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): October 31, 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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Item 2.02. Results of Operations and Financial Condition.

On October 31, 2017, Empire State Realty Trust, Inc. (the “Company” or “we”) issued a press release announcing its financial results for the third quarter 2017. 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 third quarter 2017 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 third quarter 2017
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: acquisition expenses, deferred financing costs write-offs, prepayment penalties 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 eliminated because they may not accurately represent the actual change in value in our

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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 interest expense, income taxes and depreciation and amortization. We present EBITDA because we believe that EBITDA, along with cash flow from operating activities, investing activities and financing activities, provides investors with an additional indicator of its ability to incur and service debt. EBITDA should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of our financial performance, as an alternative to net cash flows from operating activities (determined in accordance with GAAP), or as a measure of its liquidity.

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SIGNATURE

Pursuant to the requirements of the Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EMPIRE STATE REALTY TRUST, INC. (Registrant)
Date: October 31, 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: October 31, 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 THIRD QUARTER 2017 RESULTS

- Earnings of $0.12 Per Fully Diluted Share -

- Core FFO of $0.26 Per Fully Diluted Share -

- Leased 487,854 Square Feet of Office Space -

New York, New York, October 31, 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 third quarter of 2017.

“We are pleased with our strong third quarter results,” stated John B. Kessler, Empire State Realty Trust’s President and Chief Operating Officer. “Core FFO increased 7.7% from the third quarter of 2016. We continue to consolidate, redevelop and re-lease space to larger, higher credit quality tenants at materially higher rents and create value. During the quarter, we leased over 487,000 square feet which resulted in attractive spreads on both new Manhattan office and total portfolio leases of 46.1% and 27.7%, respectively. This quarter, we signed major lease agreements with Fragomen, Del Rey, Bernsen & Loewy, LLP for 108,000 square feet at 1400 Broadway and the American Society of Composers, Authors and Publishers for 85,000 square feet at 250 West 57th Street. Tenants continue to be attracted to our well-located, amenity-rich office buildings which have all been modernized for the 21^st Century.”

“Year-to-date, Observatory revenue grew 3.4% and Observatory net operating income grew 2.7%, as compared with the first nine months of 2016, driven by improved revenue mix despite unfavorable weather conditions,” added Kessler. “We further strengthened our balance sheet through the successful refinancing of our existing unsecured revolving credit facility and term loan which extended the credit facility maturity, lowered our borrowing costs and added flexibility to our financial covenants. We are well-positioned with the liquidity, strength, and flexibility of our balance sheet to fund future growth opportunities and create long-term value for our shareholders.”

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Third Quarter Highlights

• Achieved net income attributable to the Company of $0.12 per fully diluted share and Core Funds From Operations (“Core FFO”) of $0.26 per fully diluted share.

• Occupancy and leased percentages at September 30, 2017:

• Total portfolio was 89.8% occupied; including signed leases not commenced (“SLNC”), the total portfolio was 91.7% leased.

• Manhattan office portfolio (excluding the retail component of these properties) was 89.1% occupied; including SLNC, the Manhattan office portfolio was 91.5% leased.

• Retail portfolio was 94.1% occupied; including SLNC, the retail portfolio was 94.1% leased.

• Empire State Building was 93.3% occupied; including SLNC, was 93.5% leased.

• Signed 34 leases, representing 487,854 rentable square feet across the total portfolio, achieving a portfolio-wide 27.7% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.

• Signed 13 new leases representing 276,964 rentable square feet for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 46.1% in mark-to-market rent over previous fully escalated rents.

• The Empire State Building Observatory revenue for the third quarter 2017 grew 3.1% to $39.3 million from $38.1 million in the third quarter 2016.

• Recast the Company’s $1.1 billion undrawn, unsecured revolving credit facility and $265 million term loan and extended the revolving credit facility maturity, lowered the borrowing costs and added flexibility to the financial covenants.

• Declared a dividend in the amount of $0.105 per share.

Financial Results for the Third Quarter 2017

Net income attributable to common stockholders was $18.8 million, or $0.12 per fully diluted share, compared to $16.0 million, or $0.12 per fully diluted share, in the third quarter of 2016.

Core FFO was $77.5 million, or $0.26 per fully diluted share, compared to $71.9 million, or $0.26 per fully diluted share, in the third quarter of 2016.

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Modified FFO was $75.3 million, or $0.25 per fully diluted share, compared to $71.9 million, or $0.26 per fully diluted share, in the third quarter of 2016.

FFO was $73.4 million, or $0.25 per fully diluted share, compared to $70.0 million, or $0.25 per fully diluted share, in the third quarter of 2016.

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 Nine Months Ended September 30, 2017

Net income attributable to common stockholders was $45.4 million, or $0.29 per fully diluted share, compared to $34.5 million, or $0.27 per fully diluted share, in the nine months ended September 30, 2016.

Core FFO was $212.0 million, or $0.71 per fully diluted share, compared to $194.8 million, or $0.72 per fully diluted share, in the nine months ended September 30, 2016.

Modified FFO was $209.9 million, or $0.70 per fully diluted share, compared to $194.2 million, or $0.72 per fully diluted share, in the nine months ended September 30, 2016.

FFO was $204.0 million, or $0.68 per fully diluted share, compared to $188.3 million, or $0.69 per fully diluted share, in the nine months ended September 30, 2016.

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

Portfolio Operations

As of September 30, 2017, 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 the date of tenants’ move out and the date of Company’s completion of redevelopment work for new leases to commence. As of September 30, 2017, the Company’s portfolio was occupied and leased as follows. Leased percentages include signed leases not commenced.

