8-K

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): July 27, 2016

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.)

One Grand Central Place 60 East 42nd Street New York, New York	10165
(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))

Item 2.02. Results of Operations and Financial Condition.

On July 27, 2016, Empire State Realty Trust, Inc. (the “Company” or “we”) issued a press release announcing its financial results for the second quarter of 2016. The press release referred to certain supplemental information that is available on the Company’s website. The press release and the supplemental information 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 second quarter of 2016 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	Press Release announcing financial results for the second quarter of 2016
99.2	Supplemental report

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

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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 its 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 July 2014 acquisition of two properties 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.

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Core Funds From Operations (“Core FFO”)

Core FFO adds back to Modified FFO the following items: private perpetual preferred exchange offering expenses, acquisition expenses, gain on settlement of lawsuit related to the Observatory, net of income taxes, deferred financing costs write-offs, prepayment penalties, construction severance expenses and acquisition break-up fee. 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.

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 and break-up fee, 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 net operating income because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is also 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

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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 GAAP. Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not-be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.

EBITDA

We compute EBITDA as net income plus perpetual preferred unit distributions, interest expense, income taxes, depreciation and amortization and acquisition expenses. 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: July 27, 2016	By:	/s/ David A. Karp
	Name:	David A. Karp
	Title:	Executive Vice President and Chief Financial Officer

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: July 27, 2016	By:	/s/ David A. Karp
	Name:	David A. Karp
	Title:	Executive Vice President and Chief Financial Officer

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EX-99.1

Exhibit 99.1

EMPIRE STATE REALTY TRUST ANNOUNCES SECOND QUARTER 2016 RESULTS

- Reports EPS of $0.09 Per Fully Diluted Share -

- Reports Core FFO of $0.24 Per Fully Diluted Share -

- Leased 176,533 Square Feet of Office and Retail Space

Including 110,099 Square Feet to 22 New Tenants -

- Achieved a 58.1% Increase in Mark-To-Market Rent on New Manhattan Office Leases -

New York, New York, July 27, 2016 - 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 second quarter of 2016.

“We are pleased with our strong second quarter results which reflect the continued successful execution of our strategy as we consolidate, redevelop and re-lease space to larger, higher credit quality tenants at materially higher rents. Solid leasing demand and our newly renovated space allowed us to achieve market-leading spreads on new Manhattan office and all retail leases, which exceeded 58.1% and 55.8%, respectively, this quarter. Prospective tenants continued to be attracted to our well located, amenity-rich office buildings,” stated John B. Kessler, Empire State Realty Trust’s President and Chief Operating Officer.

“In spite of the significant impact of the calendar shift of Easter weekend to the first quarter of 2016, and assisted by an improved revenue mix and favorable weather, Observatory revenues increased 4.0% over the second quarter of last year. Our balance sheet remains low-levered and is further strengthened as we unlock the embedded, de-risked growth within our portfolio and create long term value for our shareholders. While we had limited new net borrowings during the past year, we enhanced our high levels of liquidity with the increase from $800 million to $1.1 billion in our unsecured revolving credit facility. We look forward to discussing our results in greater detail on tomorrow’s conference call,” added Kessler.

Second Quarter Highlights

• Achieved net income attributable to the Company of $0.09 per fully diluted share (“EPS”) and Core Funds From Operations (“Core FFO”) of $0.24 per fully diluted share.

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• Occupancy and leased percentages at June 30, 2016:

• Total portfolio was 86.6% occupied; including signed leases not commenced (“SLNC”), the total portfolio was 89.4% leased.

• Manhattan office portfolio (excluding the retail component of these properties) was 84.9% occupied; including SLNC, the Manhattan office portfolio was 88.4% leased.

• Retail portfolio was 83.6% occupied; including SLNC, the retail portfolio was 86.0% leased.

• Empire State Building was 88.7% occupied; including SLNC, the Empire State Building was 90.7% leased.

• Executed 45 leases, representing 176,533 rentable square feet across the total portfolio, achieving a 39.4% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.

• Signed 19 new leases representing 99,180 rentable square feet in the second quarter 2016 for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 58.1% in mark-to-market rent over previous fully escalated rents.

• The Empire State Building Observatory revenue for the second quarter 2016 grew 4.0% to $31.8 million from $30.6 million in the second quarter 2015.

• Declared a dividend in the amount of $0.105 per share for the second quarter 2016, a 24% increase from previous quarters.

Financial Results for the Second Quarter 2016

Net income attributable to common stockholders was $11.1 million, or $0.09 of EPS, compared to $11.1 million, or $0.10 of EPS, in the second quarter of 2015.

Core FFO was $64.8 million, or $0.24 per fully diluted share, compared to $68.3 million, or $0.26 per fully diluted share, in the second quarter of 2015.

Modified FFO was $64.8 million, or $0.24 per fully diluted share, compared to $67.9 million, or $0.26 per fully diluted share, in the second quarter of 2015.

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FFO was $62.8 million, or $0.24 per fully diluted share, compared to $65.9 million, or $0.25 per fully diluted share, in the second quarter of 2015.

A reconciliation of net income to FFO, Modified FFO and Core FFO is provided in the tables accompanying this press release.

Financial Results for the Six Months Ended June 30, 2016

Net income attributable to common stockholders was $18.5 million, or $0.15 of EPS, compared to $14.3 million, or $0.13 of EPS, in the six months ended June 30, 2015.

Core FFO was $122.9 million, or $0.46 per fully diluted share, compared to $120.9 million, or $0.45 per fully diluted share, in the six months ended June 30, 2015.

Modified FFO was $122.3 million, or $0.46 per fully diluted share, compared to $118.7 million, or $0.45 per fully diluted share, in the six months ended June 30, 2015.

FFO was $118.3 million, or $0.44 per fully diluted share, compared to $114.8 million, or $0.43 per fully diluted share, in the six months ended June 30, 2015.

Portfolio Operations

As of June 30, 2016, 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 that exists between when tenants move out and before the Company completes redevelopment work and new leases commence. As of June 30, 2016, the Company’s portfolio was occupied and leased as follows. Leased percentages include signed leases not commenced.

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	June 30, 2016			March 31, 2016			June 30, 2015
Percent occupied:
Total portfolio		86.6	%		88.2	%		88.0	%
Total office		86.9	%		88.0	%		87.7	%
Manhattan office		84.9	%		86.4	%		86.2	%
Empire State Building		88.7	%		89.2	%		85.0	%
Retail		83.6	%		91.4	%		92.3	%
Percent leased:
Total portfolio		89.4	%		89.8	%		90.0	%
Total office		89.6	%		89.5	%		89.7	%
Manhattan office		88.4	%		88.2	%		88.4	%
Empire State Building		90.7	%		90.7	%		89.6	%
Retail		86.0	%		93.4	%		94.1	%

Leasing

For the three months ended June 30, 2016, the Company executed 45 new, renewal, and expansion leases within the total portfolio, comprising 176,533 rentable square feet with an average starting rental rate of $59.09 per rentable square foot, representing an increase of 39.4% over the prior in-place rent on a fully escalated basis.

On a blended basis, the 44 new, renewal, and expansion office leases signed within the total portfolio during the quarter had an average starting rental rate of $56.96 per rentable square foot, representing an increase of 38.8% over the prior in-place rent on a fully escalated basis.

The one renewal retail lease signed within the total portfolio during the quarter had a starting rental rate of $375.00 per rentable square foot, representing an increase of 55.8% over the prior in-place rent on a fully escalated basis.

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Leases Signed in the Second Quarter 2016 for the Manhattan Office Portfolio

• 19 new leases comprising 99,180 rentable square feet, with an average starting rental rate of $61.34 per rentable square foot, representing an increase of 58.1% over the prior in-place rent on a fully escalated basis, and

• 20 renewal leases, comprising 57,565 rentable square feet, with an average starting rental rate of $56.90 per rentable square foot, representing an increase of 25.1% over the prior in-place rent on a fully escalated basis.

Significant Leases Executed During the Second Quarter 2016

• At One Grand Central Place, the Company signed a new 21,800 rentable square foot lease, with National CineMedia (NASDAQ: NCMI), for a term of 15.5 years.

• At the Empire State Building, the Company signed a new 20,000 rentable square foot lease with ZS Associates, for a term of 16.0 years.

Empire State Building

The Company continues to renovate and lease the 2.8 million rentable square foot Empire State Building, its flagship property. At June 30, 2016, the Empire State Building was 88.7% occupied; including SLNC, the Empire State Building was 90.7% leased.

During the second quarter 2016, the Company executed 11 office leases at the Empire State Building, representing 44,096 rentable square feet in the aggregate.

The Observatory revenue for the second quarter 2016 grew 4.0% to $31.8 million, from $30.6 million in the second quarter 2015. The Observatory hosted approximately 1,124,000 visitors in the second quarter 2016 compared to 1,165,000 visitors in the second quarter 2015, a decrease of 3.5%. The shift of the Easter weekend to the first quarter in 2016 from the second quarter in 2015 was a major component of the jump in first quarter attendance and the source of the decline in second quarter attendance which was partially offset by an increase in general visitor traffic outside of the Easter holiday weekend. The increase in revenue in the face of a slight reduction in attendance is the result of an improvement in our ticket mix. In the second quarter 2016, there were two bad weather weekend days compared to five bad weather weekend days in the second quarter 2015.

