8-K
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
FORM
8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 2020
 
EMPIRE STATE REALTY TRUST, INC.
(Exact Name of Registrant as Specified in its Charter)
 
         
Maryland
 
001-36105
 
37-1645259
(State or other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
EMPIRE STATE REALTY OP, L.P.
(Exact Name of Registrant as Specified in its Charter)
 
         
Delaware
 
001-36106
 
45-4685158
(State or other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(I.R.S. Employer
Identification No.)
 
 
 
     
111 West 33
rd
Street
, 12
th
Floor
New York, New York
 
10120
(Address of Principal Executive Offices)
 
(Zip Code)
 
 
Registrant’s telephone number, including area code:
(212) 687-8700
n/a
(Former name or former address, if changed from last report)
 
Check the appropriate box below if the Form
8-K
filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
Soliciting material pursuant to Rule
14a-12
under the Exchange Act (17 CFR
240.14a-12)
 
 
Pre-commencement
communications pursuant to Rule
14d-2(b)
under the Exchange Act (17 CFR
240.14d-2(b))
 
 
Pre-commencement
communications pursuant to Rule
13e-4(c)
under the Exchange Act (17 CFR
240.13e-4(c))
 
 
Securities registered pursuant to Section 12(b) of the Act:
         
Title of each class
 
Trading
Symbol(s)
 
Name of each exchange
on which registered
Empire State Realty Trust, Inc.
 
 
Class A Common Stock, par value $0.01 per share
 
ESRT
 
The New York Stock Exchange
         
Empire State Realty OP, L.P.
 
 
Series ES Operating Partnership Units
 
ESBA
 
NYSE Arca, Inc.
Series 60 Operating Partnership Units
 
OGCP
 
NYSE Arca, Inc.
Series 250 Operating Partnership Units
 
FISK
 
NYSE Arca, Inc.
 
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule
12b-2
of the Securities Exchange Act of 1934 (§
240.12b-2
of this chapter).
Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
 
 

Item 2.02.
Results of Operations and Financial Condition.
On April 22, 2020, Empire State Realty Trust, Inc. (the “Company” or “we”) issued a press release announcing its financial results for the first quarter 2020. The press release referred to certain supplemental information that is available on the Company’s website. The press release and supplemental report are attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated by reference herein.
The information in Item 2.02 of this Current Report, including Exhibits 99.1 and 99.2, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, unless it is specifically incorporated by reference therein. 
Item 7.01.
Regulation FD Disclosure
As discussed in Item 2.02 above, the Company issued a press release regarding its financial results for the first quarter 2020 and made available on its website certain supplemental information relating thereto.
The information in Item 7.01 of this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that Section. Such information shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act or the Exchange Act, unless it is specifically incorporated by reference therein.
Item 9.01.
Financial Statements and Exhibits.
(d) Exhibits.
         
Exhibit No.
 
 
Description
 
 
 
 
 
 
99.1
 
 
 
 
 
 
 
 
99.2
 
 
 
 
 
 
 
 
104
 
 
Cover Page Interactive File (the cover page tags are embedded within the Inline XBRL document).
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Non-GAAP
Supplemental Financial Measures
Funds From Operations (“FFO”)
We compute FFO in accordance with the “White Paper” on FFO published by the National Association of Real Estate Investment Trusts, or NAREIT, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding impairment writedowns of investments in depreciable real estate and investments in
in-substance
real estate investments, gains or losses from debt restructurings and sales of depreciable operating properties, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs), less distributions to
non-controlling
interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognized
non-GAAP
financial measure for REITs that we believe, when considered with financial statements determined in accordance with GAAP, is useful to investors in understanding financial performance and providing a relevant basis for comparison among REITs. In addition, FFO is useful to investors as it captures features particular to real estate performance by recognizing that real estate has generally appreciated over time or maintains residual value to a much greater extent than do other depreciable assets. Investors should review FFO, along with GAAP net income, when trying to understand an equity REIT’s operating performance. We present FFO because we consider it an important supplemental measure of our operating performance and believe that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs. However, because FFO excludes depreciation and amortization and captures neither the changes in the value of our properties that result from use or market conditions nor the level of capital expenditures and leasing commissions necessary to maintain the operating performance of our properties, all of which have real economic effect and could materially impact our results of operations, the utility of FFO as a measure of performance is limited. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.
Modified Funds From Operations (“Modified FFO”)
Modified FFO adds back an adjustment for any above or below-market ground lease amortization to traditionally defined FFO. We consider this a useful supplemental measure in evaluating our operating performance due to the
non-cash
accounting treatment under GAAP, which stems from the third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we consider it an important supplemental measure of our operating performance in that it adds back the
non-cash
amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.
Core Funds From Operations (“Core FFO”)
Core FFO adds back to Modified FFO the following items: acquisition expenses, deferred tax asset
write-off
and loss on early extinguishment of debt. The Company presents Core FFO because it considers it an important supplemental measure of its operating performance in that it excludes
non-recurring
items. There can be no assurance that Core FFO presented by the Company is comparable to similarly titled measures of other REITs. Core FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. In future periods, we may also exclude other items from Core FFO that we believe may help investors compare our results.
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Core Funds Available for Distribution (“Core FAD”)
In addition to Core FFO, we present Core FAD by (i) adding to Core FFO
non-real
estate depreciation and amortization, the amortization of deferred financing costs, amortization of debt discounts and
non-cash
compensation expense and (ii) deducting straight line rent, recurring second generation leasing commissions, tenant improvements, prebuilts, capital expenditures, furniture, fixtures & equipment purchases, amortization of debt premiums and above/below market rent revenue. Core FAD is presented solely as a supplemental disclosure that management believes provides useful information regarding our ability to fund our dividends. Core FAD does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Core FAD is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. There can be no assurance that Core FAD presented by us is comparable to similarly titled measures of other REITs.
Net Operating Income (“NOI”)
NOI is a
non-GAAP
financial measure of performance. NOI is used by our management to evaluate and compare the performance of our properties and to determine trends in earnings and to compute the fair value of our properties as it is not affected by: (i) the cost of funds of the property owner, (ii) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (iii) acquisition expenses, loss on early extinguishment of debt and loss from derivative financial instruments, or (iv) general and administrative expenses and other gains and losses that are specific to the property owner. The cost of funds is eliminated from NOI because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly-timed purchases or sales. We believe that eliminating these costs from net income is useful because the resulting measure captures the actual revenue, generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with. Other companies may use different methods for calculating NOI or similarly titled measures and, accordingly, our NOI may not be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.
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EBITDA
We compute EBITDA as net income plus interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.
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SIGNATURE
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
 
 
EMPIRE STATE REALTY TRUST, INC.
 
 
(Registrant)
             
Date: April 22, 2020
 
 
By:
 
/s/ Thomas N. Keltner, Jr.
 
 
 
Name: Thomas N. Keltner, Jr.
 
 
 
Title: Executive Vice President, General Counsel and Secretary
 
 
Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
             
 
 
EMPIRE STATE REALTY OP, L.P.
 
 
(Registrant)
         
 
 
By: Empire State Realty Trust, Inc., as general partner
             
Date: April 22, 2020
 
 
By:
 
/s/ Thomas N. Keltner, Jr.
 
 
 
Name: Thomas N. Keltner, Jr.
 
 
 
Title: Executive Vice President, General Counsel and Secretary
 
 
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EX-99.1

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Exhibit 99.1

EMPIRE STATE REALTY TRUST ANNOUNCES FIRST QUARTER 2020 RESULTS

- Earnings of $0.02 Per Fully Diluted Share -

- Core FFO of $0.18 Per Fully Diluted Share -

- Strong and Flexible Balance Sheet with Over $1 Billion in Cash –

New York, New York, April 22, 2020—Empire State Realty Trust, Inc. (NYSE: ESRT) (the “Company”), a real estate investment trust with office and retail properties in Manhattan and the greater New York metropolitan area, today reported its operational and financial results for the first quarter of 2020.

“We have positioned ourselves for change and face this special period with a rock-solid balance sheet to allow us to meet our requirements and provide for external growth. I look forward to our earnings call and a full discussion of the impacts on our business from the “19,” the repurchase of our shares, and our plans for the use of our balance sheet,” stated Anthony E. Malkin, Empire State Realty Trust’s Chairman and Chief Executive Officer.

First Quarter Highlights

 

   

Net income attributable to the Company was $0.02 per fully diluted share.

 

   

Core Funds From Operations (“Core FFO”) was $0.18 per fully diluted share.

 

   

Fortified its already strong balance sheet with the completion of several financings that raised $300 million in net incremental proceeds.

 

   

Increased its cash balance to over $1 billion with a $550 million draw under its $1.1 billion unsecured revolving credit facility.

 

   

Repurchased 8.5 million shares at a weighted average price of $9.37 per share, totaling $79.8 million in aggregate, through April 22, 2020.

 

   

Occupancy and leased percentages at March 31, 2020:

 

   

Total portfolio was 88.7% occupied; including Signed Leases Not Commenced (“SLNC”), the total portfolio was 91.1% leased.

 

   

Manhattan office portfolio (excluding the retail component of these properties) was 90.0% occupied; including SLNC, the Manhattan office portfolio was 92.6% leased.

 

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Retail portfolio was 88.5% occupied; including SLNC, the retail portfolio was 94.0% leased.

 

   

Empire State Building was 93.7% occupied; including SLNC, was 95.4% leased.

 

   

Signed 35 leases, representing 149,143 rentable square feet across the total portfolio, and achieved a 3.4% increase in mark-to-market cash rent over previous fully escalated cash rents portfolio-wide on new, renewal, and expansion leases.

 

   

Signed 12 new leases, representing 63,153 rentable square feet for the Manhattan office portfolio (excluding the retail component of these properties), and achieved an increase of 19.4% in mark-to-market cash rent over previous fully escalated cash rents.

 

   

Increased Empire State Building Observatory revenues during the first two months of 2020 by 13.2%, after adjusting for the 102nd floor observation deck, to $14.4 million from $12.7 million in the first two months of 2019. On March 16, 2020, the Company complied with the instructions of authorities and closed the Empire State Building Observatory.

 

   

Declared a dividend of $0.105 per share.

Investor Presentation Update

The Company has posted on the “Investors” section of its website (www.empirestaterealtytrust.com) the latest investor presentation which contains information on the current impact of the COVID-19 pandemic on its businesses, financial condition and results of operations.

