Empire State Realty Trust, Inc. · NYSE:ESRT
Empire State Realty Trust — Q2 2023 Earnings Presentation
31 slides from Empire State Realty Trust's earnings presentation, Jul 27, 2023
Slide 1: Empire State Realty Trust Investor Presentation July 2023
EMPIRE STATE REALTY TRUST Investor Presentation July 2023 Veuve Clicquot Polo Classic BED Wats a = & ml x, NYC Mayor Eric T a isits Empire a...” StarbuekS Reserve-at ESB
Slide 2: Contents
ESRT Overview Company Priorities ———— Competitive Advantages C t t Flight To Quality ontents Value Proposition Contracted Rents and Tenant Expansions Strong and Flexible Balance Sheet ESG Leadership ESRT Property Sector Highlights Office ESB Observatory Retail Multifamily Meet the Team: ESRT Managem
Slide 3: ESRT Overview: Why ESRT?
Zz ESRT OVERVIEW Why ESRT? ° NYC is the international capital of the world * Resilient, vibrant, irreplicable ° Pure play NYC REIT ° Office, Observatory, Retail, Multifamily ° Competitive advantages * Debt levels low, interest rates fixed, diverse income streams, sustainability leader, accessible pr
Slide 4: ▪ ▪ ▪ ▪ ▪ ▪ ▪ 67% ▪ ▪ ▪ 24% ▪ ▪
▪ ▪ ▪ ▪ ▪ ▪ ▪ 67% ▪ ▪ ▪ 24% ▪ ▪ ▪ ▪ ▪ ▪ 4% 4% ▪ ▪ ▪ ▪ ▪ ▪
Slide 5: Company Priorities
Dn COMPANY PRIORITIES Laser Focused on Shareholder Value Execute on capital allocation goals v Recycle capital opportunistically Manage Our v Selective value-enhancing acquisitions at Lease Space Balance attractive entry points 86.8% 85-87% Sheet v Buybacks Y Occupancy Occupancy / Y Maintain balance
Slide 6: ESRT Outperforms Peers; Future-Ready Portfolio Drives Value
ESRT Outperforms Peers Popular Narrative is Wrong • ✘ • ✘ • • Future-Ready Portfolio Drives Value • for Shareholders • • • • • • • • • • • • • • • • • •
Slide 7: Competitive Advantage: Value Proposition for Tenants
COMPETITIVE ADVANTAGE Value Proposition for Tenants Illustrative Example NEW CONSTRUCTION NYC OFFICE vy Well-Amenitized ¥_ High Indoor Environmental Air Quality v Energy-Efficient PRE-WAR TROPHY RETROFIT NYC OFFICE vy Class A renovated buildings with character Modernized Well-Amenitized High Indoor
Slide 8: Contracted Rents & Tenant Expansions
Dn COMPETITIVE ADVANTAGES Contracted Rents & Tenant Expansions * Limited near-term lease expiration ° Locked-in pipeline of signed leases * Proven record of existing with upside to in-place rents not commenced & free rent burn tenant expansions Upcoming Lease Expirations SLNC and Free-Rent Burn-Off*
Slide 9: Strong & Flexible Balance Sheet
Dn COMPETITIVE ADVANTAGES Strong & Flexible Balance Sheet Flexibility Optionality Allows ESRT to: ° No floating rate debt exposure ° Capital recycling Compete and win new tenants ° Weighted average interest rate = 3.9% 0 ° External growth Be nimble - capital recycling, acquisitions, No significant m
Slide 10: ESG Leadership
COMPETITIVE ADVANTAGES ESG Leadership 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! SUPPORT PRESERVATION OF F
Slide 11: Focus on ESG Initiatives
Dn COMPETITIVE ADVANTAGES Focus on ESG Initiatives nN Env mental AWARDED AS A LEADER #1 LOWEST EMISSIONS OF ALL NYC-BASED REITS 10 < LEADER ON TRACK WITH SECTOR LEADING TARGETS 100% renewable wind powered commercial portfolio Net-zero commitment for carbon emissions at ESB by 2030 and the entire com
Slide 12: Office: Prime Locations Near Mass Transit
9 pi , 9 commitment to healthy buildings and indoor environmental quality, OFFICE : made our choice to renew and extend our lease easy.” 4 Hy - James Kelly, managing partner at Davidson, Dawson, & Clark, LLP Prime Locations Near Mass Transit wean ' 0060 cant 2 WATHST 7 4 us *® Majority of our portfo
Slide 13: Office: Robust Amenity Offering
OFFICE Robust Amenity Offering * 60 usable terraces * Proximity to mass transit ° 23 food and beverage * Restaurants, leisure, options shopping ° Fitness / Wellness facility ° Broadway Plaza * Town Hall * Madison Square Park Tenant Lounge Enhance underutilized concourse & rooftop space Cost synergie
Slide 14: Office: Flight to Quality
De OFFICE Flight to Quality Today’s Tenants Seek Characteristics of ESRT’s Portfolio 14 v \ SN SSN Trophy pre-war assets - differentiated, authentic, high quality Well-located, amenity-rich Modernized, energy-efficient, IEQ, healthy buildings Compelling value proposition Customer service in our buil
