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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to            
Commission File Number: 001-36105
EMPIRE STATE REALTY TRUST, INC.

(Exact name of Registrant as specified in its charter)
Maryland
 37-1645259
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)

111 West 33rd Street, 12th Floor
New York, New York 10120
(Address of principal executive offices) (Zip Code)
(212) 850-2600
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of SecuritiesTrading SymbolExchange on which traded
Class A Common Stock, par value $0.01 per shareESRTThe New York Stock Exchange
Class B Common Stock, par value $0.01 per shareN/AN/A
    Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes       No 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes       No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. 
Large accelerated filerAccelerated filer 
Non-accelerated filer 
Smaller reporting company 
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.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  
As of April 27, 2021, there were 171,931,429 shares of Class A Common Stock, $0.01 par value per share, outstanding and 1,003,441 shares of Class B Common Stock, $0.01 par value per share, outstanding.





EMPIRE STATE REALTY TRUST, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021
TABLE OF CONTENTSPAGE
PART 1.FINANCIAL INFORMATION
ITEM 1.FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020
Condensed Consolidated Statements of Operations for the three months ended March 31, 2021 and 2020 (unaudited)
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three months ended March 31, 2021 and 2020 (unaudited)
Condensed Consolidated Statements of Stockholders' Equity for the three months ended March 31, 2021 and 2020 (unaudited)
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2021 and 2020 (unaudited)
Notes to Condensed Consolidated Financial Statements (unaudited)
ITEM 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
ITEM 4.CONTROLS AND PROCEDURES
PART II.OTHER INFORMATION
ITEM 1.LEGAL PROCEEDINGS
ITEM 1A.RISK FACTORS
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS45
ITEM 3.DEFAULTS UPON SENIOR SECURITIES45
ITEM 4.MINE SAFETY DISCLOSURES45
ITEM 5.OTHER INFORMATION45
ITEM 6.EXHIBITS46
SIGNATURES

1



ITEM 1. FINANCIAL STATEMENTS
Empire State Realty Trust, Inc.
Condensed Consolidated Balance Sheets
(amounts in thousands, except share and per share amounts)
March 31, 2021December 31, 2020
ASSETS(unaudited)
Commercial real estate properties, at cost:
Land $201,196 $201,196 
Development costs8,064 7,966 
Building and improvements2,943,148 2,924,804 
3,152,408 3,133,966 
Less: accumulated depreciation(973,940)(941,612)
Commercial real estate properties, net2,178,468 2,192,354 
Cash and cash equivalents567,102 526,714 
Restricted cash40,295 41,225 
Tenant and other receivables16,749 21,541 
Deferred rent receivables228,117 222,508 
Prepaid expenses and other assets50,427 77,182 
Deferred costs, net207,058 203,853 
Acquired below-market ground leases, net342,777 344,735 
Right of use assets29,051 29,104 
Goodwill491,479 491,479 
Total assets$4,151,523 $4,150,695 
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net$775,276 $775,929 
Senior unsecured notes, net973,214 973,159 
Unsecured term loan facilities, net387,811 387,561 
Unsecured revolving credit facility  
Accounts payable and accrued expenses102,381 103,203 
Acquired below-market leases, net30,112 31,705 
Ground lease liabilities29,051 29,104 
Deferred revenue and other liabilities94,625 88,319 
Tenants’ security deposits27,858 30,408 
Total liabilities2,420,328 2,419,388 
Commitments and contingencies
Equity:
Empire State Realty Trust, Inc. stockholders' equity:
Preferred stock, $0.01 par value per share, 50,000,000 shares authorized, none issued or outstanding
  