Portfolio Operations

As of March 31, 2020, the Company’s total portfolio contained 10.1 million rentable square feet of office and retail space. The Company’s occupancy levels fluctuate in certain periods due to the timing lag between the date of tenants’ move out and the date of Company’s completion of redevelopment work for new leases to commence. As of March 31, 2020, the Company’s portfolio was occupied and leased as shown below. Leased percentages include signed leases not commenced.

 

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     March 31, 2020     December 31, 2019     March 31, 2019  

Percent occupied:

      

Total portfolio

     88.7     88.6     88.8

Total office

     88.7     88.5     88.6

Manhattan office

     90.0     89.8     88.9

Empire State Building

     93.7     94.1     92.9

Retail

     88.5     90.3     90.7

Percent leased:

      

Total portfolio

     91.1     91.2     91.5

Total office

     90.9     91.0     91.4

Manhattan office

     92.6     92.7     92.2

Empire State Building

     95.4     95.2     94.1

Retail

     94.0     93.1     92.3

Leasing

For the three months ended March 31, 2020, the Company signed 35 new, renewal, and expansion leases within the total portfolio, comprising 149,143 rentable square feet with an average starting rental rate of $66.58 per rentable square foot, representing an increase of 3.4% over the previous fully escalated cash rent.

On a blended basis, the 24 new, renewal, and expansion office leases, comprising 93,865 rentable square feet signed within the Manhattan office portfolio during the first quarter, had an average starting rental rate of $61.94 per rentable square foot, representing an increase of 12.6% over the previous fully escalated cash rent.

Leases Signed in the First Quarter 2020 for the Manhattan Office Portfolio

 

   

12 new leases, comprising 63,153 rentable square feet, with an average starting rental rate of $62.78 per rentable square foot, representing an increase of 19.4% over the previous fully escalated cash rent, and

 

   

12 renewal leases, comprising 30,712 rentable square feet, with an average starting rental rate of $60.20 per rentable square foot, representing an increase of 0.3% over the previous fully escalated cash rent.

 

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Observatory

Revenue for January and February 2020 increased 13.2% from January and February 2019, after adjusting for the 102nd floor observation deck, which was closed for redevelopment in first quarter 2019 and re-opened in the fourth quarter 2019. The Company closed the Empire State Building Observatory on March 16, 2020 due to the COVID-19 pandemic.

First Quarter Observatory Results

 

(dollars in thousands)    2020      2019      Percent
Change
 

Observatory revenue

   $ 19,544      $ 20,569        (5.0 %) 

Less: 102nd floor revenue

     (1,808      (180      —    
  

 

 

    

 

 

    

 

 

 

Observatory revenue excluding 102nd floor

   $ 17,736      $ 20,389        (13.0 %) 
  

 

 

    

 

 

    

 

 

 

Number of visitors

     422,000        601,000        (29.8 %) 

Bad weather days (during open days)

     15        15     

Days closed due to COVID-19

     15        —       

Balance Sheet

During the quarter, the Company undertook several capital market actions to further enhance the strength and flexibility of its balance sheet. The Company has over $1.0 billion in cash, additional borrowing capacity under its revolving credit facility, low leverage levels and a weighted average debt maturity of more than seven years.

The Company completed several financings that added $300 million in net incremental cash proceeds to its balance sheet at an all-in blended cost of 2.6%, or 3.6% inclusive of interest rate swap agreements, and a weighted average maturity of 8.1 years.

 

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On March 17, 2020, the Company issued and sold an aggregate principal amount of $175 million of senior unsecured notes in a private placement to entities affiliated with Prudential Private Capital, MetLife Management Advisors, LLC, and AIG Asset Management. The notes consist of $100 million of 3.61% Series G Senior Notes due March 2032 and $75 million of 3.73% Series H Senior Notes due March 2035.

On March 19, 2020, the Company proactively refinanced its existing $265 million unsecured bank term loan due August 2022 with a new $215 million unsecured term loan due March 2025 with an initial interest rate of LIBOR plus 1.20% and at the same time completed a new $175 million unsecured term loan due December 2026 with an initial interest rate of LIBOR plus 1.50%.

In addition to the aforementioned financings, and as a prudent action to bolster the Company’s cash balance and enhance its flexibility, the Company drew $550 million under the Company’s $1.1 billion unsecured revolving credit facility. The Company held cash and cash equivalents of approximately $1.0 billion at March 31, 2020.

At March 31, 2020, the Company had total debt outstanding of approximately $2.5 billion, with a weighted average interest rate of 3.60% per annum, and a weighted average term to maturity of 7.2 years. At March 31, 2020, the Company’s consolidated net debt to total market capitalization was approximately 35.5% and consolidated net debt to EBITDA was 4.4x.

Through April 22, 2020, the Company purchased 8.5 million of its shares at a weighted average share price of $9.37 per share, totaling $79.8 million, through a combination of open-market purchases and the execution of a 10B5-1 program.

 

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Dividend

On March 31, 2020, the Company paid a dividend of $0.105 per share, or unit as applicable, for the first quarter 2020 to holders of the Company’s Class A common stock (NYSE: ESRT) and Class B common stock and to holders of the Series ES, Series 250 and Series 60 partnership units (NYSE Arca: ESBA, FISK and OGCP, respectively) and Series PR partnership units of Empire State Realty OP, L.P., the Company’s operating partnership (the “Operating Partnership”). The Company paid a dividend of $0.15 per unit for the first quarter 2020 to holders of the Operating Partnership’s Series 2014 private perpetual preferred units and paid a dividend of $0.175 per unit for the first quarter 2020 to holders of the Operating Partnership’s Series 2019 private perpetual preferred units.

Webcast and Conference Call Details

Empire State Realty Trust, Inc. will host a webcast and conference call, open to the general public, on Thursday, April 23, 2020 at 1:00 pm Eastern time.

The webcast will be accessible on the “Investors” section of the Company’s website at www.empirestaterealtytrust.com. To listen to the live webcast, go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.

The conference call can also be accessed by dialing 1-877-407-3982 for domestic callers or 1-201-493-6780 for international callers. A dial-in replay will be available starting shortly after the call until April 30, 2020, which can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for this dial-in replay is 13701815.

The Supplemental Report and Investor Presentation are integral components of quarterly earnings announcement and are now available on the “Investors” section of the Company’s website at www.empirestaterealtytrust.com.

 

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About Empire State Realty Trust

Empire State Realty Trust, Inc. (NYSE: ESRT), a leading real estate investment trust (REIT), owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous building. Headquartered in New York, New York, the Company’s office and retail portfolio covers 10.1 million rentable square feet, as of March 31, 2020, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.

Forward-Looking Statements

This press release 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,” “aims,” “continues,” “would” or “anticipates” or the negative of these words and phrases or similar words or phrases. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: (i) economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to businesses that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, as well as individuals adversely impacted by the COVID-19 pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of the Company’s tenants, particularly retail, and the Observatory recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments, (d) international and national disruption of travel and tourism with a resulting decline in Observatory visitors, and (e) macroeconomic conditions, such as a disruption of, or lack of access to, the capital markets, and general volatility adversely impacting the market price of the Company’s Class A common stock and publicly-traded partnership units of the Operating Partnership; (ii) resolution of legal proceedings involving the Company; (iii) reduced demand for office or retail space; (iv)changes in our business strategy; (v) changes in technology and market competition that affect utilization of our broadcast or other facilities; (vi) changes in domestic or international tourism, including due to health crises such as the COVID-19 pandemic, geopolitical events and/or currency exchange rates, which may cause a decline in Observatory visitors; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) declining real estate valuations and impairment charges; (x) termination or expiration of our ground leases; (xi) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due and potential limitations on our ability to borrow additional funds in compliance with drawdown conditions and financial covenants; (xii) decreased rental rates or increased vacancy rates; (xiii) our failure to redevelop and reposition properties, or to execute any newly planned capital project successfully or on the anticipated timeline or at the anticipated costs; (xiv) difficulties in identifying properties to acquire and completing acquisitions; (xv) risks related to our development projects (including our Metro Tower development site) and capital projects, including the cost of construction delays and cost overruns; (xvi) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvii) our failure to qualify as a REIT; and (xviii) environmental uncertainties and risks related to adverse weather conditions, rising sea levels and natural disasters. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

 

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While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to update or revise publicly any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this press release, except as required by applicable law. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

Contact:

Investors

Empire State Realty Trust Investor Relations

(212) 850-2678

IR@empirestaterealtytrust.com

Media

Sard Verbinnen & Co.

(212) 687-8080

 

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

(unaudited and amounts in thousands, except per share data)

 

     Three Months Ended March 31,  
     2020     2019  

Revenues

    

Rental revenue

   $ 148,113     $ 143,417  

Observatory revenue

     19,544       20,569  

Lease termination fees

     211       388  

Third-party management and other fees

     346       320  

Other revenue and fees

     2,010       2,599  
  

 

 

   

 

 

 

Total revenues

     170,224       167,293  

Operating expenses

    

Property operating expenses

     41,468       42,955  

Ground rent expenses

     2,331       2,331  

General and administrative expenses

     15,951       14,026  

Observatory expenses

     8,154       7,575  

Real estate taxes

     29,254       28,232  

Depreciation and amortization

     46,093       46,098  
  

 

 

   

 

 

 

Total operating expenses

     143,251       141,217  
  

 

 

   

 

 

 

Total operating income

     26,973       26,076  

Other income (expense):

    

Interest income

     637       3,739  

Interest expense

     (19,618     (20,689

Loss on early extinguishment of debt

     (86     —    
  

 

 

   

 

 

 

Income before income taxes

     7,906       9,126  

Income tax benefit

     382       730  
  

 

 

   

 

 

 

Net income

     8,288       9,856  

Preferred unit distributions

     (1,050     (234

Net income attributable to non-controlling interests

     (2,743     (3,945
  

 

 

   

 

 

 

Net income attributable to common stockholders

   $ 4,495     $ 5,677  
  

 

 

   

 

 

 

Total weighted average shares

    

Basic

     181,741       175,850  
  

 

 

   

 

 

 

Diluted

     292,645       298,049  
  

 

 

   

 

 

 

Net income per share attributable to common stockholders

 

Basic

   $ 0.02     $ 0.03  
  

 

 

   

 

 

 

Diluted

   $ 0.02     $ 0.03  
  

 

 

   

 

 

 

 

9


LOGO

 

Empire State Realty Trust, Inc.