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For the six months ended June 30, 2016, the Observatory hosted approximately 1,843,000 visitors, compared to 1,787,000 visitors for the same period in 2015, an increase of 3.1%. Observatory revenue was $53.0 million for the six months ended June 30, 2016, an 8.6% increase from $48.8 million for the six months ended June 30, 2015. For the six months ended June 30, 2016, there were four bad weather weekend days compared to 14 bad weather weekend days in the first six months of 2015.

Balance Sheet

At June 30, 2016, the outstanding balance on the Company’s $800.0 million unsecured revolving credit facility was $40.0 million. On July 6, 2016, the Company increased its committed borrowing capacity under the unsecured revolving credit facility from $800 million to $1.1 billion. The unsecured revolving credit facility has an accordion feature allowing for an additional increase in its maximum aggregate principal balance to $1.25 billion under certain circumstances.

At June 30, 2016, the Company had total debt outstanding of approximately $1.7 billion, with a weighted average interest rate of 4.08% per annum, and a weighted average term to maturity of 5.1 years. As of June 30, 2016, the Company had no debt maturing during 2016. The Company’s consolidated debt to total market capitalization was approximately 24% as of June 30, 2016 and consolidated net debt to EBITDA was 5.0x.

Dividend

On June 30, 2016, the Company raised its dividend by 24% and paid a dividend of $0.105 per share for the second quarter 2016 to holders of the Company’s Class A common stock and Class B common stock and to holders of the operating partnership’s Series ES, Series 250 and Series 60 operating partnership units (NYSE Arca: ESBA, FISK and OGCP, respectively) and Series PR operating partnership units. The Company paid a dividend of $0.15 per unit for the second quarter 2016 to holders of the operating partnership’s private perpetual preferred units.

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Webcast and Conference Call Details

Empire State Realty Trust, Inc. will host a webcast and conference call, open to the general public, on Thursday, July 28, 2016 at 8:30 am Eastern time.

The webcast will be available in the Investors section of the Company’s website at www.empirestaterealtytrust.com. To listen to a live broadcast, 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 be accessed by dialing 1-877-407-3982 for domestic callers or 1-201-493-6780 for international callers. A replay will be available shortly after the call and can be accessed by dialing 1-877-870-5176 for domestic callers or 1-858-384-5517 for international callers. The passcode for the replay is 13640372. A replay of the conference call will be available until August 4, 2016.

The Supplemental Report will be available prior to the conference call in the Investors section of the Company’s website, www.empirestaterealtytrust.com.

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 June 30, 2016, 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 709,000 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,” “pro forma,” “estimates,” “contemplates,”

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“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: changes in our industry, the real estate markets, either nationally or in Manhattan or the greater New York metropolitan area; resolution of the litigations and arbitration involving the company; reduced demand for office or retail space; general volatility of the capital and credit markets and the market price of our Class A common stock and our publicly-traded OP Units; changes in technology and market competition, which affect utilization of our broadcast or other facilities; changes in domestic or international tourism, including geopolitical events and currency exchange rates; defaults on, early terminations of, or non-renewal of leases by tenants; fluctuations in interest rates; declining real estate valuations and impairment charges; our failure to obtain necessary outside financing, including our unsecured revolving credit facility; decreased rental rates or increased vacancy rates; our failure to redevelop and reposition properties successfully or on the anticipated timeline or at the anticipated costs; difficulties in identifying properties to acquire and completing acquisitions; risks of real estate development (including our Metro Tower development site), including the cost of construction delays and cost overruns; and conflicts of interest affecting any of our senior management team.

While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes after the date of this press release, except as required by applicable law. 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 Annual Report on Form 10-K for the year ended December 31, 2015, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. 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).

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Contact:

Investors

Empire State Realty Trust Investor Relations

(212) 850-2678

IR@empirestaterealtytrust.com

Media

Brandy Bergman/Hugh Burns

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 June 30,
	2016			2015
Revenues
Rental revenue	$	112,613		$	112,866
Tenant expense reimbursement		19,054			18,582
Observatory revenue		31,838			30,600
Construction revenue		—			374
Third-party management and other fees		423			594
Other revenue and fees		1,887			1,757
Total revenues		165,815			164,773
Operating expenses
Property operating expenses (1)		37,386			37,262
Ground rent expenses		2,330			2,332
General and administrative expenses (2)		12,907			9,113
Observatory expenses (1)		6,895			8,093
Construction expenses		—			353
Real estate taxes		23,557			22,952
Depreciation and amortization		38,548			39,629
Total operating expenses		121,623			119,734
Total operating income		44,192			45,039
Interest expense		(17,420	)		(17,571	)
Income before income taxes		26,772			27,468
Income tax expense		(2,132	)		(883	)
Net income		24,640			26,585
Preferred unit distributions		(234	)		(234	)
Net income attributable to non-controlling interests		(13,317	)		(15,231	)
Net income attributable to common stockholders	$	11,089		$	11,120
Total weighted average shares
Basic		122,502			112,852
Diluted		266,167			265,867
Net income per share attributable to common stockholders
Basic	$	0.09		$	0.10
Diluted	$	0.09		$	0.10

(1) For the three months ended June 30, 2015, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended June 30, 2016 and 2015, these costs were $314 and $673, respectively.

(2) For the three months ended June 30, 2016, includes incremental legal costs of $1.5 million pertaining to formation transactions litigation.

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

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

	Six Months Ended June 30,
	2016			2015
Revenues
Rental revenue	$	227,521		$	222,924
Tenant expense reimbursement		37,174			36,782
Observatory revenue		53,019			48,823
Construction revenue		—			1,981
Third-party management and other fees		968			1,040
Other revenue and fees		4,207			5,105
Total revenues		322,889			316,655
Operating expenses
Property operating expenses		76,490			79,289
Ground rent expenses		4,663			4,663
General and administrative expenses		23,825			18,213
Observatory expenses		14,650			15,495
Construction expenses		—			3,222
Real estate taxes		47,082			45,930
Acquisition expenses		98			—
Depreciation and amortization		77,775			81,047
Total operating expenses		244,583			247,859
Total operating income		78,306			68,796
Interest expense		(35,371	)		(33,618	)
Income before income taxes		42,935			35,178
Income tax expense		(1,590	)		(705	)
Net income		41,345			34,473
Preferred unit distributions		(468	)		(468	)
Net income attributable to non-controlling interests		(22,360	)		(19,747	)
Net income attributable to common stockholders	$	18,517		$	14,258
Total weighted average shares
Basic		121,640			111,136
Diluted		267,121			265,866
Net income per share attributable to common stockholders
Basic	$	0.15		$	0.13
Diluted	$	0.15		$	0.13

For the six months ended June 30, 2015, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the six months ended June 30, 2016 and 2015, these costs were $1,326 and $1,098, respectively.

11

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 June 30,
	2016			2015
Net income	$	24,640		$	26,585
Preferred unit distributions		(234	)		(234	)
Real estate depreciation and amortization		38,386			39,542
FFO attributable to common stockholders and non-controlling interests		62,792			65,893
Amortization of below-market ground leases		1,958			1,958
Modified FFO attributable to common stockholders and non-controlling interests		64,750			67,851
Prepayment penalty and deferred financing cost write-off		—			404
Core FFO attributable to common stockholders and non-controlling interests	$	64,750		$	68,255
Total weighted average shares
Basic		266,167			265,867
Diluted		266,167			265,867
FFO per share
Basic	$	0.24		$	0.25
Diluted	$	0.24		$	0.25
Modified FFO per share
Basic	$	0.24		$	0.26
Diluted	$	0.24		$	0.26
Core FFO per share
Basic	$	0.24		$	0.26
Diluted	$	0.24		$	0.26

12

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)

	Six Months Ended June 30,
	2016			2015
Net income	$	41,345		$	34,473
Preferred unit distributions		(468	)		(468	)
Real estate depreciation and amortization		77,461			80,775
FFO attributable to common stockholders and non-controlling interests		118,338			114,780
Amortization of below-market ground leases		3,916			3,916
Modified FFO attributable to common stockholders and non-controlling interests		122,254			118,696
Prepayment penalty and deferred financing cost write-off		552			1,749
Acquisition expenses		98			—
Construction severance expenses, net of income taxes		—			480
Core FFO attributable to common stockholders and non-controlling interests	$	122,904		$	120,925
Total weighted average shares
Basic		266,151			265,866
Diluted		266,151			265,866
FFO per share
Basic	$	0.44		$	0.43
Diluted	$	0.44		$	0.43
Modified FFO per share
Basic	$	0.46		$	0.45
Diluted	$	0.46		$	0.45
Core FFO per share
Basic	$	0.46		$	0.45
Diluted	$	0.46		$	0.45

13

Empire State Realty Trust, Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands)

