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): February 22, 2017

EMPIRE STATE REALTY TRUST, INC.

(Exact Name of Registrant as Specified in its Charter)

Maryland	001-36105	37-1645259
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

EMPIRE STATE REALTY OP, L.P.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-36106	45-4685158
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)
111 West 33rd Street, 12th Floor New York, New York		10120
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (212) 687-8700

n/a

(Former name or former address, if changed from last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On February 22, 2017, Empire State Realty Trust, Inc. (the “Company” or “we”) issued a press release announcing its financial results for the fourth quarter 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 fourth quarter 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 fourth quarter 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 performance is limited. There can be no assurance that FFO presented by us is comparable to similarly titled measures of other REITs. FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions. Although FFO is a measure used for comparability in assessing the performance of REITs, as the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one company to another.

Modified Funds From Operations (“Modified FFO”)

Modified FFO adds back an adjustment for any above or below-market ground lease amortization to traditionally defined FFO. We consider this a useful supplemental measure in evaluating our operating performance due to the non-cash accounting treatment under GAAP, which stems from the third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we consider it an important supplemental measure of our operating performance in that it adds back the non-cash amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

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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 NOI because it is specific to the particular financing capabilities and constraints of the owner. The cost of funds is eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital which may have changed or may change in the future. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are

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eliminated because they may not accurately represent the actual change in value in our office or retail properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale which will usually change from period to period. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly-timed purchases or sales. We believe that eliminating these costs from net income is useful because the resulting measure captures the actual revenue, generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs. However, the usefulness of NOI is limited because it excludes general and administrative costs, interest expense, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as stipulated by GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income which further limits its usefulness. NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income computed in accordance with. Other companies may use different methods for calculating NOI or similarly titled measures and, accordingly, our NOI may not be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

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: February 22, 2017	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: February 22, 2017	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 FOURTH QUARTER 2016 RESULTS

- Earnings of $0.11 Per Fully Diluted Share -

- Core FFO of $0.25 Per Fully Diluted Share -

- Leased 210,780 Square Feet of Office and Retail Space -

- Observatory Revenues Grew 11.2% Year-Over-Year to Record Level -

New York, New York, February 22, 2017 - 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 fourth quarter of 2016.

“We are pleased with our strong fourth quarter and full year 2016 results. We continue to consolidate, redevelop and re-lease space to larger, higher credit quality tenants at materially higher rents and create value. During 2016, we leased 992,000 square feet of office and retail space which resulted in market-leading spreads on both new Manhattan office and total portfolio leases of 50.6% and 32.7%, respectively. Current and prospective tenants continued to be attracted to our modernized spaces within well-located, amenity-rich office buildings,” stated John B. Kessler, Empire State Realty Trust’s President and Chief Operating Officer.

“Observatory revenues grew 11.2% year-over-year to record level driven by increased tourist visits, improved revenue mix and favorable weekend weather conditions. We also grew and added to the flexibility of our low-levered balance sheet during the year with a $622 million investment by an affiliate of the Qatar Investment Authority and the expansion of our line of credit to $1.1 billion. As we look forward in 2017, we remain committed to unlock the embedded growth within our portfolio and the added liquidity, strength, and flexibility in our balance sheet positions us to fund future growth opportunities and create long-term value for our shareholders,” added Kessler.

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Fourth Quarter Highlights

• Achieved net income attributable to the Company of $0.11 per fully diluted share and Core Funds From Operations (“Core FFO”) of $0.25 per fully diluted share, which includes additional share issuance in August 2016.

• Occupancy and leased percentages at December 31, 2016:

• Total portfolio was 88.1% occupied; including signed leases not commenced (“SLNC”), the total portfolio was 90.2% leased.

• Manhattan office portfolio (excluding the retail component of these properties) was 86.8% occupied; including SLNC, the Manhattan office portfolio was 89.1% leased.

• Retail portfolio was 88.6% occupied; including SLNC, the retail portfolio was 89.6% leased.

• Empire State Building was 90.5% occupied; including SLNC, was 91.8% leased.

• Signed 64 leases, representing 210,780 rentable square feet across the total portfolio, achieving a portfolio-wide 21.8% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.

• Signed 24 new leases representing 83,282 rentable square feet in the fourth quarter 2016 for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 24.3% in mark-to-market rent over previous fully escalated rents.

• The Empire State Building Observatory revenue for the fourth quarter 2016 grew 22.1% to $33.7 million from $27.6 million in the fourth quarter 2015.

• Declared a dividend in the amount of $0.105 per share for the fourth quarter 2016.

Full Year Highlights

• Achieved net income attributable to the Company of $0.38 per fully diluted share and Core FFO of $0.97 per fully diluted share, which includes additional share issuance in August 2016.

• Signed 207 leases, representing 991,806 rentable square feet across the total portfolio, achieving a 32.7% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases; 155 of these leases, representing 724,417 rentable square feet, were within the Manhattan office portfolio (excluding the retail component of these properties) achieving a 42.2% increase in mark-to-market rent over previous fully escalated rents on new, renewal and expansion leases.

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• Signed 19 leases, representing 47,835 rentable square feet within the Manhattan retail portfolio, achieving a 35.0% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.

• Signed 78 new leases representing 542,190 rentable square feet in 2016 for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 50.6% in mark-to-market rent over expired previous fully escalated rents.

• The Empire State Building Observatory revenue grew 11.2% to $124.8 million from $112.2 million in 2015.

• Issued 29,610,854 Class A common shares at $21.00 per share in a private placement transaction with an affiliate of the Qatar Investment Authority which raised approximately $622 million in gross proceeds.

• Increased the Company’s committed borrowing capacity under the unsecured revolving credit facility from $800 million to $1.1 billion.

• Declared and paid aggregate dividends of $0.40 per share during 2016, an 18% increase from the previous year.

Financial Results for the Fourth Quarter 2016

Net income attributable to common stockholders was $17.0 million, or $0.11 per fully diluted share, compared to $8.3 million, or $0.07 per fully diluted share, in the fourth quarter of 2015.

Core FFO was $74.2 million, or $0.25 per fully diluted share, compared to $66.2 million, or $0.25 per fully diluted share, in the fourth quarter of 2015.

Modified FFO was $74.2 million, or $0.25 per fully diluted share, compared to $66.2 million, or $0.25 per fully diluted share, in the fourth quarter of 2015.

FFO was $72.2 million, or $0.24 per fully diluted share, compared to $64.2 million, or $0.24 per fully diluted share, in the fourth quarter of 2015.

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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 Year Ended December 31, 2016

Net income attributable to common stockholders was $51.5 million, or $0.38 per fully diluted share, compared to $33.7 million, or $0.29 per fully diluted share, for the year ended December 31, 2015.

Core FFO was $269.0 million, or $0.97 per fully diluted share, compared to $257.7 million, or $0.97 per fully diluted share, for the year ended December 31, 2015.

Modified FFO was $268.4 million, or $0.97 per fully diluted share, compared to $257.8 million, or $0.97 per fully diluted share, for the year ended December 31, 2015.

FFO was $260.5 million, or $0.94 per fully diluted share, compared to $249.9 million, or $0.94 per fully diluted share, for the year ended December 31, 2015.

Portfolio Operations

As of December 31, 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 December 31, 2016, the Company’s portfolio was occupied and leased as follows. Leased percentages include signed leases not commenced.