Reconciliation of Net Income to Funds From Operations (“FFO”),

Modified Funds From Operations (“Modified FFO”) and Core Funds From Operations (“Core FFO”)

(unaudited and amounts in thousands, except per share data)

 

     Three Months Ended March 31,  
     2020     2019  

Net income

   $ 8,288     $ 9,856  

Preferred unit distributions

     (1,050     (234

Real estate depreciation and amortization

     44,430       45,092  
  

 

 

   

 

 

 

FFO attributable to common stockholders and non-controlling interests

     51,668       54,714  

Amortization of below-market ground leases

     1,958       1,958  
  

 

 

   

 

 

 

Modified FFO attributable to common stockholders and non-controlling interests

     53,626       56,672  

Loss on early extinguishment of debt

     86       —    
  

 

 

   

 

 

 

Core FFO attributable to common stockholders and non-controlling interests

   $ 53,712     $ 56,672  
  

 

 

   

 

 

 

Total weighted average shares

    

Basic

     292,645       298,049  
  

 

 

   

 

 

 

Diluted

     292,645       298,049  
  

 

 

   

 

 

 

FFO per share

    

Basic

   $ 0.18     $ 0.18  
  

 

 

   

 

 

 

Diluted

   $ 0.18     $ 0.18  
  

 

 

   

 

 

 

Modified FFO per share

    

Basic

   $ 0.18     $ 0.19  
  

 

 

   

 

 

 

Diluted

   $ 0.18     $ 0.19  
  

 

 

   

 

 

 

Core FFO per share

    

Basic

   $ 0.18     $ 0.19  
  

 

 

   

 

 

 

Diluted

   $ 0.18     $ 0.19  
  

 

 

   

 

 

 

 

10


LOGO

 

Empire State Realty Trust, Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands)

 

     March 31,
2020
    December 31,
2019
 

Assets

    

Commercial real estate properties, at cost

   $ 3,123,308     $ 3,109,433  

Less: accumulated depreciation

     (886,822     (862,534
  

 

 

   

 

 

 

Commercial real estate properties, net

     2,236,486       2,246,899  

Cash and cash equivalents

     1,008,983       233,946  

Restricted cash

     36,881       37,651  

Tenant and other receivables

     22,549       25,423  

Deferred rent receivables

     229,154       220,960  

Prepaid expenses and other assets

     40,583       65,453  

Deferred costs, net

     218,578       228,150  

Acquired below market ground leases, net

     350,609       352,566  

Right of use assets

     29,256       29,307  

Goodwill

     491,479       491,479  
  

 

 

   

 

 

 

Total assets

   $ 4,664,558     $ 3,931,834  
  

 

 

   

 

 

 

Liabilities and equity

    

Mortgage notes payable, net

   $ 604,763     $ 605,542  

Senior unsecured notes, net

     973,002       798,392  

Unsecured term loan facility, net

     386,568       264,640  

Unsecured revolving credit facility, net

     546,436       —    

Accounts payable and accrued expenses

     142,315       143,786  

Acquired below market leases, net

     37,623       39,679  

Ground lease liabilities

     29,256       29,307  

Deferred revenue and other liabilities

     64,176       72,015  

Tenants’ security deposits

     30,543       30,560  
  

 

 

   

 

 

 

Total liabilities

     2,814,682       1,983,921  

Total equity

     1,849,876       1,947,913  
  

 

 

   

 

 

 

Total liabilities and equity

   $ 4,664,558     $ 3,931,834  
  

 

 

   

 

 

 

 

11

EX-99.2

Exhibit 99.2

 

LOGO


LOGO

 

   First Quarter 2020

 

Table of Contents

   Page  

Summary

  

Company Profile

     3  

Financial Highlights

     4  

Selected Property Data

  

Property Summary Net Operating Income

     5  

Net Operating Income and Initial Free Rent Burn-Off

     6  

Leasing Activity

     7  

Portfolio Expirations and Vacates Summary

     9  

Property Detail

     10  

Tenant Lease Expirations

     11  

Largest Tenants and Portfolio Tenant Diversification by Industry

     14  

Capital Expenditures and Redevelopment Program

     15  

Observatory Summary

     16  

Financial information

  

Condensed Consolidated Balance Sheets

     17  

Condensed Consolidated Statements of Income

     18  

Core FFO, Modified FFO, FFO, FAD and EBITDA

     19  

Consolidated Debt Analysis

  

Debt Summary

     20  

Debt Detail

     21  

Debt Maturities

     22  

Ground Leases

     22  

Supplemental Definitions

     23  

Forward-looking Statements

We make forward-looking statements in this supplemental package 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. You should not rely on them as predictions of future events. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections.

You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or similar words or phrases in the positive or negative. In particular, forward looking statements include those pertaining to our capital resources, portfolio performance, dividend policy, results of operations, anticipated growth in our portfolio from operations, acquisitions, and market conditions and demographics.

Forward-looking statements involve numerous risks and uncertainties, many of which are difficult to predict and generally beyond our control. They depend on assumptions, data or methods which may be incorrect or imprecise, and we may not be able to realize them. We do not guarantee that the transactions and events described will happen as described (or that they will happen at all).

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: (i) economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to businesses that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, as well as individuals adversely impacted by the COVID-19 pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of the Company’s tenants, particularly retail, and the Observatory recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments, (d) international and national disruption of travel and tourism with a resulting decline in Observatory visitors, and (e) macroeconomic conditions, such as a disruption of, or lack of access to, the capital markets, and general volatility adversely impacting the market price of the Company’s Class A common stock and publicly-traded partnership units of the Operating Partnership; (ii) resolution of legal proceedings involving the Company; (iii) reduced demand for office or retail space; (iv) changes in our business strategy; (v) changes in technology and market competition that affect utilization of our broadcast or other facilities; (vi) changes in domestic or international tourism, including due to health crises such as the COVID-19 pandemic, geopolitical events and/or currency exchange rates, which may cause a decline in Observatory visitors; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) declining real estate valuations and impairment charges; (x) termination or expiration of our ground leases; (xi) our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due and potential limitations on our ability to borrow additional funds in compliance with drawdown conditions and financial covenants; (xii) decreased rental rates or increased vacancy rates; (xiii) our failure to redevelop and reposition properties, or to execute any newly planned capital project successfully or on the anticipated timeline or at the anticipated costs; (xiv) difficulties in identifying properties to acquire and completing acquisitions; (xv) risks related to our development projects (including our Metro Tower development site) and capital projects, including the cost of construction delays and cost overruns; (xvi) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvii) our failure to qualify as a REIT; and (xviii) environmental uncertainties and risks related to adverse weather conditions, rising sea levels and natural disasters. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

 

Page 2


LOGO

 

   First Quarter 2020

 

COMPANY PROFILE

Empire State Realty Trust, Inc., or the Company, is a leading real estate investment trust (REIT) that owns, manages, operates, acquires and repositions office and retail properties in Manhattan and the greater New York metropolitan area, including the Empire State Building, the world’s most famous building.

BOARD OF DIRECTORS

 

Anthony E. Malkin    Chairman and Chief Executive Officer
William H. Berkman    Director, Chair of Finance Committee
Leslie D. Biddle    Director
Thomas J. DeRosa    Director
Steven J. Gilbert    Director, Lead Director
S. Michael Giliberto    Director, Chair of Audit Committee
Patricia S. Han    Director
James D. Robinson IV    Director, Chair of Compensation and Nominating/Corporate Governance Committees

EXECUTIVE MANAGEMENT

 

Anthony E. Malkin    Chairman and Chief Executive Officer
John B. Kessler    President and Chief Operating Officer
Thomas P. Durels    Executive Vice President, Real Estate
Thomas N. Keltner, Jr.    Executive Vice President, General Counsel and Secretary

COMPANY INFORMATION

 

Corporate Headquarters    Investor Relations    New York Stock Exchange
111 West 33rd Street, 12th Floor    Greg Faje    Trading Symbol: ESRT
New York, NY 10120    IR@empirestaterealtytrust.com   
www.empirestaterealtytrust.com      
(212) 687-8700      

RESEARCH COVERAGE

 

Bank of America Merrill Lynch      James Feldman      (646) 855-5808    james.feldman@baml.com
BMO Capital Markets Corp.      John Kim      (212) 885-4115    jp.kim@bmo.com
BTIG      Thomas Catherwood      (212) 738-6140    tcatherwood@btig.com
Citi      Michael Bilerman      (212) 816-1383    michael.bilerman@citi.com
     Emmanuel Korchman      (212) 816-1382    emmanuel.korchman@citi.com
Evercore ISI      Steve Sakwa      (212) 446-9462    steve.sakwa@evercoreisi.com
     Jason Green      (212) 446-9449    jason.green@evercoreisi.com
Green Street Advisors      Daniel Ismail      (949) 640-8780    dismail@greenstreetadvisors.com
Goldman Sachs      Richard Skidmore      (801) 741-5459    richard.skidmore@gs.com
KeyBanc Capital Markets      Jordan Sadler      (917) 368-2280    jsadler@key.com
     Craig Mailman      (917) 368-2316    cmailman@key.com
Stifel Nicolaus & Company, Inc.      John Guinee      (443) 224-1307    jwguinee@stifel.com
Wells Fargo Securities, LLC      Blaine Heck      (443) 263-6529    blaine.heck@wellsfargo.com

 

Page 3


LOGO

 

  

First Quarter 2020

Financial Highlights

(unaudited and dollars in thousands, except per share amounts)

 

     Three Months Ended  

Selected Items:

   March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Revenue

   $ 170,224     $ 194,933     $ 192,873     $ 176,244     $ 167,293  

Net income

   $ 8,288     $ 28,720     $ 26,784     $ 18,930     $ 9,856  

Cash net operating income (1)

   $ 81,528     $ 103,992     $ 98,757     $ 93,737     $ 80,080  

Core funds from operations (“Core FFO”) (1)

   $ 53,712     $ 74,935     $ 71,810     $ 64,476     $ 56,672  

Core funds available for distribution (“Core
FAD”) (1)

   $ 37,738     $ 41,903     $ 54,650     $ 48,235     $ 41,179  

Core FFO per share—diluted

   $ 0.18     $ 0.25     $ 0.24     $ 0.22     $ 0.19  

Diluted weighted average shares

     292,645,000       296,852,000       298,151,000       298,131,000       298,049,000  

Dividends declared and paid per share

   $ 0.105     $ 0.105     $ 0.105     $ 0.105     $ 0.105  

Portfolio Statistics:

          