Slide 15: 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 16: Office: Strong & Diverse Tenant Mix
De OFFICE Strong & Diverse Tenant Mix “A” quality buildings attract “A” quality tenants 16 Technology, Media and Advertising mFinance, Insurance, Real Estate mConsumer Goods mOther mProfessional Services mLegal Services mNon-Profit Linked) Expedia FDIC werkdvy. shutterstock’ A FRANKLIN.TEMPLETON. IN
Slide 17: ESB Observatory: Proven Performer & Resilient
Dn ESB OBSERVATORY Proven Performer & Resilient Significant upside to NYC tourism recovery ° #1 Tripadvisor Attraction in the U.S. (2023 & 2022)'8 * Inflation hedge ° “World’s Most Famous Building” * $165M renovation complete * Top Uber tourist attraction in the world'4 * High margin operating busin
Slide 18: Retail
RETAIL . Brand New 3-Story Starbucks Portfol 10 Reserve at the Empire State Building Highlights % of % of Retail 7op 10 Retail Tenants'® Annual Square Retail FER Footage ° 718K SF portfolio . SEPHORA 11.7% 17% of irreplaceable 2. 10.4% 12.5% street retail assets © TARGET 3. URBAN OUTFITTERS 8.8% 8.7
Slide 19: Multifamily Portfolio
MULTIFAMILY Multifamily Portfolio Benefits from strong NYC residential demand 298 Mulberry Street 345 E 94th Street ue Victory at 561 10 Ave Mulberry Street & East Houston Street 94th Street and Ist Avenue Just north of Hudson Yards and Manhattan West, 415 Street and 10 Avenue * Subway lines: B,D,F,
Slide 20: Meet the Team: Experienced and Aligned Management
De MEET THE TEAM Experienced and Aligned Management Management team has a deep understanding of NYC market, real estate and capital markets Anthony E. Malkin Christina Chiu Thomas P. Durels Chairman, President & Executive Vice President, Executive Vice President, Chief Executive Officer Chief Operat
Slide 21: Conclusion
Conclusion 21 Unique NYC-focused portfolio comprised of modernized office assets; everyday retail in high foot traffic locations; well-located, well-amenitized multifamily assets; iconic Empire State Building Observatory Experience Well-positioned balance sheet affords flexibility to pursue capital
Slide 22: Appendix
Appendix 22 Overview Sustainability Achievements and Leadership Social Responsibility Governance Reconciliation of Non-GAAP Measures Disclaimer
Slide 23: Sustainability Overview
SUSTAINABILITY Overview 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 electricity
Slide 24: Learn more about IEQ – Click Play Below
Learn more about IEQ – Click Play Below
Slide 25: Sustainability: Achievements & Leadership
SUSTAINABILITY Achievements & Leadership Achievements GRESB Rating: 2022 5-Star 95 Public 24 in peer group Disclosure: 96 # 1tin peer group Lowest EE ee Ne EE REITs Policy Leadership at National State and City Levels 25 Our Chairman, President Z and CEO, Anthony E. Malkin is a recognized leader on s
Slide 26: Social Responsibility
In support of, Ce - Social Responsibility BROW ERMENT Exley UN Women and the UiSlooa compoct ote 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-
Slide 27: Governance
FC Governance Board Diversity = 30% female / 70% male = 30% minority / 70% white Board Practices = Balance of continuity (3 directors since 2013 IPO) and refreshment with 6 new directors since 2017 ™ Focused on enhanced diversity and refreshment with 5 independent diverse directors appointed since 2
Slide 28: Reconciliation of Net Income to Cash NOI and Same Store Cash NOI
Three Months Ended Reconciliation of Net Income to Cash NOI and June 30, March 31, December 31, September 30, June 30, Same Store Cash NOI 21 2023 2023 2022 2022 2022 Net income (loss) $ 38,655 $ 11,694 $ 21,620 $ 10,118 $ 48,695 Add: General and administrative expenses 16,075 15,708 16,478 15,725 1
Slide 29: Reconciliation of Non-GAAP Measures
Three Months Ended 22 Twelve Months to December 31, September 30, Date June 30, 2023 March 31, 2023 2022 2022 Rental revenue $ 527,135 $ 138,808 $ 124,782 $ 131,745 $ 131,800 Tenant expense reimbursement 61,754 15,795 15,309 14,160 16,490 Deduct: Straight-line rental revenues (25,785) (11,859) (556)
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Slide 31: Disclaimer
Disclaimer 31 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,” “thinks,” “forecasts,” anticipates,” “hope,” “may,” “expects,” “may,” “will,” “should,” “seeks
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