Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q2 2022 Earnings Presentation
31 slides from Empire State Realty Trust's earnings presentation, Jul 28, 2022
Slide 1: Empire State Realty Trust Investor Presentation July 2022
EMPIRE STATE REALTY TRUST Investor Presentation July 2022 Empire State Building ‘Observatory President Clinton, ‘nofHochul, Mayor Adams
Slide 2: Contents
Company Priorities Competitive Advantages ———— Flight To Quality Attractive Value Proposition Contents Contracted Rents and Tenant Expansions Strong & Flexible Balance Sheet Focus on ESG Initiatives Sustainability Leadership & Scorecard ESRT Property Sector Highlights Office ESB Observatory Retail M
Slide 3: Company Priorities: Laser Focused on Shareholder Value
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value Total Portfolio Occupancy Execute on capital allocation goals v Buybacks L s Shepohata v Selective Value-Enhancing Acquisitions ease Space jarenoider YO vet. a 7 pportunistic Capital Recycling 84% 84-86% Value a vY Maintain balance sheet flexi
Slide 4: Competitive Advantages: NYC-Focused Portfolio
COMPETITIVE ADVANTAGES NYC-Focused Portfolio with Multiple Sources of Upside Tourism, residential, retail and office demand Office ESB Observatory Experience Retail Multifamily ‘Per Tripadvisor report titled: Travelers’ Choice 2022 Best of the Best. Click here for more information. Portfolio 9.2M SF
Slide 5: Competitive Advantages: Flight to Quality
Zz COMPETITIVE ADVANTAGES Flight to Quality Upgraded tenant spaces, amenities, and HVAC and energy systems in our modernized, pre-war buildings at accessible rents Amenities Competitive price point for quality assets * Z av ce = = = re Hew TSK SF Rooftop at 1333 Centrally located to mass transit Ene
Slide 6: Attractive Value Proposition
COMPETITIVE ADVANTAGES Attractive Value Proposition ESRT offers Flight to Quality destinations at accessible price points. EMPIRE STATE REALTY TRUST Class A NYC Office Class B NYC Office $80 - $200 PSF $50 - $82 PSF $40 - $60 PSF New construction; P , Pre-war, not modernized steel and glass Moderniz
Slide 7: Attractive price point with high quality offerings
Attractive price point with Captures significant market high quality offerings share with smaller tenants
Slide 8: Contracted Rents & Tenant Expansions
COMPETITIVE ADVANTAGES Contracted Rents & Tenant Expansions * Signed Leases Not Commenced (“SLNC”) + Free Rent Burn-Off * Existing Tenant Expansion Select SLNC Building SF/Term Cash Commencement Start Date acc One Grand Network Central | = 106K SF /16 yrs = 2023 Place (expansion) Signature 1400 1 .
Slide 9: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility to allocate capital for long term shareholder value. Liquidity " Cash: $359M = Undrawn Credit Facility: $850M = Unencumbered Office + Retail Portfolio: 76% of SF Optionality = Share repurchases = External growth = Capital recyclin
Slide 10: Focus on ESG Initiatives
10 Dn COMPETITIVE ADVANTAGES Focus on ESG Initiatives ee Governance Env mental AWARDED AS A LEADER #1 LOWEST EMISSIONS OF ALL NYC-BASED REITS GREEN LEASE WELL ON TRACK WITH SECTOR LEADING TARGETS = Carbon emission ¥43% since 2009 * 100% renewable wind energy powered portfolio * Net-zero commitment f
Slide 11: Learn more about IEQ – Click Play
Learn more about IEQ – Click Play Below
Slide 12: Portfolio Overview: NOI Composition
PORTFOLIO OVERVIEW NOI Composition Niche NYC market focus with income streams from multiple property types. As Observatory recovers NOI composition becomes less concentrated. nee Standalone Standalone Multifami " | ulti fami ly —- Retail Multifamily Retail 4% 3% 4% 2% Observatory 9% Observatory 21%
Slide 13: Office: Strong and Diverse Tenant Mix
De OFFICE Strong and Diverse Tenant Mix Technology, Media and Advertising ™Finance, Insurance, Real Estate m™Consumer Goods mOther m Professional Services Legal Services mi Non-Profit 3 Industry diversification by annualized fully escalated rent. Company data and filings as of June 30, 2022. Select
Slide 14: Office with Prime Locations Near Mass Transit
oe waw ii =Q@O00O amin wRw 060 OFFICE WITH ST Nonw can @ wrist sche Prime Locations CIE —- : 1. wets : Na Near Mass Transit mi 0G zs OO The majority of our portfolio is located within E Z = = ! A ° 3 a 9 minute walk to the primary transportation . ee oO = vem eM Ba hubs of the most valuable U.S. off
Slide 15: ESB Observatory: Proven Performer
De ESB OBSERVATORY Proven Performer New $165M Interactive Experience Iconic and Authentic * #1 Tripadvisor Attraction in the US and #3 in the world’ Cl 202 * Top Uber tourist attraction in the world® * Top 10 searched ‘Bucket List’ travel experiences” Institutional Asset Class with Affirmed Valuatio
Slide 16: ESB Observatory: World's Most Famous Building
ESB OBSERVATORY World’s Most Famous Building Observatory has delivered consistent, long-term growth through economic cycles and new attractions. With increased visitorship, we see more pass program and tour and travel customers, but revenue per caps are higher relative to prior periods with the same
Slide 17: Retail Portfolio Highlights
De RETAIL Portfolio Highlights = 734K SF portfolio of irreplaceable street retail assets = 95% of retail FER comprised of national retailers! = High density and foot traffic = On or near mass transit = Weighted average lease term of 7.6 years = Tip: Click the ‘Play Arrow’ for video 17 Top 15 Retail
Slide 18: Multifamily: Residential Acquisitions
Dn MULTIFAMILY Residential Acquisitions In December 2021, we acquired 90% ownership and control of 625 units in two high quality Manhattan multifamily assets. Initial yield on cost -4%; mid-5% stabilized cap rate by 2025 = Annual price adjustment provides inflation protection = Total price: $307M ($
Slide 19: Conclusion
Conclusion NYC-focused portfolio with multiple sources of NYC upside, including tourism, residential, retail and office demand. 19 K K{£ K& 4 Unique NYC-focused portfolio comprised of modernized office assets; everyday retail in high foot traffic locations; well-located, well-amenitized multifamily
Slide 20: Meet the Team
MEET THE TEAM Experienced and Aligned Management Our management team has a long track record at ESRT and within NYC real estate more broadly, which drives our deep understanding and expertise of the markets in which we operate. Anthony E. Malkin Christina Chiu Thomas P. Durels Thomas N. Keltner, Jr.
