Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q4 2023 Earnings Presentation
28 slides from Empire State Realty Trust's earnings presentation, Feb 21, 2024
Slide 1: Investor Presentation February 2024
Best of the Best 2022 +2023 ed Sets" EMPIRE STATE REALTY TRUST RT IPO 10 Anniversary Investor Presentation i; LE February 2024 aa irene clines ese Empire State Building 111 W 33" Street CLA at One Grand Central Place e Observatory
Slide 2: Contents
ESRT Overview Company Priorities ———— Competitive Advantages Cc Flight To Quality ontents Contracted Rents and Tenant Expansions Strong and Flexible Balance Sheet ESRT Property Sector Highlights Office ESB Observatory Retail Multifamily Meet the Team: ESRT Management Sustainability Leadership Conclu
Slide 3: ESRT Overview: Why ESRT?
Zz ESRT OVERVIEW Why ESRT? ° NYC is the international capital of the world © Resilient, vibrant, irreplicable © Pure play NYC REIT ° Office, Observatory, Retail, Multifamily Competitive advantages * Debt levels low, interest rates fixed, diverse income streams, sustainability leader, accessible pric
Slide 4: ▪ ▪ ▪ ▪ ▪ ▪ ▪ 65% ▪ ▪ ▪ ▪ 25% ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ 65% ▪ ▪ ▪ ▪ 25% ▪ ▪ ▪ 2% ▪ 4% 4% ▪ ▪ ▪ ▪ ▪ ▪
Slide 5: Company Priorities
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value foascssaas f (| 92.1% | 90.6% eae” cr @ = Execute on capital allocation goals Lecsed 1 -0ree Portolc); Aa anage Our Y Recycle capital opportunistically Lease Space (Commercial | | | eae Balance - , , : Portfolio) ! \ ! canirvercial Sheet Y On
Slide 6: Competitive Advantages: Flight to Quality
Dn COMPETITIVE ADVANTAGES Flight to Top Quality Space within Rental Price Tier ESRT Outperforms Peers * Proven Leasing Results Increased NYC office leased rate +250 bps y/y in 4Q23 to 92.1% Increased NYC office occupancy +130 bps y/y in 4Q23 to 87.3% Achieved +10.0% positive mark to market NYC offic
Slide 7: Contracted Rents & Tenant Expansions
COMPETITIVE ADVANTAGES, Contracted Rents & Tenant Expansions * Limited near-term lease expiration ° Locked-in pipeline of signed leases with upside to in-place rents not commenced & free rent burn SLNC and Free-Rent Burn-Off® Upcoming Lease Expirations 15% $70 2,800,000 2,400,000 2,000,000 1,600,000
Slide 8: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet ° No floating rate debt exposure Net Debt / Adj. EBITDAS ESRT Peers’ Commercial portfolio 100% owned Weighted average interest rate = 3.9% Well-laddered debt maturity schedule No complex JVs or capital structure Secured Debt %S 8.9x 60% 5.4x
Slide 9: Office: Prime Locations Near Mass Transit
OFFICE Prime Locations Near Mass Transit ° Majority of our portfolio is located within a 9-minute walk to the primary transportation hubs in the most valuable U.S. office market ° Campus portfolio - Buildings in close proximity create valuable synergies including certain shared amenities * C&W study
Slide 10: Office: Robust Amenity Offering
10 Virtual Tour Zz OFFICE Robust Amenity Offering Planned 7K SF Rooftop at 1833 BroadWay Overlooking ESB 60 usable terraces Proximity to mass transit * 24 food and beverage * Restaurants, leisure, options shopping ° Fitness / Wellness facilities | ° Broadway Plaza ° Town Halls * Madison Square Park
Slide 11: Hear From Our Tenants and Brokers
OFFICE Hear From Our Tenants and Brokers nN "The reaction of our own employees, candidates, prospects and customers that we bring to the facilities is awe and a sense of wonder when you walk through these walls.” ~Sr. Brand Marketing Manager, Talent Attraction, LinkedIn PROGYNY THRIVES AT 1359 BROAD
Slide 12: Location, Expansions, Sustainability Leader
Leader Sustainability Energy Efficiency Healthy Building Fully Amenitized Fully Redeveloped Modernized Best-In-Class Balance Sheet Financially Stable Carbon Neutral Great Partners Expansions Friendly Clean Great Staff Service Oriented Helpful Location Professional
Slide 13: Attractive price point with our high-quality offering
Attractive price point with our Serves the deepest pool of high-quality offering demand in the market
Slide 14: ESB Observatory
