Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Investor Presentation (March 2021)
33 slides from Empire State Realty Trust's investor presentation, March 2021
Slide 1: Investor Presentation March 2021
EMPIRE STATE REALTY TRUST Investor Presentation March 2021
Slide 2: Well-Positioned with Path to the Future
Well-Positioned with Path to the Future Flexible balance sheet * — Ample liquidity of $1.6 billion comprised of $527 million cash plus $1.1 billion undrawn capacity on revolving credit facility ° Modest leverage ° No outstanding debt maturity until 2024 Manhattan office portfolio represents attracti
Slide 3: Strong and Flexible Balance Sheet
Strong and Flexible Balance Sheet AMPLE LIQUIDITY, MODEST LEVERAGE, NO OUTSTANDING DEBT MATURITY UNTIL 2024 $1.6BN 6.3x Total Liquidity Net Debt / Adj. Available EBITDA $527MM 37.2% Cash and S-T Net Debt / Investments Enterprise Value $1.1BN 74% of SF Undrawn Unencumbered Capacity on LOC Portfolio C
Slide 4: Flexible Balance Sheet
Flexible Balance Sheet EMPIRE STATE PEERS! Net Debt / 6 3x 7 8x Adj. EBITDA! Net Debt / 37% Enterprise Value’ CURRENT DEBT MATURITY PROFILE (As of December 31, 2020)? ($ millions) 1,018 $315 $319 — ~s5 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 and thereafter mUnsecured private placement mMor
Slide 5: Portfolio Overview
Portfolio Overview erm st 10.1 Million Total SRS + Rentable rm st ° Square Feet 100% a _ A Manhattan powered by 4 o Office renewable wind a nolo Third Aver 75% energy romero “ons "ooo" 2 200e g eo veo £ 8 First Commercial fae’. | Gea ne Portfolio in the Americas % ris to Achieve the WELL % Health-Sa
Slide 6: Varied Tenant Base
Varied Tenant Base JCDecaux = Shutterstock l &G Interpublic Group Non-Profit Consumer 4.4% Goods 18.5% PartnerRe . Media & Advertising " Linked [f). 4.6% — — Legal Services EMPIRE STATE Ay 4.9% i ANTB FRAG@MEN REALTY TRUST Finance, ascap Insurance, We creare Music Real Estate 17.3% 6) Berkley NESPRE
Slide 7: Tenant Expansions Fuel Leases
> We focus on tenants which have potential for Tenant Expansions Fuel Leases Cumulative Growth from Tenant Expansions 2,000,000 1,600,000 1,200,000 800,000 Square Footage 400,000 2013 2014 2015 2016 growth Tenants expand due to: Tenant service Proven execution Newly redeveloped buildings Combination
Slide 8: Fully modernized, energy efficient assets, centrally located near mass transit
Fully modernized, energy efficient assets, centrally located near mass transit Substantially lower price point versus rents for new construction/aged Class A, and offers much more than Class B Company data and filings as of December 31, 2020. EMPIRE STATE
Slide 9: Embedded Upside From Contracted Revenue Growth
Embedded Upside From Contracted Revenue Growth Cumulative Cash Rent Contribution to Cash NOI $35 (In millions) $33.25M $31.53M $30 $25 25.28M $20 $15 $10 - = $0 2021 2022 2023 2024 = Burn-off of free rent m Signed leases not commenced Company data and filings as of December 31, 2020. EMPIRE STATE RE
Slide 10: Total Billings Collected and Write-Offs
Total Billings Collected Office Retail Total Write-Offs ($ millions) Tenant Receivables Straight-Line (non-cash) 2Q 2020 97% 77% 2Q 2020 $1.9 $7.2 3Q 2020 97% 87% 3Q 2020 $1.9 $1.4 4Q 2020 96% 87% 4Q 2020 $1.6 $0.6
Slide 11: Cost Reduction Targets Achieved
Cost Reduction Targets Achieved ° G&A: * 2020 G&A expenses of $60 million’, approximately 12% less than the previously disclosed run-rate of $68 million. Key highlights include: * $4.3 million reduction in 2020 Named Executive Officer (NEO) compensation ¢ $1.5 million reduction in 2020 corporate ove
Slide 12: Norwalk, Stamford, White Plains
Highway Metro-North Railroad Metro-North Train Stop 684 Norwalk 95 Stamford White Plains 287 Harrison ~30 miles to Midtown Manhattan 10 Bank Street 500 Mamaroneck Avenue First Stamford Place Metro Center 383 Main Avenue
Slide 13: Tenant Re-Occupancy: Health and Safety
Tenant Re-Occupancy: Health and Safety Tenant Communications * Proactive communications inform tenants of the new health and safety protocols in preparation for their return to the office Cleaning & Air Quality ¢ Increased cleaning frequency of high touch points in common areas, reduced touchpoints
Slide 14: Observatory Performance
Observatory Performance CONSISTENT PERFORMANCE AMID ECONOMIC CYCLES, FX MOVEMENTS AND NEW ATTRACTIONS Observatory annual revenue! (millions) Opens (1.0 Million Visitors 2 (3.1 Million Visitors $131.2 estimated | : $124.8 y. $112.2 $101.8 q Financial: $91.9 P : Crisis Hits : : (3.0 Million Visitors $
Slide 15: Hypothetical Observatory Admissions
Hypothetical Observatory Admissions Monthly Admissions!: Equivalent Quarterly Weighted Average cin ca * Weuse 2019 attendance numbers Admissions': for comparison purposes * We use 2019 attendance numbers for comparison purposes * 1Q2021: 9% of 2019 levels * 2Q2021: 13% * 3Q2021: 30% ° 4Q2021: 50% *
Slide 16: Observatory Reopening: Health and Safety
Observatory Reopening: Health and Safety Customer Communications * Our official website and our reseller partners will advise all prospective guests of our enhanced protocols and admission requirements, click here Indoor Environmental Quality & Cleaning * MERV-13 air filters ¢ AtmosAir purification
Slide 17: Observatory is a Global Brand