	December 31, 2016			September 30, 2016			December 31, 2015
Percent occupied:
Total portfolio		88.1	%		87.9	%		87.3	%
Total office		88.0	%		88.0	%		86.7	%
Manhattan office		86.8	%		86.6	%		84.9	%
Empire State Building		90.5	%		90.1	%		86.7	%
Retail		88.6	%		86.3	%		94.3	%
Percent leased:
Total portfolio		90.2	%		90.3	%		89.1	%
Total office		90.2	%		90.4	%		88.6	%
Manhattan office		89.1	%		89.5	%		87.2	%
Empire State Building		91.8	%		91.5	%		90.7	%
Retail		89.6	%		88.3	%		94.6	%

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Leasing

For the three months ended December 31, 2016, the Company signed 64 new, renewal, and expansion leases within the total portfolio, comprising 210,780 rentable square feet with an average starting rental rate of $63.34 per rentable square foot, representing an increase of 21.8% over the prior in-place rent on a fully escalated basis.

On a blended basis, the 57 new, renewal, and expansion office leases signed within the total portfolio during the quarter had an average starting rental rate of $47.56 per rentable square foot, representing an increase of 14.4% over the prior in-place rent on a fully escalated basis.

On a blended basis, the seven new, and renewal retail leases signed within the total portfolio during the quarter had a starting rental rate of $331.30 per rentable square foot, representing an increase of 44.3% over the prior in-place rent on a fully escalated basis.

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

• 24 new leases comprising 83,282 rentable square feet, with an average starting rental rate of $58.41 per rentable square foot, representing an increase of 24.3% over the prior in-place rent on a fully escalated basis, and

• 25 renewal leases, comprising 36,738 rentable square feet, with an average starting rental rate of $53.03 per rentable square foot, representing an increase of 15.2% over the prior in-place rent on a fully escalated basis.

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Empire State Building

The Company continues to renovate and lease the 2.8 million rentable square foot Empire State Building, its flagship property. At December 31, 2016, the Empire State Building was 90.5% occupied; including SLNC, the Empire State Building was 91.8% leased.

During the fourth quarter 2016, the Company signed five office leases at the Empire State Building, representing 12,432 rentable square feet in the aggregate.

The Observatory revenue for the fourth quarter 2016 grew 22.1% to $33.7 million, from $27.6 million in the fourth quarter 2015. The Observatory hosted approximately 1,068,000 visitors in the fourth quarter 2016 compared to 949,000 visitors in the fourth quarter 2015, an increase of 12.5%. In the fourth quarter 2016, there were 14 bad weather days, five of which fell on weekend days compared to 15 bad weather days, one of which fell on a weekend day, in the fourth quarter 2015.

For the year ended December 31, 2016, the Observatory hosted approximately 4,250,000 visitors, compared to 4,064,000 visitors for the same period in 2015, an increase of 4.6%. Observatory revenue was $124.8 million for the year ended December 31, 2016, an 11.2% increase from $112.2 million for the year ended December 31, 2015. The increase is a result of greater tourist visits, favorable weather conditions, and improved ticket mix. For the year ended December 31, 2016, there were 45 bad weather days, 13 of which fell on weekend days compared to 67 bad weather days, 15 of which fell on weekend days, in the year ended December 31, 2015.

Balance Sheet

At December 31, 2016, there was no outstanding balance on the Company’s $1.1 billion unsecured revolving credit facility. 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.

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At December 31, 2016, the Company had total debt outstanding of approximately $1.6 billion, with a weighted average interest rate of 4.19% per annum, and a weighted average term to maturity of 4.7 years. As of December 31, 2016, the Company had $336.0 million of debt maturing in 2017 and $262.2 million of debt maturing in 2018. As of December 31, 2016, the Company had cash and cash equivalents of $554.4 million. The Company’s consolidated net debt to total market capitalization was approximately 14.9% as of December 31, 2016 and consolidated net debt to EBITDA was 3.1x.

Dividend

On December 31, 2016, the Company paid a dividend of $0.105 per share for the fourth 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 fourth quarter 2016 to holders of the operating partnership’s private perpetual preferred units.

Webcast and Conference Call Details

Empire State Realty Trust, Inc. will host a webcast and conference call, open to the general public, on Thursday, February 23, 2017 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 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for the replay is 13654088. A replay of the conference call will be available until March 2, 2017.

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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 December 31, 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 706,000 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,” “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

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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).

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 December 31,
	2016			2015
Revenues
Rental revenue	$	117,498		$	113,957
Tenant expense reimbursement		17,109			19,638
Observatory revenue		33,702			27,647
Third-party management and other fees		394			475
Other revenue and fees		10,560			3,483
Total revenues		179,263			165,200
Operating expenses
Property operating expenses		38,775			38,297
Ground rent expenses		2,332			2,332
General and administrative expenses		13,455			9,678
Observatory expenses		7,933			8,783
Real estate taxes		24,288			23,622
Depreciation and amortization		39,829			45,258
Total operating expenses		126,612			127,970
Total operating income		52,651			37,230
Interest expense		(17,837	)		(17,194	)
Income before income taxes		34,814			20,036
Income tax expense		(1,806	)		(666	)
Net income		33,008			19,370
Preferred unit distributions		(234	)		(234	)
Net income attributable to non-controlling interests		(15,808	)		(10,884	)
Net income attributable to common stockholders	$	16,966		$	8,252
Total weighted average shares
Basic		153,273			118,706
Diluted		297,046			266,048
Net income per share attributable to common stockholders
Basic	$	0.11		$	0.07
Diluted	$	0.11		$	0.07

For the three months ended December 31, 2015, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended December 31, 2016 and 2015, these costs were $607 and $621, respectively.

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

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

	Year Ended December 31,
	2016			2015
Revenues
Rental revenue	$	460,653		$	447,784
Tenant expense reimbursement		73,459			79,516
Observatory revenue		124,814			112,172
Construction revenue		—			1,981
Third-party management and other fees		1,766			2,133
Other revenue and fees		17,308			14,048
Total revenues		678,000			657,634
Operating expenses
Property operating expenses		153,850			158,638
Ground rent expenses		9,326			9,326
General and administrative expenses		49,078			38,073
Observatory expenses		29,833			32,174
Construction expenses		—			3,222
Real estate taxes		96,061			93,165
Acquisition expenses		98			193
Depreciation and amortization		155,211			171,474
Total operating expenses		493,457			506,265
Total operating income		184,543			151,369
Interest expense		(71,147	)		(67,492	)
Income before income taxes		113,396			83,877
Income tax expense		(6,146	)		(3,949	)
Net income		107,250			79,928
Preferred unit distributions		(936	)		(936	)
Net income attributable to non-controlling interests		(54,858	)		(45,262	)
Net income attributable to common stockholders	$	51,456		$	33,730
Total weighted average shares
Basic		133,881			114,245
Diluted		277,568			266,621
Net income per share attributable to common stockholders
Basic	$	0.38		$	0.30
Diluted	$	0.38		$	0.29

For the year ended December 31, 2015, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the year ended December 31, 2016 and 2015, these costs were $2,404 and $2,331, 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 December 31,
	2016			2015
Net income	$	33,008		$	19,370
Preferred unit distributions		(234	)		(234	)
Real estate depreciation and amortization		39,426			45,085
FFO attributable to common stockholders and non-controlling interests		72,200			64,221
Amortization of below-market ground leases		1,958			1,958
Modified FFO attributable to common stockholders and non-controlling interests		74,158			66,179
Core FFO attributable to common stockholders and non-controlling interests	$	74,158		$	66,179
Total weighted average shares
Basic		296,084			266,048
Diluted		297,046			266,048
FFO per share
Basic	$	0.24		$	0.24
Diluted	$	0.24		$	0.24
Modified FFO per share
Basic	$	0.25		$	0.25
Diluted	$	0.25		$	0.25
Core FFO per share
Basic	$	0.25		$	0.25
Diluted	$	0.25		$	0.25

