Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Investor Presentation (May 2019)
45 slides from Empire State Realty Trust's investor presentation, May 2019
Slide 1: Retail Investor Presentation May 2019
Retail Investor Presentation May 2019
Slide 2: Investor Highlights
Investor Highlights COMPETITIVE ADVANTAGES AND PROVEN PERFORMER › Fully modernized assets, central locations, easy access to mass-transit › Four drivers of growth deliver embedded upside › Market leading cash leasing spreads focused on Manhattan › Positioned, between trophy/class A and class B prope
Slide 3: Portfolio Overview
Portfolio Overview PURE-PLAY MANHATTAN AND GREATER NEW YORK METROPOLITAN AREA 10.1 Million Total Rentable High Quality Diverse Square Feet Tenant Mix GNYMA GNYMA Office Office 18.2% 19.6% Retail 7.1% Manhattan Office Manhattan Office 80.4% 74.7% Company data and filings as of March 31, 2019. 3
Slide 4: Manhattan Portfolio
Manhattan Portfolio Office Properties Retail Properties 4
Slide 5: Manhattan Portfolio Market Position
Manhattan Portfolio Market Position NEW LEASE ASKING RENTS New Build Class A “Aged Trophy” Class A › New construction since 2008 › Stock constructed from 1970-2000 that needs base building renovation of approx. $100 PSF › Asking rents of $148 PSF 1,2 › Asking rents of $94 PSF 1,2 › Well-located, red
Slide 6: Tenant Expansions Fuel Leases
Tenant Expansions Fuel Leases Cumulative Growth from Tenant Expansions 1,600,000 200 Number of Transactions 181 163 160 Square Footage 1,200,000 132 120 800,000 108 90 1,171,443 1,292,163 80 400,000 49 901,585 649,690 742,515 40 26 133,708 294,503 - - 2013 2014 2015 2016 2017 2018 1Q 2019 › We focus
Slide 7: Four Drivers of Revenue Growth
Four Drivers of Revenue Growth 1 EMBEDDED UPSIDE Burn-off of free rent $32 M Signed leases not commenced Retail $19 M opportunity $107 $8 M Million4 Office mark-to- Lease up of market vacant opportunity3 redeveloped $18 M Manhattan office space2 $30 M 1 Amounts reflect management’s estimates of addi
Slide 8: Delivering on Cash NOI Growth
Delivering on Cash NOI Growth MANAGEMENT TEAM HAS DELIVERED Cash NOI Growth Even With Fluctuating Occupancy $400,000 90.0% $380,000 89.5% $360,000 thousand89.0% $340,000 88.5% $320,000 88.0% $300,000 87.5% $280,000 87.0% $260,000 86.5% $240,000 86.0% 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3
Slide 9: Creating Full Floor Availabilities
Creating Full Floor Availabilities REDEVELOPMENT CASE STUDY Floors 55-58 originally had 42 tenants Adjacent tenants are grouped by lease expiration dates Spaces are vacated as expired leases 2014 are not renewed Floors 55-58 leased entirely to two tenants 9
Slide 10: Superior Cash Leasing Spreads
Superior Cash Leasing Spreads ILLUSTRATES MARK TO MARKET OPPORTUNITY Strong NYC office leasing spreads1 Strong NYC office leasing spreads All leases Q1 2019 New leases Q1 2019 All leases Q1 2019 average3 $ 63.29 $ 63.74 16.0% 14.0% $ 55.50 $ 52.65 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0% (0.