Observatory is a Global Brand 80% OF VISITORS DECIDE TO VISIT BEFORE LEAVING HOME! Demographics': What Differentiates the ESB 64% International, 36% Domestic > Global and Iconic brand built 47% of Visitors are 18-34 years through: old Top Foreign Countries!: *° 89 years of popular cultural reference
Slide 18: Observatory Ticket Mix
Observatory Ticket Mix ACTIVE MANAGEMENT OF TICKET MIX TO DRIVE REVENUE PER CAPITA Direct sales at full price is Premium experience largest source offerings capture incremental revenue Growth in Observatory Revenue Per Capital? DB OG BG DD DM M ~O -O -O ,~O qo qo n> SS SM VM SM 1 Revenue per Capita
Slide 19: Observatory Valuation
Observatory Valuation SUM OF THE PARTS VALUES BOTH RENTAL REVENUE AND RESIDUAL PROFIT STREAMS Observatory Results -Trailing Twelve Months2 In $MM3 Visitor Revenue 25 Gift Shop License Fee a Total Revenue 29 Less Operating Expenses 24 NOI 5 Less Intercompany rent expense 18 NOI after intercompany ren
Slide 20: Sustainability Leadership
Sustainability Leadership ESG Integration Company-Wide * Our Chairman, President and CEO, Anthony E. Malkin is a recognized leader on sustainability initiatives for our local and national community * Sole New York City owner member of NYC Climate Mobilization Local Law 97 Advisory Board * Chairman o
Slide 21: Social - Human Capital & Community
Social - Human Capital & Community Human Capital Development Goals * Actively engage with our employees on policy and company culture * Implement state of the art wellness programs * Increase employee training and education opportunities and participation + Increase the gender and ethnic diversity o
Slide 22: Governance
Governance Board Independence * Lead Independent Director, elected annually, with responsibilities outlined in the corporate governance guidelines . Independent Board (8 of 9 directors) / All Board committees composed of independent irectors Accountability * Proxy access stockholder right (adopted i
Slide 23: Management Team
Anthony E. Malkin Chairman, President & Chief Executive Officer 32 years with ESRT 32 years in industry AB. from Harvard College Management Team WW Christina Chiu Executive Vice President & Chief Financial Officer 11 months with ESRT 19 years in industry B.S. from New York University Stern School of
Slide 24: Appendix
Slide 25: Environmental - Energy & Emissions
Environmental - Energy & Emissions Sustainability Goals and Progress Energy Goals * Reduce energy use intensity * Increase renewable energy usage across the portfolio * Achieve ENERGY STAR certification Status: v v v Progress: * 5% reduction in energy use intensity in 2019 vs 2018 * 76% ENERGY STAR
Slide 26: Indoor Environmental Quality & ESG Certification
Indoor Environmental Quality IEQ) & ESG Certification Sustainability Goals and Progress IEQ Goals Status: Progress: * Improve the |EQ in our * Ist commercial portfolio in the Americas buildings to improve SA to achieve WELL Health-Safety rating efficiencies, tenant safety * Member of the Wel! Living
Slide 27: Environmental - Waste & Water
Environmental - Waste & Water Sustainability Goals and Progress Waste & Recycling Goals Status: Progress: * Reduce waste generation * 10.6% reduction in waste tons psf in by 5% year over year 2019 vs 2018 * Aggressive waste diversion strategies to meet and exceed NYC legislation * Tenant education o
Slide 28: ESRT's Renewable Power Leadership
ESRT’s Renewable Power Leadership vw.washingtonpost.com/climate-solutions/2021/02/03/climate-empire-state-wind/ The Washington pi Climate Solutions The Empire State Building and its related buildings are now powered by wind “Empire State Realty Trust will announce Wednesday a major purchase of wind
Slide 29: ESRT Achieves WELL Health-Safety & GRESB STAR Ratings
ESRT Achieves WELL Health-Safety & GRESB 5 STAR Ratings First Commercial Portfolio in the Americas to Achieve the WELL Health-Safety Rating HeMaemeery We %y wy G RE S B w &® &® &® & 2020 RATED 2020 WELL Health-Safety Rating ESRT GRESB Recognition . Evidence-based, third-party verified rating for new
Slide 30: Reconciliation of Net Income to NOI and Cash NOI
Three Months Ended Year Ended Reconciliation of Net Income to NOI and Cash December 31, September 30, June 30, March 31, December 31, December 31, NOI 2020 2020 2020 2020 2019 2019 Net income $ 710 $ (12,269) $ (19,618) $ 8,288 $ 28,720 $ 84,290 Add: General and administrative expenses 13,627 14,517
Slide 31: Total Cash Revenues Reconciliation
Three Months Ended Twelve Months to December 31, September 30, June 30, March 31, Date 2020 2020 2020 2020 Rental revenue $ 500,593 $ 123,821 $ 123,821 $ 122,374 $ 130,577 Tenant expense reimbursement 65,337 16,088 16,088 15,625 17,536 Deduct: Straight-line rental revenues (6,273) (395) (395) 2,710
Slide 32: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Three Months Ended December 31, September 30, June 30, March 31, December 31, 2020 2020 2020 2020 2019 Net income (loss) $ 710 $ (12,269) $ (19,618) $ 8,288 $ 28,720 Interest expense 23,001 23,360 23,928 19,618 18,534 Income tax expense (benefit) (4,177) 38 (2,450) (382) 1,210 Depreciation and amort
Slide 33: Forward-Looking Statements
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,” “contemplates
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