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)

	Year Ended December 31,
	2016			2015
Net income	$	107,250		$	79,928
Preferred unit distributions		(936	)		(936	)
Real estate depreciation and amortization		154,205			170,932
FFO attributable to common stockholders and non-controlling interests		260,519			249,924
Amortization of below-market ground leases		7,831			7,831
Modified FFO attributable to common stockholders and non-controlling interests		268,350			257,755
Acquisition break-up fee		—			(2,500	)
Deferred financing cost write-off		552			1,749
Acquisition expenses		98			193
Construction severance expenses, net of income taxes		—			480
Core FFO attributable to common stockholders and non-controlling interests	$	269,000		$	257,677
Total weighted average shares
Basic		276,848			265,914
Diluted		277,568			265,914
FFO per share
Basic	$	0.94		$	0.94
Diluted	$	0.94		$	0.94
Modified FFO per share
Basic	$	0.97		$	0.97
Diluted	$	0.97		$	0.97
Core FFO per share
Basic	$	0.97		$	0.97
Diluted	$	0.97		$	0.97

13

Empire State Realty Trust, Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands)

	December 31,			December 31,
	2016			2015
Assets
Commercial real estate properties, at cost	$	2,458,629		$	2,276,330
Less: accumulated depreciation		(556,546	)		(465,584	)
Commercial real estate properties, net		1,902,083			1,810,746
Cash and cash equivalents		554,371			46,685
Restricted cash		61,514			65,880
Tenant and other receivables		22,542			18,782
Deferred rent receivables		152,074			122,048
Prepaid expenses and other assets		53,749			50,460
Deferred costs, net		277,081			310,679
Acquired below market ground leases, net		376,060			383,891
Goodwill		491,479			491,479
Total assets	$	3,890,953		$	3,300,650
Liabilities and equity
Mortgage notes payable, net	$	759,016		$	747,661
Senior unsecured notes, net		590,388			587,018
Unsecured term loan facility, net		262,927			262,545
Unsecured revolving credit facility, net		—			35,192
Accounts payable and accrued expenses		134,064			111,099
Acquired below market leases, net		82,300			104,171
Deferred revenue and other liabilities		32,212			31,388
Tenants’ security deposits		47,183			48,890
Total liabilities		1,908,090			1,927,964
Total equity		1,982,863			1,372,686
Total liabilities and equity	$	3,890,953		$	3,300,650

14

EX-99.2

Exhibit 99.2

EMPIRE STATE REALTY TRUST

Supplemental Operating and Financial Data

For the Quarter Ended December 31, 2016

Fourth 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

Fourth 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	Chairman and Chief Executive Officer
William H. Berkman	Director, Chair of Finance Committee
Alice M. Connell	Director
Thomas J. DeRosa	Director
Steven J. Gilbert	Director, Lead Director
S. Michael Giliberto	Director, Chair of Audit Committee
James D. Robinson IV	Director, Chair of Compensation and Nominating/Corporate Governance Committees

EXECUTIVE MANAGEMENT

Anthony E. Malkin	Chairman and Chief Executive Officer
John B. Kessler	President and Chief Operating Officer
Thomas P. Durels	Executive Vice President and Director of Leasing and Operations
David A. Karp	Executive Vice President and Chief Financial Officer
Thomas N. Keltner, Jr.	Executive Vice President, General Counsel and Secretary

COMPANY INFORMATION

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

RESEARCH COVERAGE

Bank of America Merrill Lynch	James Feldman	(646) 855-5808	james.feldman@baml.com
BMO Capital Markets Corp.	John Kim	(212) 885-4115	jp.kim@bmo.com
BTIG	Thomas Catherwood	(212) 738-6140	tcatherwood@btig.com
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	John Guinee	(443) 224-1307	jwguinee@stifel.com
Wells Fargo Securities, LLC	Blaine Heck	(443) 263-6529	blaine.heck@wellsfargo.com

Page 3

Fourth Quarter 2016

Financial Highlights

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

	Three Months Ended
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Selected Items:
Revenue	$	179,263		$	175,848		$	165,815		$	157,074		$	165,200
Net income	$	33,008		$	32,897		$	24,640		$	16,705		$	19,370
EBITDA (1)	$	92,246		$	90,959		$	82,506		$	73,205		$	82,254
Cash net operating income (1)	$	96,338		$	93,715		$	89,542		$	76,459		$	83,066
Core funds from operations (“Core FFO”) (1)	$	74,158		$	71,938		$	64,750		$	58,154		$	66,179
Core funds available for distribution (“Core FAD”) (1)	$	60,472		$	59,712		$	49,798		$	48,141		$	52,552
Core FFO per share - diluted	$	0.25		$	0.26		$	0.24		$	0.22		$	0.25
Dividends declared and paid per share	$	0.105		$	0.105		$	0.105		$	0.085		$	0.085
Portfolio Statistics:
Number of properties		20			20			20			20			20
Total rentable square footage		10,138,999			10,125,119			10,077,905			10,080,601			10,063,752
Percent occupied (2)		88.1	%		87.9	%		86.6	%		88.2	%		87.3	%
Percent leased (3)		90.2	%		90.3	%		89.4	%		89.8	%		89.1	%
Observatory Metrics:
Number of visitors		1,068,000			1,340,000			1,124,000			719,000			949,000
Change in visitors year over year		12.5	%		1.0	%		-3.5	%		15.6	%		-4.8	%
Observatory revenues	$	33,702		$	38,093		$	31,838		$	21,181		$	27,647
Change in revenues year over year		22.1	%		6.7	%		4.0	%		16.5	%		-1.8	%
Ratios:
Consolidated Debt to Total Market Capitalization (4)		21.1	%		20.5	%		24.5	%		25.6	%		25.1	%
Consolidated Net Debt to Total Market Capitalization (4)		14.9	%		14.0	%		24.1	%		25.0	%		24.6	%
Consolidated Debt and Perpetual Preferred Units to Total Market Capitalization (4)		21.4	%		20.8	%		24.9	%		26.0	%		25.5	%
Consolidated Net Debt and Perpetual Preferred Units to Total Market Capitalization (4)		15.3	%		14.4	%		24.5	%		25.5	%		25.0	%
Consolidated Debt to EBITDA (5)		4.8	x		4.9	x		5.1	x		4.9	x		5.1	x
Consolidated Net Debt to EBITDA (5)		3.1	x		3.1	x		5.0	x		4.8	x		4.9	x
Interest Coverage Ratio		5.8	x		5.7	x		5.5	x		4.7	x		5.3	x
Core FFO Payout Ratio (6)		42	%		44	%		44	%		40	%		34	%
Core FAD Payout Ratio (7)		52	%		53	%		57	%		48	%		43	%
Class A common stock price at quarter end	$	20.19		$	20.95		$	18.99		$	17.53		$	18.07
Average closing price	$	19.82		$	20.67		$	18.76		$	16.51		$	17.95
Dividends per share - annualized	$	0.42		$	0.42		$	0.42		$	0.34		$	0.34
Dividend yield (8)		2.1	%		2.0	%		2.2	%		1.9	%		1.9	%
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		154,744,740			153,828,060			122,781,134			120,639,410			118,903,312
Class B common stock		1,095,737			1,097,584			1,100,089			1,107,290			1,120,067
Operating partnership units		143,252,598			144,173,889			145,607,456			147,692,115			147,550,632
Total common stock and operating partnership units outstanding		299,093,075			299,099,533			269,488,679			269,438,815			267,574,011

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 December 31, 2016 multiplied by the total outstanding number of shares of common stock and operating partnership units as of December 31, 2016; (ii) the number of perpetual preferred units at December 31, 2016 multiplied by $16.62 and (iii) our outstanding indebtedness or net indebtedness as of December 31, 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 December 31, 2016.