Slide 21: Appendix Overview
Overview Sustainability Achievements and Leadership Appendix Environmental Goals Energy & Emissions Waste & Water Indoor Environmental Quality & ESG Certification Social Responsibility Governance Reconciliation of Non-GAAP Measures Disclaimer 21) 5)
Slide 22: Sustainability Overview
OVERVIEW Sustainability #1 —_ MOST Energy Efficiency REIT = Alignment with Science Based Targets initiative (SBTi) 1.5-degree scenario IN NYC? = Commitment to net-zero carbon emissions at the Empire State Building by 2030 and NYC office portfolio by 2035 = 100% of portfolio fully powered by renewabl
Slide 23: Sustainability Achievements & Leadership
SUSTAINABILITY Achievements & Leadership Achievements = #1 Lowest Emissions of all NYC-based REITs, per Green Street! Policy Leadership at National State and City Levels = Our Chairman, President and CEO, Anthony E. Malkin is a recognized leader on sustainability initiatives for our local and nation
Slide 24: Environmental Goals: Energy & Emissions
ENVIRONMENTAL GOALS Energy & Emissions Goal: 50% site energy Reduction by 2035 2021 Progress: On Target Energy Use Intensity (kBtu/ft2) 2021 58 2020 57 Goal’: Carbon Neutrality By 2030 for Empire State Building, and by 2035 for the office portfolio 2021 Progress: On Target Greenhouse Gas Emissions I
Slide 25: Environmental Goals: Waste & Water
Le ENVIRONMENTAL GOALS Waste & Water 30% Water Performance intensity by 2035 2021 Water Consumption! (ms) 2021 Progress: 800,000 On Target 641,312 581,193 Water 600,000 (om) 400,000 21 297,834 19 200,000 ih ° 2018 ©2019 2020 2021 Like-For-Like Water Use Goal: 75% faste diversion rate Intensity! by 2
Slide 26: Environmental Goals: Indoor Environmental Quality & ESG Certification
Le ENVIRONMENTAL GOALS Indoor Environmental Quality & ESG Certification Environmental Performance 2021 Energy Consumption Distribution! (MWh) Goal: Goal: (e) 100% 75% ars {13% of eligible buildings are of eligible consumption green-certified across buildings are Electricity (98,106) compared to 2020
Slide 27: Social Responsibility
Social Responsibility Diversity, Equity and Inclusion (DE&l) Included in the 2022 Bloomberg Gender-Equality Index Transparent public reporting of EEOC diversity for all levels (Board, leadership, all employees) Employee-led Inclusion Committee in place All executives and employees participate in tra
Slide 28: Governance
FC Governance Board Diversity = 22% female / 78% male = 22% minority / 78% white Board Practices ™" Balance of continuity (3 directors since 2013 IPO) and refreshment with 4 new directors since 2017 ™ Focused on enhanced diversity and refreshment with 3 independent diverse directors appointed since
Slide 29: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI June 30, March 31, December 31, September 30, June 30, and Same Store Cash NOI 2022 2022 2021 2021 2021 Net income (loss) $ 48,695 $ (17,221) $ (4,074) $ (10,183) $ 4,411 Add: General and administrative expenses 15,876 13,686 13,578 14,427
Slide 30: Reconciliation of EBITDA and Cash Revenues
Three Months Ended Twelve Months to March 31, December 31, September 30, Date June 30, 2022 2022 2021 2021 Rental revenue $ 520,728 $ 135,191 $ 133,689 $ 126,393 $ 125,455 Tenant expense reimbursement 54,787 14,148 13,825 12,711 14,103 Deduct: Straight-line rental revenues (22,160) (8,597) (2,595) (
Slide 31: Disclaimer
FC Disclaimer 31 This presentation includes “forward looking statements” within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as “believes, ‘expects,” “may,” “will” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,
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