	June 30,			December 31,
	2016			2015
Assets
Commercial real estate properties, at cost	$	2,356,192		$	2,276,330
Less: accumulated depreciation		(509,736	)		(465,584	)
Commercial real estate properties, net		1,846,456			1,810,746
Cash and cash equivalents		35,454			46,685
Restricted cash		59,141			65,880
Tenant and other receivables		14,521			18,782
Deferred rent receivables		133,955			122,048
Prepaid expenses and other assets		47,895			50,460
Deferred costs, net		292,777			310,679
Acquired below market ground leases, net		379,976			383,891
Goodwill		491,479			491,479
Total assets	$	3,301,654		$	3,300,650
Liabilities and equity
Mortgage notes payable, net	$	767,717		$	747,661
Senior unsecured notes, net		588,703			587,018
Unsecured term loan facility, net		262,735			262,545
Unsecured revolving credit facility, net		40,000			35,192
Accounts payable and accrued expenses		143,296			111,099
Acquired below market leases, net		91,850			104,171
Deferred revenue and other liabilities		23,019			31,388
Tenants’ security deposits		47,565			48,890
Total liabilities		1,964,885			1,927,964
Total equity		1,336,769			1,372,686
Total liabilities and equity	$	3,301,654		$	3,300,650

14

EX-99.2

Exhibit 99.2

EMPIRE STATE REALTY TRUST

Supplemental Operating and Financial Data

For the Quarter Ended June 30, 2016

Second Quarter 2016

Table of Contents	Page
Summary
Company Profile		3
Financial Highlights		4
Selected Property Data
Property Summary		5
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
Net Operating Income		20
Consolidated Debt Analysis
Debt Summary		21
Debt Detail		22
Debt Maturities		23
Ground Leases		23
Supplemental Definitions		24
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: changes in our industry and markets, either nationally or in Manhattan or the greater New York metropolitan area; resolution of the litigations and arbitration involving our company; reduced demand for office or retail space; general volatility of the capital and credit markets and the market price of our Class A common stock and listed operating partnership units; changes in our business strategy; defaults on, early terminations of, or non-renewal of, leases by tenants; bankruptcy or insolvency of a major tenant or a significant number of smaller tenants; litigation; fluctuations in interest rates; increased operating costs; declining real estate valuations and impairment charges; availability, terms and deployment of capital; our failure to obtain necessary outside financing; our expected leverage; decreased rental rates or increased vacancy rates; breach of or the expiration of our ground lease; our failure to generate sufficient cash flows to service our outstanding indebtedness; our failure to redevelop, renovate and reposition properties successfully or on the anticipated timeline or at the anticipated costs; difficulties in identifying properties to acquire and completing acquisitions; risks of real estate acquisitions, dispositions and development (including our Metro Tower development site), including construction delays and cost overruns; our failure to operate acquired properties and operations successfully; our ability to manage our growth effectively; changes in governmental regulations, tax laws and rates and similar matters; estimates relating to our ability to make distributions to our securityholders in the future; our failure to qualify as a REIT; a future terrorist event in the U.S.; environmental uncertainties and risks related to adverse weather conditions and natural disasters; lack or insufficient amounts of insurance; financial market fluctuations; availability of, and our ability to attract and retain, qualified personnel; conflicts of interest affecting our senior management team; competition; changes in real estate and zoning laws and increases in real property tax rates; and our ability to comply with the laws, rules and regulations applicable to companies and, in particular, public companies. While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. We disclaim any obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, or new information, data or methods, future events or other changes after the date of this presentation, except as required by applicable law. For a further discussion of these and other factors that could impact our future results, performance or transactions, see the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2015 and other risks described in documents we subsequently file from time to time with the Securities and Exchange Commission.

Page 2

Second Quarter 2016

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	William H. Berkman	Alice M. Connell
Chairman and Chief Executive Officer	Director	Director, Chair of Finance Committee
Thomas J. DeRosa	Steven J. Gilbert	S. Michael Giliberto
Director	Director, Lead Director	Director, Chair of Audit Committee
James D. Robinson IV
Director, Chair of Compensation and Nominating/Corporate
Governance Committees
EXECUTIVE MANAGEMENT
Anthony E. Malkin	John B. Kessler	Thomas P. Durels
Chairman and Chief Executive Officer	President and Chief Operating Officer	Executive Vice President and Director of Leasing and Operations
David A. Karp	Thomas N. Keltner, Jr.
Executive Vice President and Chief	Executive Vice President,
Financial Officer	General Counsel and Secretary
COMPANY INFORMATION
Corporate Headquarters	Investor Relations	New York Stock Exchange
One Grand Central Place	David A. Karp	Trading Symbol: ESRT
60 East 42nd Street	IR@empirestaterealtytrust.com
New York, NY 10165 www.empirestaterealtytrust.com
(212) 687-8700

ANALYST COVERAGE
Firm	Analyst	Phone	Email
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
Capital One Securities, Inc.	Thomas Lesnick	(571) 633-8191	thomas.lesnick@capitalone.com
Goldman Sachs & Co.	Brad Burke	(917) 343-2082	brad.burke@gs.com
Green Street Advisors	Jed Reagan	(949) 640-8780	jreagan@greenstreetadvisors.com
KeyBanc Capital Markets	Craig Mailman	(917) 368-2316	cmailman@key.com
Stifel Nicolaus	John Guinee	(443) 224-1307	jwguinee@stifel.com
Wells Fargo Securities, LLC	Blaine Heck	(443) 263-6529	blaine.heck@wellsfargo.com

Page 3

Second Quarter 2016

Financial Highlights

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

	Three Months Ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Selected Items:
Revenue	$	165,815		$	157,074		$	165,200		$	175,779		$	164,773
EBITDA (1)	$	82,506		$	73,205		$	82,254		$	90,471		$	84,434
Cash net operating income (1)	$	89,542		$	76,459		$	83,066		$	89,490		$	84,926
Net income	$	24,640		$	16,705		$	19,370		$	26,085		$	26,585
Core funds from operations (“Core FFO”) (1)	$	64,750		$	58,154		$	66,179		$	70,573		$	68,255
Core funds available for distribution (“Core FAD”) (1)	$	49,798		$	48,141		$	52,552		$	59,197		$	55,903
Core FFO per share - diluted	$	0.24		$	0.22		$	0.25		$	0.27		$	0.26
Core FAD per share - diluted	$	0.19		$	0.18		$	0.20		$	0.22		$	0.21
Dividends declared and paid per share	$	0.105		$	0.085		$	0.085		$	0.085		$	0.085
Portfolio Statistics:
Number of properties		20			20			20			20			20
Total rentable square footage		10,077,905			10,080,601			10,063,752			10,087,018			10,042,025
Percent occupied (2)		86.6	%		88.2	%		87.3	%		87.4	%		88.0	%
Percent leased (3)		89.4	%		89.8	%		89.1	%		90.0	%		90.0	%
Observatory Metrics:
Number of visitors		1,124,000			719,000			949,000			1,327,000			1,165,000
Change in visitors year over year		-3.5	%		15.6	%		-4.8	%		-5.5	%		-4.7	%
Observatory revenues	$	31,838		$	21,181		$	27,647		$	35,702		$	30,600
Change in revenues year over year		4.0	%		16.5	%		-1.8	%		0.1	%		0.7	%
Ratios:
Consolidated Debt to Total Market Capitalization (4)		24	%		26	%		25	%		26	%		26	%
Consolidated Debt and Perpetual Preferred Units to
Total Market Capitalization (4)		25	%		26	%		26	%		27	%		27	%
Consolidated Debt to EBITDA (5)		5.1	x		4.9	x		5.1	x		5.1	x		5.2	x
Consolidated Net Debt to EBITDA (5)		5.0	x		4.8	x		4.9	x		5.0	x		5.1	x
Interest Coverage Ratio		5.5	x		4.7	x		5.3	x		5.4	x		5.6	x
Core FFO Payout Ratio (6)		44	%		40	%		34	%		32	%		33	%
Core FAD Payout Ratio (7)		57	%		48	%		43	%		38	%		41	%
Class A common stock price at quarter end	$	18.99		$	17.53		$	18.07		$	17.03		$	17.06
Average closing price	$	18.76		$	16.51		$	17.95		$	17.19		$	18.01
Dividends per share - annualized	$	0.42		$	0.34		$	0.34		$	0.34		$	0.34
Dividend yield (8)		2.2	%		1.9	%		1.9	%		2.0	%		2.0	%
Private Perpetual Preferred Units outstanding ($16.62 liquidation value)		1,560,360			1,560,360			1,560,360			1,560,360			1,560,360
Class A common stock		122,781,134			120,639,410			118,903,312			116,823,306			113,119,634
Class B common stock		1,100,089			1,107,290			1,120,067			1,130,728			1,134,252
Operating partnership units		145,607,456			147,692,115			147,550,632			149,625,374			153,332,538
Total common stock and operating partnership units outstanding		269,488,679			269,438,815			267,574,011			267,579,408			267,586,424

Notes:

(1) Represents non-GAAP financial measures. For a discussion on what these metrics represent and why the Company presents them, see page 24 and for a reconciliation of these metrics to net income, see pages 19 and 20. (2) Based on leases signed and commenced as of end of period.

(3) Represents occupancy and includes signed leases not commenced.