Page 4

Fourth Quarter 2016

Property Summary

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

	Three Months Ended December 31, 2016
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,138,999			8,062,089			1,872,458			204,452
Occupancy (2)		88.1	%		86.7	%		93.0	%		99.4	%
Revenue	$	178,869		$	115,177		$	25,347		$	4,643		$	33,702
Operating expenses		(73,328	)		(55,501	)		(8,165	)		(1,729	)		(7,933	)
Net operating income		105,541			59,676			17,182			2,914			25,769
Straight-line rent		(8,652	)		(10,296	)		1,301			343			—
Above/below-market rent revenue amortization		(2,509	)		(2,509	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	96,338		$	48,829		$	18,483		$	3,257		$	25,769
Leasing activity
Total leases executed		64			54			8			2
Total square footage executed		210,780			125,499			79,145			6,136
Average rent psf - leases executed	$	63.34		$	67.85		$	33.61		$	349.60
Previously escalated rents psf	$	52.02		$	50.63		$	33.79		$	312.18
Percentage of new rent over previously escalated rents		21.8	%		34.0	%		-0.6	%		12.0	%
Weighted average lease term		7.3 years
Leasing commission costs per square foot	$	13.89		$	15.25		$	11.76		$	13.56
Tenant improvement costs per square foot		50.35			45.30			62.25			—
Total LC and TI per square foot (3)	$	64.24		$	60.55		$	74.01		$	13.56

	Office			Retail			Total
Total Portfolio
Total square footage executed		199,165			11,615			210,780
Average rent psf - leases executed	$	47.56		$	331.30		$	63.34
Previously escalated rents psf	$	41.57		$	229.54		$	52.02
Percentage of new rent over previously escalated rents		14.4	%		44.3	%		21.8	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		120,020			5,479			125,499
Average rent psf - leases executed	$	56.76		$	310.81		$	67.85
Previously escalated rents psf	$	46.69		$	137.00		$	50.63
Percentage of new rent over previously escalated rents		21.6	%		126.9	%		34.0	%

Page 5

Fourth Quarter 2016

Property Summary

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

	Three Months Ended September 30, 2016
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,125,119			8,055,809			1,864,858			204,452
Occupancy (2)		87.9	%		86.3	%		93.4	%		99.4	%
Revenue	$	175,444		$	113,451		$	19,225		$	4,675		$	38,093
Operating expenses		(72,857	)		(55,612	)		(8,279	)		(1,716	)		(7,250	)
Net operating income		102,587			57,839			10,946			2,959			30,843
Straight-line rent		(9,619	)		(9,914	)		271			24			—
Above/below-market rent revenue amortization		(1,210	)		(1,210	)		—			—			—
Below-market ground lease amortization		1,957			1,957			—			—			—
Cash net operating income	$	93,715		$	48,672		$	11,217		$	2,983		$	30,843
Leasing activity
Total leases executed		51			40			8			3
Total square footage executed		348,770			283,199			59,812			5,759
Average rent psf - leases executed	$	57.61		$	59.16		$	33.44		$	211.43
Previously escalated rents psf	$	44.24		$	42.27		$	34.14		$	237.87
Percentage of new rent over previously escalated rents		30.2	%		40.0	%		-2.0	%		-11.1	%
Weighted average lease term		9.6 years
Leasing commission costs per square foot	$	20.24		$	22.83		$	8.76		$	12.01
Tenant improvement costs per square foot		70.31			79.77			31.63			6.95
Total LC and TI per square foot (3)	$	90.55		$	102.60		$	40.39		$	18.96

	Office			Retail			Total
Total Portfolio
Total square footage executed		324,396			24,374			348,770
Average rent psf - leases executed	$	54.12		$	99.07		$	57.61
Previously escalated rents psf	$	38.23		$	122.27		$	44.24
Percentage of new rent over previously escalated rents		41.6	%		-19.0	%		30.2	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		264,584			18,615			283,199
Average rent psf - leases executed	$	58.80		$	64.30		$	59.16
Previously escalated rents psf	$	39.15		$	86.51		$	42.27
Percentage of new rent over previously escalated rents		50.2	%		-25.7	%		40.0	%

Page 6

Fourth Quarter 2016

Property Summary

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

	Three Months Ended June 30, 2016
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,077,905			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 rent revenue 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 7

Fourth Quarter 2016

Property Summary    

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

	Three Months Ended March 31, 2016
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,080,601			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 rent revenue 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 8

Fourth Quarter 2016

Property Summary    

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

	Three Months Ended December 31, 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		10,063,752			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 rent revenue 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	%

Notes:

⁽¹⁾  Includes 501,653 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

Fourth Quarter 2016

Property Detail

(unaudited)

									Annualized Rent
Property Name	Location or Sub-Market	Rentable Square Feet (1)		Percent Occupied (2)			Annualized Rent (3)		per Occupied Square Foot (4)		Number of Leases (5)
Manhattan Office Properties - Office
The Empire State Building (6)	Penn Station -Times Sq. South		2,706,202		91.3	%	$	127,563,431	$	51.65		182
One Grand Central Place	Grand Central		1,241,665		84.4	%		56,698,774		54.10		236
1400 Broadway (8)	Penn Station -Times Sq. South		905,880		92.2	%		38,131,012		45.65		47
111 West 33rd Street (9)	Penn Station -Times Sq. South		636,949		55.4	%		18,230,207		51.66		17
250 West 57th Street	Columbus Circle - West Side		488,877		75.7	%		20,450,783		55.26		96
501 Seventh Avenue	Penn Station -Times Sq. South		459,329		98.8	%		19,232,207		42.39		37
1359 Broadway	Penn Station -Times Sq. South		455,303		90.9	%		20,513,574		49.59		35
1350 Broadway (10)	Penn Station -Times Sq. South		373,602		88.7	%		17,869,821		53.91		65
1333 Broadway	Penn Station -Times Sq. South		292,629		98.8	%		13,773,871		47.64		10
Manhattan Office Properties - Office			7,560,436		86.8	%		332,463,681		50.65		725
Manhattan Office Properties - Retail
The Empire State Building (7)	Penn Station -Times Sq. South		115,568		73.8	%		13,587,057		159.35		15
One Grand Central Place	Grand Central		66,810		99.4	%		7,194,415		108.39		14
1400 Broadway (8)	Penn Station -Times Sq. South		21,803		63.4	%		1,517,622		109.81		8
112 West 34th Street (9)	Penn Station -Times Sq. South		86,934		54.2	%		18,082,376		383.81		3
250 West 57th Street	Columbus Circle - West Side		48,962		100.0	%		8,010,165		163.60		8
501 Seventh Avenue	Penn Station -Times Sq. South		35,558		96.9	%		1,940,753		56.35		9
1359 Broadway	Penn Station -Times Sq. South		27,243		100.0	%		2,155,646		79.13		6
1350 Broadway (10)	Penn Station -Times Sq. South		31,774		100.0	%		6,711,102		211.21		6
1333 Broadway	Penn Station -Times Sq. South		67,001		100.0	%		8,397,109		125.33		4
Manhattan Office Properties - Retail			501,653		84.1	%		67,596,244		160.18		73
Sub-Total/Weighted Average Manhattan Office Properties - Office and Retail			8,062,089		86.7	%		400,059,925		57.27		798
Greater New York Metropolitan Area Office Properties
First Stamford Place (11)	Stamford, CT		794,623		95.7	%		32,537,042		42.80		58
Metro Center	Stamford, CT		285,228		95.8	%		15,299,888		56.01		29
383 Main Avenue	Norwalk, CT		262,501		91.5	%		7,548,885		31.44		22
500 Mamaroneck Avenue	Harrison, NY		294,821		92.0	%		7,861,196		28.99		34
10 Bank Street	White Plains, NY		235,285		83.4	%		7,015,578		35.75		32
Sub-Total/Weighted Average Greater New York Metropolitan Area Office Properties			1,872,458		93.0	%		70,262,590		40.36		175
Standalone Retail Properties
10 Union Square	Union Square		58,005		98.0	%		6,212,593		109.34		12
1542 Third Avenue	Upper East Side		56,250		100.0	%		3,468,724		61.67		4
1010 Third Avenue	Upper East Side		44,662		100.0	%		3,539,989		79.26		2
77 West 55th Street	Midtown		24,102		100.0	%		2,733,043		113.39		3
69-97 Main Street	Westport, CT		17,103		100.0	%		2,196,199		128.41		5
103-107 Main Street	Westport, CT		4,330		100.0	%		714,348		164.98		1
Sub-Total/Weighted Average Standalone Retail Properties			204,452		99.4	%		18,864,897		92.81		27
Portfolio Total			10,138,999		88.1	%	$	489,187,412	$	54.78		1,000
Total/Weighted Average Office Properties			9,432,894		88.0	%	$	402,726,271	$	48.49		900
Total/Weighted Average Retail Properties			706,105		88.6	%		86,461,141		138.28		100
Portfolio Total			10,138,999		88.1	%	$	489,187,412	$	54.78		1,000

