Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — NAREIT San Francisco, November 2013
27 slides from Empire State Realty Trust's conference presentation, Nov 12, 2013
Slide 1: NAREIT San Francisco November 2013
Exhibit 99.2 NAREI T SAN FRANCI SCO NOVEMBER 2013
Slide 2: 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. For these statements, we claim the protections of the safe harbor for forward-looking st
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Slide 4: Key Investment Highlights
Key Investment Highlights High quality, pure-play Manhattan and Greater New York office and retail portfolio Growth potential from completing turnaround in existing properties and new leasing, option properties and acquisitions Proven track record of managing, leasing and executing our repositioning
Slide 5: History of Innovation and Commitment to New York
History of Innovation and Commitment to New York Public real estate company primarily focused on office and 2013+ retail properties in Manhattan and Greater New York metropolitan area 2010 Malkin Holdings begins consolidation of portfolio ownership Ground-breaking energy efficiency retrofit program
Slide 6: Operating Philosophy
Operating Philosophy Focus on performance, history as fiduciaries and hands-on operators Maintain process, exercise discipline in execution and no complacency Demonstrated capabilities in up and down markets Focus on servicing brokers and tenants Proactive, service-intensive approach to asset and pr
Slide 7: Introduction to ESRT's Management Team
Introduction to ESRT’s Management Team Anthony E. Malkin Thomas P. Durels David A. Karp Thomas N. Keltner, Jr. Chairman, Executive Vice President & Chief Executive Vice President, Executive Vice President, Chief Executive Officer & of Property Operations and Chief Financial Officer & General Counsel
Slide 8: Pure Play Midtown Manhattan and Greater New York Strategy
Pure Play Midtown Manhattan and Greater New York Strategy
Slide 9: Empire State Building "The World's Most Famous Office Building"
Empire State Building “The World’s Most Famous Office Building” International Icon Premier Office Building International icon of the New York City Comprehensive upgrade and skyline repurposing underway – Full restoration or re-creation of 1 exterior and all public spaces “America’s Favorite Architec
Slide 10: Pure Play Midtown Manhattan and Greater New York Strategy
Pure Play Midtown Manhattan and Greater New York Strategy Highway Metro-North Railroad 66-99 Main St Metro-North Train Stop Westport 103-107 Main St 684 95 Norwalk 287 Stamford White Plains 383 Main Avenue Harrison ~30 miles to Midtown Manhattan First Stamford Place Metro Center 10 Bank Street 500 M
Slide 11: Observatory has been a Stable and Growing Source of Revenue
Observatory has been a Stable and Growing Source of Revenue Leading NYC Tourist Destination Value-Added Strategy Improvement 3 to 4+ million visitors every year since 2000 Focused on a modern guest experience – – Modernization program for new second floor Record number of visitors YTD in 2013 at 3.2
Slide 12: Observatory has been a Stable and Growing Source of Revenue
Observatory has been a Stable and Growing Source of Revenue Positive Tourism Trends to New York City (visitors in millions) ‘01 – ‘12 48.8 50.9 52.0 CAGR 45.9 47.1 45.6 42.6 43.8 3.6% 37.8 40.0 35.2 35.3 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Domestic Visitors International Visi
Slide 13: Attractive Retail Portfolio in Prime Manhattan and Greater New York Locations
Attractive Retail Portfolio in Prime Manhattan and Greater New York Locations High Quality Retail Portfolio Location in premier corridors including Herald Square, 34 th Street corridor, Grand Central, Union Square and Columbus Circle Ground floor spaces in our office buildings and standalone spaces
Slide 14: Competitive Advantage From Energy Efficiency
Competitive Advantage From Energy Efficiency Global ground-breaker in defining and implementing energy efficiency in buildings and tenant installations Empire State Building project is recognized worldwide as the new model for sustainability Est. Energy 1 Reduction – Partnered with the Clinton Clima
Slide 15: Internal and External Growth Opportunities
Internal and External Growth Opportunities Experienced management team uses its best practices to develop and execute winning internal and external strategies Internal External Repositioning Growth Growth Expertise Opportunities Opportunities 15