Class A common stock, $0.01 par value per share, 400,000,000 shares authorized, 171,327,270 and 170,555,274 shares issued and outstanding in 2021 and 2020, respectively
1,713 1,705 
Class B common stock, $0.01 par value per share, 50,000,000 shares authorized, 1,004,601 and 1,010,130 shares issued and outstanding in 2021 and 2020, respectively
10 10 
Additional paid-in capital1,147,588 1,147,527 
Accumulated other comprehensive loss(26,544)(28,320)
Retained deficit(69,272)(65,673)
Total Empire State Realty Trust, Inc. stockholders' equity1,053,495 1,055,249 
Non-controlling interests in operating partnership647,760 646,118 
Private perpetual preferred units:
Private perpetual preferred units, $13.52 per unit liquidation preference, 4,664,038 issued and outstanding in 2021 and 2020, respectively
21,936 21,936 
Private perpetual preferred units, $16.62 per unit liquidation preference, 1,560,360 issued and outstanding in 2021 and 2020
8,004 8,004 
Total equity1,731,195 1,731,307 
Total liabilities and equity$4,151,523 $4,150,695 
The accompanying notes are an integral part of these consolidated financial statements 
2


Empire State Realty Trust, Inc.
Condensed Consolidated Statements of Operations
(unaudited)
(amounts in thousands, except per share amounts)
Three Months Ended March 31,
20212020
Revenues:
Rental revenue$140,231 $148,113 
Observatory revenue2,603 19,544 
Lease termination fees1,289 211 
Third-party management and other fees276 346 
Other revenue and fees905 2,010 
Total revenues145,304 170,224 
Operating expenses:
Property operating expenses30,279 41,468 
Ground rent expenses2,331 2,331 
General and administrative expenses13,853 15,951 
Observatory expenses4,588 8,154 
Real estate taxes31,447 29,254 
Depreciation and amortization44,457 46,093 
Total operating expenses126,955 143,251 
Total operating income
18,349 26,973 
Other income (expense):
Interest income122 637 
Interest expense(23,554)(19,618)
Loss on early extinguishment of debt(214)(86)
Income (loss) before income taxes(5,297)7,906 
Income tax benefit2,106 382 
Net income (loss)(3,191)8,288 
Private perpetual preferred unit distributions(1,050)(1,050)
Net (income) loss attributable to non-controlling interests1,620 (2,743)
Net income (loss) attributable to common stockholders$(2,621)$4,495 
Total weighted average shares:
Basic171,735 181,741 
Diluted277,881 292,645 
Earnings (loss) per share attributable to common stockholders:
Basic$(0.02)$0.02 
Diluted$(0.02)$0.02 
Dividends per share$ $0.105 

The accompanying notes are an integral part of these consolidated financial statements
3


Empire State Realty Trust, Inc.
Condensed Consolidated Statements of Comprehensive Loss
(unaudited)
(amounts in thousands)
Three Months Ended March 31,
20212020
Net income (loss)$(3,191)$8,288 
Other comprehensive income (loss):
Unrealized gain (loss) on valuation of interest rate swap agreements59 (17,695)
Less: amount reclassified into interest expense2,869 796 
     Other comprehensive income (loss)2,928 (16,899)
Comprehensive loss(263)(8,611)
Net (income) loss attributable to non-controlling interests and private perpetual preferred unitholders570 (3,793)
Other comprehensive (income) loss attributable to non-controlling interests(1,114)6,405 
Comprehensive loss attributable to common stockholders$(807)$(5,999)

The accompanying notes are an integral part of these consolidated financial statements