Notes:

(1) Excludes (i) 151,618 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 December 31, 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 December 31, 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 75,161 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 47 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 61 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 34 years (expiring July 31, 2050).

(11) First Stamford Place consists of three buildings.

Page 10

Fourth 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		—		993,286		9.8	%	$	—		0.0	%	$	—
Signed leases not commenced		27		215,526		2.1	%		—		0.0	%		—
2017		176		705,873		7.0	%		34,476,553		7.0	%		48.84
2018		171		822,372		8.1	%		41,727,230		8.5	%		50.74
2019		131		756,760		7.5	%		37,827,413		7.7	%		49.99
2020		135		897,033		8.8	%		47,752,884		9.8	%		53.23
2021		96		697,973		6.9	%		37,323,479		7.6	%		53.47
2022		64		549,039		5.4	%		31,934,831		6.5	%		58.16
2023		51		543,385		5.4	%		30,627,106		6.3	%		56.36
2024		43		488,731		4.8	%		27,727,453		5.7	%		56.73
2025		38		320,016		3.2	%		24,413,546		5.0	%		76.29
2026		39		944,620		9.3	%		49,591,862		10.1	%		52.50
Thereafter		56		2,204,385		21.7	%		125,785,055		25.7	%		57.06
Total		1,027		10,138,999		100.0	%	$	489,187,412		100.0	%	$	54.78

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) 151,618 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

Fourth Quarter 2016

Tenant Lease Expirations

(unaudited)

Manhattan Office Properties (1)	Number of Leases Expiring (2)		Rentable Square Feet Expiring (3)		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent (4)		Percent of Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		822,129		10.9	%	$	—		0.0	%	$	—
Signed leases not commenced		19		174,295		2.3	%		—		0.0	%		—
2017		146		541,877		7.2	%		26,542,389		8.0	%		48.98
2018		134		561,814		7.4	%		30,295,048		9.1	%		53.92
2019		101		494,725		6.5	%		24,421,526		7.3	%		49.36
2020		99		609,742		8.1	%		32,349,929		9.7	%		53.06
2021		58		442,918		5.9	%		22,867,415		6.9	%		51.63
2022		40		256,320		3.4	%		14,515,812		4.4	%		56.63
2023		37		398,977		5.3	%		20,553,291		6.2	%		51.51
2024		26		301,019		4.0	%		14,772,797		4.4	%		49.08
2025		21		201,891		2.7	%		11,048,309		3.3	%		54.72
2026		29		824,755		10.9	%		43,655,894		13.1	%		52.93
Thereafter		34		1,929,974		25.4	%		91,441,271		27.5	%		47.38
Total Manhattan office properties		744		7,560,436		100.0	%		332,463,681		100.0	%		50.65
Greater New York Metropolitan Area Office Properties
Available		—		97,606		5.2	%	$	—		0.0	%	$	—
Signed leases not commenced		6		33,946		1.8	%		—		0.0	%		—
2017		20		119,282		6.4	%		4,989,533		7.1	%		41.83
2018		31		236,882		12.7	%		8,897,104		12.7	%		37.56
2019		21		229,887		12.3	%		8,946,856		12.7	%		38.92
2020		26		230,508		12.3	%		9,856,388		14.0	%		42.76
2021		31		225,410		12.0	%		9,696,998		13.8	%		43.02
2022		14		230,418		12.3	%		8,973,890		12.8	%		38.95
2023		8		95,771		5.1	%		4,543,159		6.5	%		47.44
2024		4		154,688		8.3	%		6,995,826		10.0	%		45.23
2025		10		83,805		4.5	%		2,971,218		4.2	%		35.45
2026		1		45,361		2.4	%		1,393,214		2.0	%		30.71
Thereafter		9		88,894		4.7	%		2,998,404		4.3	%		33.73
Total greater New York metropolitan area office properties		181		1,872,458		100.0	%		70,262,590		100.0	%		40.36
Retail Properties
Available		—		73,551		10.4	%	$	—		0.0	%	$	—
Signed leases not commenced		2		7,285		1.0	%		—		0.0	%		—
2017		10		44,714		6.3	%		2,944,631		3.4	%		65.85
2018		6		23,676		3.4	%		2,535,078		2.9	%		107.07
2019		9		32,148		4.6	%		4,459,031		5.2	%		138.70
2020		10		56,783		8.0	%		5,546,567		6.4	%		97.68
2021		7		29,645		4.2	%		4,759,066		5.5	%		160.54
2022		10		62,301		8.8	%		8,445,129		9.8	%		135.55
2023		6		48,637		6.9	%		5,530,656		6.4	%		113.71
2024		13		33,024		4.7	%		5,958,830		6.9	%		180.44
2025		7		34,320		4.9	%		10,394,019		12.0	%		302.86
2026		9		74,504		10.6	%		4,542,754		5.3	%		60.97
Thereafter		13		185,517		26.2	%		31,345,380		36.3	%		168.96
Total retail properties		102		706,105		100.0	%		86,461,141		100.0	%		138.28
Total portfolio lease expirations		1,027		10,138,999		100.0	%	$	489,187,412		100.0	%	$	54.78

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) 151,618 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