Slide 16: Organic Growth Potential in Manhattan Office Portfolio
Organic Growth Potential in Manhattan Office Portfolio Strong Re-Leasing Spreads Lease-up of Empire’s Available Space in Empire’s Manhattan Office Portfolio² Manhattan Office Submarket Avg. Occupancy¹ FY 2012 YTD 3Q 2013 87.6% 90.6% 90.6% 91.4% $45.70 $ 44.04 86.6% 85.3% $ 36.66 $ 38.99 78.6% 82.0%
Slide 17: Illustrative NOI impact of ESB Repositioning
Illustrative NOI impact of ESB Repositioning¹ A 5% increase in occupancy at ESB increases illustrative NOI by ~$6-8 million, while a $5 increase in base rent per square foot on new leases at ESB increases illustrative NOI by ~$1-2 million Illustrative Potential NOI Upside at ESB from Higher Illustra
Slide 18: Attractive External Growth Opportunities
Attractive External Growth Opportunities Existing Managed Properties with Option to Purchase Other External Growth Opportunities th 112-122 W. 34 Street 1400 Broadway Acquisition strategy focused on Manhattan office and retail Market dominated by multi- generational family ownership – providing us a
Slide 19: Pure Play Midtown Manhattan and Greater New York Strategy
Pure Play Midtown Manhattan and Greater New York Strategy Total Portfolio Office Portfolio Midtown 1 Manhattan Greater NY Retail Office 7% 93% Office Metro Office 76% 24% 8.4 million rentable square feet 7.8 million rentable square feet Note: Percentage splits based on square footage. Data as of Sep
Slide 20: Proven Value-Add Repositioning Strategy
Proven Value-Add Repositioning Strategy Took control over day-to-day management of Repositioning Program¹,² Manhattan office properties from 2002-2006 Additional Spend on ESB Repositioning program developed and (2014-2016) $100 million - $130 million commenced 21% Renovation programs at each propert
Slide 21: Empire State Building Repositioning Case Study
Empire State Building Repositioning Case Study 1.0 million square feet of the Empire State Building remain to be repositioned¹ Pre Post (rentable SF (rentable SF per The Benefits per leases) new bldg. measurement) Change Decreased Number of Leases 201 20 (181) Increased Occupancy 73.9% 99.1% +25.2p.
Slide 22: 1333 Broadway Repositioning Case Study
1333 Broadway Repositioning Case Study Repositioning substantially completed with 8 out of 10 office floors renovated –now seeing tangible benefits and achieving attractive leasing results from capital deployed¹ Pre Post (rentable SF (rentable SF per The Benefits per leases) new bldg. measurement) C
Slide 23: Pre-Built Strategy
Pre-Built Strategy Pre-Built Strategy: Utilization of Space for New Tenants Pre-built office suites are designed to: Appeal to a broad range of users Have efficient layouts 501 7 ThAvenue Be energy efficient Have ability to re-use install and re- lease with only modest work Our pre-built strategy im
Slide 24: Financial Highlights
Financial Highlights Significant signed leases not commenced, adding $7.6 million of annualized base rent, a 2.4% increase in percent leased over 2Q13 Low leverage of 24.2% of enterprise value 1 Significant balance sheet flexibility, with goal of achieving investment grade ratings $300 million drawn
Slide 25: Well-Capitalized Balance Sheet to Support Future Growth
Well-Capitalized Balance Sheet to Support Future Growth 1 Flexible Low-Levered Balance Sheet Capital Structure New Credit Low leverage Facility – ($300mm) $300 million drawn on $800 million credit 1 facility Mortgage – Untapped debt capacity embedded in many Debt low-levered assets ($897mm) Attracti
Slide 26: Strong Independent Board
Strong Independent Board 6 of 7 board members are independent Managing Partner, Associated Partners, L.P. William H. Berkman Former director at IAC Managing Principal, Bay Hollow Associates Alice M. Connell Formerly held senior positions in mortgage lending and real estate equity areas at TIAA-CREF
Slide 27: Key Investment Highlights
Key Investment Highlights High quality, pure-play Manhattan and Greater New York office and retail portfolio Growth potential from completing turnaround in existing properties and new leasing, option properties and acquisitions Proven track record of managing, leasing and executing our repositioning
Empire State Realty Trust — NAREIT San Francisco, November 2013 on 6ix