Number of properties

     20       20       20       20       20  

Total rentable square footage

     10,135,413       10,138,057       10,134,495       10,134,435       10,130,875  

Percent occupied (2)

     88.7     88.6     89.4     90.2     88.8

Percent leased (3)

     91.1     91.2     91.7     92.2     91.5

Observatory Metrics:

          

Number of visitors (4)

     422,000       894,000       1,042,000       968,000       601,000  

Change in visitors year over year

     (29.8 %)      (5.5 %)      (10.7 %)      (7.7 %)      (6.7 %) 

Observatory revenues (5)

   $ 19,544     $ 37,730     $ 37,575     $ 32,895     $ 20,569  

Change in revenues year over year

     (5.0 %)      9.2     (6.6 %)      (6.6 %)      (3.2 %) 

Ratios:

          

Consolidated Debt to Total Market Capitalization (6)

     47.8     28.2     27.7     29.8     28.5

Consolidated Net Debt to Total Market Capitalization (6)

     35.5     25.2     24.1     23.6     21.6

Consolidated Debt and Perpetual Preferred Units to Total Market Capitalization (6)

     49.5     29.7     28.2     30.2     28.9

Consolidated Net Debt and Perpetual Preferred Units to Total Market Capitalization (6)

     37.6     26.8     24.5     24.0     22.0

Consolidated Debt to EBITDA (7)

     7.3x       4.8x       4.6x       5.3x       5.2x  

Consolidated Net Debt to EBITDA (7)

     4.4x       4.1x       3.8x       3.9x       3.6x  

Interest Coverage Ratio

     4.3x       5.0x       4.8x       4.4x       4.0x  

Core FFO Payout Ratio (8)

     61     43     45     50     56

Core FAD Payout Ratio (9)

     87     76     59     66     77

Class A common stock price at quarter end

   $ 8.96     $ 13.96     $ 14.27     $ 14.81     $ 15.80  

Average closing price

   $ 12.24     $ 14.04     $ 14.12     $ 15.48     $ 15.36  

Dividends per share—annualized

   $ 0.42     $ 0.42     $ 0.42     $ 0.42     $ 0.42  

Dividend yield (10)

     4.7     3.0     2.9     2.8     2.7

Series 2013 Private Perpetual Preferred Units outstanding ($16.62 liquidation value)

     1,560,360       1,560,360       1,560,360       1,560,360       1,560,360  

Series 2019 Private Perpetual Preferred Units outstanding ($13.52 liquidation value)

     4,664,038       4,610,383       —         —         —    

Class A common stock

     176,112,860       180,877,597       179,131,090       176,991,123       175,557,910  

Class B common stock

     1,015,149       1,016,799       1,018,463       1,029,782       1,035,327  

Operating partnership units

     120,548,216       117,757,653       124,107,019       126,870,876       128,232,650  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total common stock and operating partnership units outstanding (11)

     297,676,225       299,652,049       304,256,572       304,891,781       304,825,887  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

Represents non-GAAP financial measures. For a discussion on what these metrics represent and why the Company presents them, see page 23 and for a reconciliation of these metrics to net income, see pages 5 and 19.

(2)

Based on leases signed and commenced as of end of period.

(3)

Represents occupancy and includes signed leases not commenced.

(4)

Reflects the number of visitors who pass through the turnstile, excluding visitors who make a second visit on the same ticket at no additional charge.

(5)

Observatory revenues include the fixed license fee received from WDFG North America, the Observatory gift shop operator. See page 16.

(6)

Market capitalization represents the sum of (i) Company’s common stock per share price as of March 31, 2020 multiplied by the total outstanding number of shares of common stock and operating partnership units as of March 31, 2020; (ii) the number of Series 2014 perpetual preferred units at March 31, 2020 multiplied by $16.62, (iii) the number of Series 2019 perpetual preferred units at March 31, 2020 multiplied by $13.52, and (iv) our outstanding indebetedness as of March 31, 2020.

(7)

Calculated based on trailing 12 months EBITDA.

(8)

Represents the amount of Core FFO paid out in distributions.

(9)

Represents the amount of Core FAD paid out in distributions.

(10)

Based on the closing price per share of Class A common stock on March 31, 2020.

(11)

As of March 31, 2020, the Company has had conversions from operating partnership units and Class B common shares to Class A common shares totaling 55.5 million shares or approximately $497 million at a closing share price of $8.96. This represents a 67% increase in the number of Class A shares since the IPO.

 

Page 4


LOGO

 

  

First Quarter 2020

Property Summary—Same Store Net Operating Income (“NOI”) by Quarter

(unaudited and dollars in thousands)

 

     Three Months Ended  
     March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Same Store Total Portfolio

          

Revenues

   $ 150,123     $ 155,664     $ 152,633     $ 142,655     $ 146,016  

Operating expenses

     (73,053     (76,051     (79,824     (70,826     (73,518
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     77,070       79,613       72,809       71,829       72,498  

Straight-line rent

     (8,193     (6,276     (5,174     (3,203     (5,404

Above/below-market rent revenue amortization

     (908     (1,530     (1,682     (1,745     (2,354

Below-market ground lease amortization

     1,958       1,958       1,957       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

   $ 69,927     $ 73,765     $ 67,910     $ 68,839     $ 66,698  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Percent increase over prior year

     4.8     6.9     2.0     0.2     0.1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property cash NOI

   $ 69,927     $ 73,765     $ 67,910     $ 68,839     $ 66,698  

Observatory cash NOI

     11,390       28,987       28,486       24,535       12,994  

Lease termination fees

     211       1,240       2,361       363       388  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total portfolio same store cash NOI

   $ 81,528     $ 103,992     $ 98,757     $ 93,737     $ 80,080  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Manhattan Office Portfolio (1)

          

Revenues

   $ 128,909     $ 132,672     $ 130,214     $ 120,249     $ 123,290  

Operating expenses

     (62,670     (65,509     (68,516     (60,152     (62,665
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     66,239       67,163       61,698       60,097       60,625  

Straight-line rent

     (8,338     (6,705     (5,319     (4,163     (5,408

Above/below-market rent revenue amortization

     (908     (1,530     (1,682     (1,745     (2,354

Below-market ground lease amortization

     1,958       1,958       1,957       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     58,951       60,886       56,654       56,147       54,821  

Lease termination fees

     159       995       835       301       326  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 59,110     $ 61,881     $ 57,489     $ 56,448     $ 55,147  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Greater New York

Metropolitan Area Office Portfolio

          

Revenues

   $ 16,915     $ 18,771     $ 18,137     $ 17,798     $ 18,045  

Operating expenses

     (8,479     (8,663     (9,373     (8,784     (8,927
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     8,436       10,108       8,764       9,014       9,118  

Straight-line rent

     12       285       (42     655       (124

Above/below-market rent revenue amortization

     —         —         —         —         —    

Below-market ground lease amortization

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     8,448       10,393       8,722       9,669       8,994  

Lease termination fees

     52       245       710       62       62  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 8,500     $ 10,638     $ 9,432     $ 9,731     $ 9,056  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Standalone Retail Portfolio

          

Revenues

   $ 4,299     $ 4,221     $ 4,282     $ 4,608     $ 4,681  

Operating expenses

     (1,904     (1,879     (1,935     (1,890     (1,926
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     2,395       2,342       2,347       2,718       2,755  

Straight-line rent

     133       144       187       305       128  

Above/below-market rent revenue amortization

     —         —         —         —         —    

Below-market ground lease amortization

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     2,528       2,486       2,534       3,023       2,883  

Lease termination fees

     —         —         816       —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 2,528     $ 2,486     $ 3,350     $ 3,023     $ 2,883  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note:

Includes 509,244 rentable square feet of retail space in the Company’s nine Manhattan office properties.

 

Page 5


LOGO

 

  

First Quarter 2020

Net Operating Income (“NOI”), Initial Free Rent Burn-Off  and Signed Leases Not Commenced

(unaudited and dollars in thousands)

 

     Three Months Ended  
     March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Reconciliation of Net Income to NOI and Cash NOI

          

Net income

   $ 8,288     $ 28,720     $ 26,784     $ 18,930     $ 9,856  

Add:

          

General and administrative expenses

     15,951       16,618       14,421       15,998       14,026  

Depreciation and amortization

     46,093       46,409       44,260       44,821       46,098  

Interest expense

     19,704       18,534       19,426       20,597       20,689  

Income tax expense (benefit)

     (382     1,210       1,338       611       (730

Less:

          

Third-party management and other fees

     (346     (299     (304     (331     (320

Interest income

     (637     (1,352     (2,269     (3,899     (3,739
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net operating income

     88,671       109,840       103,656       96,727       85,880  

Straight-line rent

     (8,193     (6,276     (5,174     (3,203     (5,404

Above/below-market rent revenue amortization

     (908     (1,530     (1,682     (1,745     (2,354

Below-market ground lease amortization

     1,958       1,958       1,957       1,958       1,958  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cash NOI—including Observatory and lease termination income

     81,528       103,992       98,757       93,737       80,080  

Less: Observatory NOI

     (11,390     (28,987     (28,486     (24,535     (12,994

Less: lease termination income

     (211     (1,240     (2,361     (363     (388
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property cash NOI—excluding Observatory and lease termination income

   $ 69,927     $ 73,765     $ 67,910     $ 68,839     $ 66,698  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Burn-off of Free Rent and Signed Leases Not Commenced

 

    

Incremental

Annual

     Base Cash Rent Contributing to Cash NOI in the Following Years  

Total Portfolio

   Revenue      2020      2021      2022      2023  

Commenced leases in free rent period

   $ 27,570      $ 15,053      $ 27,508      $ 27,570      $ 27,570  

Signed leases not commenced

     22,190        1,094        11,028        18,979        19,705  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 49,760      $ 16,147      $ 38,536      $ 46,549      $ 47,275  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commenced leases in free rent period

 

     Square      Cash     

Incremental

Annual

     Base Cash Rent Contributing to Cash NOI in the Following Years  
     Feet      Rent Date      Revenue      2020     2021      2022      2023  

Second quarter 2020 - 27 leases

     408,164        Apr. 2020 - Jun. 2020      $ 18,898      $ 12,127 (1)    $ 18,898      $ 18,898      $ 18,898  

Third quarter 2020 - 11 leases

     133,202        Jul. 2020 - Sept. 2020        7,224        2,791       7,224        7,224        7,224  

Fourth quarter 2020 - 3 leases

     20,841        Oct. 2020 - Dec. 2020        844        135       844        844        844  

First quarter 2021 - 1 lease

     2,652        Jan. 2021 - Mar. 2021        604        —         542        604        604  
        

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
         $ 27,570      $ 15,053     $ 27,508      $ 27,570      $ 27,570  
        

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Signed leases not commenced (“SLNC”)

 

    Square     Expected Base Rent
Commencement
 

Incremental

Annual

    Base Cash Rent Contributing to Cash NOI in the Following Years  

Tenant

  Feet     GAAP   Cash   Revenue (2)     2020     2021     2022     2023  

Interpublic Group of Companies, Inc.