Fourth 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		—		199,749		7.4	%		—		0.0	%	$	—
Signed leases not commenced		4		36,858		1.4	%		—		0.0	%		—
2017		27		95,849		3.5	%		5,317,993		4.2	%		55.48
2018		19		68,554		2.5	%		3,884,488		3.0	%		56.66
2019		17		72,186		2.7	%		3,492,419		2.7	%		48.38
2020		39		305,273		11.3	%		17,226,096		13.5	%		56.43
2021		19		118,447		4.4	%		6,296,146		4.9	%		53.16
2022		13		61,509		2.3	%		3,817,551		3.0	%		62.06
2023		10		53,885		2.0	%		3,326,228		2.6	%		61.73
2024		8		66,859		2.5	%		3,781,898		3.0	%		56.57
2025		6		57,433		2.1	%		3,003,760		2.4	%		52.30
2026		11		497,393		18.4	%		26,856,836		21.1	%		54.00
Thereafter		13		1,072,207		39.5	%		50,560,016		39.6	%		47.16
Total Empire State Building office		186		2,706,202		100.0	%	$	127,563,431		100.0	%	$	51.65
								Annualized					Percent of
Empire State Building Broadcasting Licenses and Leases					Annualized Base Rent (6)			Expense Reimbursements		Annualized Rent (4)			Annualized Rent
2017						5,341,238			3,649,488		8,990,726			30.9	%
2018						5,226,644			2,762,405		7,989,049			27.5	%
2019						212,240			47,628		259,868			0.9	%
2020						1,513,053			412,901		1,925,954			6.6	%
2021						2,186,388			328,181		2,514,569			8.6	%
2022						2,101,006			330,299		2,431,305			8.4	%
2023						651,922			113,019		764,941			2.6	%
2024						44,558			43,054		87,612			0.3	%
2025						1,599,000			287,415		1,886,415			6.5	%
2026						750,000			177,666		927,666			3.2	%
Thereafter						1,113,800			195,507		1,309,307			4.5	%
Total Empire State Building broadcasting licenses and leases					$	20,739,849		$	8,347,563	$	29,087,412			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 $5.9 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

Fourth Quarter 2016

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

				Weighted				Percent of
				Average		Total		Portfolio					Percent of
				Remaining		Occupied		Rentable					Portfolio
			Lease	Lease		Square		Square			Annualized		Annualized
20 Largest Tenants		Property	Expiration (1)	Term(2)		Feet (3)		Feet (4)			Rent (5)		Rent (6)
1.	Global Brands Group	ESB, 1333 B’Way, 111 West 33rd	June 2017-Oct. 2028		10.7 years		688,600		6.8	%	$	30,543,248		6.2	%
2.	Coty	ESB	Jan. 2030		13.1 years		312,700		3.1	%		15,463,374		3.2	%
3.	LinkedIn	ESB	Feb. 2026		9.2 years		278,023		2.7	%		14,395,469		2.9	%
4.	Sephora	112 West 34th Street	Jan. 2029		12.1 years		11,334		0.1	%		10,432,766		2.1	%
5.	PVH Corp.	501 West 57th Street	June 2017-Oct. 2028		11.5 years		217,293		2.1	%		9,142,695		1.9	%
6.	Thomson Reuters	Metro Center, First Stamford Place	Apr. 2018-Apr. 2020		2.6 years		147,208		1.5	%		7,523,906		1.5	%
7.	Li & Fung	1359 Broadway	Oct. 2021-Oct. 2027		7.3 years		149,436		1.5	%		7,172,674		1.5	%
8.	Federal Deposit Insurance Corp.	ESB	Jan. 2020		3.1 years		121,879		1.2	%		6,841,176		1.4	%
9.	Macy’s	111 West 33rd Street	May 2030		13.4 years		131,117		1.3	%		6,626,117		1.4	%
10.	Urban Outfitters	1333 Broadway	Sept. 2029		12.8 years		56,730		0.6	%		6,594,879		1.3	%
11.	Footlocker	112 West 34th Street	Sept. 2031		14.8 years		34,192		0.3	%		6,214,260		1.3	%
12.	Duane Reade	ESB, 1350 B’Way, 250 West 57th	Feb. 2021-Sept. 2027		7.9 years		47,541		0.5	%		6,203,743		1.3	%
13.	Legg Mason	First Stamford Place	Sept. 2024		7.8 years		137,583		1.4	%		6,200,427		1.3	%
14.	On Deck Capital	1400 Broadway	Dec. 2026		10.0 years		107,800		1.1	%		5,743,805		1.2	%
15.	WDFG North America	ESB	Dec 2025		9.0 years		5,300		0.1	%		5,351,699		1.1	%
16.	Shutterstock	ESB	Apr. 2029		12.3 years		110,236		1.1	%		4,886,141		1.0	%
17.	Kohl’s	1400 Broadway	May 2029		12.4 years		113,032		1.1	%		4,802,479		1.0	%
18.	HNTB Corporation	ESB	Feb. 2026		9.2 years		78,361		0.8	%		4,466,577		0.9	%
19.	Odyssey America Reinsurance	First Stamford Place	Sept. 2022		5.8 years		101,619		1.0	%		4,249,775		0.9	%
20.	The Interpublic Group of Companies	1400 Broadway	Jul. 2024		7.6 years		87,076		0.9	%		3,962,524		0.8	%
	Total						2,937,060		29.2	%	$	166,817,734		34.2	%

Notes:

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

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

(3) Based on leases signed and commenced as of December 31, 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)

Page 14

Fourth Quarter 2016

Capital Expenditures and Redevelopment Program

(unaudited)

	Three Months Ended
	December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016		December 31, 2015
Capital expenditures
Tenant improvements - first generation	$	28,575	$	31,959	$	28,593	$	8,876	$	21,351
Tenant improvements - second generation		3,122		949		1,113		1,443		2,507
Leasing commissions - first generation		3,077		7,141		3,374		5,696		3,515
Leasing commissions - second generation		467		388		313		185		462
Building improvements - first generation		21,800		17,970		24,073		11,728		16,547
Building improvements - second generation		1,754		2,061		53		604		1,546
Total	$	58,795	$	60,468	$	57,519	$	28,532	$	45,928

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

• Future redevelopment (Empire State Building) - 270,000 square feet

• Future redevelopment (other Manhattan properties) - 940,000 square feet

• Redevelopment completed - 6,780,000 square feet

Inventory of vacant space ⁽²⁾

• Developed - 720,000 square feet, 84%

• Undeveloped - 140,000 square feet, 16%

Inventory of undeveloped space ⁽²⁾

• Vacant - 140,000 square feet, 11%

• Expires in 2017 - 190,000 square feet, 16%

• Expires in 2018 and thereafter - 880,000 square feet, 73%

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

Fourth Quarter 2016

Observatory Summary

(unaudited and in thousands)

			Three Months Ended
Observatory NOI	Twelve Months to Date		December 31, 2016		September 30, 2016		June 30, 2016		March 31, 2016			December 31, 2015
Observatory revenue	$	124,814	$	33,702	$	38,093	$	31,838	$	21,181		$	27,647
Observatory expenses (1)		29,833		7,933		7,250		6,895		7,755			8,783
NOI		94,981		25,769		30,843		24,943		13,426			18,864
Intercompany rent expense (2)		75,658		20,469		22,983		18,488		13,718			16,853
NOI after intercompany rent	$	19,323	$	5,300	$	7,860	$	6,455	$	(292	)	$	2,011

Note:

⁽¹⁾ For the 2015 period presented, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, public relations costs were $607, $471, $314, $1,012 and $621, 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 2012 to 2016

