twelve
Months to
Date
     December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Observatory revenue (1)

   $ 129,366      $ 36,217     $ 37,562     $ 33,433     $ 22,154     $ 32,318  

Observatory expenses

     35,265        9,282       9,471       8,657       7,855       8,529  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NOI

     94,101        26,935       28,091       24,776       14,299       23,789  

Intercompany rent expense (2)

     80,514        21,545       22,113       20,942       15,914       18,204  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NOI after intercompany rent

   $ 13,587      $ 5,390     $ 5,978     $ 3,834     $ (1,615   $ 5,585  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Observatory Metrics

             

Number of visitors (3)

        711,000       743,000       666,000       443,000       660,000  

Change in visitors year over year

        7.7     8.2     16.2     64.7     83.3

Number of bad weather days (“BWD”) (4)

        11       10       12       15       20  

Notes:

 

(1)

Observatory revenues include the fixed license fee received from WDFG North America, the Observatory gift shop operator. For the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, the fixed license fee was $1,807, $1,807, $1,807, $1,807 and $1,200 respectively.

(2)

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.

(3)

Reflects the number of visitors who pass through the turnstile, excluding visitors who make a second visit on the same ticket at no additional charge.

(4)

The Company defines a bad weather day as one in which the top of the Empire State Building is obscured from view for more than 50% of the day.

Annual Observatory NOI 2018 to 2023

 

LOGO

Notes:

(1)

The 102nd floor Observatory was closed for approximately nine months in 2019 for renovations.

(2)

Due to the COVID-19 pandemic, the Observatory was closed on March 16, 2020. The 86th floor Observatory reopened on July 20, 2020 and the 102nd floor Observatory reopened on August 24, 2020.

(3)

The Observatory continued to experience a gradual recovery in visitors due to the COVID-19 pandemic.

 

Page 19


LOGO   

Fourth Quarter 2023

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  

Reconciliation of Net Income to FFO, Modified FFO and Core FFO

   December 31,
2023
    September 30,
2023
    June 30,
2023
    March 31,
2023
    December 31,
2022
 

Net Income

   $ 15,830     $ 19,928     $ 36,955     $ 11,694     $ 21,620  

Non-controlling interests in other partnerships

     1       (111     (1     43       (28

Preferred unit distributions

     (1,050     (1,050     (1,051     (1,050     (1,050

Real estate depreciation and amortization

     48,548       45,174       44,887       46,024       43,076  

(Gain) loss on sale of properties

     2,497       —        (13,565     (15,696     (6,818
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and the Operating Partnership

     65,826       63,941       67,225       41,015       56,800  

Amortization of below-market ground lease

     1,958       1,957       1,958       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified FFO attributable to common stockholders and the Operating Partnership

     67,784       65,898       69,183       42,973       58,758  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FFO attributable to common stockholders and the Operating Partnership

   $ 67,784     $ 65,898     $ 69,183     $ 42,973     $ 58,758  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total weighted average shares and Operating Partnership units

          

Basic

     262,775       262,756       262,903       264,493       263,759  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     267,003       266,073       264,196       265,197       265,370  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and the Operating Partnership per share and unit

          

Basic

   $ 0.25     $ 0.24     $ 0.26     $ 0.16     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.25     $ 0.24     $ 0.25     $ 0.15     $ 0.21  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified FFO attributable to common stockholders and the Operating Partnership per share and unit

          

Basic

   $ 0.26     $ 0.25     $ 0.26     $ 0.16     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.25     $ 0.25     $ 0.26     $ 0.16     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FFO attributable to common stockholders and the Operating Partnership per share and unit

          

Basic

   $ 0.26     $ 0.25     $ 0.26     $ 0.16     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.25     $ 0.25     $ 0.26     $ 0.16     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Core FFO to Core FAD

          

Core FFO

   $ 67,784     $ 65,898     $ 69,183     $ 42,973     $ 58,758  

Add:

          

Amortization of deferred financing costs

     1,075       1,089       1,088       1,089       1,096  

Non-real estate depreciation and amortization

     1,077       1,298       1,248       1,237       1,285  

Amortization of non-cash compensation expense

     5,294       4,989       5,369       4,375       5,412  

Amortization of loss on interest rate derivative

     1,527       1,527       1,527       1,527       1,525  

Deduct:

          

Straight-line rental revenues, above/below market rent, and other non-cash adjustments

     (3,013     (5,569     (12,534     (1,259     (6,651

Corporate capital expenditures

     (71     (90     (225     (270     (162

Tenant improvements - second generation

     (28,817     (18,047     (19,823     (23,919     (8,867

Building improvements - second generation

     (12,102     (7,425     (8,879     (11,050     (5,945

Leasing commissions - second generation

     (5,706     (2,319     (4,370     (4,114     (4,721
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FAD (1)

   $ 27,047     $ 41,351     $ 32,584     $ 10,589     $ 41,730  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

          