    15,086     May. 2020   June 2020   $ 1,060     $ 613     $ 1,060     $ 1,060     $ 1,060  

Uber Technologies, Inc.

    32,927     Dec. 2020   Apr. 2021     2,300       —         1,722       2,300       2,300  

Concord Music Group, Inc.

    46,329     Dec. 2020   Oct. 2021     2,870       —         635       2,870       2,870  

Kaplan Hecker & Fink LLP

    26,997     Feb. 2021   Feb. 2021     2,000       —         1,743       2,000       2,000  

First Republic Bank

    14,430     Jul. 2021   Jul. 2021     2,040       —         1,016       2,040       2,040  

LinkedIn Corporation:

 

             

LinkedIn Corporation

    52,939     May 2021   Jan. 2022     1,000       —           994       1,000  

LinkedIn Corporation

    52,666     Nov. 2021   Nov. 2021     900       —         147       900       900  

LinkedIn Corporation

    52,574     Jul. 2022   Jul. 2022     1,110       —         —         555       1,110  

LinkedIn Corporation

    30,283     Dec. 2022   Oct. 2023     670       —         —         —         165  

Target

    32,579     June 2024   Oct. 2024     1,980       —         —         —         —    

Other SLNC

    114,833     Apr. 2020 - Dec. 2020   Jan. 2020 - Sept. 2021     6,260       481       4,705       6,260       6,260  
 

 

 

       

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    471,643         $ 22,190     $ 1,094     $ 11,028     $ 18,979     $ 19,705  
 

 

 

       

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

As an example, the 2020 amount represents cash revenue contributing from the cash rent commencement date of April 2020 through December 2020. The full annual amount is realized in 2021.

(2)

Reflects new annual rent less annual rent from existing tenant in the space.

(3)

New York State mandate related to COVID-19 has stopped construction of tenant spaces. The above commencement dates assume that work will be allowed to resume by July 1, 2020. If the government moratorium on construction extends past July 1, 2020, the above commencement dates will change.

 

Page 6


LOGO

 

  

First Quarter 2020

Property Summary — Leasing Activity by Quarter

(unaudited)

 

     Three Months Ended  
     March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Total Portfolio

          

Total leases executed

     35       47       25       55       34  

Weighted average lease term

     6.8 years       8.6 years       10.7 years       6.4 years       8.3 years  

Average free rent period

     4.1 months       5.3 months       6.9 months       2.8 months       4.7 months  

Office

          

Total square footage executed

     117,481       313,027       374,256       228,346       300,408  

Average cash rent psf—leases executed

   $ 57.29     $ 59.74     $ 62.83     $ 59.13     $ 61.79  

Previously escalated cash rents psf

   $ 52.43     $ 54.02     $ 51.10     $ 51.72     $ 54.36  

Percentage of new cash rent over previously escalated rents

     9.3     10.6     23.0     14.3     13.7

Retail

          

Total square footage executed

     31,662       32,579       14,430       32,706       7,643  

Average cash rent psf—leases executed

   $ 101.03     $ 122.78     $ 141.68     $ 71.52     $ 109.54  

Previously escalated cash rents psf

   $ 108.81     $ 60.79     $ 104.66     $ 72.08     $ 106.84  

Percentage of new cash rent over previously escalated rents

     (7.1 %)      102.0     35.4     (0.8 %)      2.5

Total Portfolio

          

Total square footage executed

     149,143       345,606       388,686       261,052       308,051  

Average cash rent psf—leases executed

   $ 66.58     $ 65.68     $ 65.76     $ 61.25     $ 63.90  

Previously escalated cash rents psf

   $ 64.40     $ 54.66     $ 53.09     $ 54.58     $ 56.35  

Percentage of new cash rent over previously escalated rents

     3.4 %      20.2 %      23.9 %      12.2 %      13.4 % 

Leasing commission costs per square foot

   $ 20.19     $ 19.84     $ 23.75     $ 15.61     $ 15.00  

Tenant improvement costs per square foot

     100.79       55.65       65.59       47.06       55.09  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 120.98     $ 75.49     $ 89.34     $ 62.67     $ 70.09  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     88.7     88.6     89.4     90.2     88.8

Manhattan Office Portfolio (1)

          

Total leases executed

     26       36       18       40       30  

Office—New Leases

          

Total square footage executed

     63,153       170,247       266,769       119,235       153,506  

Average cash rent psf—leases executed

   $ 62.78     $ 64.82     $ 71.36     $ 65.08     $ 63.74  

Previously escalated cash rents psf

   $ 52.56     $ 52.12     $ 53.83     $ 53.26     $ 52.65  

Percentage of new cash rent over previously escalated rents

     19.4     24.4     32.6     22.2     21.1

Office—Renewal Leases

          

Total square footage executed

     30,712       54,345       18,826       56,211       131,304  

Average cash rent psf—leases executed

   $ 60.20     $ 66.62     $ 53.83     $ 62.37     $ 62.51  

Previously escalated cash rents psf

   $ 60.02     $ 66.27     $ 53.64     $ 55.88     $ 58.55  

Percentage of new cash rent over previously escalated rents

     0.3     0.5     0.4     11.6     6.8

Retail—New and Renewal Leases

          

Total square footage executed

     26,432       —         14,430       3,711       1,998  

Average cash rent psf—leases executed

   $ 76.73     $ —       $ 141.68     $ 405.41     $ 80.00  

Previously escalated cash rents psf

   $ 103.75     $ —       $ 104.66     $ 317.25     $ 73.73  

Percentage of new cash rent over previously escalated rents

     (26.0 %)      —         35.4     27.8     8.5

Total Manhattan Office Portfolio

          

Total square footage executed

     120,297       224,592       300,025       179,157       286,808  

Average cash rent psf—leases executed

   $ 65.19     $ 65.26     $ 73.64     $ 71.28     $ 63.29  

Previously escalated cash rents psf

   $ 65.71     $ 55.54     $ 56.26     $ 59.55     $ 55.50  

Percentage of new cash rent over previously escalated rents

     (0.8 %)      17.5 %      30.9 %      19.7 %      14.0 % 

Leasing commission costs per square foot

   $ 20.57     $ 19.81     $ 28.93     $ 20.53     $ 14.50  

Tenant improvement costs per square foot

     107.77       70.39       78.31       56.60       54.18  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 128.34     $ 90.20     $ 107.24     $ 77.13     $ 68.68  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     89.8     89.7     89.6     90.6     88.9

 

Page 7


LOGO

 

  

First Quarter 2020

Property Summary—Leasing Activity by Quarter—(Continued)

(unaudited)

 

     Three Months Ended  
     March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Greater New York Metropolitan Area Office Portfolio

          

Total leases executed

     7       10       7       12       3  

Total square footage executed

     23,616       88,435       88,661       52,900       15,598  

Average cash rent psf—leases executed

   $ 38.85     $ 45.73     $ 39.08     $ 42.30     $ 36.60  

Previously escalated cash rents psf

   $ 42.23     $ 50.15     $ 42.36     $ 43.82     $ 35.78  

Percentage of new cash rent over previously escalated rents

     (8.0 %)      (8.8 %)      (7.7 %)      (3.5 %)      2.3

Leasing commission costs per square foot

   $ 7.34     $ 8.00     $ 6.22     $ 6.05     $ 15.32  

Tenant improvement costs per square foot

     51.56       26.02       22.53       37.37       77.21  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 58.90     $ 34.02     $ 28.75     $ 43.42     $ 92.53  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     83.0     83.0     88.0     87.8     87.8

Standalone Retail Portfolio

          

Total leases executed

     2       1       —         3       1  

Total square footage executed

     5,230       32,579       —         28,995       5,645  

Average cash rent psf—leases executed

   $ 223.86     $ 122.78     $ —       $ 28.78     $ 120.00  

Previously escalated cash rents psf

   $ 134.41     $ 60.79     $ —       $ 40.70     $ 118.56  

Percentage of new cash rent over previously escalated rents

     66.5     102.0     —         (29.3 %)(3)      1.2

Leasing commission costs per square foot

   $ 69.53     $ 52.21     $ —       $ 2.68     $ 39.08  

Tenant improvement costs per square foot

     162.60       34.47       —         5.79       40.00  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 232.13     $ 86.68     $ —       $ 8.47     $ 79.08  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     95.2     93.7     93.7     93.7     94.4

Notes:

 

(1)

Includes 509,244 rentable square feet of retail space in the Company’s nine Manhattan office properties.

(2)

Presents all tenant improvement and leasing commission costs as if they were incurred in the period in which the lease was signed, which may be different than the period in which they were actually paid.

(3)

Includes the renewal of two parking garages comprising 27,143 of rentable square feet. These below grade spaces have market rents considerably lower than the Company’s typical street grade retail and drove the negative spread for the quarter.