Page 16

Fourth Quarter 2016

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Assets
Commercial real estate properties, at cost:
Land	$	201,196		$	201,196		$	201,196		$	201,196		$	201,196
Development costs		7,951			7,946			7,946			7,931			7,498
Building and improvements		2,249,482			2,196,864			2,147,050			2,089,792			2,067,636
		2,458,629			2,406,006			2,356,192			2,298,919			2,276,330
Less: accumulated depreciation		(556,546	)		(532,406	)		(509,736	)		(490,427	)		(465,584	)
Commercial real estate properties, net		1,902,083			1,873,600			1,846,456			1,808,492			1,810,746
Cash and cash equivalents		554,371			594,297			35,454			44,440			46,685
Restricted cash		61,514			60,752			59,141			60,165			65,880
Tenant and other receivables, net		22,542			19,569			14,521			14,828			18,782
Deferred rent receivables, net		152,074			143,578			133,955			127,148			122,048
Prepaid expenses and other assets		53,749			33,685			47,895			29,908			50,460
Deferred costs, net		277,081			287,591			292,777			304,977			310,679
Acquired below-market ground leases, net		376,060			378,018			379,976			381,934			383,891
Goodwill		491,479			491,479			491,479			491,479			491,479
Total assets	$	3,890,953		$	3,882,569		$	3,301,654		$	3,263,371		$	3,300,650
Liabilities and Equity
Mortgage notes payable, net	$	759,016		$	763,457		$	767,717		$	772,015		$	747,661
Senior unsecured notes, net		590,388			589,546			588,703			587,861			587,018
Unsecured term loan facility, net		262,927			262,830			262,735			262,640			262,545
Unsecured revolving credit facility, net		—			—			40,000			—			35,192
Accounts payable and accrued expenses		134,064			154,573			143,296			119,104			111,099
Acquired below-market leases, net		82,300			87,708			91,850			96,245			104,171
Deferred revenue and other liabilities		32,212			24,176			23,019			26,802			31,388
Tenants’ security deposits		47,183			47,440			47,565			49,729			48,890
Total liabilities		1,908,090			1,929,730			1,964,885			1,914,396			1,927,964
Total equity		1,982,863			1,952,839			1,336,769			1,348,975			1,372,686
Total liabilities and equity	$	3,890,953		$	3,882,569		$	3,301,654		$	3,263,371		$	3,300,650

Page 17

Fourth Quarter 2016

Condensed Consolidated Statements of Income

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Revenues
Rental revenue	$	117,498		$	115,634		$	112,613		$	114,908		$	113,957
Tenant expense reimbursement		17,109			19,176			19,054			18,120			19,638
Observatory revenue		33,702			38,093			31,838			21,181			27,647
Third party management and other fees		394			404			423			545			475
Other revenue and fees		10,560			2,541			1,887			2,320			3,483
Total revenues		179,263			175,848			165,815			157,074			165,200
Operating expenses
Property operating expenses (1)		38,775			38,585			37,386			39,104			38,297
Ground rent expenses		2,332			2,331			2,330			2,333			2,332
General and administrative expenses		13,455			11,798			12,907			10,918			9,678
Observatory expenses (1)		7,933			7,250			6,895			7,755			8,783
Real estate taxes		24,288			24,691			23,557			23,525			23,622
Acquisition expenses		—			—			—			98			—
Depreciation and amortization		39,829			37,607			38,548			39,227			45,258
Total operating expenses		126,612			122,262			121,623			122,960			127,970
Total operating income		52,651			53,586			44,192			34,114			37,230
Other income (expense)
Interest expense		(17,837	)		(17,939	)		(17,420	)		(17,951	)		(17,194	)
Income before income taxes		34,814			35,647			26,772			16,163			20,036
Income tax (expense) benefit		(1,806	)		(2,750	)		(2,132	)		542			(666	)
Net income		33,008			32,897			24,640			16,705			19,370
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Net income attributable to non-controlling interests		(15,808	)		(16,690	)		(13,317	)		(9,043	)		(10,884	)
Net income attributable to common stockholders	$	16,966		$	15,973		$	11,089		$	7,428		$	8,252
Weighted average common shares outstanding
Basic		153,273			136,831			122,502			120,778			118,706
Diluted		297,046			280,614			266,167			266,641			266,048
Net income per share attributable to common stockholders
Basic and Diluted	$	0.11		$	0.12		$	0.09		$	0.06		$	0.07
Dividends per share	$	0.105		$	0.105		$	0.105		$	0.085		$	0.085

⁽¹⁾  For the 2015 period presented, certain Empire State Building public relations costs previously included in property operating expenses are included in observatory expenses. For the three months ended December 31, 2016, September 30, 2016, June 30, 2016, March 31, 2016 and December 31, 2015, public relations costs were $607, $471, $314, $1,012 and $621, respectively.    

Page 18

Fourth 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
	December 31, 2016			September 30, 2016			June 30, 2016			March 31, 2016			December 31, 2015
Reconciliation of Net Income to FFO, Modified FFO and Core FFO
Net Income	$	33,008		$	32,897		$	24,640		$	16,705		$	19,370
Preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Real estate depreciation and amortization		39,426			37,318			38,386			39,075			45,085
FFO attributable to common stockholders and non-controlled interests		72,200			69,981			62,792			55,546			64,221
Amortization of below-market ground lease		1,958			1,957			1,958			1,958			1,958
Modified FFO attributable to common stockholders and non-controlled interests		74,158			71,938			64,750			57,504			66,179
Deferred financing costs write-off and prepayment penalty		—			—			—			552			—
Acquisition expenses		—			—			—			98			—
Core FFO attributable to common stockholders and non-controlled interests	$	74,158		$	71,938		$	64,750		$	58,154		$	66,179
Total weighted average shares and Operating Partnership Units
Basic		296,084			278,739			266,167			266,134			266,048
Diluted		297,046			280,614			266,167			266,134			266,048
FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.24		$	0.25		$	0.24		$	0.21		$	0.24
Diluted	$	0.24		$	0.25		$	0.24		$	0.21		$	0.24
Modified FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.26		$	0.24		$	0.22		$	0.25
Diluted	$	0.25		$	0.26		$	0.24		$	0.22		$	0.25
Core FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.26		$	0.24		$	0.22		$	0.25
Diluted	$	0.25		$	0.26		$	0.24		$	0.22		$	0.25
Reconciliation of Core FFO to Core FAD
Core FFO	$	74,158		$	71,938		$	64,750		$	58,154		$	66,179
Add:
Amortization of deferred financing costs		1,293			1,291			1,142			1,142			1,141
Non-real estate depreciation and amortization		403			289			162			152			173
Amortization of non-cash compensation expense		2,476			2,604			2,553			2,097			1,225
Amortization of debt discount		668			668			668			668			668
Deduct:
Straight-line rental revenues		(8,652	)		(9,619	)		(6,796	)		(5,080	)		(5,892	)
Amortization of debt premiums		(1,737	)		(1,736	)		(1,737	)		(1,737	)		(1,736	)
Above/below-market rent revenue amortization		(2,509	)		(1,210	)		(844	)		(4,231	)		(4,691	)
Corporate and Observatory capital expenditures		(285	)		(1,115	)		(8,621	)		(792	)		—
Tenant improvements - second generation		(3,122	)		(949	)		(1,113	)		(1,443	)		(2,507	)
Building improvements - second generation		(1,754	)		(2,061	)		(53	)		(604	)		(1,546	)
Leasing commissions - second generation		(467	)		(388	)		(313	)		(185	)		(462	)
Core FAD	$	60,472		$	59,712		$	49,798		$	48,141		$	52,552
Reconciliation of Net Income to EBITDA
Net income	$	33,008		$	32,897		$	24,640		$	16,705		$	19,370
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Interest expense		17,837			17,939			17,420			17,951			17,194
Income tax expense (benefit)		1,806			2,750			2,132			(542	)		666
Depreciation and amortization		39,829			37,607			38,548			39,227			45,258
Acquisition expenses		—			—			—			98			—
EBITDA	$	92,246		$	90,959		$	82,506		$	73,205		$	82,254