(4) Market capitalization represents the sum of (i) Company’s common stock per share price as of June 30, 2016 multiplied by the total outstanding number of shares of common stock and operating partnership units as of June 30, 2016; (ii) the number of perpetual preferred units at June 30, 2016 multiplied by $16.62 and (iii) our outstanding indebtedness as of June 30, 2016.

(5) Calculated based on trailing 12 months EBITDA.

(6) Represents the amount of Core FFO paid out in distributions.

(7) Represents the amount of Core FAD paid out in distributions.

(8) Based on the closing price per share of Class A common stock on June 30, 2016.

Page 4

Second Quarter 2016

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended June 30, 2016
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,077,905			8,009,636			1,863,817			204,452
Occupancy (2)		86.6	%		84.5	%		94.6	%		99.4	%
Revenue	$	165,392		$	108,962		$	20,126		$	4,466		$	31,838
Operating expenses		(70,168	)		(53,429	)		(8,304	)		(1,540	)		(6,895	)
Net operating income		95,224			55,533			11,822			2,926			24,943
Straight-line rent		(6,796	)		(6,869	)		(5	)		78			—
Above/below-market lease amortization		(844	)		(844	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	89,542		$	49,778		$	11,817		$	3,004		$	24,943
Leasing activity
Total leases executed		45			39			5			1
Total square footage executed		176,533			156,745			18,604			1,184
Average rent psf - leases executed	$	59.09		$	59.72		$	33.73		$	375.00
Previously escalated rents psf	$	42.39		$	41.25		$	39.40		$	240.63
Percentage of new rent over previously escalated rents		39.4	%		44.8	%		-14.4	%		55.8	%
Weighted average lease term		7.9 years
Leasing commission costs per square foot	$	17.00		$	17.73		$	3.95		$	124.35
Tenant improvement costs per square foot		55.67			60.29			20.29			—
Total LC and TI per square foot (3)	$	72.67		$	78.02		$	24.24		$	124.35

	Office			Retail			Total
Total Portfolio
Total square footage executed		175,349			1,184			176,533
Average rent psf - leases executed	$	56.96		$	375.00		$	59.09
Previously escalated rents psf	$	41.05		$	240.63		$	42.39
Percentage of new rent over previously escalated rents		38.8	%		55.8	%		39.4	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		156,745			—			156,745
Average rent psf - leases executed	$	59.72		$	—		$	59.72
Previously escalated rents psf	$	41.25		$	—		$	41.25
Percentage of new rent over previously escalated rents		44.8	%		—			44.8	%

Page 5

Second Quarter 2016

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended March 31, 2016
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,080,601			8,013,014			1,863,135			204,452
Occupancy (2)		88.2	%		86.5	%		94.5	%		99.4	%
Revenue	$	156,529		$	110,730		$	19,954		$	4,664		$	21,181
Operating expenses		(72,717	)		(55,260	)		(8,048	)		(1,654	)		(7,755	)
Net operating income		83,812			55,470			11,906			3,010			13,426
Straight-line rent		(5,080	)		(5,278	)		202			(4	)		—
Above/below-market lease amortization		(4,231	)		(4,231	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	76,459		$	47,919		$	12,108		$	3,006		$	13,426
Leasing activity
Total leases executed		47			36			11			—
Total square footage executed		255,723			196,693			59,030			—
Average rent psf - leases executed	$	61.63		$	69.73		$	30.00		$	—
Previously escalated rents psf	$	43.12		$	45.18		$	35.06		$	—
Percentage of new rent over previously escalated rents		42.9	%		54.3	%		-14.4	%		—
Weighted average lease term		10.4 years
Leasing commission costs per square foot	$	20.60		$	25.17		$	5.39		$	—
Tenant improvement costs per square foot		58.14			68.73			22.88			—
Total LC and TI per square foot (3)	$	78.74		$	93.90		$	28.27		$	—

	Office			Retail			Total
Total Portfolio
Total square footage executed		242,098			13,625			255,723
Average rent psf - leases executed	$	52.29		$	207.39		$	61.63
Previously escalated rents psf	$	39.66		$	99.48		$	43.12
Percentage of new rent over previously escalated rents		31.9	%		108.5	%		42.9	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		183,068			13,625			196,693
Average rent psf - leases executed	$	59.48		$	207.39		$	69.73
Previously escalated rents psf	$	41.14		$	99.48		$	45.18
Percentage of new rent over previously escalated rents		44.6	%		108.5	%		54.3	%

Page 6

Second Quarter 2016

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended December 31, 2015
	Total Portfolio			Manhattan Office Portfolio (1)			Greater New York Office Portfolio			Standalone Retail Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,063,752			7,998,804			1,860,496			204,452
Occupancy (2)		87.3	%		85.4	%		93.9	%		100.0	%
Revenue	$	164,725		$	112,958		$	19,234		$	4,886		$	27,647
Operating expenses		(73,034	)		(54,263	)		(8,350	)		(1,638	)		(8,783	)
Net operating income		91,691			58,695			10,884			3,248			18,864
Straight-line rent		(5,892	)		(5,934	)		(23	)		65			—
Above/below-market lease amortization		(4,691	)		(4,691	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	83,066		$	50,028		$	10,861		$	3,313		$	18,864
Leasing activity
Total leases executed		39			36			3			—	(4)
Total square footage executed		198,216			174,169			24,047			—
Average rent psf - leases executed	$	50.60		$	53.66		$	25.05		$	—
Previously escalated rents psf	$	37.75		$	39.25		$	26.43		$	—
Percentage of new rent over previously escalated rents		34.0	%		36.7	%		-5.2	%		—
Leasing commission costs per square foot	$	14.82		$	15.98		$	6.41		$	—
Tenant improvement costs per square foot		47.66			50.52			26.94			—
Total LC and TI per square foot (3)	$	62.48		$	66.50		$	33.35		$	—

	Office			Retail		Total
Total Portfolio
Total square footage executed		198,216			—		198,216
Average rent psf - leases executed	$	50.60		$	—	$	50.60
Previously escalated rents psf	$	37.75		$	—	$	37.75
Percentage of new rent over previously escalated rents		34.0	%		—		34.0	%
	Office			Retail		Total
Manhattan Office Portfolio
Total square footage executed		174,169			—		174,169
Average rent psf - leases executed	$	53.66		$	—	$	53.66
Previously escalated rents psf	$	39.25		$	—	$	39.25
Percentage of new rent over previously escalated rents		36.7	%		—		36.7	%

Page 7

Second Quarter 2016

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended September 30, 2015
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,087,018			8,021,017			1,861,549			204,452
Occupancy (2)		87.4	%		85.7	%		93.6	%		100.0	%
Revenue	$	172,661		$	112,633		$	19,426		$	4,900		$	35,702
Operating expenses		(74,892	)		(57,178	)		(8,345	)		(1,473	)		(7,896	)
Net operating income		97,769			55,455			11,081			3,427			27,806
Straight-line rent		(5,441	)		(5,608	)		97			70			—
Above/below-market lease amortization		(4,795	)		(4,795	)		—			—			—
Below-market ground lease amortization		1,957			1,957			—			—			—
Cash net operating income	$	89,490		$	47,009		$	11,178		$	3,497		$	27,806
Leasing activity
Total leases executed		67			55			12			—
Total square footage executed		338,477			286,746			51,731			—
Average rent psf - leases executed	$	53.55		$	57.08		$	33.96		$	—
Previously escalated rents psf	$	39.82		$	40.91		$	33.75		$	—
Percentage of new rent over previously escalated rents		34.5	%		39.5	%		0.6	%		—
Leasing commission costs per square foot	$	14.57		$	16.08		$	6.24		$	—
Tenant improvement costs per square foot		55.16			59.29			32.30			—
Total LC and TI per square foot (3)	$	69.73		$	75.37		$	38.54		$	—

	Office			Retail			Total
Total Portfolio
Total square footage executed		335,904			2,573			338,477
Average rent psf - leases executed	$	51.89		$	269.80		$	53.55
Previously escalated rents psf	$	39.06		$	138.63		$	39.82
Percentage of new rent over previously escalated rents		32.9	%		94.6	%		34.5	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		284,173			2,573			286,746
Average rent psf - leases executed	$	55.15		$	269.80		$	57.08
Previously escalated rents psf	$	40.02		$	138.63		$	40.91
Percentage of new rent over previously escalated rents		37.8	%		94.6	%		39.5	%

Page 8

Second Quarter 2016

Property Summary

(unaudited and dollars in thousands, except per square foot amounts)

	Three Months Ended June 30, 2015
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,042,025			7,975,720			1,862,130			204,175
Occupancy (2)		88.0	%		86.4	%		93.4	%		100.0	%
Revenue	$	163,805		$	109,252		$	19,511		$	4,442		$	30,600
Operating expenses		(70,639	)		(52,720	)		(8,345	)		(1,481	)		(8,093	)
Net operating income		93,166			56,532			11,166			2,961			22,507
Straight-line rent		(5,622	)		(5,643	)		(74	)		95			—
Above/below-market lease amortization		(4,576	)		(4,576	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	84,926		$	48,271		$	11,092		$	3,056		$	22,507
Leasing activity
Total leases executed		79			65			14			—
Total square footage executed		254,360			203,721			50,639			—
Average rent psf - leases executed	$	64.67		$	68.72		$	41.90		$	—
Previously escalated rents psf	$	44.31		$	44.42		$	43.67		$	—
Percentage of new rent over previously escalated rents		46.0	%		54.7	%		-4.0	%		—
Leasing commission costs per square foot	$	12.33		$	14.24		$	4.90		$	—
Tenant improvement costs per square foot		47.15			51.25			31.55			—
Total LC and TI per square foot (3)	$	59.48		$	65.49		$	36.45		$	—

	Office			Retail			Total
Total Portfolio
Total square footage executed		236,324			18,036			254,360
Average rent psf - leases executed	$	52.37		$	207.71		$	64.67
Previously escalated rents psf	$	40.70		$	91.08		$	44.31
Percentage of new rent over previously escalated rents		28.7	%		128.1	%		46.0	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		185,685			18,036			203,721
Average rent psf - leases executed	$	55.22		$	207.71		$	68.72
Previously escalated rents psf	$	39.89		$	91.08		$	44.42
Percentage of new rent over previously escalated rents		38.4	%		128.1	%		54.7	%

Notes:

⁽¹⁾  Includes 504,294 rentable square feet of retail space in the Company’s nine Manhattan office properties.