 

Page 8


LOGO   

First Quarter 2020

Total Portfolio Expirations and Vacates Summary

(unaudited and in square feet)

 

     Three Months Ended              
     Actual     Forecast (1)     Forecast (1)      Forecast (1)     Forecast (1)     Full Year  
     March 31,
2020
    June 30,
2020
    September 30,
2020
     December 31,
2020
    Apr. to Dec.
2020
    2021  

Total Portfolio (2)

             

Total expirations

     92,373       382,479       137,859        154,982       675,320       669,641  

Less: broadcasting

     (906     (906     —          (753     (1,659     (1,049
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Office and retail expirations

     91,467       381,573       137,859        154,229       673,661       668,592  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     35,005       68,471       58,727        48,726       175,924       161,865  

Short-term renewals (4)

     —         —         —          —         —         —    

New leases (5)

     2,286       171,863       9,367        10,562       191,792       44,755  

Tenant vacates (6)

     30,445       98,112       57,937        35,256       191,305       252,657  

Intentional vacates (7)

     23,731       36,255       4,078        —         40,333       42,348  

Holdover (8)

     —         —         —          —         —         —    

Unknown (9)

     —         6,872       7,750        59,685       74,307       166,967  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total Portfolio expirations and vacates

     91,467       381,573       137,859        154,229       673,661       668,592  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Manhattan Office Portfolio

 

          

Total expirations

     53,312       247,446       125,968        113,180       486,594       428,098  

Less: broadcasting

     (906     (906     —          (753     (1,659     (1,049
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Office expirations

     52,406       246,540       125,968        112,427       484,935       427,049  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     16,958       22,355       51,978        31,201       105,534       63,806  

Short-term renewals (4)

     —         —         —          —         —         —    

New leases (5)

     2,286       164,549       9,367        10,562       184,478       21,870  

Tenant vacates (6)

     27,106       24,075       52,795        27,362       104,232       187,803  

Intentional vacates (7)

     6,056       28,818       4,078        —         32,896       42,348  

Holdover (8)

     —         —         —          —         —         —    

Unknown (9)

     —         6,743       7,750        43,302       57,795       111,222  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     52,406       246,540       125,968        112,427       484,935       427,049  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Greater New York Metropolitan Area Office Portfolio

         

Office expirations

     17,148       124,162       8,391        32,237       164,790       211,165  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     13,809       42,811       3,249        17,525       63,585       79,727  

Short-term renewals (4)

     —         —         —          —         —         —    

New leases (5)

     —         7,314       —          —         7,314       22,885  

Tenant vacates (6)

     3,339       74,037       5,142        —         79,179       56,455  

Intentional vacates (7)

     —         —         —          —         —         —    

Holdover (8)

     —         —         —          —         —         —    

Unknown (9)

     —         —         —          14,712       14,712       52,098  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     17,148       124,162       8,391        32,237       164,790       211,165  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Retail Portfolio

 

          

Retail expirations

     21,913       10,871       3,500        9,565       23,936       30,378  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     4,238       3,305       3,500        —         6,805       18,332  

Short-term renewals (4)

     —         —         —          —         —         —    

New leases (5)

     —         —         —          —         —         —    

Tenant vacates (6)

     —         —         —          7,894       7,894       8,399  

Intentional vacates (7)

     17,675       7,437       —          —         7,437       —    

Holdover (8)

     —         —         —          —         —         —    

Unknown (9)

     —         129       —          1,671       1,800       3,647  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     21,913       10,871       3,500        9,565       23,936       30,378  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

These forecasts, which are subject to change, are based on management’s expectations, including, among other things, discussions with and other information provided by tenants as well as management’s analyses of past historical trends.

(2)

Any lease on month to month or short-term will re-appear in “Actual” in each period until tenant has vacated or renewed, and thus it would be double counted if periods were cumulated. “Forecast” avoids double counting.

(3)

For forecasted periods, “Renewals” assume tenants renew their existing leases in all or a portion of their current spaces, and “Relocations” assume tenants move within a building or within the Company’s portfolio.

(4)

Represents tenants which signed renewal leases for a term of less than six months and reappear in forecast periods in 2020.

(5)

For forecasted periods, “New Leases” represents leases that have been signed with a new tenant, a subtenant who signed a direct lease or a tenant who expanded. The lease commencement dates are provided on page 6. There may be downtime between the lease expiration and the new lease commencement.

(6)

For forecasted periods, “Tenant Vacates” assumes a tenant elects not to renew at the end of their existing lease or exercises an early termination option.

(7)

For forecasted periods, “Intentional Vacates” assumes the Company decides not to renew tenant at the end of their existing lease due to anticipated future redevelopment or for other reasons. This also may include early lease terminations.

(8)

Holdover represents a tenant that remains in its space, paying rent after the expiration of its lease, but is not anticipated to continue doing so on a monthly basis. These tenants may reappear in forecast periods in 2020.

(9)

For forecasted periods, “Unknown” represents tenants’ existing leases which do not fall into any of the above categories: Renewals & Relocations,

New Leases, Tenant Vacates or Intentional Vacates and tenants’ whose intention is unknown.

 

Page 9


LOGO

 

  

First Quarter 2020

Property Detail

(unaudited)

 

                           Annualized
Rent
       

Property Name

  

Location or Sub-Market

  Rentable
Square Feet (1)
    Percent
Occupied (2)
    Annualized
Rent (3)
    per Occupied
Square Foot (4)
    Number of
Leases (5)
 

Manhattan Office Properties—Office

         

The Empire State Building (6)

   Penn Station —Times Sq. South     2,710,823       95.2   $ 156,739,511     $ 60.75       169  

One Grand Central Place

   Grand Central     1,247,411       88.1     65,065,885       59.21       186  

1400 Broadway (8)

   Penn Station —Times Sq. South     916,834       88.5     43,626,634       53.80       25  

111 West 33rd Street (9)

   Penn Station —Times Sq. South     641,135       97.6     38,289,310       61.17       24  

250 West 57th Street

   Columbus Circle—West Side     474,047       71.3     21,049,359       62.30       36  

501 Seventh Avenue

   Penn Station —Times Sq. South     461,652       82.8     18,890,710       49.44       30  

1359 Broadway

   Penn Station —Times Sq. South     455,873       96.4     24,245,005       55.18       31  

1350 Broadway (10)

   Penn Station —Times Sq. South     372,778       85.5     19,119,454       60.01       55  

1333 Broadway

   Penn Station —Times Sq. South     292,835       77.1     12,173,226       53.89       8  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Manhattan Office Properties—Office

    7,573,388       90.0 %      399,199,093       58.54       564  

Manhattan Office Properties—Retail

         

The Empire State Building (7)

   Penn Station -Times Sq. South     102,364       53.7     12,111,789       220.44       12  

One Grand Central Place

   Grand Central     68,732       79.0     6,439,115       118.58       13  

1400 Broadway (8)

   Penn Station —Times Sq. South     20,176       77.2     2,048,770       131.58       7  

112 West 34th Street (9)

   Penn Station —Times Sq. South     90,132       100.0     23,273,069       258.21       4  

250 West 57th Street

   Columbus Circle—West Side     67,927       100.0     10,316,195       151.87       8  

501 Seventh Avenue

   Penn Station —Times Sq. South     33,632       87.3     2,028,797       69.11       8  

1359 Broadway

   Penn Station —Times Sq. South     27,506       100.0     2,355,336       85.63       6  

1350 Broadway (10)

   Penn Station —Times Sq. South     31,774       95.6     7,238,797       238.20       5  

1333 Broadway

   Penn Station —Times Sq. South     67,001       100.0     9,330,744       139.26       4  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Manhattan Office Properties—Retail

    509,244       85.8 %      75,142,611       171.90       67  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Sub-Total/Weighted Average Manhattan Office Properties—Office and Retail

    8,082,632       89.8 %      474,341,705       65.36       631  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Greater New York Metropolitan Area Office Properties

         

First Stamford Place (11)

   Stamford, CT     779,098       85.4     29,274,677       44.00       46  

Metro Center

   Stamford, CT     287,975       89.0     15,786,219       61.58       24  

383 Main Avenue

   Norwalk, CT     260,546       54.1     4,164,606       29.53       21  

500 Mamaroneck Avenue

   Harrison, NY     287,157       82.8     7,160,462       30.13       30  

10 Bank Street

   White Plains, NY     232,517       100.0     8,381,397       36.05       36  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Sub-Total/Weighted Average Greater New York Metropolitan Area Office Properties

    1,847,293       83.0 %      64,767,361       42.25       157  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Standalone Retail Properties

            

10 Union Square

   Union Square     57,984       94.7     6,652,084       121.17       11  

1542 Third Avenue

   Upper East Side     56,250       100.0     4,160,189       73.96       4  

1010 Third Avenue

   Upper East Side     44,662       100.0     3,612,691       80.89       2  

77 West 55th Street

   Midtown     25,388       100.0     2,824,593       111.26       3  

69-97 Main Street

   Westport, CT     16,874       59.7     1,143,384       113.49       3  

103-107 Main Street

   Westport, CT     4,330       100.0     776,442       179.32       1  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Sub-Total/Weighted Average Standalone Retail Properties

    205,488       95.2 %      19,169,382       98.00       24  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio Total

       10,135,413       88.7 %    $ 558,278,448     $ 62.13       812  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total/Weighted Average Office Properties

    9,420,681       88.7 %    $ 463,966,454     $ 55.55       721  

Total/Weighted Average Retail Properties

    714,732       88.5 %      94,311,993       149.05       91  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio Total

       10,135,413       88.7 %    $ 558,278,448     $ 62.13       812  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

Excludes (i) 193,510 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(2)

Based on leases signed and commenced as of March 31, 2020.

(3)

Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4)

Represents annualized rent under leases commenced as of March 31, 2020 divided by occupied square feet.

(5)

Represents the number of leases at each property or on a portfolio basis. If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations.

(6)

Includes 37,004 rentable square feet of space leased by the Company’s broadcasting tenants.

(7)

Includes 5,300 rentable square feet of space leased by WDFG North America, a licensee of the Company’s observatory.

(8)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 43 years (expiring December 31, 2063).

(9)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 57 years (expiring May 31, 2077).

(10)

Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 30 years (expiring July 31, 2050).

(11)

First Stamford Place consists of three buildings.

