Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q1 2023 Earnings Presentation
34 slides from Empire State Realty Trust's earnings presentation, Apr 27, 2023
Slide 1: Empire State Realty Trust Investor Presentation April 2023
EMPIRE STATE REALTY TRUST Investor Presentation April 2023
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: Laser Focused on Shareholder Value
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value Execute on capital allocation goals Manage Our v Buybacks Balance v Recycle capital opportunistically Sheet Y Selective Value-Enhancing Acquisitions Y Maintain balance sheet flexibility Provide transparency in our disclosures 89.4% Leased Leas
Slide 4: ▪ ▪ ▪ 5% ▪ ▪ 1% ▪ 23% ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ 5% ▪ ▪ 1% ▪ 23% ▪ ▪ ▪ ▪ ▪ 71% ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
Slide 5: ESRT Outperforms its Peers
ESRT Outperforms its Peers Popular Narrative is Wrong • ✘ • ✘ • • • • ESRT is Future Ready to • Drive Value for ESRT Shareholders • • • • • • • • • • • • • • • • •
Slide 6: Competitive Advantages: Attractive Value Proposition
Zz COMPETITIVE ADVANTAGES 'g P ii || nome fy s a Attractive Value Proposition OO oa Differentiated older vintage buildings with authenticity and high quality attract and retain tenants Modernized, energy-efficient, IEQ to protect value for all 5 2 j A av - ce = = h fined 7K-SF Rooft 1333 stakeholder
Slide 7: Tenant Testimonials
Dn COMPETITIVE ADVANTAGES Tena nt Testimonials Tip: Click the ‘Play Button’ for video Progyny Thrives at 1359 Broadway a “There really wasn’t anything | can think of that we weren’t able to do that we needed. That’s just an example of ESRT’s willingness to partner with us and help us be successful i
Slide 8: Attractive price point with high-quality offering
Attractive price point with our Serves the deepest pool of high-quality offering demand in the market
Slide 9: 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 Cash Commencement Start Date STV Empire State = 66K SF / 16 yrs = 2025 Incorporated Building itutl One Grand Institution
Slide 10: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility to allocate capital for long term shareholder value Liquidity * Cash: $273M = Undrawn Credit Facility: $850M = Unencumbered Office + Retail Portfolio: 78% of SF * No debt maturity until November 2024 Optionality = Share repurchase
Slide 11: Q1 2023 ESG Highlights
COMPANY PRIORITIES Q1 2023 ESG Highlights CARBON NEUTRAL AS OF 2022 REDUCED EMISSIONS 0 oy inour entire | 43 % portfolio since 2009 at the Empire State Building since 2009 54% PURCHASED WIND RECs tor 1OO% of the commercial portfolio’s electrical usage since 2021, and for the Empire State Building si
Slide 12: Focus on ESG Initiatives
Dn COMPETITIVE ADVANTAGES Focus on ESG Initiatives ey mento! p Soria | Governance 12 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 commercial portfolio Net-zero commitment for carbon emiss
Slide 13: Learn more about IEQ
Learn more about IEQ – Click Play Below
Slide 14: 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 14 Industry diversification by annualized fully escalated rent. Company data and filings as of March 31, 2023. Selec
Slide 15: Office: Prime Locations Near Mass Transit
w sort f HST ©0000 ITRAT FARK naw 060 wsen Wet tam OFFICE WITH ST ; NQRW cag @ wrist z TH ST : Prime Locations a — ; Hf men : Na Near Mass Transit ie meget mes Pee ole me ee The majority of our portfolio is located within E = = = " A ° 3 a 9 minute walk to the primary transportation . ee oe = vem eM
Slide 16: ESB Observatory: Proven Performer
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 17: ESB Observatory: World's Most Famous Building
ESB OBSERVATORY World’s M ost Fa m (e} us Growth in Observatory Revenue Per Capita! Building ex Observatory has delivered consistent, long-term growth through economic cycles and new attractions wo 5 $40 As visitorship returns to normal, lower price pass program and tour and travel customers bring d