⁽²⁾  Based on leases signed and commenced as of period end.

⁽³⁾  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.

⁽⁴⁾  Excludes a standalone retail tenant that exercised a below-market renewal option contained within its lease for 48,377 square feet.

Page 9

Second Quarter 2016

Property Detail

(unaudited) Annualized

									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		2,707,071		89.3	%	$	126,439,210	$	52.31		184
One Grand Central Place	Grand Central		1,197,730		83.7	%		52,993,090		52.86		235
1400 Broadway (8)	Penn Station -Times Sq. South		903,748		90.0	%		36,150,616		44.46		45
111 West 33rd Street (9)	Penn Station -Times Sq. South		632,855		51.4	%		16,062,511		49.34		21
250 West 57th Street	Columbus Circle - West Side		483,313		75.0	%		19,149,046		52.82		114
501 Seventh Avenue	Penn Station -Times Sq. South		458,731		96.8	%		18,670,154		42.07		36
1359 Broadway	Penn Station -Times Sq. South		455,337		89.4	%		19,125,494		46.98		32
1350 Broadway (10)	Penn Station -Times Sq. South		374,033		84.2	%		16,211,352		51.50		60
1333 Broadway	Penn Station -Times Sq. South		292,524		98.8	%		13,531,443		46.82		9
Manhattan Office Properties - Office			7,505,342		84.9	%		318,332,915		49.93		736
Manhattan Office Properties - Retail
The Empire State Building (7)	Penn Station -Times Sq. South		118,678		74.5	%		13,848,982		156.70		16
One Grand Central Place	Grand Central		67,463		99.1	%		7,340,873		109.76		15
1400 Broadway (8)	Penn Station -Times Sq. South		22,440		66.6	%		1,635,839		109.41		9
112 West 34th Street (9)	Penn Station -Times Sq. South		87,170		41.0	%		7,649,896		213.81		2
250 West 57th Street	Columbus Circle - West Side		48,962		90.9	%		6,518,777		146.39		7
501 Seventh Avenue	Penn Station -Times Sq. South		35,331		85.1	%		1,748,969		58.17		8
1359 Broadway	Penn Station -Times Sq. South		27,243		49.2	%		1,549,212		115.48		5
1350 Broadway (10)	Penn Station -Times Sq. South		31,774		100.0	%		6,689,040		210.52		6
1333 Broadway	Penn Station -Times Sq. South		65,233		97.2	%		7,513,797		118.52		3
Manhattan Office Properties - Retail			504,294		77.2	%		54,495,386		140.03		71
Sub-Total/Weighted Average
Manhattan Office Properties - Office and Retail			8,009,636		84.5	%		372,828,301		55.12		807
Greater New York Metropolitan Area Office Properties
First Stamford Place (11)	Stamford, CT		795,129		96.1	%		32,353,862		42.36		57
Metro Center	Stamford, CT		282,091		96.8	%		15,525,467		56.84		30
383 Main Avenue	Norwalk, CT		262,288		94.7	%		8,119,388		32.69		24
500 Mamaroneck Avenue	Harrison, NY		294,412		92.6	%		7,779,525		28.55		33
10 Bank Street	White Plains, NY		229,897		89.2	%		7,397,187		36.09		31
Sub-Total/Weighted Average Greater New York
Metropolitan Area Office Properties			1,863,817		94.6	%		71,175,430		40.38		175
Standalone Retail Properties
10 Union Square	Union Square		58,005		98.0	%		6,179,715		108.76		12
1542 Third Avenue	Upper East Side		56,250		100.0	%		3,416,397		60.74		4
1010 Third Avenue	Upper East Side		44,662		100.0	%		3,467,822		77.65		2
77 West 55th Street	Midtown		24,102		100.0	%		2,572,579		106.74		3
69-97 Main Street	Westport, CT		17,103		100.0	%		2,174,642		127.15		5
103-107 Main Street	Westport, CT		4,330		100.0	%		697,353		161.05		1
Sub-Total/Weighted Average Standalone
Retail Properties			204,452		99.4	%		18,508,507		91.05		27
Portfolio Total			10,077,905		86.6	%	$	462,512,238	$	52.98		1,009
Total/Weighted Average Office Properties			9,369,159		86.9	%	$	389,508,345	$	47.86		911
Total/Weighted Average Retail Properties			708,746		83.6	%		73,003,893		123.23		98
Portfolio Total			10,077,905		86.6	%	$	462,512,238	$	52.98		1,009

Notes:

(1) Excludes (i) 183,186 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

(2) Based on leases signed and commenced as of June 30, 2016.

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

(4) Represents annualized rent under leases commenced as of June 30, 2016 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 86,902 rentable square feet of space leased by the Company’s broadcasting tenants.

(7) Includes 5,300 rentable square feet of space leased by WDGF 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 48 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 62 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 35 years (expiring July 31, 2050).

(11) First Stamford Place consists of three buildings.

Page 10

Second Quarter 2016

Tenant Lease Expirations

(unaudited)

					Percent of
			Rentable		Portfolio								Annualized
	Number		Square		Rentable					Percent of			Rent Per
	of Leases		Feet		Square Feet			Annualized		Annualized			Rentable
Total Lease Expirations	Expiring (1)		Expiring (2)		Expiring			Rent (3)		Rent			Square Foot
Available		—		1,070,396		10.6	%	$	—		0.0	%	$	—
Signed leases not commenced		21		276,885		2.7	%		—		0.0	%		—
2016		106		306,318		3.0	%		15,974,218		3.5	%		52.15
2017		164		682,578		6.8	%		34,560,228		7.5	%		50.63
2018		168		828,210		8.2	%		41,677,661		9.0	%		50.32
2019		117		706,362		7.0	%		34,027,640		7.4	%		48.17
2020		137		995,701		9.9	%		51,251,788		11.1	%		51.47
2021		83		664,062		6.6	%		35,202,432		7.6	%		53.01
2022		51		503,898		5.0	%		28,209,938		6.1	%		55.98
2023		46		556,851		5.5	%		29,966,804		6.5	%		53.81
2024		35		533,542		5.3	%		28,833,379		6.2	%		54.04
2025		37		279,975		2.8	%		22,139,274		4.8	%		79.08
Thereafter		65		2,673,127		26.5	%		140,668,876		30.4	%		52.62
Total		1,030		10,077,905		100.0	%	$	462,512,238		100.0	%	$	52.98

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) 183,186 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,789 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.

Page 11

Second Quarter 2016

Tenant Lease Expirations

(unaudited)