 

Page 10


LOGO

 

  

First Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Total Lease Expirations

   Number
of Leases
Expiring (1)
     Rentable
Square
Feet
Expiring (2)
     Percent of
Portfolio
Rentable
Square Feet
Expiring
    Annualized
Rent (3)
     Percent of
Annualized
Rent
    Annualized
Rent Per
Rentable
Square Foot
 

Available

     —          901,697        8.9   $ —          0.0   $ —    

Signed leases not commenced

     21        248,351        2.5     —          0.0     —    

1Q 2020 (4)

     8        20,108        0.2     989,845        0.2     49.23  

2Q 2020

     37        373,476        3.7     20,233,336        3.6     54.19  

3Q 2020

     28        137,859        1.4     8,140,537        1.5     59.05  

4Q 2020

     25        154,982        1.5     8,778,265        1.6     56.64  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     98        686,425        6.8     38,141,983        6.8     55.57  

1Q 2021

     29        104,916        1.0     7,227,565        1.3     68.89  

2Q 2021

     27        192,371        1.9     11,556,452        2.1     60.07  

3Q 2021

     26        175,142        1.7     10,193,906        1.8     58.20  

4Q 2021

     23        197,212        1.9     9,754,528        1.7     49.46  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     105        669,641        6.6     38,732,451        6.9     57.84  

2022

     114        576,655        5.7     37,174,196        6.7     64.47  

2023

     94        705,714        7.0     44,229,743        7.9     62.67  

2024

     82        791,680        7.8     48,339,903        8.7     61.06  

2025

     78        491,437        4.8     36,536,513        6.5     74.35  

2026

     57        734,737        7.2     40,377,933        7.2     54.96  

2027

     51        562,737        5.6     33,596,727        6.0     59.70  

2028

     29        1,031,308        10.2     56,660,703        10.1     54.94  

2029

     35        872,679        8.6     61,690,892        11.1     70.69  

2030

     29        677,029        6.7     43,513,796        7.8     64.27  

Thereafter

     40        1,185,323        11.6     79,283,607        14.2     66.89  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

     833        10,135,413        100.0   $ 558,278,448        100.0   $ 62.13  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Manhattan Office Properties (5)

                                       

Available

     —          562,944        7.4   $ —          0.0   $ —    

Signed leases not commenced

     13        190,724        2.5     —          0.0     —    

1Q 2020 (4)

     5        10,958        0.1     626,486        0.2     57.17  

2Q 2020

     26        245,593        3.2     13,337,868        3.3     54.31  

3Q 2020

     22        125,968        1.7     7,095,202        1.8     56.33  

4Q 2020

     18        113,180        1.5     5,595,068        1.4     49.44  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     71        495,699        6.5     26,654,624        6.7     53.77  

1Q 2021

     14        41,948        0.6     2,180,175        0.5     51.97  

2Q 2021

     21        146,911        1.9     8,086,408        2.0     55.04  

3Q 2021

     15        115,569        1.5     7,230,229        1.8     62.56  

4Q 2021

     16        123,670        1.6     6,823,145        1.7     55.17  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     66        428,098        5.7     24,319,957        6.1     56.81  

2022

     83        384,272        5.1     22,896,842        5.7     59.58  

2023

     71        531,176        7.0     31,588,679        7.9     59.47  

2024

     60        561,175        7.4     33,299,153        8.3     59.34  

2025

     49        320,138        4.2     20,371,468        5.1     63.63  

2026

     36        520,366        6.9     29,930,349        7.5     57.52  

2027

     38        433,014        5.7     24,684,278        6.2     57.01  

2028

     19        948,934        12.5     52,754,296        13.2     55.59  

2029

     23        629,599        8.3     36,879,869        9.2     58.58  

2030

     18        576,700        7.6     34,542,113        8.7     59.90  

Thereafter

     30        990,549        13.2     61,277,465        15.4     61.86  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Manhattan office properties

     577        7,573,388        100.0   $ 399,199,093        100.0   $ 58.54  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

 

(1)

If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(2)

Excludes (i) 193,510 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(3)

Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4)

Represents leases that are included in occupancy as of March 31, 2020 and expire on March 31, 2020.

(5)

Excludes (i) retail space in the Company’s Manhattan office properties and (ii) the Empire State Building broadcasting licenses and observatory operations.

 

Page 11


LOGO   

First Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Greater New York Metropolitan

Area Office Properties

   Number
of Leases
Expiring (1)
     Rentable
Square
Feet
Expiring (2)
     Percent of
Portfolio
Rentable
Square Feet
Expiring
    Annualized
Rent (3)
     Percent of
Annualized
Rent
    Annualized
Rent Per
Rentable
Square Foot
 

Available

     —          295,770        16.0   $ —          0.0   $ —    

Signed leases not commenced

     4        18,612        1.0     —          0.0     —    

1Q 2020 (4)

     3        9,150        0.5     363,359        0.6     39.71  

2Q 2020

     8        117,012        6.3     6,307,513        9.7     53.90  

3Q 2020

     4        8,391        0.5     399,028        0.6     47.55  

4Q 2020

     5        32,237        1.7     1,343,111        2.1     41.66  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     20        166,790        9.0     8,413,011        13.0     50.44  

1Q 2021

     11        49,650        2.7     2,448,045        3.8     49.31  

2Q 2021

     3        31,767        1.7     1,526,572        2.4     48.06  

3Q 2021

     10        56,504        3.1     2,427,390        3.7     42.96  

4Q 2021

     7        73,542        4.0     2,931,383        4.5     39.86  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     31        211,463        11.4     9,333,390        14.4     44.14  

2022

     22        133,636        7.2     5,130,047        7.9     38.39  

2023

     13        119,834        6.5     5,656,575        8.7     47.20  

2024

     12        205,193        11.1     9,248,851        14.3     45.07  

2025

     21        133,974        7.3     4,490,391        6.9     33.52  

2026

     13        144,020        7.8     5,831,011        9.0     40.49  

2027

     8        73,457        4.0     2,486,741        3.8     33.85  

2028

     6        74,387        4.0     2,676,163        4.1     35.98  

2029

     6        144,998        7.8     5,924,740        9.1     40.86  

2030

     4        36,578        2.0     1,794,318        2.8     49.05  

Thereafter

     1        88,581        4.9     3,782,123        6.0     42.70  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total greater New York metropolitan

area office properties

     161        1,847,293        100.0   $ 64,767,361        100.0   $ 42.25  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 
               

Retail Properties

               

Available

     —          42,983        6.0   $ —          0.0   $ —    

Signed leases not commenced

     4        39,015        5.5     —          0.0     —    

1Q 2020 (4)

     —          —          0.0     —          0.0     —    

2Q 2020

     3        10,871        1.5     587,955        0.6     54.08  

3Q 2020

     2        3,500        0.5     646,307        0.7     184.66  

4Q 2020

     2        9,565        1.3     1,840,086        2.0     192.38  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     7        23,936        3.3     3,074,348        3.3     128.44  

1Q 2021

     4        13,318        1.9     2,599,345        2.8     195.18  

2Q 2021

     3        13,693        1.9     1,943,472        2.1     141.93  

3Q 2021

     1        3,069        0.4     536,287        0.6     174.74  

4Q 2021

     —          —          0.0     —          0.0     —    
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     8        30,080        4.2     5,079,104        5.4     168.85  

2022

     9        58,747        8.2     9,147,307        9.7     155.71  

2023

     10        54,704        7.7     6,984,489        7.4     127.68  

2024

     10        25,312        3.5     5,791,899        6.1     228.82  

2025

     8        37,325        5.2     11,674,654        12.4     312.78  

2026

     8        70,351        9.8     4,616,573        4.9     65.62  

2027

     5        56,266        7.9     6,425,708        6.8     114.20  

2028

     4        7,987        1.1     1,230,244        1.3     154.03  

2029

     6        98,082        13.7     18,886,283        20.0     192.56  

2030

     7        63,751        8.9     7,177,365        7.6     112.58  

Thereafter

     9        106,193        15.0     14,224,019        15.1     133.94  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total retail properties

     95        714,732        100.0   $ 94,311,993        100.0   $ 149.05  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

 

(1)

If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(2)

Excludes (i) 193,510 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(3)

Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(4)

Represents leases that are included in occupancy as of March 31, 2020 and expire on March 31, 2020.

(5)

Represents two license agreements.

 

Page 12


LOGO   

First Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Empire State Building Office (1)

   Number
of Leases
Expiring (2)
     Rentable
Square
Feet
Expiring (3)
     Percent of
Portfolio
Rentable
Square
Feet
Expiring
    Annualized
Rent (4) (5)
     Percent of
Annualized
Rent
    Annualized
Rent Per
Rentable
Square
Foot
 

Available

     —          103,689        3.8   $ —          0.0   $ —    

Signed leases not commenced

     1        26,997        1.0     —          0.0     —    

1Q 2020 (6)

     2        1,853        0.1     41,203        0.0     22.24  

2Q 2020

     6        192,735        7.1     10,276,235        6.6     53.32  

3Q 2020

     5        24,519        0.9     1,560,771        1.0     63.66  

4Q 2020

     6        37,592        1.4     1,997,379        1.3     53.13  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     19        256,699        9.5     13,875,588        8.9     54.05  

1Q 2021

     1        2,488        0.1     210,663        0.1     84.67  

2Q 2021

     13        81,328        3.0     4,362,809        2.8     53.64  

3Q 2021

     3        16,066        0.6     1,158,610        0.7     72.12  

4Q 2021

     2        7,903        0.3     505,720        0.3     63.99  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     19        107,785        4.0     6,237,802        4.0     57.87  

2022

     24        122,863        4.5     7,832,660        5.0     63.75  

2023

     25        112,852        4.2     7,588,787        4.8     67.25  

2024

     18        227,351        8.4     14,880,657        9.5     65.45  

2025

     14        106,823        3.9     7,214,570        4.6     67.54  

2026

     9        122,685        4.5     7,673,978        4.9     62.55  

2027

     8        29,184        1.1     1,762,316        1.1     60.39  

2028

     4        545,713        20.1     30,765,416        19.6     56.38  

2029

     7        282,020        10.4     17,327,003        11.1     61.44  

2030

     5        204,740        7.6     12,072,670        7.7     58.97  

Thereafter

     17        461,422        17.0     29,508,064        18.8     63.95  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Empire State Building office

     170        2,710,823        100.0   $ 156,739,511        100.0   $ 60.75  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Empire State Building Broadcasting Licenses and Leases

   Annualized
Base Rent (7)
     Annualized
Expense
Reimbursements
     Annualized
Rent (4)
     Percent of
Annualized
Rent
 

1Q 2020 (6)

   $ 31,710      $ 12,618      $ 44,328        0.3

2Q 2020

     —          —          —          0.0

3Q 2020

     —          —          —          0.0

4Q 2020

     99,320        31,588        130,908        0.9
  

 

 

    

 

 

    

 

 

    

 

 

 

Total 2020

     131,030        44,206        175,236        1.2

1Q 2021

     —          —          —          0.0

2Q 2021

     —          —          —          0.0

3Q 2021

     —          —          —          0.0

4Q 2021

     —          —          —          0.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Total 2021

     —          —          —          0.0

2022

     1,727,808        414,711        2,142,519        15.2

2023

     219,668        49,169        268,837        1.9

2024

     65,000        21,278        86,278        0.6

2025

     1,571,830        176,869        1,748,699        12.4

2026

     807,668        63,727        871,395        6.2

2027

     787,969        70,312        858,281        6.1

2028

     248,614        7,964        256,578        1.8

2029

     —          —          —          0.0

2030

     463,507        88,346        551,853        3.9

Thereafter

     6,398,955        719,840        7,118,795        50.7
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Empire State Building broadcasting licenses and leases

   $ 12,422,049      $ 1,656,422      $ 14,078,471        100.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

Excludes retail space, broadcasting licenses and observatory operations

(2)

If a lease has two different expiration dates, it is considered to be two leases (for the purpose of lease count and square footage).