Slide 18: Retail Portfolio Highlights
De % of Annual Top 15 Retail Tenants? Retail FER RETAIL P tf li « SEPHORA 12.1% 11,334 or {o] 10 Quality Foot Traffic around H ig hi ig hts 2 © TARGET 10.8% 81,340 ESRT’s Retail Portfolio s. URBAN OUTFITTERS 9.2% 56,730 « 718K SF portfolio + Foot Locker 8.9% 34,192 of irreplaceable street 5 Ww 5.6%
Slide 19: Multifamily
MULTIFAMILY Asset Highlights 19 298 Mulberry Street Mulberry Street & East Houston Street = 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, laundry room, parking. Roof deck and resident lounge in Q3 2023 345 E
Slide 20: Greenwich East
GREENWICH EAST —E VILLAGE RW e VILLAGE an eee i Recent Acquisition: 298 Mulberry Street S060 ay : NOH . Purchase Price: $115M “ a Off-market transaction = 100% Free-market 0 CID = 96 Units, $940K per unit! o 298 MULBERRY = Funded by proceeds from dispositions of office and retail assets in SOHO GNYM
Slide 21: Capital Recycling
Dn CAPITAL RECYCLING Recent Dispositions Transaction Asset Value = The acquisition of 298 10 Bank Street + $42M Mulberry Street in White Plains, NY December 2022 was funded by proceeds from these GNYMA dispositions in a 1031 tax deferral transaction 69-97 & 103-107 Main Street + $40M Westport, CT 50
Slide 22: Conclusion
Conclusion NYC-focused portfolio with multiple sources of NYC upside, including tourism, residential, retail and office demand. Vv K << 22 Unique NYC-focused portfolio comprised of modernized office assets; everyday retail in high foot traffic locations; well-located, well-amenitized multifamily ass
Slide 23: Meet the Team
De MEET THE TEAM Experienced and Aligned Management Our management team has a mix of NYC and buy-side public equity experience which give us both a deep understanding of our market and real estate and capital markets generally Anthony E. Malkin Christina Chiu Thomas P. Durels Chairman, President & E
Slide 24: Appendix 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 24 | 54
Slide 25: Overview: Sustainability
25 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 commercial portfolio elect
Slide 26: 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 27: 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’: Net Zero By 2030 for Empire State Building, and by 2035 for the commercial portfolio 2021 Progress: On Target Greenhouse Gas Emissions Intens
Slide 28: 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 29: Environmental Goals: IEQ & 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 30: Social Responsibility
In support of Social Responsibility WOMEN’S EMPOWERMENT PRINCIPLES Wiciopa Compact Ofer WE SUPPORT iaeral ec sled Investment in Human Capital Supplier Diversity Initiatives Implemented ™ Included in the 2022 and 2023 = Actively engage with our employees on policy and | i I Bloomberg Gender-Equality
Slide 31: Governance
FC Governance Board Diversity! ™ 11% female / 78% male / 11% open board seat committed to be female ™ 25% minority / 75% white Board Practices = Balance of continuity (3 directors since 2013 IPO) and refreshment with 4 new directors since 2017 ™ Focused on enhanced diversity and refreshment with 3 i
Slide 32: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI and March 31, December 31, September 30, June 30, March 31, Same Store Cash NOI 2023 2022 2022 2022 2022 Net income (loss) $ 11,694 $ 21,620 $ 10,118 $ 48,695 $ (17,221) Add: General and administrative expenses 15,708 16,478 15,725 15,876 1
Slide 33: Reconciliation of Non-GAAP Measures
Three Months Ended Twelve Months to December 31, September 30, Date March 31, 2023 2022 2022 June 30, 2022 Rental revenue $ 522,504 $ 124,165 $ 131,745 $ 131,800 $ 134,794 Tenant expense reimbursement 61,504 15,309 14,160 16,490 15,545 Deduct: Straight-line rental revenues (21,906) 61 (6,029) (7,341
Slide 34: Disclaimer
Disclaimer 34 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,” “wil,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,”
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