					Percent of
			Rentable		Portfolio								Annualized
	Number		Square		Rentable					Percent of			Rent Per
	of Leases		Feet		Square Feet			Annualized		Annualized			Rentable
Manhattan Office Properties (1)	Expiring (2)		Expiring (3)		Expiring			Rent (4)		Rent			Square Foot
Available		—		872,182		11.6	%	$	—		0.0	%	$	—
Signed leases not commenced		17		257,803		3.4	%		—		0.0	%		—
2016		85		257,890		3.4	%		12,587,942		4.0	%		48.81
2017		139		499,812		6.7	%		24,730,520		7.8	%		49.48
2018		129		569,678		7.6	%		30,163,453		9.5	%		52.95
2019		88		430,751		5.7	%		21,012,320		6.6	%		48.78
2020		98		686,041		9.1	%		34,706,834		10.9	%		50.59
2021		49		413,033		5.5	%		20,873,160		6.6	%		50.54
2022		32		236,265		3.1	%		13,100,863		4.1	%		55.45
2023		34		389,972		5.2	%		19,199,952		6.0	%		49.23
2024		19		352,809		4.7	%		16,649,315		5.2	%		47.19
2025		20		161,677		2.2	%		8,817,750		2.8	%		54.54
Thereafter		43		2,377,429		31.8	%		116,490,806		36.6	%		49.00
Total Manhattan office properties		753		7,505,342		100.0	%		318,332,915		100.0	%		49.93
Greater New York Metropolitan Area Office Properties
Available		—		98,872		5.3	%		—		0.0	%		—
Signed leases not commenced		1		2,114		0.1	%		—		0.0	%		—
2016		11		38,763		2.1	%		1,559,067		2.2	%		40.22
2017		19		136,317		7.3	%		5,617,797		7.9	%		41.21
2018		32		237,427		12.7	%		9,024,587		12.7	%		38.01
2019		22		248,849		13.4	%		9,876,333		13.9	%		39.69
2020		28		249,303		13.4	%		10,436,194		14.7	%		41.86
2021		28		221,527		11.9	%		9,611,205		13.5	%		43.39
2022		10		203,241		10.9	%		7,727,500		10.9	%		38.02
2023		6		118,242		6.3	%		5,319,857		7.5	%		44.99
2024		3		149,541		8.0	%		6,676,762		9.4	%		44.65
2025		10		83,805		4.5	%		2,968,143		4.2	%		35.42
Thereafter		6		75,816		4.1	%		2,357,985		3.3	%		31.10
Total greater New York metropolitan area office properties		176		1,863,817		100.0	%		71,175,430		100.0	%		40.38
Retail Properties
Available		—		99,342		14.0	%		—		0.0	%		—
Signed leases not commenced		3		16,968		2.4	%		—		0.0	%		—
2016		10		9,665		1.4	%		1,827,209		2.5	%		189.05
2017		6		46,449		6.6	%		4,211,911		5.8	%		90.68
2018		7		21,105		3.0	%		2,489,621		3.4	%		117.96
2019		7		26,762		3.8	%		3,138,987		4.3	%		117.29
2020		11		60,357		8.5	%		6,108,760		8.4	%		101.21
2021		6		29,502		4.2	%		4,718,067		6.5	%		159.92
2022		9		64,392		9.1	%		7,381,575		10.1	%		114.63
2023		6		48,637		6.9	%		5,446,995		7.5	%		111.99
2024		13		31,192		4.4	%		5,507,302		7.5	%		176.56
2025		7		34,493		4.9	%		10,353,381		14.2	%		300.16
Thereafter		16		219,882		30.8	%		21,820,085		29.9	%		99.24
Total retail properties		101		708,746		100.0	%		73,003,893		100.0	%		123.23
Total portfolio lease expirations		1,030		10,077,905		100.0	%	$	462,512,238		100.0	%	$	52.98

Notes:

(1) Excludes (i) retail space in the Company’s Manhattan office properties and (ii) the Empire State Building 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 (i) 183,186 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

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

Page 12

Second Quarter 2016

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		—		233,034		8.6	%	$	—		0.0	%	$	—
Signed leases not commenced		4		57,135		2.1	%		—		0.0	%		—
2016		13		52,095		1.9	%		2,473,090		2.0	%		47.47
2017		25		89,907		3.3	%		5,134,311		4.1	%		57.11
2018		23		84,079		3.1	%		4,680,081		3.7	%		55.66
2019		16		65,146		2.4	%		3,285,394		2.6	%		50.43
2020		39		308,754		11.4	%		16,682,654		13.2	%		54.03
2021		17		109,383		4.0	%		6,015,087		4.8	%		54.99
2022		13		62,204		2.3	%		3,991,585		3.2	%		64.17
2023		10		61,306		2.3	%		3,346,150		2.6	%		54.58
2024		8		152,594		5.6	%		7,766,770		6.1	%		50.90
2025		6		57,285		2.1	%		3,029,924		2.4	%		52.89
Thereafter		14		1,374,149		50.9	%		70,034,163		55.4	%		50.97
Total Empire State Building office		188		2,707,071		100.0	%	$	126,439,210		100.0	%	$	52.31
Empire State Building Broadcasting Licenses and Leases					Annualized Base Rent (6)			Annualized Expense Reimbursements		Annualized Rent (4)			Percent of Annualized Rent
2016					$	18,450		$	14,725	$	33,175			0.1	%
2017						5,326,724			3,236,403		8,563,127			29.4	%
2018						6,168,780			2,953,603		9,122,383			31.3	%
2019						212,240			47,203		259,443			0.9	%
2020						2,004,144			364,214		2,368,358			8.1	%
2021						2,186,388			283,378		2,469,766			8.5	%
2022						2,100,918			276,952		2,377,870			8.2	%
2023						640,667			94,270		734,937			2.5	%
2024						43,260			35,949		79,209			0.3	%
2025						1,599,000			251,822		1,850,822			6.3	%
Thereafter						1,113,800			183,066		1,296,866			4.4	%
Total Empire State Building broadcasting licenses and leases					$	21,414,371		$	7,741,585	$	29,155,956			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 25,937 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 $4.6 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 license fees for the use of the Empire State Building mast and base rent for physical space occupied by broadcasting tenants.

Page 13

Second Quarter 2016

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, 111 West 33rd	Oct. 2023-Oct. 2028	11.3 years		676,160		6.7	%	$	31,400,055		6.8	%
2. Coty	ESB	Jan. 2030	13.6 years		312,217		3.1	%		16,034,713		3.5	%
3. LinkedIn	ESB	Feb. 2026	9.7 years		278,023		2.8	%		14,532,800		3.1	%
4. PVH Corp.	501 West 57th Street	Oct. 2028	12.3 years		211,311		2.1	%		8,806,636		1.9	%
5. Thomson Reuters	Metro Center, First Stamford Place	Apr. 2018-Apr. 2020	3.1 years		147,208		1.5	%		7,779,829		1.7	%
6. Li & Fung	1359 Broadway	Oct. 2021-Oct. 2027	7.8 years		149,436		1.5	%		7,066,271		1.5	%
7. Federal Deposit Insurance Corporation	ESB	Feb. 2020	3.6 years		121,879		1.2	%		6,578,777		1.4	%
8. Urban Outfitters	1333 Broadway	Sept. 2029	13.3 years		56,730		0.6	%		6,392,536		1.4	%
9. Footlocker	112 West 34th Street	Apr. 2031	15.3 years		34,192		0.3	%		6,214,260		1.3	%
10. Duane Reade	ESB, 1350 B’Way, 250 West 57th	Feb. 2021-Sept. 2027	8.3 years		47,541		0.5	%		6,148,566		1.3	%
11. Legg Mason	First Stamford Place	Sept. 2024	8.3 years		138,868		1.4	%		6,129,367		1.3	%
12. On Deck Capital	1400 Broadway	Oct. 2016-Dec. 2026	9.3 years		107,800		1.0	%		5,667,483		1.2	%
13. WDGF North America	ESB	Dec 2025	9.5 years		5,300		0.1	%		5,351,820		1.2	%
14. Kohl’s	1400 Broadway	May 2029	12.9 years		113,032		1.1	%		4,729,284		1.1	%
15. HNTB Corporation	ESB	Feb. 2026	9.7 years		78,361		0.8	%		4,466,577		1.0	%
16. Aeropostale	111 West 33rd Street	Nov. 2016-Nov. 2020	2.6 years		88,760		0.9	%		4,275,609		0.9	%
17. Shutterstock	ESB	Sept. 2024	8.3 years		89,433		0.9	%		4,126,249		0.9	%
18. The Interpublic Group of Companies	1400 Broadway	Jul. 2024	8.1 years		87,076		0.8	%		3,890,348		0.8	%
19. Odyssey Reinsurance	First Stamford Place	Sept. 2022	6.3 years		101,619		0.9	%		3,857,081		0.8	%
20. RELX	383 Main Avenue	Nov. 2019-Oct. 2022	3.6 years		102,376		1.0	%		3,502,021		0.8	%
Total					2,947,322		29.2	%	$	156,950,282		33.9	%

Notes:

(1) Expiration dates are per lease and do not assume exercise of renewal or extension options. None of these leases contain early termination 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 June 30, 2016.

(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)⁽¹⁾

Note:

(1) Tenant diversification by industry conforms to standard industrial classification codes (SIC Codes).

Page 14

Second Quarter 2016

Capital Expenditures and Redevelopment Program

(unaudited)

	Three Months Ended
	June 30, 2016		March 31, 2016		December 31, 2015		September 30, 2015		June 30, 2015
Capital expenditures
Tenant improvements - first generation	$	28,593	$	8,876	$	21,351	$	29,552	$	13,536
Tenant improvements - second generation		1,113		1,443		2,507		1,792		2,015
Leasing commissions - first generation		3,374		5,696		3,515		4,115		4,613
Leasing commissions - second generation		313		185		462		60		513
Building improvements - first generation		24,073		11,728		16,547		12,554		13,833
Building improvements - second generation		53		604		1,546		650		928
Total	$	57,519	$	28,532	$	45,928	$	48,723	$	35,438

Tenant space redevelopment by square feet ^{(1) (2)}

• Future redevelopment (Empire State Building) - 360,000 square feet

• Future redevelopment (other Manhattan properties) - 1,040,000 square feet

• Redevelopment completed - 6,580,000 square feet

Inventory of vacant space ⁽²⁾

• Developed - 790,000 square feet, 82%

• Undeveloped - 170,000 square feet, 18%

Inventory of undeveloped space ⁽²⁾

• Vacant - 170,000 square feet, 12%

• Expires in 2016 - 140,000 square feet, 10%

• Expires in 2017 and thereafter -1,090,000 square feet, 78%

Notes:

⁽¹⁾  These estimates are based on the Company’s current budgets (which do not include base building work in tenant spaces, tenant improvements and leasing commission costs) and are subject to change.

