Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q1 2024 Earnings Presentation
29 slides from Empire State Realty Trust's earnings presentation, Apr 25, 2024
Slide 1: Investor Presentation April 2024
Observatory Empire State Building Kaplan Hecker & Fink LLP at ESB CLA at One Grand Central Place 3 £ a 2 i ™ 3 ion EMPIRE STATE Investor Presentat April 2024
Slide 2: Contents
ESRT Overview Company Priorities ———— Competitive Advantages Flight To Quality Contents Contracted Rents and Tenant Expansions Strong and Flexible Balance Sheet Recent Balance Sheet & Transaction Activity ESRT Property Sector Highlights Office ESB Observatory Retail Multifamily Meet the Team: ESRT M
Slide 3: ESRT Overview: Why ESRT?
eae Ee caer ar, eT. Zz ESRT OVERVIEW Why ESRT? ° NYC is the international capital of the world , © Resilient, vibrant, irreplicable Empire State see © Pure play NYC REIT with multiple drivers of upside Building Sete |e 250'W. 57% ° Office, Observatory, Retail, Multifamily ° Competitive advantages *
Slide 4: ▪ ▪ ▪ ▪ ▪ ▪ ▪ 58% ▪ ▪ 25% ▪ ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ 58% ▪ ▪ 25% ▪ ▪ ▪ ▪ ▪ 10% ▪ ▪ 5% 2% ▪ ▪ ▪ ▪ ▪
Slide 5: Company Priorities
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value = Execute on capital allocation goals v Recycle capital opportunistically Manage Our 87-89% Balance Lease Space ee Sheet Y On offense amidst capital markets dislocation vA y Y¥ Buybacks Y = Maintain balance sheet flexibility 1Q 2024 YE24 Guida
Slide 6: Competitive Advantages: Flight to Top Quality Space
Dn COMPETITIVE ADVANTAGES Flight to Top Quality Space within Rental Price Tier ESRT Outperforms Peers Top of Our Price Tier Assets * Proven Leasing Results * Fully Redeveloped and Modernized Buildings * Increased NYC office leased rate +200 bps Compete and Win viy in 1024 to 92.7% + $1B invested in
Slide 7: Contracted Rents & Tenant Expansions
Dn COMPETITIVE ADVANTAGES Contracted Rents & Tenant Expansions * Limited near-term lease expiration ° Locked-in pipeline of signed leases * Proven record of existing with upside to in-place rents not commenced & free rent burn tenant expansions Upcoming Lease Expirations Cumulative SLNC and Free-Ren
Slide 8: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility ° No floating rate debt exposure Weighted average interest rate = 3.97% Well-laddered debt maturity schedule Entire portfolio 100% owned No complex JVs or capital structure Net Debt / Adj. Secured Debt EBITDA‘ %> 9.0x 62% 5.3x 40%
Slide 9: Recent Balance Sheet & Transaction Activity
Recent Balance Sheet & Transaction Activity 1Q24: March Activity * New Credit Facility - * $715M total: $620M revolving credit facility & $95M term loan * New facility matures March 2029 inclusive of extensions * Replaces existing credit facility due to mature in March 2025 * Multifamily Partner Buy
Slide 10: Prime Locations Near Mass Transit
10 pune’ STH AV 53RD AN W46THST E 46TH ST MADISON WASTHST TIMES SQUARE/ W4STH ST waarist THEATER DISTRICT qu MIDTOWN OFFICE WARD ST Tanna EAST Prime Locations w4n0s| por OOO Saecd GOGO @ 66060 E39TH ST a vt Cait H PAR Near Mass Transit Ton aonDWAY ONE GRAND CENTRAL PLACE W 39THST PARK AVE ° Majority
Slide 11: Office: Robust Amenity Offering
Virtual Tour De OFFICE Robust Amenity Offering vy IN BUILDING vy NEIGHBORHOOD AMENITIES AMENITIES Pifenned HK SF Rooftop at 1333 Broadway Overlooking ESB Bae > * 60 usable terraces * Proximity to mass transit * 24 food and beverage * Restaurants, leisure, options shopping ° Fitness / Wellness facili
Slide 12: Hear From Our Tenants and Brokers
OFFICE Hear From Our Tenants and Brokers 12 "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 13: 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 14: Attractive price point with high-quality offering