Net income

   $ 15,830     $ 19,928     $ 36,955     $ 11,694     $ 21,620  

Interest expense

     25,393       25,382       25,405       25,304       25,634  

Income tax expense (benefit)

     1,792       1,409       733       (1,219     1,322  

Depreciation and amortization

     49,599       46,624       46,280       47,408       44,500  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     92,614       93,343       109,373       83,187       93,076  

(Gain) loss on sale of properties

     2,497       —        (13,565     (15,696     (6,818
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 95,111     $ 93,343     $ 95,808     $ 67,491     $ 86,258  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

Beginning in the three months ended December 31, 2023, we have eliminated a deduction of other non-recurring capital improvements from Core FFO to arrive at Core FAD and the related Core FAD payout ratio. We made this modification to the calculation of Core FAD for the other periods presented; in our previous supplemental reports prior to this change, Core FAD was $35,922, $28,551, $9,028, and $40,838 for the three months ended September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively.

 

Page 20


LOGO   

Fourth Quarter 2023

Debt Summary

(unaudited and dollars in thousands)

 

 

     December 31, 2023      September 30, 2023  
           ESRT      Weighted Average            ESRT      Weighted Average  
           Pro-rata      Interest     Maturity            Pro-rata      Interest     Maturity  

Debt Summary

   Balance     Share      Rate     (Years)      Balance     Share      Rate     (Years)  

Mortgage debt

   $ 891,998     $ 873,887        3.77     6.0      $ 893,945     $ 875,775        3.77     6.3  

Senior unsecured notes

     975,000       975,000        4.05     6.2        975,000       975,000        4.05     6.4  

Unsecured term loan facilities (1)

     390,000       390,000        3.93     2.0        390,000       390,000        3.93     2.3  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total fixed rate debt

     2,256,998       2,238,887        3.94     5.4        2,258,945       2,240,775        3.94     5.7  

Unsecured term loan facilities (2)

     —        —         —        —         —        —         —        —   

Unsecured revolving credit facilities

     —        —         —        1.3        —        —         —        1.5  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total variable rate debt

     —        —         —        1.5        —        —         —        1.5  
  

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total debt

     2,256,998       2,238,887        3.94     5.4        2,258,945       2,240,775        3.94     5.7  
    

 

 

    

 

 

   

 

 

      

 

 

    

 

 

   

 

 

 

Deferred financing costs, net

     (9,488             (10,052       

Debt discount

     (6,964             (7,159       
  

 

 

           

 

 

        

Total

   $ 2,240,546             $ 2,241,734         
  

 

 

           

 

 

        

 

Available Capacity

   Facility      Outstanding at
December 31,
2023
     Letters
of Credit
     Available
Capacity
 

Unsecured revolving credit facility (3)

   $ 850,000      $ —       $ —       $ 850,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Covenant Summary

   Required     Current
Quarter
    In
Compliance
 

Maximum Total Leverage(4)

     < 60     31.5     Yes  

Maximum Secured Leverage (4)

     < 40     12.3     Yes  

Minimum Fixed Charge Coverage

     > 1.50x       3.3x       Yes  

Minimum Unencumbered Interest Coverage

     > 1.75x       5.7x       Yes  

Maximum Unsecured Leverage (4)

     < 60     23.4     Yes  

Notes:

 

(1)

SOFR is fixed at 2.562% for $175 million and 2.626% for $215 million under variable to fixed interest rate swap agreements, through debt maturity.

(2)

As of December 31, 2023, each of our unsecured term loan facilities are fixed under variable to fixed interest rate swap agreements.

(3)

The unsecured revolving credit and term loan facilities have an accordion feature allowing for an increase in maximum aggregate principal balance to $1.5 billion under certain circumstances. This unsecured revolving credit facility matures in March 2025 with two additional six-month extension options.

(4)

Represents the ratio of total indebtedness to total asset value as determined in accordance with the credit facility agreement.

 

Page 21


LOGO   

Fourth Quarter 2023

Debt Detail

(unaudited and dollars in thousands)

 

 

   

Stated

Interest

 

Effective

Interest

    Principal     ESRT Pro-rata
Share
    Maturity        
   

Rate (%)

  Rate (%) (1)     Balance     Percent     Amount     Date     Amortization  

Metro Center

  3.59%     3.67   $ 80,070       100   $ 80,070       11/5/2024       30 years  

10 Union Square

  3.70%     3.97     50,000       100     50,000       4/1/2026       Interest only  

1542 Third Avenue

  4.29%     4.53     30,000       100     30,000       5/1/2027       Interest only  

First Stamford Place (2)

  4.28%     4.73     175,860       100     175,860       7/1/2027      
5 years interest only;
30 years thereafter
 
 

1010 Third Avenue & 77 West 55th St.

  4.01%     4.21     34,958       100     34,958       1/5/2028       30 years  

250 West 57th Street

  2.83%     3.21     180,000       100     180,000       12/1/2030       Interest only  

1333 Broadway

  4.21%     4.29     160,000       100     160,000       2/5/2033       Interest only  