⁽²⁾  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

Second Quarter 2016

Observatory Summary

(unaudited and in thousands)

			Three Months Ended
Observatory NOI	Twelve Months to Date		June 30, 2016		March 31, 2016			December 31, 2015		September 30, 2015		June 30, 2015
Observatory revenue	$	116,368	$	31,838	$	21,181		$	27,647	$	35,702	$	30,600
Observatory expenses (1)		31,329		6,895		7,755			8,783		7,896		8,093
NOI		85,039		24,943		13,426			18,864		27,806		22,507
Intercompany rent expense (2)		69,887		18,488		13,718			16,853		20,828		18,910
NOI after intercompany rent	$	15,152	$	6,455	$	(292	)	$	2,011	$	6,978	$	3,597

Note:

⁽¹⁾  For 2015 periods presented, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, public relations costs were $314, $1,012, $621, $612 and $673, respectively.

⁽²⁾  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.

Annual Observatory Revenues 2011 to 2015

Page 16

Second Quarter 2016

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Assets
Commercial real estate properties, at cost:
Land	$	201,196		$	201,196		$	201,196		$	201,196		$	201,196
Development costs		7,946			7,931			7,498			7,479			7,388
Building and improvements		2,147,050			2,089,792			2,067,636			2,036,187			1,996,318
		2,356,192			2,298,919			2,276,330			2,244,862			2,204,902
Less: accumulated depreciation		(509,736	)		(490,427	)		(465,584	)		(445,549	)		(423,279	)
Commercial real estate properties, net		1,846,456			1,808,492			1,810,746			1,799,313			1,781,623
Cash and cash equivalents		35,454			44,440			46,685			46,388			34,221
Restricted cash		59,141			60,165			65,880			64,899			69,709
Tenant and other receivables, net		14,521			14,828			18,782			32,406			16,431
Deferred rent receivables, net		133,955			127,148			122,048			116,208			111,897
Prepaid expenses and other assets		47,895			29,908			50,460			33,759			47,857
Deferred costs, net		292,777			304,977			310,679			324,388			340,351
Acquired below-market ground leases, net		379,976			381,934			383,891			385,849			387,807
Goodwill		491,479			491,479			491,479			491,479			491,479
Total assets	$	3,301,654		$	3,263,371		$	3,300,650		$	3,294,689		$	3,281,375
Liabilities and Equity
Mortgage notes payable, net	$	767,717		$	772,015		$	747,661		$	751,904		$	756,081
Senior unsecured notes, net		588,703			587,861			587,018			586,167			585,325
Unsecured term loan facility, net		262,735			262,640			262,545			262,457			—
Unsecured revolving credit facility, net		40,000			—			35,192			14,802			279,412
Accounts payable and accrued expenses		143,296			119,104			111,099			106,699			101,674
Acquired below-market leases, net		91,850			96,245			104,171			112,312			121,286
Deferred revenue and other liabilities		23,019			26,802			31,388			38,066			18,713
Tenants’ security deposits		47,565			49,729			48,890			49,672			46,338
Total liabilities		1,964,885			1,914,396			1,927,964			1,922,079			1,908,829
Total equity		1,336,769			1,348,975			1,372,686			1,372,610			1,372,546
Total liabilities and equity	$	3,301,654		$	3,263,371		$	3,300,650		$	3,294,689		$	3,281,375

Page 17

Second Quarter 2016

Condensed Consolidated Statements of Income

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Revenues
Rental revenue	$	112,613		$	114,908		$	113,957		$	110,903		$	112,866
Tenant expense reimbursement		19,054			18,120			19,638			23,096			18,582
Observatory revenue		31,838			21,181			27,647			35,702			30,600
Construction revenue		—			—			—			—			374
Third party management and other fees		423			545			475			618			594
Other revenue and fees		1,887			2,320			3,483			5,460			1,757
Total revenues		165,815			157,074			165,200			175,779			164,773
Operating expenses
Property operating expenses (1)		37,386			39,104			38,297			41,052			37,262
Ground rent expenses		2,330			2,333			2,332			2,331			2,332
General and administrative expenses		12,907			10,918			9,678			10,182			9,113
Observatory expenses (1)		6,895			7,755			8,783			7,896			8,093
Construction expenses		—			—			—			—			353
Real estate taxes		23,557			23,525			23,622			23,613			22,952
Acquisition expenses		—			98			—			193			—
Depreciation and amortization		38,548			39,227			45,258			45,169			39,629
Total operating expenses		121,623			122,960			127,970			130,436			119,734
Total operating income		44,192			34,114			37,230			45,343			45,039
Other income (expense)
Interest expense		(17,420	)		(17,951	)		(17,194	)		(16,680	)		(17,571	)
Income before income taxes		26,772			16,163			20,036			28,663			27,468
Income tax (expense) benefit		(2,132	)		542			(666	)		(2,578	)		(883	)
Net income		24,640			16,705			19,370			26,085			26,585
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Net income attributable to non-controlling interests		(13,317	)		(9,043	)		(10,884	)		(14,631	)		(15,231	)
Net income attributable to common stockholders	$	11,089		$	7,428		$	8,252		$	11,220		$	11,120
Weighted average common shares outstanding
Basic		122,502			120,778			118,706			115,900			112,852
Diluted		266,167			266,641			266,048			265,873			265,867
Net income per share attributable to common stockholders
Basic and Diluted	$	0.09		$	0.06		$	0.07		$	0.10		$	0.10
Dividends per share	$	0.105		$	0.085		$	0.085		$	0.085		$	0.085

⁽¹⁾  For 2015 periods presented, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended June 30, 2016, March 31, 2016, December 31, 2015, September 30, 2015 and June 30, 2015, public relations costs were $314, $1,012, $621, $612 and $673, respectively.

Page 18

Second Quarter 2016

Funds from Operations (“FFO”), Modified Funds From Operations (“Modified FFO”), Core Funds from

Operations (“Core FFO”), Core Funds Available for Distribution (“Core FAD”) and EBITDA

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	June 30, 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Reconciliation of Net Income to FFO, Modified FFO and Core FFO
Net Income	$	24,640		$	16,705		$	19,370		$	26,085		$	26,585
Preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Real estate depreciation and amortization		38,386			39,075			45,085			45,072			39,542
FFO attributable to common stockholders and non-controlled interests		62,792			55,546			64,221			70,923			65,893
Amortization of below-market ground lease		1,958			1,958			1,958			1,957			1,958
Modified FFO attributable to common stockholders and non-controlled interests		64,750			57,504			66,179			72,880			67,851
Deferred financing costs write-off and prepayment penalty		—			552			—			—			404
Acquisition break-up fee		—			—			—			(2,500	)		—
Acquisition expenses		—			98			—			193			—
Core FFO attributable to common stockholders and non-controlled interests	$	64,750		$	58,154		$	66,179		$	70,573		$	68,255
Total weighted average shares and Operating Partnership Units
Basic and Diluted		266,167			266,134			266,048			265,873			265,867
FFO attributable to common stockholders and non-controlled interests per share
Basic and Diluted	$	0.24		$	0.21		$	0.24		$	0.27		$	0.25
Modified FFO attributable to common stockholders and non-controlled interests per share
Basic and Diluted	$	0.24		$	0.22		$	0.25		$	0.27		$	0.26
Core FFO attributable to common stockholders and non-controlled interests per share
Basic and Diluted	$	0.24		$	0.22		$	0.25		$	0.27		$	0.26
Reconciliation of Core FFO to Core FAD
Core FFO	$	64,750		$	58,154		$	66,179		$	70,573		$	68,255
Add:
Amortization of deferred financing costs		1,142			1,142			1,141			1,086			1,054
Non-real estate depreciation and amortization		162			152			173			97			87
Amortization of non-cash compensation expense		2,553			2,097			1,225			1,334			1,230
Amortization of debt discount		668			668			668			668			668
Deduct:
Straight-line rental revenues		(6,796	)		(5,080	)		(5,892	)		(5,441	)		(5,622	)
Amortization of debt premiums		(1,737	)		(1,737	)		(1,736	)		(1,737	)		(1,737	)
Above/below-market rent revenue		(844	)		(4,231	)		(4,691	)		(4,795	)		(4,576	)
Corporate and Observatory capital expenditures		(8,621	)		(792	)		—			(86	)		—
Tenant improvements - second generation		(1,113	)		(1,443	)		(2,507	)		(1,792	)		(2,015	)
Building improvements - second generation		(53	)		(604	)		(1,546	)		(650	)		(928	)
Leasing commissions - second generation		(313	)		(185	)		(462	)		(60	)		(513	)
Core FAD	$	49,798		$	48,141		$	52,552		$	59,197		$	55,903
Core FAD attributable to common stockholders and non-controlled interests per share
Basic and Diluted	$	0.19		$	0.18		$	0.20		$	0.22		$	0.21
Reconciliation of Net Income to EBITDA
Net income	$	24,640		$	16,705		$	19,370		$	26,085		$	26,585
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Interest expense		17,420			17,951			17,194			16,680			17,571
Income tax expense (benefit)		2,132			(542	)		666			2,578			883
Depreciation and amortization		38,548			39,227			45,258			45,169			39,629
Acquisition expenses		—			98			—			193			—
EBITDA	$	82,506		$	73,205		$	82,254		$	90,471		$	84,434