(3)

Excludes 52,508 rentable square feet of space attributable to building management use.

(4)

Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(5)

Includes approximately $6.0 million of annualized rent related to physical space occupied by broadcasting tenants for their broadcasting operations. Does not include license fees charged to broadcasting tenants.

(6)

Represents leases that are included in occupancy as of March 31, 2020 and expire on March 31, 2020.

(7)

Represents license fees for the use of the Empire State Building mast and base rent for physical space occupied by broadcasting tenants.

 

Page 13


LOGO   

First Quarter 2020

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

 

20 Largest Tenants

  

Property

  

Lease

Expiration (1)

  

Weighted

Average

Remaining

Lease

Term(2)

   Total
Occupied
Square
Feet (3)
     Percent of
Portfolio
Rentable
Square
Feet  (4)
    Annualized
Rent (5)
     Percent of
Portfolio
Annualized
Rent (6)
 

1. Global Brands Group

   ESB, 1333 B’Way    Oct. 2023 - Oct. 2028    7.8 years      668,942        6.6   $ 36,579,857        6.6

2. LinkedIn

   ESB    Aug. 2036    16.4 years      312,947        3.1     18,434,225        3.3

3. Coty

   ESB    Apr. 2020 - Jan. 2030    5.1 years      312,471        3.1     17,712,823        3.2

4. PVH Corp.

   501 Seventh Avenue    Oct. 2028    8.6 years      237,281        2.3     11,716,228        2.1

5. Sephora

   112 West 34th Street    Jan. 2029    8.8 years      11,334        0.1     10,468,996        1.9

6. Macy’s

   111 West 33rd Street    May 2030    10.2 years      131,117        1.3     7,813,096        1.4

7. Li & Fung

   1359 Broadway    Oct. 2021 - Oct. 2027    4.0 years      149,436        1.5     7,701,934        1.4

8. Signature Bank

   1333 & 1400 Broadway    Jul. 2030 - Apr. 2035    14.6 years      124,884        1.2     7,540,459        1.4

9. Federal Deposit Insurance Corp.

   ESB    Dec. 2024    4.8 years      119,226        1.2     7,511,238        1.3

10. Urban Outfitters

   1333 Broadway    Sept. 2029    9.5 years      56,730        0.6     7,367,374        1.3

11. Footlocker

   112 West 34th Street    Sept. 2031    11.5 years      34,192        0.3     6,898,262        1.2

12. Duane Reade/Walgreen’s

   ESB, 1350 B’Way, 250 West 57th    Feb. 2021 - Sept. 2027    4.7 years      47,541        0.5     6,704,508        1.2

13. HNTB Corporation

   ESB    Feb. 2029    8.9 years      105,143        1.0     6,666,632        1.2

14. The Interpublic Group of Co’s, Inc.

   111 West 33rd St & 1400 B’way    Jul. 2024 - Feb. 2025    4.5 years      117,278        1.2     6,443,584        1.2

15. Legg Mason

   First Stamford Place    Sept. 2024    4.5 years      137,583        1.4     6,407,814        1.1

16. WDFG North America

   ESB    Dec. 2025    5.8 years      5,300        0.1     6,037,484        1.1

17. Shutterstock

   ESB    Apr. 2029    9.1 years      104,386        1.0     5,953,855        1.1

18. Fragomen

   1400 Broadway    Feb. 2035    14.9 years      107,680        1.1     5,922,400        1.1

19. The Michael J. Fox Foundation

   111 West 33rd Street    Nov. 2029    9.7 years      86,492        0.9     5,390,818        1.0

20. ASCAP

   250 West 57th Street    Aug. 2034    14.4 years      87,943        0.9     5,345,814        1.0
           

 

 

    

 

 

   

 

 

    

 

 

 

Total

              2,957,906        29.4   $ 194,617,401        35.1
           

 

 

    

 

 

   

 

 

    

 

 

 

Notes:

 

(1)

Expiration dates are per lease and do not assume exercise of renewal or extension options. For tenants with more than two leases, the lease expiration is shown as a range.

(2)

Represents the weighted average lease term, based on annualized rent.

(3)

Based on leases signed and commenced as of March 31, 2020.

(4)

Represents the percentage of rentable square feet of the Company’s office and retail portfolios in the aggregate.

(5)

Represents annualized base rent and current reimbursement for operating expenses and real estate taxes.

(6)

Represents the percentage of annualized rent of the Company’s office and retail portfolios in the aggregate.

Portfolio Tenant Diversification by Industry (based on annualized rent)

 

LOGO

 

Page 14


LOGO   

First Quarter 2020

Capital Expenditures and Redevelopment Program and Leasing Opportunity

(unaudited and dollars in thousands)

 

     Three Months Ended  
Capital expenditures    March 31,
2020
     December 31,
2019
     September 30,
2019
     June 30,
2019
     March 31,
2019
 

Tenant improvements—first generation

   $ 4,913      $ 22,479      $ 17,639      $ 17,255      $ 19,142  

Tenant improvements—second generation

     8,151        12,581        8,734        10,513        9,028  

Leasing commissions—first generation

     4,001        578        574        4,742        1,276  

Leasing commissions—second generation

     3,347        13,244        2,651        3,016        1,869  

Building improvements—first generation

     8,379        14,457        10,988        12,910        11,022  

Building improvements—second generation

     3,846        6,556        4,931        6,296        4,840  

Observatory capital project (1)

     1,175        17,574        18,185        14,539        13,789  

Development (2)

     811        —          —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 34,623      $ 87,469      $ 63,702      $ 69,271      $ 60,966  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:

 

(1)

Total Observatory capital project spent-to-date was $156.6 million as of March 31, 2020.

(2)

Primarily represents design and engineering costs.

Tenant space redevelopment by square feet (3) (4)

- Future redevelopment (Empire State Building) - 140,000 square feet

- Future redevelopment (other Manhattan properties) - 330,000 square feet

- Redevelopment completed - 7,500,000 square feet

Inventory of vacant space (3)

- Developed - 530,000 square feet, 93%

- Undeveloped - 40,000 square feet, 7%

Inventory of undeveloped space (3)

- Vacant - 40,000 square feet, 9%

- Expires in 2020 - 110,000 square feet, 23%

- Expires in 2021 and thereafter - 320,000 square feet, 68%

Developed 80,000 square feet in the first quarter 2020.

 

Leasing Opportunity—Inventory of Current Vacant Space as of March 31, 2020 (in square feet)

  

Total Portfolio vacant space

     1,150,000  
  

 

 

 

Signed leases not commenced (“SLNC”):

  

Manhattan Office Properties SLNC

     191,000  

Greater New York Office Properties SLNC

     18,000  

Retail Properties SLNC

     39,000  

Redeveloped Manhattan Office space

     467,000  

Greater New York Office Properties space

     296,000  

Retail Properties space

     43,000  

Undeveloped Manhattan Office space

     20,000  

Space held off market

     32,000  

Other

     44,000  
  

 

 

 

Total

     1,150,000  
  

 

 

 

Notes:

 

(3)

These estimates are based on the Company’s current budgets and are subject to change.

(4)

Redevelopment program is for the Manhattan office assets only. Square footage based on market measurement. Developed space includes space that has been demolished and completed asbestos abatement and available for lease up or ready to be prebuilt. Permanent building use spaces, amenity spaces and broadcasting spaces are excluded.

 

Page 15


LOGO   

First Quarter 2020

Observatory Summary

(unaudited and dollars in thousands)

 

            Three Months Ended  

Observatory NOI

   Twelve Months
to Date
     March 31,
2020 (1)
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Observatory revenue (2)

   $ 127,744      $ 19,544     $ 37,730     $ 37,575     $ 32,895     $ 20,569  

Observatory expenses

     34,346        8,154       8,743       9,089       8,360       7,575  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NOI

     93,398        11,390       28,987       28,486       24,535       12,994  

Intercompany rent expense (3)

     79,984        11,536       23,715       23,242       21,491       14,021  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

NOI after intercompany rent

   $ 13,414      $ (146   $ 5,272     $ 5,244     $ 3,044     $ (1,027
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Observatory Metrics

                                     

Number of visitors (4)

        422,000       894,000       1,042,000       968,000       601,000  

Change in visitors year over year

        (29.8 %)      (5.5 %)      (10.7 %)      (7.7 %)      (6.7 %) 

Number of bad weather days during open days (“BWD”) (5)

        15       22       12       24       15  

Days closed due to COVID-19

        15       —         —         —         —    

102nd floor revenue (6)

      $ 1,808     $ 3,375     $ —       $ —       $ 180  

Notes:

 

(1)

Due to the COVID-19 pandemic, the Observatory was closed on March 16, 2020.

(2)

Observatory revenues include the fixed license fee received from WDFG North America, the Observatory gift shop operator. For the three months ended March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019 and March 31, 2019, the fixed license fee was $1,314, $1,453, $1,453, $1,453, and $1,413, respectively.

(3)

The observatory pays a market-based rent payment comprised of fixed and percentage rent to the Empire State Building. Intercompany rent is eliminated upon consolidation.

(4)

Reflects the number of visitors who pass through the turnstile, excluding visitors who make a second visit on the same ticket at no additional charge.

(5)

The Company defines a bad weather day as one in which the top of the Empire State Building is obscured from view for more than 50% of the day.

(6)

Reflects revenues derived from the 102nd floor observatory which are included in total observatory revenues above.

Annual Observatory Revenues 2015 to 2019

 

LOGO

Note:

 

(1)

The 102nd floor observatory was closed for approximately nine months in 2019 for renovations.

 

Page 16


LOGO

 

  

First Quarter 2020

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

 

     March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
    March 31,
2019
 

Assets

          

Commercial real estate properties, at cost:

          

Land

   $ 201,196     $ 201,196     $ 201,196     $ 201,196     $ 201,196  

Development costs

     8,800       7,989       7,989       7,987       7,987  

Building and improvements

     2,913,312       2,900,248       2,830,353       2,784,472       2,727,497  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     3,123,308       3,109,433       3,039,538       2,993,655       2,936,680  

Less: accumulated depreciation

     (886,822     (862,534     (829,495     (809,197     (777,794