ESB OBSERVATORY ESB Observatory PROVEN PERFORMER AND RESILIENT oe ; ; ACROSS ALL ECONOMIC CYCLES, NEW COMPETITION, PANDEMIC Significant upside to NYC tourism recovery °* #1 Tripadvisor Attraction in the U.S. (2023 & 2022)'° * Inflation hedge * “World’s Most Famous Building” * $165M renovation comple
Slide 15: Office: Strong & Diverse Tenant Mix
De OFFICE Strong & Diverse Tenant Mix Prime Top of Tier Assets Attract Top-Quality Tenants 15 Technology, Media and Advertising mFinance, Insurance, Real Estate mConsumer Goods mOther Professional Services Legal Services Non-Profit eo Linked} ry] Expedia vn Sepsns UNIVERSAL MUSIC GRouP iCapital FDIC
Slide 16: Retail Portfolio Highlights
De RETAIL Portfolio Highlights 16 94% national retailers Everyday retailers High density and foot traffic On or near mass transit Weighted average lease term of 7.1 years 3-Story Starbucks Reserve at the Empire State Building % of % of Reti Top 10 Retail Tenants’? Annual Square Retail FER Footage |
Slide 17: Multifamily Portfolio
MULTIFAMILY Multifamily Portfolio Benefits from strong NYC residential demand = 17 298 Mulberry Street = Mulberry St. & East Houston St. = Subway lines: B,D,F,M, & 6 = 96 Units, 100% free-market = Studio, IBR, 2BR = Retail space leased to CVS = 24-hour doorman, fitness center, laundry room, parking.
Slide 18: Meet the Team
De MEET THE TEAM Experienced and Aligned Management Management team has a deep understanding of NYC market, real estate and capital markets Anthony E. Malkin Christina Chiu Chairman & Chief Executive President Officer 4 years with ESRT 35 years with ESRT 22 years in industry 35 years in industry B.S
Slide 19: Sustainability Leadership
Dn COMPETITIVE ADVANTAGES Sustainability Leadership CARBON NEUTRAL AS OF 2022 2023 GRESB 5 STAR RATING FRAMEWORKS AND CERTIFICATIONS Ranked as one of Newsweek’s 2024 Most Responsible Companies REDUCED EMISSIONS 9 in our entire 43% portfolio since 2009 for 100% of the commercial portfolio’s electrica
Slide 20: Conclusion
Conclusion 20 Unique NYC-focused portfolio comprised of modernized office assets; everyday retail in high foot traffic locations; well-located, well-amenitized multifamily assets; iconic Empire State Building Observatory Experience Well-positioned balance sheet affords flexibility to pursue capital
Slide 21: Appendix
Appendix 21 Overview Sustainability Initiatives Sustainability Scorecard Sustainability Leadership Reconciliation of Non-GAAP Measures Footnotes Disclaimer
Slide 22: Focus on Sustainability Initiatives
Dn SUSTAINABILITY Focus on Sustainability Initiatives ey mento! p Soria AWARDED AS A LEADER #1 LOWEST te aTeD EMISSIONS OF ALL NYC-BASED REITS S LEADER WELL 14 ON TRACK WITH SECTOR LEADING TARGETS = 100% renewable wind powered commercial portfolio « Net-zero commitment for carbon emissions at ESB by
Slide 23: Learn more about IEQ
Learn more about IEQ – Click Play Below
Slide 24: Sustainability Leadership
De SUSTAINABILITY Sustainability Leadership 24 Our Chairman and CEO, Anthony E. Malkin is a recognized leader on sustainability initiatives for our local and national community =~ Chairman of the Real Estate Roundtable Sustainability Policy Advisory Committee = Was sole commercial owner member of NY
Slide 25: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Twelve Months Ended Three Months Ended Reconciliation of Net Income to Cash NOI and December 31, December 31, September 30, June 30, March 31, December 31, 16 Same Store Cash NOI 2023 2023 2023 2023 2023 2022 Net income $ 84,407 $ 15,830 $ 19,928 $ 36,955 $ 11,694 $ 21,620 Add: General and administr
Slide 26: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
17 Three Months Ended Twelve Months to Date 31-Dec-23 30-Sep-23 30-Jun-23 31-Mar-23 Rental revenue 531,285 134,467 133,228 138,808 124,782 Tenant expense reimbursement 66,034 16,700 18,230 15,795 15,309 Deduct: Straight-line rental revenues (19,563) (2,133) (5,015) (11,859) (556) Above/below-market
Slide 27: Footnotes
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Slide 28: Disclaimer
Disclaimer 28 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 statement
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