Page 19

Second Quarter 2016

Net Operating Income (“NOI”)

(unaudited and dollars in thousands)

	Three Months Ended
	June 30 2016			March 31, 2016			December 31, 2015			September 30, 2015			June 30, 2015
Reconciliation of Net Income to NOI and Cash NOI
Net income	$	24,640		$	16,705		$	19,370		$	26,085		$	26,585
Add:
General and administrative expenses		12,907			10,918			9,678			10,182			9,113
Depreciation and amortization		38,548			39,227			45,258			45,169			39,629
Interest expense		17,420			17,951			17,194			16,680			17,571
Construction expenses		—			—			—			—			353
Acquisition expenses		—			98			—			193			—
Income tax expense (benefit)		2,132			(542	)		666			2,578			883
Less:
Construction revenue		—			—			—			—			(374	)
Third-party management and other fees		(423	)		(545	)		(475	)		(618	)		(594	)
Acquisition break-up fee		—			—			—			(2,500	)		—
Net operating income		95,224			83,812			91,691			97,769			93,166
Straight-line rent		(6,796	)		(5,080	)		(5,892	)		(5,441	)		(5,622	)
Above/below-market lease amortization		(844	)		(4,231	)		(4,691	)		(4,795	)		(4,576	)
Below-market ground lease amortization		1,958			1,958			1,958			1,957			1,958
Cash net operating income		89,542			76,459			83,066			89,490			84,926
Less: Observatory net operating income		(24,943	)		(13,426	)		(18,864	)		(27,806	)		(22,507	)
Total portfolio (excluding observatory) cash net operating income	$	64,599		$	63,033		$	64,202		$	61,684		$	62,419

Page 20

Second Quarter 2016

Debt Summary

(unaudited and dollars in thousands)

	June 30, 2016								March 31, 2016
				Weighted Average								Weighted Average
				Interest			Maturity					Interest			Maturity
Debt Summary	Balance			Rate			(Years)		Balance			Rate			(Years)
Fixed rate mortgage debt	$	758,929			5.40	%		2.7	$	761,893			5.40	%		3.0
Senior unsecured notes		600,000			3.47	%		7.9		600,000			3.47	%		8.1
Total fixed rate debt		1,358,929			4.55	%		5.0		1,361,893			4.55	%		5.3
Unsecured revolving credit facility		40,000			1.62	%		2.6		—			—
Unsecured term loan facility (1)		265,000			2.07	%		6.2		265,000			2.03	%		6.4
Total variable rate debt		305,000			2.01	%		5.7		265,000			2.03	%		6.4
Total debt		1,663,929			4.08	%		5.1		1,626,893			4.14	%		5.4
Premium/discount		3,044								4,112
Deferred financing costs, net		(7,818	)							(8,489	)
Total	$	1,659,155							$	1,622,516

Notes:

⁽¹⁾  Beginning August 2017, LIBOR is fixed at 2.1485% under a variable to fixed interest rate swap agreement.

			Outstanding at
			June 30,		Letters		Available
Available Capacity	Facility		2016		of Credit		Capacity
Unsecured revolving credit facility (1)	$	1,100,000	$	40,000	$	—	$	1,060,000

				Current			In
Covenant Summary	Required			Quarter			Compliance
Maximum Total Leverage(2)		< 60	%		30.2	%	Yes
Maximum Secured Debt		< 40	%		13.7	%	Yes
Minimum Fixed Charge Coverage		> 1.50	x		3.4	x	Yes
Minimum Unencumbered Interest Coverage		> 1.75	x		7.7	x	Yes
Maximum Unsecured Leverage		< 60	%		23.5	%	Yes
Maximum Secured Recourse Indebtedness		< 10	%		0	%	Yes
Minimum Tangible Net Worth	$	745,356		$	964,822		Yes

Notes:

⁽¹⁾  The unsecured revolving credit facility has an accordion feature allowing for an increase in maximum aggregate principal balance to $1.25 billion under certain circumstances. This facility matures in January 2019 with two additional six-month extension options. On July 6, 2016, the unsecured revolving credit facility increased from $800 million to $1.1 billion.

⁽²⁾  Represents the ratio of total indebtedness to total asset value as defined and determined in accordance with the credit facility agreement.

Page 21

Second Quarter 2016

Debt Detail

(unaudited and dollars in thousands)

	Stated			Current
	Interest			Interest			Principal			Maturity
	Rate (%)			Rate (%)			Balance			Date		Amortization
Fixed rate mortgage debt:
10 Bank Street		5.72	%		5.72	%	$	31,883			6/1/2017	30 years
1542 Third Avenue		5.90	%		5.90	%		18,012			6/1/2017	30 years
First Stamford Place		5.65	%		5.65	%		236,942			7/5/2017	30 years
383 Main Avenue		5.59	%		5.59	%		28,966			7/5/2017	30 years
1010 Third Avenue and 77 West 55th Street		5.69	%		5.69	%		26,787			7/5/2017	30 years
1333 Broadway		6.32	%		6.32	%		68,159			1/5/2018	30 years
1400 Broadway (first lien mortgage loan)		6.12	%		6.12	%		68,231			2/5/2018	30 years
1400 Broadway (second lien mortgage loan)		3.35	%		3.35	%		9,495			2/5/2018	30 years
111 West 34th Street (first lien mortgage loan)		6.01	%		6.01	%		75,842			4/5/2018	30 years
111 West 34th Street (second lien mortgage loan)		6.56	%		6.56	%		9,576			4/5/2018	30 years
1350 Broadway		5.87	%		5.87	%		38,060			4/5/2018	30 years
Metro Center		3.59	%		3.59	%		96,976			11/5/2024	30 years
10 Union Square		3.70	%		3.70	%		50,000			4/1/2026	Interest only
Total mortgage debt								758,929
Unsecured revolving credit facility		LIBOR plus 1.15	%		1.62	%		40,000			1/23/2019	Interest only
Exchangeable senior unsecured notes		2.63	%		2.63	%		250,000			8/15/2019	Interest only
Unsecured term loan facility		LIBOR plus 1.60	%		2.07	%		265,000			8/24/2022	Interest only
Senior unsecured notes (Series A)		3.93	%		3.93	%		100,000			3/27/2025	Interest only
Senior unsecured notes (Series B)		4.09	%		4.09	%		125,000			3/27/2027	Interest only
Senior unsecured notes (Series C)		4.18	%		4.18	%		125,000			3/27/2030	Interest only
Total / weighted average debt					4.08	%		1,663,929
Premium/discounts								3,044
Deferred financing costs, net								(7,818	)
Total							$	1,659,155

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Second Quarter 2016

Debt Maturities and Ground Lease Commitments

(unaudited and dollars in thousands)

Year	Amortization		Maturities (1)		Total			Percentage of Total Debt			Weighted Average Interest Rate of Maturing Debt
2016	$	6,089	$	—	$	6,089			0.4	%		n/a
2017		9,904		336,009		345,913			20.8	%		5.67	%
2018		2,880		262,210		265,090			15.9	%		6.02	%
2019		2,188		290,000		292,188			17.6	%		2.49	%
2020		2,268		—		2,268			0.1	%		n/a
Thereafter		9,706		742,675		752,381			45.2	%		3.29	%
Total debt	$	33,035	$	1,630,894		1,663,929			100.0	%		4.08	%
Premium/discount						3,044
Deferred financing costs, net						(7,818	)
Total					$	1,659,155

Note:

(1) Assumes no extension options are exercised.

Debt Maturity Profile

Ground Lease Commitments

Year	1350 Broadway		1400 Broadway		111 West 33rd Street		Total
2016	$	54	$	338	$	368	$	760
2017		108		675		735		1,518
2018		108		675		735		1,518
2019		108		675		735		1,518
2020		108		675		735		1,518
Thereafter		2,439		12,825		41,466		56,730
	$	2,925	$	15,863	$	44,774	$	63,562

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Second Quarter 2016

Supplemental Definitions

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 its 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 July 2014 acquisition of two properties 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: private perpetual preferred exchange offering expenses, acquisition expenses, gain on settlement of lawsuit related to the Observatory, net of income taxes, deferred financing cost write-off, prepayment penalties, construction severance expenses and acquisition break-up fee. 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.

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 expenses and (ii) deducting straight line rent, recurring second generation leasing commissions, tenant improvements, prebuilts, capital expenditures, furniture, fixtures & equipment, amortization of debt premiums and above/below market rent revenue. Core FAD is presented solely as a supplemental disclosure that we believe 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 and break-up fee, 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 net operating income because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is also 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 GAAP. Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not-be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.

EBITDA

We compute EBITDA as net income plus perpetual preferred unit distributions, interest expense, income taxes, depreciation and amortization and acquisition expenses. 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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