4


Empire State Realty Trust, Inc.
Condensed Consolidated Statements of Stockholders' Equity
For The Three Months Ended March 31, 2021 and 2020
(unaudited)
(amounts in thousands)
Number of Class A Common SharesClass A Common StockNumber of Class B Common SharesClass B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained DeficitTotal Stockholders' EquityNon-controlling InterestsPrivate Perpetual Preferred UnitsTotal Equity
Balance at December 31, 2020170,555 $1,705 1,010 $10 $1,147,527 $(28,320)$(65,673)$1,055,249 $646,118 $29,940 $1,731,307 
Conversion of operating partnership units and Class B shares to Class A shares1,071 11 (5)— 2,689 (38)— 2,662 (2,662)—  
Repurchases of common shares(383)(4)— — (2,551)— (978)(3,533)— — (3,533)
Equity compensation:
LTIP units— — — — — — — — 4,810 — 4,810 
Restricted stock, net of forfeitures84 1 — — (77)— — (76)— — (76)
Dividends and distributions— — — — — — — — — (1,050)(1,050)
Net income (loss)— — — — — (2,621)(2,621)(1,620)1,050 (3,191)
Other comprehensive income — — — — 1,814 — 1,814 1,114 — 2,928 
Balance at March 31, 2021171,327 $1,713 1,005 $10 $1,147,588 $(26,544)$(69,272)$1,053,495 $647,760 $29,940 $1,731,195 
Number of Class A Common SharesClass A Common StockNumber of Class B Common SharesClass B Common StockAdditional Paid-In CapitalAccumulated Other Comprehensive Income (Loss)Retained Earnings (Deficit)Total Stockholders' EquityNon-controlling InterestsPrivate Perpetual Preferred UnitsTotal Equity
Balance at December 31, 2019180,878 $1,809 1,017$10 $1,232,433 $(21,496)$15,764 $1,228,520 $690,242 $29,151 $1,947,913 
Issuance of private perpetual in exchange for common shares— — — — — — — (789)789 — 
Conversion of operating partnership units and Class B shares to Class A shares1,660 17 (2)— 7,661 (116)— 7,562 (7,562)—  
Repurchases of common shares(6,571)(65)— (44,363)— (18,238)(62,666)— — (62,666)
Equity compensation:
LTIP units— — — — — — — 5,737 — 5,737 
Restricted stock, net of forfeitures146 — — 154 — — 154 — — 154 
Dividends and distributions— — — — — (18,987)(18,987)(12,614)(1,050)(32,651)
Net income— — — — — 4,495 4,495 2,743 1,050 8,288 
Other comprehensive loss— — — — (10,494)— (10,494)(6,405)— (16,899)
Balance at March 31, 2020176,113 $1,761 1,015 $10 $1,195,885 $(32,106)$(16,966)$1,148,584 $671,352 $29,940 $1,849,876 

The accompanying notes are an integral part of these consolidated financial statements
5


Empire State Realty Trust, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)
(amounts in thousands)
Three Months Ended March 31,
20212020
Cash Flows From Operating Activities
Net income (loss)$(3,191)$8,288 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization44,457 46,093 
Amortization of non-cash items within interest expense2,733 1,052 
Amortization of acquired above- and below-market leases, net(654)(908)
Amortization of acquired below-market ground leases1,958 1,958 
Straight-lining of rental revenue(6,347)(8,193)
Equity based compensation4,734 5,891 
Loss on early extinguishment of debt214 86 
Increase (decrease) in cash flows due to changes in operating assets and liabilities:
Security deposits(2,550)(17)
Tenant and other receivables4,792 2,874 
Deferred leasing costs(3,243)(4,118)
Prepaid expenses and other assets26,755 24,869 
Accounts payable and accrued expenses(3,302)(5,261)
Deferred revenue and other liabilities7,044 (7,840)
Net cash provided by operating activities73,400 64,774 
Cash Flows From Investing Activities
Development costs(98)(811)
Additions to building and improvements(20,714)(39,799)
Net cash used in investing activities(20,812)(40,610)

The accompanying notes are an integral part of these consolidated financial statements


















6



Empire State Realty Trust, Inc.
Condensed Consolidated Statements of Cash Flows (continued)
(unaudited)
(amounts in thousands)

