Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q4 2022 Earnings Presentation
33 slides from Empire State Realty Trust's earnings presentation, Feb 16, 2023
Slide 1: Empire State Realty Trust Investor Presentation
EMPIRE STATE REALTY TRUST Investor Presentation February 2023 ding\Playbook Launch with 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
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value Execute on capital allocation goals v Buybacks v Selective Value-Enhancing Acquisitions Lease Space v Recycle capital opportunistically 85-87% Occupancy Maintain balance sheet flexibility Enhance transparency and disclosure ¥ Introduced earnin
Slide 4: ▪ ▪ ▪ 5% ▪ 1% ▪ 21% ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ 5% ▪ 1% ▪ 21% ▪ ▪ ▪ ▪ ▪ ▪ ▪ 73% ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
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 high quality assets —— a zs Centrally located near mass transit { ~ t sas 2 aa Energy efficient an
Slide 6: Competitive Advantages: Attractive Value Proposition
COMPETITIVE ADVANTAGES Attractive Value Proposition ESRT offers Flight to Quality destinations at accessible price points Tenant Testimonial on Flight to Quality at the Empire State Building Class A NYC Office SINISE NI) class B NYC Office REALTY TRUST $80 - $200 PSF $50 - $82 PSF $40 - $60 PSF New
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
Dn COMPETITIVE ADVANTAGES Contracted Rents & Tenant Expansions * Signed Leases Not Commenced (“SLNC”) + Free Rent Burn-Off * Existing Tenant Expansion Select SLNC Building SF/Term Commencement Start Date Cash acc One Grand Network Central = 77K SF /16 yrs = 2023 Place (expansion) Progyny 1359 . . (e
Slide 9: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility to allocate capital for long term shareholder value Liquidity " Cash: $264M = Undrawn Credit Facility: $850M = Unencumbered Office + Retail Portfolio: 78% of SF Optionality " Share repurchases = External growth = Capital recycling
Slide 10: Carbon Neutral as of 2022
CARBON NEUTRAL AS OF 2022 COMPANY PRIORITIES Q4 2022 ESG Highli REDUCED EMISSIONS f 43% 54% in our entire portfolio since 2009 at the Empire State Building since 2009 PURCHASED WIND RECs for 100% of the commercial portfolio’s electrical usage since 2021, and for the Empire State Building since 2011!
Slide 11: Focus on ESG Initiatives
Dn COMPETITIVE ADVANTAGES Focus on ESG Initiatives ey mento! p Soria | Goveranss 1 AWARDED AS A LEADER case ucase LEADER Biem)) Loves aye OF ALL Es] NYC-BASED ——s REITS ON TRACK WITH SECTOR LEADING TARGETS 100% renewable wind energy powered portfolio Net-zero commitment for carbon emissions at ESB b
Slide 12: Learn more about IEQ – Click Play Below
Learn more about IEQ – Click Play Below
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 December 31, 2022. Sel
Slide 14: Office: 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
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: Revenue Per Capita
ESB OBSERVATORY World’s Growth in Observatory Revenue Per Capita! Most Famous on Building $40 Observatory has delivered consistent, long-term 0 growth through economic cycles and new attractions = DA 0D 2 6 © nO OO NV MV KV LV A@ 2B 9B ABD 0D DD 4 AO gO HO DD DD ah » ae a . MSP Ge GO GO 5O 5O (5O 50
Slide 17: Retail Portfolio Highlights
De RETAIL Portfolio Highlights = 741K SF portfolio of irreplaceable street retail assets = 93% of retail FER comprised of national retailers! = High density and foot traffic = On or near mass transit = Weighted average lease term of 7.8 years = Tip: Click the ‘Play Arrow’ for video 17 Top 15 Retail
Slide 18: Multifamily
MULTIFAMILY Asset Highlights 18 298 Mulberry Street Mulberry Street & East Houston Street = Subway lines: B,D,F,M, & 4 = 96 Units, 100% free-market = Studio, IBR, 2BR = Retail space leased to CVS * 24-hour Doorman, Fitness Center, Laundry room, Parking 345 E 94th Street 94 Street and 1 Avenue = 2nd
Slide 19: Recent Acquisition – 298 Mulberry St.
MULTIFAMILY Recent Acquisition – 298 Mulberry St. ▪ Purchase Price: $115M ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Upside ▪ ▪ ▪ ▪
Slide 20: Recent Dispositions
Capital Recycling Recent Dispositions Transaction ▪ Asset Value Comments 10 Bank Street, White Plains, NY • $42M • Tax-efficient sale which did not trigger any payments under tax protection agreement • $30.1M of debt assumed by the buyer • Transaction closed on December 8th, 2022 69-97 & 103-107 Mai
Slide 21: Conclusion
Conclusion NYC-focused portfolio with multiple sources of NYC upside, including tourism, residential, retail and office demand. 21 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 22: 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 Thomas P. Durels Executive Vice President, Real Estate 33 years with ESRT
Slide 23: 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 2355
Slide 24: Overview: Sustainability
24 De OVERVIEW Sustainability Energy Efficiency & Emissions Reductions = Alignment with Science Based Targets initiative (SBTi) 1.5-degree scenario = Commitment to net-zero carbon emissions at the Empire State Building by 2030 and the commercial portfolio by 2035 = 100% of portfolio electricity full
Slide 25: Sustainability Achievements & Leadership
SUSTAINABILITY Achievements & Leadership Achievements Industry Leadership 2022 5-Star 95 Public 96 # & Engagement Peaciaty Disclosure: [RA RW MR Lowest Emissions of all NYC-based REITs GRESB Rating: v WELL Living Lab/Mayo Clinic Policy Leadership at National State and City Levels VY REBNY Sustainabi
Slide 26: 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 27: 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 28: 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 29: Social Responsibility
Social Responsibility wer ec rnc IUs Investment in Human Capital Supplier Diversity Initiatives Implemented ™ Included in the 2022 and 2023 ™ Actively engage with our employees on policy and Bloomberg Gender-Equality Index company culture Yandereade at conduct = Ist commercial office REIT in the = H
Slide 30: Governance
FC Governance Board Diversity! ™ 12.5% female / 87.5% male ™ 25% minority / 75% white Accountability ™ Proxy access stockholder right ™ Stockholder right to amend bylaws Board Practices = Frequent and robust shareholder engagement efforts = Balance of continuity (3 directors since 2013 IPO) and = Ad
Slide 31: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI December 31, September 30, June 30, March 31, December 31, and Same Store Cash NOI 2022 2022 2022 2022 2021 Net income (loss) $ 21,620 $ 10,118 $ 48,695 $ (17,221) $ (4,074) Add: General and administrative expenses 16,478 15,725 15,876 13,6
Slide 32: WAITING ON UPDATE
Three Months Ended Twelve Months to December 31, September 30, March 31, Date 2022 2022 June 30, 2022 2022 Rental revenue $ 532,871 $ 132,010 $ 131,981 $ 135,191 $ 133,689 Tenant expense reimbursement 58,177 13,895 16,309 14,148 13,825 Deduct: WAITING ON UPDATE Straight-line rental revenues (24,562)
Slide 33: Disclaimer
Disclaimer 33 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,” s
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