Slide 11: Fortress Balance Sheet
Fortress Balance Sheet SIGNIFICANT CASH, LINE AVAILABILITY AND LOW LEVERAGE 3.6x 22% $593MM $1.1BN+ Net Debt / Net Debt / Cash and S-T Unsecured EBITDA Enterprise Value Investments Credit Facility 100% 3.84% 7.8 years 79% of SF Fixed Rate Weighted Avg. Weighted Avg. Unencumbered Outstanding Debt Int
Slide 12: Best in Class Balance Sheet
Best in Class Balance Sheet MEETS NEEDS AND SUPPORTS GROWTH PEERS1 Net Debt / EBITDA 3.6x 7.5x Net Debt / 22% 42% Enterprise Value CURRENT DEBT MATURITY PROFILE (AS OF MARCH 31, 2019) ($ millions) $663 $203 $319 $250 $265 $460 $100 $194 $146 $78 $50 $125 $115 2019 2020 2021 2022 2023 2024 2025 2026
Slide 13: Observatory Performance
Observatory Performance CONSISTENT PERFORMANCE THROUGH ECONOMIC CYCLE AND NEW ATTRACTIONS One World Observatory Observatory annual revenue1 (millions) Opens 1.6 Million Visitors (estimated 2018) 2001 – 2018 CAGR 9/11 Museum Opens 10.2% 3.2 Million Visitors $131.2 2 (estimated 2018) $127.1 $124.8 $11
Slide 14: Observatory is a Global Brand
Observatory is a Global Brand 77% OF VISITORS DECIDE TO VISIT BEFORE LEAVING HOME1 International vs. Domestic1: What Differentiates the ESB 63% International › 87 years of popular cultural 37% Domestic references make ESB a Global Age Group1: brand 50% 18-34 years old › ESRT invests in strategies to
Slide 15: Empire State Building CoBranding Case Study
Empire State Building CoBranding Case Study PARTNERSHIP WITH ABC, JIMMY KIMMEL LIVE!, GOOGLE, EMINEM AND INTERSCOPE RECORDS MEDIA COVERAGE 1.1B $1.8MM 112MM MEDIA IMPRESSIONS AD VALUE EQUIVALENCY SOCIAL MEDIA IMPRESSIONS Media impressions is based on U.S. print, online, and broadcast outlets; exclud
Slide 16: Sustainability Leader
Sustainability Leader LEADER IN INVESTMENT AND RETURN ORIENTATED SUSTAINABILITY PRACTICES › Focus on quantifiable transparent results › Our key performance indicators (KPIs) focus on: • Reduction in energy consumption • Water use reduction • Waste management and recycling • Indoor environmental Tena
Slide 17: Creating Value Through Sustainability
Creating Value Through Sustainability EMPIRE STATE BUILDING CASE STUDIES 3 ESB Tenant Energy Optimization Projects Examples Global Brands › Annual savings of Coty Group LinkedIn $4.4 M Energy reduction 31% 12% 38% › 3.1 year payback › Energy Star 861 ROI over lease term 328% 126% 93% › Quantifiable
Slide 18: Property Highlights
Property Highlights
Slide 19: Empire State Building
Empire State Building EMPIRE STATE REALTY TRUST
Slide 20: Empire State Building Lobby
Empire State Building Lobby 20
Slide 21: Tenant Amenities
Tenant Amenities › After Creation of an Urban Campus: • 15,000 sq ft tenant-only fitness center • Tenant-only conference Before center on 67th floor • 8 on-site dining options • Private executive dining and event space and full service restaurant • Wired Certified Platinum broadband and distributed
Slide 22: Tacombi
Tacombil 22 EMPIRE STATE REALTY TRUST
Slide 23: JCDecaux
JCDecaux 23
Slide 24: Shutterstock
Shutterstock 24
Slide 25: LinkedIn
LinkedIn 25
Slide 26: LinkedIn
EMPIRE STATE
Slide 27: Energy Efficiency
Energy Efficiency EMPIRE STATE 27
Slide 28: Observatory
Observatory 28
Slide 29: Observatory
Observatory 29
Slide 30: Observatory
Observatory 30
Slide 31: One Grand Central Place
One Grand Central Place 31
Slide 32: One Grand Central Place Lobby
One Grand Central Place Lobby 32
Slide 33: GLG
“ui al Mm ELMGEEAALE a ae Hl i atin,“ ! Sl a EMPIRE STATE
Slide 34: 111 West 33rd Street
111 West 337 Street 34 EMPIRE STATE REALTY TRUST
Slide 35: 111 West 33rd Street Lobby
EMPIRE STATE 111 West 337 Street Lobby 35
Slide 36: ESRT HQ
ESRT HQ 36
Slide 37: 1400 Broadway
EMPIRE STATE REALTY TRUST 1400 Broadway Ay! 1h) a | iin i i 37
Slide 38: 1400 Broadway Lobby
1400 Broadway Lobby =e i i As de a EMPIRE STATE REALTY TRUST 38
Slide 39: J3 (Interpublic subsidiary)
J3 (Interpublic subsidiary) 39
Slide 40: Kohl's
Kohl’s 40
Slide 41: Burlington
Burlington —_—_, ss 1a oO in ize
Slide 42: Appendix
Appendix
Slide 43: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Three Months Ended Year Ended Year Ended Year Ended Year Ended Period From 10/7/13 Reconciliation of Net Income to NOI March 31, December 31, September 30, June 30, March 31, Dec 31, Dec 31, Dec 31, Dec 31, through and Cash NOI 2019 2018 2018 2018 2018 2017 2016 2
Slide 44: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Three Months Ended Reconciliation of Rental Revenue and Tenant Twelve Months March 31, December 31, September 30, June 30, March 31, Expense Reimbursement to Cash Revenues to Date 2019 2018 2018 2018 2018 Rental revenue $ 514,337 $ 143,417 $ 123,261 $ 123,621 $ 12
Slide 45: Disclaimer
Disclaimer We make forward-looking statements in this presentation within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. You should not rely on them as predictions of future events. For these statements, we cl
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