Three Months Ended March 31,
20212020
Cash Flows From Financing Activities
Repayment of mortgage notes payable(1,008)(970)
Proceeds from unsecured senior notes 175,000 
Proceeds from unsecured term loan 175,000 
Repayment of unsecured term loan (50,000)
Proceeds from unsecured revolving credit facility 550,000 
Deferred financing costs(7,539)(3,610)
Repurchases of common shares(3,533)(62,666)
Private perpetual preferred unit distributions(1,050)(1,050)
Dividends paid to common stockholders (18,987)
Distributions paid to non-controlling interests in the operating partnership (12,614)
Net cash (used in) provided by financing activities (13,130)750,103 
Net increase in cash and cash equivalents and restricted cash39,458 774,267 
Cash and cash equivalents and restricted cash—beginning of period567,939 271,597 
Cash and cash equivalents and restricted cash—end of period$607,397 $1,045,864 
Reconciliation of Cash and Cash Equivalents and Restricted Cash:
Cash and cash equivalents at beginning of period$526,714 $233,946 

Restricted cash at beginning of period
41,225 37,651 
Cash and cash equivalents and restricted cash at beginning of period$567,939 $271,597 
Cash and cash equivalents at end of period$567,102 $1,008,983 
Restricted cash at end of period40,295 36,881 
Cash and cash equivalents and restricted cash at end of period$607,397 $1,045,864 
Supplemental disclosures of cash flow information:
Cash paid for interest$19,239 $17,081 
Cash paid for income taxes$13 $898 
Non-cash investing and financing activities:
Building and improvements included in accounts payable and accrued expenses$60,536 $78,107 
Write-off of fully depreciated assets4,853 13,932 
Derivative instruments at fair values included in accounts payable and accrued expenses7,450 30,387 
Conversion of operating partnership units and Class B shares to Class A shares2,662 7,562 
Issuance of Series 2019 private perpetual preferred in exchange for common shares 789 

The accompanying notes are an integral part of these consolidated financial statements
7




Empire State Realty Trust, Inc.
Notes to Condensed Consolidated Financial Statements
(unaudited)
1. Description of Business and Organization
    As used in these condensed consolidated financial statements, unless the context otherwise requires, “we,” “us,” “our,” the “company,” and "ESRT" mean Empire State Realty Trust, Inc. and its consolidated subsidiaries.
    We are a self-administered and self-managed 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.
    As of March 31, 2021, our total portfolio contained 10.1 million rentable square feet of office and retail space. We owned 14 office properties (including three long-term ground leasehold interests) encompassing approximately 9.4 million rentable square feet of office space. Nine of these properties are located in the midtown Manhattan market and aggregate approximately 7.6 million rentable square feet of office space, including the Empire State Building. Our Manhattan office properties also contain an aggregate of approximately 0.5 million rentable square feet of retail space on their ground floor and/or contiguous levels. Our remaining five office properties are located in Fairfield County, Connecticut and Westchester County, New York, encompassing in the aggregate approximately 1.8 million rentable square feet. The majority of square footage for these five properties is located in densely populated metropolitan communities with immediate access to mass transportation. Additionally, we have entitled land at the Stamford Transportation Center in Stamford, Connecticut, adjacent to one of our office properties, that will support the development of an approximately 0.4 million rentable square foot office building and garage. As of March 31, 2021, our portfolio included four standalone retail properties located in Manhattan and two standalone retail properties located in the city center of Westport, Connecticut, encompassing approximately 0.2 million rentable square feet in the aggregate.
     We were organized as a Maryland corporation on July 29, 2011 and commenced operations upon completion of our initial public offering and related formation transactions on October 7, 2013. Our operating partnership, Empire State Realty OP, L.P. (the "Operating Partnership"), holds substantially all of our assets and conducts substantially all of our business. As of March 31, 2021, we owned approximately 60.3% of the aggregate operating partnership units in the Operating Partnership. We, as the sole general partner in the Operating Partnership, have responsibility and discretion in the management and control of the Operating Partnership, and the limited partners in the Operating Partnership, in such capacity, have no authority to transact business for, or participate in the management activities of, the Operating Partnership. Accordingly, the Operating Partnership has been consolidated by us. We elected to be taxed as a REIT and operate in a manner that we believe allows us to qualify as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2013.
2. Summary of Significant Accounting Policies
    There have been no material changes to the summary of significant accounting policies included in the section entitled "Summary of Significant Accounting Policies" in our December 31, 2020 Annual Report on Form 10-K.