Attractive price point with our Serves the deepest pool of high-quality offering demand in the market
Slide 15: ESB Observatory
ESB Observatory Significant upside to NYC tourism recovery PROVEN PERFORMER AND RESILIENT ACROSS ALL ECONOMIC CYCLES, NEW COMPETITION, PANDEMIC * “World's Most Famous Building” * Inflation hedge STAR WARS ACTIVATION * Top Uber tourist attraction in the world'© * $165M renovation complete 5 days post
Slide 16: Office: Strong & Diverse Tenant Mix
De OFFICE Strong & Diverse Tenant Mix Prime Top of Tier Assets Attract Top-Quality Tenants 16 Technology, Media and Advertising mFinance, Insurance, Real Estate mConsumer Goods mOther Professional Services Legal Services Non-Profit ec Linked} me iCapital. UNIVERSAL Music GrouP SOL werkees ee ESPRESS
Slide 17: Retail Portfolio Highlights
Retail Portfolio Highlights ° 94% national retailers ° Everyday retailers ° High density and foot traffic * On or near mass transit ° Weighted average lease term of 7.1 years 17 3-Story Starbucks Reserve at the Empire State Building % of % of Reti Top 10 Retail Tenants'2 Annual Square Retail FER Foo
Slide 18: Multifamily Portfolio Highlights
Multifamily Portfolio Highlights Benefits from strong NYC residential demand 18 298 Mulberry Street Mulberry St. & East Houston St. Subway lines: B, D, F, M&6 96 Units, 100% free-market Studio, 1BR, 2BR Retail space leased to CVS 24-hour doorman, fitness center, laundry room, parking. Roof deck and
Slide 19: 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 20: Sustainability Leadership
Sustainability Leadership CARBON NEUTRAL AS OF 2022 y a “ 20 REDUCED EMISSIONS in our entire 0, i - 4 commercial portfolio 7% since 2009 ‘of at the Empire 57% State Building since 2007 PURCHASED WIND RECs for 1OO% of the commercial portfolio’s electrical usage since 2021, and for the Empire State Bu
Slide 21: Conclusion
Conclusion 21 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 22: Appendix
Appendix 22 Overview Sustainability Initiatives Sustainability Scorecard Sustainability Leadership Reconciliation of Non-GAAP Measures Footnotes Disclaimer
Slide 23: Focus on Sustainability Initiatives
Dn SUSTAINABILITY Focus on Sustainability Initiatives ey mento! p Soria AWARDED AS A LEADER S LEADER WELL ON TRACK WITH SECTOR LEADING TARGETS = 100% renewable wind powered commercial portfolio « Net-zero commitment for carbon emissions at ESB by 2030 and the entire commercial portfolio by 2035 PREP
Slide 24: Learn more about IEQ
Learn more about IEQ – Click Play Below
Slide 25: Sustainability Leadership
De SUSTAINABILITY Sustainability Leadership 25 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 26: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI March 31, December 31, September 30, June 30, March 31, and Same Store Cash NOI 16 2024 2023 2023 2023 2023 Net income $ 10,215 $ 15,830 $ 19,928 $ 36,955 $ 11,694 Add: General and administrative expenses 15,972 16,144 16,012 16,075 15,708
Slide 27: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
17 Three Months Ended Twelve Months to Date 31-Mar-24 31-Dec-23 30-Sep-23 30-Jun-23 Rental revenue 543,060 136,557 134,467 133,228 138,808 Tenant expense reimbursement 68,050 17,325 16,700 18,230 15,795 Deduct: Straight-line rental revenues (22,068) (3,061) (2,133) (5,015) (11,859) Above/below-marke
Slide 28: Footnotes
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Slide 29: Disclaimer
Disclaimer 29 This presentation includes “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21 of the Exchange Act. We intend these forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Pr
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