Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Investor Presentation (December 2022)
34 slides from Empire State Realty Trust's investor presentation, December 2022
Slide 1: Empire State Realty Trust Investor Presentation December 2022
EMPIRE STATE REALTY TRUST Investor Presentation December 2022 Empire State Building ‘Observatory 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: Laser Focused on Shareholder Value
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 84-86% ra Maintain balance sheet flexibility }ecupancy Enhance transparency and disclosure ¥ Introduced ear
Slide 4: ▪ ▪ ▪ ▪ 3% ▪ 18% 2% ▪ ▪ ▪ ▪ ▪ ▪
▪ ▪ ▪ ▪ 3% ▪ 18% 2% ▪ ▪ ▪ ▪ ▪ ▪ ▪ 77% ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪
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 F Competitive price point for quality assets * Z =" av ay ce = Centrally located to mass transit { . at 2 5 et pe Se Energy ef
Slide 6: 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 & oa Initial Cash Rents of $71M: SLNC and Free-Rent Burn-Off! Cash Commencement nw (in $Millions) * é .- $70 Tenant Expansions sco san * Signed Leases Not Commenced (“SLNC”) 50 + Free Rent Burn-Off 40 * Existing Tenant Expansion scon! $20 $10 ol ‘$0.1M Sele
Slide 9: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility to allocate capital for long term shareholder value. Liquidity " Cash: $387M = Undrawn Credit Facility: $850M = Unencumbered Office + Retail Portfolio: 76% of SF Optionality Low Leverage Relative to Peers' and No Floating Rate Deb
Slide 10: Q3 2022 ESG Highlights
COMPANY PRIORITIES Q3 2022 ESG Highlights CARBON NEUTRAL AS OF 2022 \ REDUCED EMISSIONS ‘6 \ A 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
Slide 11: Focus on ESG Initiatives
Dn COMPETITIVE ADVANTAGES Focus on ESG Initiatives mental Env AWARDED AS A LEADER GREEN LEASE ON TRACK WITH SECTOR LEADING TARGETS + 100% renewable wind energy powered portfolio + Net-zero commitment for carbon emissions at ESB by 2030 and the entire commercial portfolio by 2035 PREPARED FOR FUTURE
Slide 12: Learn more about IEQ – Click Play
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 September 30, 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: 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 16: ESB Observatory: Growth in Revenue Per Capita
ESB OBSERVATORY World’s Growth in Observatory Revenue Per Capita! Most Famous om Building sao Observatory has delivered consistent, long-term growth through economic cycles and new attractions $30 Increased wistorsip has ae and tour and travel customers, and revenue per 1 1 1 > . P Hypothetical Weig
Slide 17: Retail Portfolio Highlights
De RETAIL Portfolio Highlights = 729K SF portfolio of irreplaceable street retail assets = 95% 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 Asset Highlights
MULTIFAMILY Asset Highlights In December 2021, we acquired 90% ownership and control of 625 units in two high quality Manhattan multifamily assets. The Victory at 561 10% Ave Just north of Hudson Yards and Manhattan West, 415t Street = Initial yield on cost ~4%; mid-5% stabilized cap rate by 2025 °
Slide 19: Recent Acquisition – 298 Mulberry Street
MULTIFAMILY Recent Acquisition – 298 Mulberry Street ▪ $115M ▪ ▪ ▪ ▪ ▪ ▪ ▪ ▪ Upside ▪ ▪ ▪ ▪
Slide 20: 298 Mulberry Street
GREENWICH EAST VILLAGE 2856 VILLAGE MULTIFAMILY WASHINGTON OCG _ sousze rari 298 Mulberry Street 0000 NOHO Doorman Building in a Highly Desirable oo Neighborhood 6000 F At A Glance NOLITA = Located at the corner of Mulberry Street and East Houston Street NoHo Submarket Fundamentals! INA 2011 2012 20
Slide 21: Recent Dispositions
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 500 Mamaroneck Avenue, Harrison, NY •
Slide 22: Conclusion
Conclusion NYC-focused portfolio with multiple sources of NYC upside, including tourism, residential, retail and office demand. 22 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 23: Meet the Team: Experienced and Aligned Management
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. 23 Anthony E. Malkin Chairman, President & Chief Executive Officer 34 ye
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: Sustainability Overview
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 portfolio electricity fully powe
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’: Carbon Neutrality By 2030 for Empire State Building, and by 2035 for the office portfolio 2021 Progress: On Target Greenhouse Gas Emissions I
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: 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 30: Social Responsibility
Social Responsibility wer eae rnc IUs Investment in Human Capital Supplier Diversity Initiatives Implemented ™ Included in the 2022 Bloomberg ™ Actively engage with our employees on policy and Gender-Equality Index company culture Vendor Code of Conduct = Ist commercial office REIT in the ™ Health a
Slide 31: Governance
FC Governance Board Diversity = 22% female / 78% male = 22% minority / 78% 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 independent diverse directors appointed since
Slide 32: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI September 30, June 30, March 31, December 31, September 30, and Same Store Cash NOI 2022 2022 2022 2021 2021 Net income (loss) $ 10,118 $ 48,695 $ (17,221) $ (4,074) $ (10,183) Add: General and administrative expenses 15,725 15,876 13,686 1
Slide 33: Reconciliation of Cash Revenues and EBITDA
Three Months Ended Twelve Months to September 30, March 31, December 31, Date 2022 June 30, 2022 2022 2021 Rental revenue $ 527,225 $ 131,952 $ 135,191 $ 133,689 $ 126,393 Tenant expense reimbursement 56,993 16,309 14,148 13,825 12,711 Deduct: Straight-line rental revenues (26,414) (7,341) (8,597) (
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,” “will” "should," “seeks,” “approximately,” “intends,” “plans,” “estimates,” s
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