Basis of Quarterly Presentation and Principles of Consolidation
    The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), for interim financial information, and with the rules and regulations of the Securities and Exchange Commission (the "SEC"). Accordingly, certain information and footnote disclosures required by GAAP for complete financial statements have been condensed or omitted in accordance with such rules and regulations. In the opinion of management, all adjustments and eliminations (including intercompany balances and transactions), consisting of normal recurring adjustments, considered necessary for the fair presentation of the financial statements have been included.
    The results of operations for the periods presented are not necessarily indicative of the results that may be expected for the corresponding full years. These financial statements should be read in conjunction with the financial statements and accompanying notes included in the financial statements for the year ended December 31, 2020 contained in our Annual Report on Form 10-K. We do not consider our business to be subject to material seasonal fluctuations, except that our observatory business is subject to tourism seasonality and currently impacted by the Coronavirus 19 ("COVID-19") pandemic. Historically, prior to the outbreak of the COVID-19 pandemic, approximately 16.0% to 18.0% of our annual observatory revenue was
8


realized in the first quarter, 26.0% to 28.0% was realized in the second quarter, 31.0% to 33.0% was realized in the third quarter and 23.0% to 25.0% was realized in the fourth quarter.
    We consolidate entities in which we have a controlling financial interest.  In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members.  For variable interest entities ("VIE"), we consolidate the entity if we are deemed to have a variable interest in the entity and through that interest we are deemed the primary beneficiary. The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE. The primary beneficiary is required to consolidate the VIE. The Operating Partnership is a variable interest entity of our company, Empire State Realty Trust, Inc.  As the Operating Partnership is already consolidated in the financial statements of Empire State Realty Trust, Inc., the identification of this entity as a variable interest entity has no impact on our consolidated financial statements.
    We will assess the accounting treatment for each investment we may have in the future. This assessment will include a review of each entity’s organizational agreement to determine which party has what rights and whether those rights are protective or participating. For all VIEs, we will review such agreements in order to determine which party has the power to direct the activities that most significantly impact the entity’s economic performance and benefit. In situations where we or our partner could approve, among other things, the annual budget, or leases that cover more than a nominal amount of space relative to the total rentable space at each property, we would not consolidate the investment as we consider these to be substantive participation rights that result in shared power of the activities that would most significantly impact the performance and benefit of such joint venture investment.
    A non-controlling interest in a consolidated subsidiary is defined as the portion of the equity (net assets) in a subsidiary not attributable, directly or indirectly, to a parent. Non-controlling interests are required to be presented as a separate component of equity in the condensed consolidated balance sheets and in the condensed consolidated statements of operations by requiring earnings and other comprehensive income to be attributed to controlling and non-controlling interests.
Accounting Estimates
    The preparation of the condensed consolidated financial statements in accordance with GAAP requires management to use estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Significant items subject to such estimates and assumptions include allocation of the purchase price of acquired real estate properties among tangible and intangible assets, determination of the useful life of real estate properties and other long-lived assets, valuation and impairment analysis of commercial real estate properties, right of use assets and other long-lived and indefinite lived assets, estimate of tenant expense reimbursements, valuation of the allowance for doubtful accounts, and valuation of derivative instruments, ground lease liabilities, senior unsecured notes, mortgage notes payable, unsecured term loan and revolving credit facilities, and equity based compensation. These estimates are prepared using management’s best judgment, after considering past, current, and expected events and economic conditions. Actual results could differ from those estimates.
Recently Issued or Adopted Accounting Standards
    During April 2020, the Financial Accounting Standards Board ("FASB") staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework. The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease. This election is only available when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease.
    During March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter 2020, we elected to apply the hedge accounting expedients related to probability and the
9


assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.     
3. Deferred Costs, Acquired Lease Intangibles and Goodwill
    Deferred costs, net, consisted of the following as of March 31, 2021 and December 31, 2020 (amounts in thousands):  
March 31, 2021December 31, 2020
Leasing costs$203,730 $203,905 
Acquired in-place lease value and deferred leasing costs180,131 181,336 
Acquired above-market leases40,254 40,398 
424,115 425,639 
Less: accumulated amortization(225,967)(223,918)
Total deferred costs, net, excluding net deferred financing costs$198,148 $201,721 
    At March 31, 2021 and December 31, 2020, $8.9 million and $2.1 million, respectively, of net deferred financing costs associated with the unsecured revolving credit facility was included in deferred costs, net on the condensed consolidated balance sheet.
    Amortization expense related to deferred leasing costs and acquired deferred leasing costs was $5.6 million and $5.9 million for the three months ended March 31, 2021 and 2020, respectively. Amortization expense related to acquired lease intangibles was $1.7 million and $2.0 million for the three months ended March 31, 2021 and 2020, respectively.
    Amortizing acquired intangible assets and liabilities consisted of the following as of March 31, 2021 and December 31, 2020 (amounts in thousands):
March 31, 2021December 31, 2020
Acquired below-market ground leases$396,916 $396,916 
Less: accumulated amortization(54,139)(52,181)
Acquired below-market ground leases, net$342,777 $344,735 
March 31, 2021December 31, 2020
Acquired below-market leases$(77,686)$(78,451)
Less: accumulated amortization47,574 46,746 
Acquired below-market leases, net$(30,112)$(31,705)
    Rental revenue related to the amortization of below-market leases, net of above-market leases, was $0.7 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively.
     As of March 31, 2021, we had goodwill of $491.5 million. Goodwill was allocated $227.5 million to the observatory reportable segment and $264.0 million to the real estate reportable segment.
    In compliance with the requirements of authorities, we closed the Empire State Building Observatory on March 16, 2020 due to the COVID-19 pandemic and it remained closed until the 86th floor observation deck was reopened on July 20, 2020. The 102nd observation deck was reopened on August 24, 2020. The closure of our Observatory and subsequent reopening under international, national, and local travel restrictions and quarantines caused us during the quarter to choose to perform an impairment test related to goodwill. We engaged a third-party valuation consulting firm to perform the valuation process. The analysis used a combination of the discounted cash flow method (a form of the income approach) utilizing Level 3 unobservable inputs and the guideline company method (a form of the market approach). Significant assumptions under the former included revenue and cost projections, weighted average cost of capital, long-term growth rate and income tax considerations while the latter included guideline company enterprise values, revenue multiples and control premium rates. Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred. Based upon the results of the goodwill impairment test of the standalone Observatory reporting unit, which is after the intercompany rent expense paid to the Real Estate reporting unit, we
10


determined that the fair value of the Observatory reporting unit exceeded its carrying value by less than 10.0%.  Many of the factors employed in determining whether or not goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods.  We will continue to assess the impairment of the Observatory reporting unit goodwill going forward and that continued assessment may again utilize a third-party valuation consulting firm.