345 East 94th Street - Series A

  70% of SOFR plus 0.95%     3.56     43,600       90     39,240       11/1/2030       Interest only  

345 East 94th Street - Series B

  SOFR plus 2.24%     3.56     7,209       90     6,488       11/1/2030       30 years  

561 10th Avenue - Series A

  70% of SOFR plus 1.07%     3.85     114,500       90     103,050       11/1/2033       Interest only  

561 10th Avenue - Series B

  SOFR plus 2.45%     3.85     15,801       90     14,221       11/1/2033       30 years  
     

 

 

     

 

 

     

Total fixed rate mortgage debt

        891,998         873,887      

Unsecured term loan facility

  SOFR plus 1.20%     4.22     215,000       100     215,000       3/19/2025       Interest only  

Unsecured revolving credit facility

  SOFR plus 1.30%     —        —        100     —        3/31/2025       Interest only  

Unsecured term loan facility

  SOFR plus 1.50%     4.51     175,000       100     175,000       12/31/2026       Interest only  

Senior unsecured notes:

             

Series A

  3.93%     3.96     100,000       100     100,000       3/27/2025       Interest only  

Series B

  4.09%     4.12     125,000       100     125,000       3/27/2027       Interest only  

Series C

  4.18%     4.21     125,000       100     125,000       3/27/2030       Interest only  

Series D

  4.08%     4.11     115,000       100     115,000       1/22/2028       Interest only  

Series E

  4.26%     4.27     160,000       100     160,000       3/22/2030       Interest only  

Series F

  4.44%     4.45     175,000       100     175,000       3/22/2033       Interest only  

Series G

  3.61%     4.89     100,000       100     100,000       3/17/2032       Interest only  

Series H

  3.73%     5.00     75,000       100     75,000       3/17/2035       Interest only  
 

 

 

 

 

   

 

 

     

 

 

     

Total / weighted average debt

  3.94%     4.20     2,256,998       $ 2,238,887      
 

 

 

 

 

   

 

 

     

 

 

     

Deferred financing costs, net

        (9,488        

Debt discount

        (6,964        
     

 

 

         

Total

      $ 2,240,546          
     

 

 

         

Notes:

(1)

The effective interest rate is composed of the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements.

(2)

Represents a $164 million mortgage loan bearing interest at 4.09% and a $11.9 million mortgage loan bearing interest at 6.25%.

 

Page 22


LOGO   

Fourth Quarter 2023

Debt Maturities and Ground Lease Commitments

(unaudited and dollars in thousands)

 

 

Year

   Maturities (1)      Amortization      Total     ESRT
Pro-rata
Share
     Percentage of
Total Debt
    Weighted
Average
Interest
Rate of
Maturing Debt
 

2024

   $ 77,675      $ 8,861      $ 86,536     $ 86,288        3.9     3.59

2025

     315,000        6,893        321,893       321,621        14.4     3.86

2026

     225,000        7,330        232,330       232,033        10.4     3.98

2027

     319,000        6,461        325,461       325,136        14.5     4.21

2028

     146,092        3,556        149,648       149,292        6.7     4.06

2029

     —         3,988        3,988       3,589        0.2     n/a  

2030

     508,600        4,413        513,013       508,212        22.7     3.67

2031

     —         3,283        3,283       2,955        0.1     n/a  

2032

     100,000        3,591        103,591       103,231        4.6     3.61

2033

     439,007        3,248        442,255       431,530        19.3     4.20

Thereafter

     75,000        —         75,000       75,000        3.2     3.73
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total debt

   $ 2,205,374      $ 51,624        2,256,998     $ 2,238,887        100.0     3.94
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Deferred financing costs, net

           (9,488       

Debt discount

           (6,964       
        

 

 

        

Total

         $ 2,240,546         
        

 

 

        

Debt Maturity Profile (2)

 

LOGO

Ground Lease Commitments (3)

 

Year

   1350
Broadway (4)
     1400
Broadway (5)
     111 West
33rd Street (6)
     Total  

2024

   $ 108      $ 675      $ 735      $ 1,518  

2025

     108        675        735        1,518  

2026

     93        675        735        1,503  

2027

     72        675        735        1,482  

2028

     72        675        735        1,482  

Thereafter

     1,584        23,625        35,586        60,795  
  

 

 

    

 

 

    

 

 

    

 

 

 
   $ 2,037      $ 27,000      $ 39,261      $ 68,298  
  

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

(1)

Assumes no extension options are exercised.

(2)

The table reflects ESRT’s pro-rata share of debt maturities.

(3)

There are no fair value market resets, no step-ups, and no escalations in the three ground lease commitments.

(4)

Expires July 31, 2050 with a remaining term, including unilateral extension rights available to the Company, of approximately 27 years.

(5)

Expires December 31, 2063 with a remaining term, including unilateral extension rights available to the Company, of approximately 40 years.

(6)

Expires May 31, 2077 with a remaining term, including unilateral extension rights available to the Company, of approximately 54 years.

 

Page 23