Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q3 2024 Earnings Presentation
34 slides from Empire State Realty Trust's earnings presentation, Oct 22, 2024
Slide 1: Empire State Realty Trust Investor Presentation October 2024
EMPIRE STATE REALTY TRUST Investor Presentation October 2024 111 W 33" Street CLA at One Grand Central Place Tripadvisor Attraction | Attraction in the World 2024 in the US 2022-2024 Observatory :
Slide 2: Contents
ESRT Overview Company Priorities Competitive Advantages Flight To Quality Contracted Rents and Tenant Expansions Contents Strong and Flexible Balance Sheet Portfolio Transformation & Redevelopment Capital Recycling ESRT Property Sector Highlights Office ESB Observatory Retail Williamsburg Retail Acq
Slide 3: ESRT Overview: Why ESRT?
Zz ESRT OVERVIEW Why ESRT? ° ESRT puts points on the board with performance ° Pure play NYC REIT with multiple drivers of upside * Office, Observatory, Retail, Multifamily * NYC is the international capital of the world * Resilient, vibrant, irreplicable ° Competitive advantages * Low leverage, no f
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Slide 5: Company Priorities
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value Manage Our Balance Sheet Vv 9% Lease Space 88%-89% Vv Occupancy (Commercial) Execute on capital allocation goals * On offense to pursue attractive acquisitions amidst capital markets dislocation Maintain balance sheet flexibility * Tenants and
Slide 6: Competitive Advantages: Top of Tier Quality Attracts Tenants
Dn COMPETITIVE ADVANTAGES Top of Tier Quality Attracts Tenants ESRT Outperforms Peers Top of Our Price Tier Assets * Proven Leasing Results * Fully Redeveloped and Modernized Buildings * Increased NYC office leased rate +170 bps Compete and Win ATES | + $1B invested in portfolio upgrades * Increased
Slide 7: Contracted Rents & Tenant Expansions
Dn COMPETITIVE ADVANTAGES Contracted Rents & Tenant Expansions * Locked-in pipeline of signed leases * Limited near-term lease expiration not commenced & free rent burn with upside to in-place rents Upcoming Lease Expirations ($Ms) Cumulative SLNC and Free-Rent Burn-Off® 15% 2,800,000 10% 2,400,000
Slide 8: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility Optionality Allows ESRT to: * No floating rate debt exposure * Operating runway * Compete and win new tenants * Weighted average interest rate = 4.27% * Capital recycling * Be nimble * Well-laddered debt maturity schedule * Extern
Slide 9: Portfolio Transformation Complete
Zz COMPETITIVE ADVANTAGES Portfolio Transformation Complete ~$1B invested to redevelop and create top of tier assets that are fully modernized, amenitized, energy efficient AFTER REDEVELOPMENT AFTER REDEVELOPMENT AFTER REDEVELOPMENT { Interactive, Museum} S Entrance Experience In Gueuing Area|
Slide 10: Capital Recycling Enhances Portfolio Quality
Dn COMPETITIVE ADVANTAGES Capital Recycling Enhances Portfolio Quality * Completed disposition of five suburban assets since early 2022 * 383 Main Avenue * 500 Mamaroneck * 10 Bank * Westport Retail (two assets) * Invested -$675M° (to date) into NYC multifamily and retail assets with better growth a
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Slide 12: Virtual Tour
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Slide 14: Tenant feedback
Leader Sustainability Energy Efficiency Healthy Building Fully Amenitized Fully Redeveloped Modernized Financially Stable Best-In-Class Balance Sheet Carbon Neutral Expansions Friendly Clean Great Staff Great Partners Helpful Location Professional Service Oriented
Slide 15: Office: Target the Deepest Part of the Market
De OFFICE Target the Deepest Part of the Market ESRT’s Top of Tier Assets satisfy the deepest pool of demand in the market by size, location, and price Attractive price point with Serves the deepest pool of our high-quality offering demand in the market All Deals With Publicly Disclosed Terms 1Q19 -
Slide 16: Office: Strong & Diverse Tenant Mix