4. Debt
    Debt consisted of the following as of March 31, 2021 and December 31, 2020 (amounts in thousands):
Principal BalanceAs of March 31, 2021
March 31, 2021December 31, 2020Stated
Rate
Effective
Rate
(1)
Maturity
Date
(2)
Mortgage debt collateralized by:
Fixed rate mortgage debt
Metro Center$86,803 $87,382 3.59 %3.68 %11/5/2024
10 Union Square50,000 50,000 3.70 %3.97 %4/1/2026
1542 Third Avenue30,000 30,000 4.29 %4.53 %5/1/2027
First Stamford Place(3)
180,000 180,000 4.28 %4.71 %7/1/2027
1010 Third Avenue and 77 West 55th Street37,278 37,477 4.01 %4.23 %1/5/2028
250 West 57th Street180,000 180,000 2.83 %3.19 %12/1/2030
10 Bank Street31,795 32,025 4.23 %4.36 %6/1/2032
383 Main Avenue30,000 30,000 4.44 %4.55 %6/30/2032
1333 Broadway160,000 160,000 4.21 %4.29 %2/5/2033
Total mortgage debt785,876 786,884 
Senior unsecured notes:(4)
   Series A100,000 100,000 3.93 %3.96 %3/27/2025
   Series B125,000 125,000 4.09 %4.12 %3/27/2027
   Series C125,000 125,000 4.18 %4.21 %3/27/2030
   Series D115,000 115,000 4.08 %4.11 %1/22/2028
   Series E160,000 160,000 4.26 %4.27 %3/22/2030
   Series F175,000 175,000 4.44 %4.45 %3/22/2033
   Series G100,000 100,000 3.61 %4.89 %3/17/2032
   Series H75,000 75,000 3.73 %5.00 %3/17/2035
Unsecured term loan facility (4)
215,000 215,000 
LIBOR plus 1.20%
3.56 %3/19/2025
Unsecured revolving credit facility (4)
  
LIBOR plus 1.30%
 3/31/2025
Unsecured term loan facility (4)
175,000 175,000 
LIBOR plus 1.50%
3.60 %12/31/2026
Total principal2,150,876 2,151,884 
Deferred financing costs, net
(14,575)(15,235)
Total$2,136,301 $2,136,649 
______________

(1)The effective rate is the yield as of March 31, 2021 and includes the stated interest rate, deferred financing cost amortization and interest associated with variable to fixed interest rate swap agreements.
(2)Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.
(3)Represents a $164 million mortgage loan bearing interest at 4.09% and a $16 million loan bearing interest at 6.25%.
(4)At March 31, 2021, we were in compliance with all debt covenants.










11



Principal Payments
    Aggregate required principal payments at March 31, 2021 are as follows (amounts in thousands):

YearAmortizationMaturitiesTotal
2021$3,082 $ $3,082 
20225,628  5,628 
20237,876  7,876 
20247,958 77,675 85,633 
20255,826 315,000 320,826 
Thereafter20,084 1,707,747 1,727,831 
Total $50,454 $2,100,422 $2,150,876 

Deferred Financing Costs
    Deferred financing costs, net, consisted of the following at March 31, 2021 and December 31, 2020 (amounts in thousands):
 March 31, 2021December 31, 2020
Financing costs$42,689 $35,365 
Less: accumulated amortization(19,202)(17,998)
Total deferred financing costs, net$23,487 $17,367 
    Amortization expense related to deferred financing costs was $1.2 million and $0.9 million for the three months ended March 31, 2021 and 2020, respectively.
Unsecured Revolving Credit and Term Loan Facilities

    On March 31, 2021, through our Operating Partnership, we entered into a second amendment to an existing credit agreement ("Amended Credit Agreement") that will govern an amended senior unsecured credit facility (the “Credit Facility”) with Bank of America, N.A., as administrative agent, and Bank of America, Wells Fargo Bank, National Association, Capital One, National Association and JPMorgan Chase Bank, N.A., as co-syndication agents, and the lenders and the letter of credit issuers party thereto. The Amended Credit Agreement amends the amended and restated credit agreement dated August 29, 2017, as amended, by and among the parties named therein.

    The Credit Facility is in the initial maximum principal amount of up to $1.065 billion, which consists of a $850.0 million revolving credit facility and a $215.0 million term loan facility. We borrowed the term loan facility in full in August 2017. We may request the Credit Facility be increased through one or more increases in the revolving credit facility or one or more increases in the term loan facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $1.50 billion. The Credit Facility will be used for our working capital needs and for other general corporate purposes. As of March 31, 2021, we had no borrowings under the revolving credit facility and $215.0 million under the term loan