Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q1 2022 Earnings Presentation
28 slides from Empire State Realty Trust's earnings presentation, Apr 28, 2022
Slide 1: Investor Presentation
EMPIRE STATE REALTY TRUST Investor Presentation April 2022
Slide 2: Contents
Competitive Advantages ▪ Portfolio Characteristics and Sources of Upside ▪ Attractive Value Proposition / Flight To Quality ▪ Contracted Rents and Tenant Expansions ▪ Strong & Flexible Balance Sheet Contents ▪ Sustainability Leadership & Scorecard ESRT Property Sector Highlights ▪ Office ▪ ESB Obser
Slide 3: Competitive Advantages: Multiple Sources of NYC Upside
COMPETITIVE ADVANTAGES ESRT’s New York City focus benefits from multiple sources of NYC upside; tourism, residential, retail and office demand ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼ ◼
Slide 4: Value Proposition
COMPETITIVE ADVANTAGES Value Proposition Upgraded tenant spaces, amenities, and HVAC and energy systems in our modernized, pre-war buildings at accessible rents ✓ Competitive price point for quality assets ✓ Centrally located to mass transit ✓ Energy efficient and healthy buildings ✓ Amenities ✓ Tur
Slide 5: Flight to Quality
COMPETITIVE ADVANTAGES Flight to Quality ESRT is a Flight to Quality destination with strong value relative Great Fundamentals to new Class A buildings and unmodernized Class B buildings Class A NYC Office Class B NYC Office $80 – $200 PSF $50 – $82 PSF $40 – $60 PSF New construction; steel & Modern
Slide 6: Contracted Rents & Tenant Expansions
COMPETITIVE ADVANTAGES Contracted Rents & Tenant $60 Contracted Rents of $50M: SLNC and Free-Rent Burn-Off Expansions $50 $40 (In $Millions) $25.59M $25.70M (1) Signed Leases Not Commenced (“SLNC”) $30 $13.95M (2) Free Rent Burn-Off $20 $ $25.40M (3) Existing Tenant Expansion $24.84M $24.59M $10 $3.
Slide 7: Strong & Flexible Balance Sheet
COMPETITIVE ADVANTAGES Strong & Flexible Flexibility to allocate capital for long term shareholder value creation Balance Sheet ▪ ▪ 1400 ▪ 1200 ▪ 1000 $530 800 ▪ 600 ▪ 400 ▪ 200 $194 $31 0 $78 $50 ▪ ▪ ▪ ▪
Slide 8: Sustainability Leadership
COMPETITIVE ADVANTAGES Sustainability Leadership ESRT is the sector leader in healthy buildings, indoor environmental quality and energy efficiency, that is important to the best tenants ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 9: Sustainability Scorecard
COMPETITIVE ADVANTAGES Sustainability Scorecard 75% 76% 30% Air Quality and HVAC 100% 100% 30% 83% 29%
Slide 10: Strong and Diversified Tenant Mix
OFFICE Strong and Diversified Tenant Mix
Slide 11: Prime Locations Near Mass Transit
OFFICE Prime Locations Near Mass Transit The majority of our portfolio is located between the primary transportation hubs of the most valuable U.S. office market
Slide 12: ESB Observatory: Proven Performer
ESB OBSERVATORY Proven Performer ▪ New $165M Interactive Experience ▪ Iconic and Authentic — Top Uber tourist attraction in the 1 ($M) world5 $140.0 — Top 10 searched ‘Bucket List’ travel 2001 – 2019 CAGR 9.0% experiences6 $120.0 ▪ Institutional Asset Class with Affirmed $100.0 Valuation — In 2021,
Slide 13: World's Most Famous Building
ESB OBSERVATORY World’s Most Famous $50 Building $40 $30 Observatory has delivered $20 consistent, long-term growth through economic cycles and new attractions. With increased visitorship we see more pass program and tour and travel customers and our revenue per cap declines somewhat • • •
Slide 14: Retail Portfolio Highlights
RETAIL Portfolio Highlights ▪ ▪ ▪ ▪ ▪
Slide 15: Multifamily
MULTIFAMILY In December 2021, we acquired 90% ownership and control of 625 units in two high quality Manhattan multifamily assets ▪ 97.6% current occupancy, +120bps q/q The Victory at 561 10th Ave ▪ Just North of Hudson yards and Manhattan West, 41st Street and 10th Avenue ▪ Initial yield on cost ~4
Slide 16: Conclusion
Conclusion NYC-focused portfolio with multiple sources of NYC upside, including tourism, residential, retail and office demand ✓ Unique NYC-focused portfolio comprised of modernized office assets; everyday retail in high foot traffic locations; well- located, well-amenitized multifamily assets; icon
Slide 17: Experienced and Aligned Management Team
MEET THE TEAM Experienced and Aligned Management Team 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,
Slide 18: Appendix
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
Slide 19: Sustainability Overview
OVERVIEW Sustainability ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ About ESRT ▪ Sustainability & ESG Initiatives
Slide 20: Achievements & Leadership
SUSTAINABILITY Achievements & Leadership ▪ Industry Leadership & Engagement ▪ ✓ ✓ ▪ ▪ ✓ ✓ ▪ ✓ ▪ ✓ ✓ ▪ ▪ ✓ ▪ ▪ ▪
Slide 21: Energy & Emissions
ENVIRONMENTAL GOALS Energy & Emissions Energy Goals Status Progress Emission Goals Status Progress
Slide 22: Waste & Water
ENVIRONMENTAL GOALS Waste & Water Waste & Recycling Goals Status Progress Water Conservation Goals Status Progress 22% 36% 297,835 318,388 581,193 641,312
Slide 23: Indoor Environmental Quality & ESG Certification
ENVIRONMENTAL GOALS Indoor Environmental Quality & ESG Certification IEQ Goals Status Progress ESG Certification Goals Status Progress
Slide 24: Social Responsibility
Social Responsibility ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 25: Governance
Governance ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 26: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Three Months Ended Year Ended Reconciliation of Net Income to NOI and March 31, December 31, September 30, June 30, March 31, December 31, Cash NOI 2022 2021 2021 2021 2021 2021 Net income (loss) $ (17,221) $ (4,074) $ (10,183) $ 4,411 $ (3,191) $ (13,037) Add: Ge
Slide 27: Reconciliation of Non-GAAP Measures
Reconciliation of Non-GAAP Measures Three Months Ended Twelve Months to December 31, September Date March 31, 2022 2021 30, 2021 June 30, 2021 Rental revenue $ 510,628 $ 133,689 $ 126,393 $ 125,455 $ 125,091 Tenant expense reimbursement 56,345 13,825 12,711 14,103 15,706 Deduct: Straight-line rental
Slide 28: Disclaimer
FC Disclaimer 28 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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