De OFFICE Strong & Diverse Tenant Mix Prime top of tier assets attract top quality tenants Linked oe SOL aN FRAGGMEN Technology, Media and Advertising mFinance, Insurance, Real Estate mConsumer Goods mOther Professional Services Legal Services Non-Profit HNTB JCDecaux 16 JANEIRQ workday. LOCCITANE a
Slide 17: ESB Observatory
ESB Observatory Proven performer across all economic cycles, new competition, and a pandemic, with upside to NYC tourism recovery wi (no eu Sete 30 Aetation ure) * “World’s Most Famous Building” * Inflation hedge * #1in the World and in the US by Tripadvisor * $165M renovation complete * 354B Media
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Slide 19: North 6th Street, Williamsburg Retail Acquisitions
De RETAIL North 6t Street, Williamsburg Retail Acquisitions ° Price: ~$225M in aggregate All-cash acquisition $143M closed in 3Q24 - $52M expected to close in 4Q24, and the balance expected to close in mid-2025 90% leased; 7.4-year WALT Tenants: Hermes, Nike, Santander Work Café, The North Face, Eve
Slide 20: Retail Owned by ESRT
Es RETAIL OWNED BY ESRT [initial Acquisition (2023) ESRT Builds Scale on N. 6* St. Retail Corridor (i 2024 acauisitions Over 500 linear feet of frontage on the shopping blocks of N. 6 St. between Wythe and Bedford Ave @rz=31 construction in Williamsburg L-Train Bedford Ave Station (1 stop to Manhatt
Slide 21: North 6th Street Retail Corridor
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Slide 22: Strength of the Williamsburg Market
Ri ETAIL Strength of the Williamsburg Market Dynamic destination retail neighborhood specially created by zoning Population Density * Daytime population of 125,000 people * 158,000 residents live within one mile 36% Population Growth within a mile over last decade 5.4% additional growth projected th
Slide 23: Multifamily Portfolio Highlights
Multifamily Portfolio Highlights Benefits from strong NYC residential demand 23 eae 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, resident lounge, roof deck,
Slide 24: Meet the Team: Experienced and Aligned Management
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 36 years with ESRT 22 years in industry 36 years in industry B.S. f
Slide 25: Sustainability Leadership
Sustainability Leadership CARBON NEUTRAL AS OF 2022 REDUCED EMISSIONS in our entire . commercial portfolio since 2009 at the Empire State Building since 2007 PURCHASED WIND RECs for 1OO% of the commercial portfolio’s electrical usage since 2021, and for the Empire State Building since 2011 SUPPORT P
Slide 26: Conclusion
Conclusion 26 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 27: Appendix
Appendix 27 Overview Sustainability Initiatives Sustainability Scorecard Sustainability Leadership Reconciliation of Non-GAAP Measures Footnotes Disclaimer
Slide 28: Focus on Sustainability Initiatives
Focus on Sustainability Initiatives ey mento! p Soria Governanss AWARDED AS A LEADER 28 LEADER 16 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 PREPARED FOR
Slide 29: Learn more about IEQ
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Slide 30: Sustainability Leadership
Sustainability Leadership 30 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 NYC's Dept of Buildi
Slide 31: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Reconciliation of Net Income to Cash NOI and September 30, June 30, March 31, December 31, September 30, 19 Same Store Cash NOI 2024 2024 2024 2023 2023 Net income $ 22,796 $ 28,555 $ 10,215 $ 15,830 $ 19,928 Add: General and administrative expenses 18,372 18,020 15,972 16,144 16,012 Depreciation an
Slide 32: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
20 Three Months Ended Twelve Months to Date 30-Sep-24 30-Jun-24 31-Mar-24 31-Dec-23 Rental revenue 539,844 132,492 136,328 136,557 134,467 Tenant expense reimbursement 70,792 20,625 16,142 17,325 16,700 Deduct: Straight-line rental revenues (9,371) (2,277) (1,900) (3,061) (2,133) Above/below-market
Slide 33: Footnotes
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Slide 34: Disclaimer
Disclaimer 34 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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