Page 19

Fourth Quarter 2016

Net Operating Income (“NOI”)

(unaudited and dollars in thousands)

	Three Months Ended
	December 31, 2016			September 30, 2016			June 30 2016			March 31, 2016			December 31, 2015
Reconciliation of Net Income to NOI and Cash NOI
Net income	$	33,008		$	32,897		$	24,640		$	16,705		$	19,370
Add:
General and administrative expenses		13,455			11,798			12,907			10,918			9,678
Depreciation and amortization		39,829			37,607			38,548			39,227			45,258
Interest expense		17,837			17,939			17,420			17,951			17,194
Acquisition expenses		—			—			—			98			—
Income tax expense (benefit)		1,806			2,750			2,132			(542	)		666
Less:
Third-party management and other fees		(394	)		(404	)		(423	)		(545	)		(475	)
Net operating income		105,541			102,587			95,224			83,812			91,691
Straight-line rent		(8,652	)		(9,619	)		(6,796	)		(5,080	)		(5,892	)
Above/below-market rent revenue amortization		(2,509	)		(1,210	)		(844	)		(4,231	)		(4,691	)
Below-market ground lease amortization		1,958			1,957			1,958			1,958			1,958
Cash net operating income		96,338			93,715			89,542			76,459			83,066
Less: Observatory net operating income		(25,769	)		(30,843	)		(24,943	)		(13,426	)		(18,864	)
Total portfolio (excluding observatory) cash net operating income	$	70,569		$	62,872		$	64,599		$	63,033		$	64,202

Page 20

Fourth Quarter 2016

Debt Summary

(unaudited and dollars in thousands)

	December 31, 2016								September 30, 2016
				Weighted Average								Weighted Average
				Interest			Maturity					Interest			Maturity
Debt Summary	Balance			Rate			(Years)		Balance			Rate			(Years)
Fixed rate mortgage debt	$	752,840			5.40	%		2.2	$	755,926			5.40	%		2.5
Senior unsecured notes		600,000			3.47	%		7.4		600,000			3.47	%		7.6
Total fixed rate debt		1,352,840			4.54	%		4.5		1,355,926			4.55	%		4.8
Unsecured revolving credit facility		—			—			2.1		—			—			2.3
Unsecured term loan facility (1)		265,000			2.37	%		5.6		265,000			2.13	%		5.9
Total variable rate debt		265,000			2.37	%		5.4		265,000			2.13	%		5.6
Total debt		1,617,840			4.19	%		4.7		1,620,926			4.15	%		4.9
Premium/discount		905								1,974
Deferred financing costs, net		(6,414	)							(7,067	)
Total	$	1,612,331							$	1,615,833

Notes:

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

Available Capacity	Facility		Outstanding at December 31, 2016		Letters of Credit		Available Capacity
Unsecured revolving credit facility (1)	$	1,100,000	$	—	$	—	$	1,100,000

Covenant Summary	Required			Current Quarter			In Compliance
Maximum Total Leverage(2)		< 60	%		24.5	%	Yes
Maximum Secured Debt		< 40	%		11.5	%	Yes
Minimum Fixed Charge Coverage		> 1.50	x		4.1	x	Yes
Minimum Unencumbered Interest Coverage		> 1.75	x		7.5	x	Yes
Maximum Unsecured Leverage		< 60	%		21.8	%	Yes
Maximum Secured Recourse Indebtedness		< 10	%		0	%	Yes
Minimum Tangible Net Worth	$	1,203,815		$	1,648,433		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.

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

Page 21

Fourth Quarter 2016

Debt Detail

(unaudited and dollars in thousands)

	Stated Interest Rate (%)			Current Interest Rate (%)			Principal Balance			Maturity Date		Amortization
Fixed rate mortgage debt:
10 Bank Street		5.72	%		5.72	%	$	31,544			6/1/2017		30 years
1542 Third Avenue		5.90	%		5.90	%		17,795			6/1/2017		30 years
First Stamford Place		5.65	%		5.65	%		235,067			7/5/2017		30 years
383 Main Avenue		5.59	%		5.59	%		28,654			7/5/2017		30 years
1010 Third Avenue and 77 West 55th Street		5.69	%		5.69	%		26,502			7/5/2017		30 years
1333 Broadway		6.32	%		6.32	%		67,656			1/5/2018		30 years
1400 Broadway (first lien mortgage loan)		6.12	%		6.12	%		67,714			2/5/2018		30 years
1400 Broadway (second lien mortgage loan)		3.35	%		3.35	%		9,389			2/5/2018		30 years
111 West 34th Street (first lien mortgage loan)		6.01	%		6.01	%		75,261			4/5/2018		30 years
111 West 34th Street (second lien mortgage loan)		6.56	%		6.56	%		9,509			4/5/2018		30 years
1350 Broadway		5.87	%		5.87	%		37,764			4/5/2018		30 years
Metro Center		3.59	%		3.59	%		95,985			11/5/2024		30 years
10 Union Square		3.70	%		3.70	%		50,000			4/1/2026		Interest only
Total mortgage debt								752,840
Unsecured revolving credit facility		LIBOR plus 1.15	%		1.92	%		—			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	%		2.37	%		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					4.19	%		1,617,840
Premium/discounts								905
Deferred financing costs, net								(6,414	)
Total							$	1,612,331

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Fourth 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
2017	$	9,904	$	336,009	$	345,913			21.4	%		5.67	%
2018		2,880		262,210		265,090			16.4	%		6.02	%
2019		2,188		250,000		252,188			15.6	%		2.63	%
2020		2,268		—		2,268			0.1	%		n/a
2021		2,350		—		2,350			0.1	%		n/a
Thereafter		7,356		742,675		750,031			46.4	%		3.40	%
Total debt	$	26,946	$	1,590,894		1,617,840			100.0	%		4.19	%
Premium/discount						905
Deferred financing costs, net						(6,414	)
Total					$	1,612,331

Note:

(1) Assumes no extension options are exercised.

Debt Maturity Profile

Ground Lease Commitments

Year	1350 Broadway		1400 Broadway		111 West 33rd Street		Total
2017		108		675		735		1,518
2018		108		675		735		1,518
2019		108		675		735		1,518
2020		108		675		735		1,518
2021		108		675		735		1,518
Thereafter		2,331		12,150		40,731		55,212
	$	2,871	$	15,525	$	44,406	$	62,802

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Fourth 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 third quarter 2014 acquisition of two option properties following our formation transactions as they carry significantly below market ground leases, the amortization of which is material to our overall results. We present Modified FFO because we consider it an important supplemental measure of our operating performance in that it adds back the non-cash amortization of below-market ground leases. There can be no assurance that Modified FFO presented by us is comparable to similarly titled measures of other REITs. Modified FFO does not represent cash generated from operating activities and should not be considered as an alternative to net income (loss) determined in accordance with GAAP or to cash flow from operating activities determined in accordance with GAAP. Modified FFO is not indicative of cash available to fund ongoing cash needs, including the ability to make cash distributions.

Core Funds From Operations (“Core FFO”)

Core FFO adds back to Modified FFO the following items: 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 titled measures and, accordingly, our NOI may not-be comparable to similarly titled measures reported by other companies that do not define the measure exactly as we do.

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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