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	September 30, 2017			June 30, 2017			September 30, 2016
Percent occupied:
Total portfolio		89.8	%		89.2	%		87.9	%
Total office		89.5	%		88.7	%		88.0	%
Manhattan office		89.1	%		88.3	%		86.6	%
Empire State Building		93.3	%		92.1	%		90.1	%
Retail		94.1	%		95.9	%		86.3	%
Percent leased:
Total portfolio		91.7	%		91.3	%		90.3	%
Total office		91.5	%		90.9	%		90.4	%
Manhattan office		91.5	%		90.7	%		89.5	%
Empire State Building		93.5	%		92.4	%		91.5	%
Retail		94.1	%		96.0	%		88.3	%

Leasing

For the three months ended September 30, 2017, the Company signed 34 new, renewal, and expansion leases within the total portfolio, comprising 487,854 rentable square feet with an average starting rental rate of $52.52 per rentable square foot, representing an increase of 27.7% over the previous fully escalated rent.

On a blended basis, the 27 new, renewal, and expansion office leases signed within the Manhattan office portfolio during the quarter had an average starting rental rate of $58.46 per rentable square foot, representing an increase of 41.1% over the previous fully escalated rent.

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Leases Signed in the Third Quarter 2017 for the Manhattan Office Portfolio

• 13 new leases, comprising 276,964 rentable square feet, with an average starting rental rate of $58.79 per rentable square foot, representing an increase of 46.1% over the previous fully escalated rent, and

• 14 renewal leases, comprising 38,180 rentable square feet, with an average starting rental rate of $56.12 per rentable square foot, representing an increase of 12.2% over the previous fully escalated rent.

Significant Leases Executed During the Third Quarter 2017

• At 1400 Broadway, the Company signed a new three full floor office lease, totaling 108,000 rentable square feet, with Fragomen, Del Rey, Bernsen & Loewy, LLP, for a term of 16 years.

• At 250 West 57th Street, the Company signed a new four floor office lease, totaling 85,000 rentable square feet, with American Society of Composers, Authors and Publishers (ASCAP) for a term of 16.3 years.

• At the Empire State Building, the Company signed a lease to expand the Priceline Group’s Agoda International USA Inc. to a 27,000 rentable square foot full floor office lease, for a term of 10.8 years.

• At First Stamford Place, the Company signed an early renewal office lease, totaling 87,000 rentable square feet, with Odyssey Reinsurance Company for a term of 15 years.

Empire State Building

The Company continues to renovate and lease the 2.8 million rentable square foot Empire State Building, its flagship property. As previously announced in the second quarter 2017, the Company commenced the first phase of a capital project to enhance the experience of office and retail tenants and Observatory visitors. The first phase will move the Observatory entrance to a new, larger, designated entrance at the western side of the Empire State Building on 34th Street which will improve the commercial tenant and office visitor experience and the value of the Empire State Building’s 34^th Street retail. At September 30, 2017, the Empire State Building was 93.3% occupied; including SLNC, the Empire State Building was 93.5% leased.

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During the third quarter 2017, the Company signed eight office leases at the Empire State Building, representing 51,651 rentable square feet in the aggregate.

Observatory revenue for the third quarter 2017 was $39.3 million, a 3.1% increase from $38.1 million in the third quarter 2016. The Observatory hosted approximately 1,276,000 visitors in the third quarter 2017 compared to 1,340,000 visitors in the third quarter 2016, a decrease of 4.8%. In the third quarter 2017, there were 14 bad weather days compared to 10 bad weather days in the third quarter 2016. For the third quarter, the Company estimates that bad weather resulted in approximately thirty-five to forty thousand net fewer visitors than in the prior year period.

Observatory revenue was $94.2 million for the nine months ended September 30, 2017, a 3.4% increase from $91.1 million for the nine months ended September 30, 2016. For the nine months ended September 30, 2017, the Observatory hosted approximately 3,038,000 visitors, compared to 3,183,000 visitors for the same period in 2016, a decrease of 4.6%. For the nine months ended September 30, 2017, there were 51 bad weather days compared to 31 bad weather days in the nine months ended September 30, 2016.

Balance Sheet

At September 30, 2017, the Company had total debt outstanding of approximately $1.6 billion, with a weighted average interest rate of 4.05% per annum, and a weighted average term to maturity of 6.2 years. As of September 30, 2017, the Company had no debt maturing during the remainder of 2017 and $262.2 million of debt maturing in 2018. As of September 30, 2017, the Company had cash and cash equivalents of $432.1 million. The Company’s consolidated net debt to total market capitalization was approximately 15.7% as of September 30, 2017, and consolidated net debt to EBITDA was 3.3x.

During the third quarter 2017, the Company recast its unsecured credit facility in the original principal amount of $1.365 billion, which consists of a $1.1 billion revolving credit facility and a $265 million term loan facility. The recast credit facility replaced the prior revolving credit facility which had been due to mature in January 2019 and was undrawn as of September 30, 2017. The term loan facility was borrowed in full at closing and was used to repay a $265 million term loan that had been due in 2022. The Company has the ability to further increase the total capacity of the new unsecured credit facility to $1.75 billion through the exercise of an accordion option during the term.

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The new revolving credit facility matures on August 29, 2021, and may be extended by two additional six-month periods at the option of the Company. The new term loan facility matures on August 29, 2022.

Initial interest rates on the new facility, which may change based on the Company’s leverage levels, are LIBOR plus 120 basis points for the term loan and LIBOR plus 110 basis points for any drawn portion of the revolving credit facility, a savings of 40 and 5 basis points, respectively, from the prior facilities. In addition, the initial annual revolving credit facility fee decreased from 20 basis points to 15 basis points.

Dividend

On September 30, 2017, the Company paid a dividend of $0.105 per share for the third quarter 2017 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 third quarter 2017 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 Wednesday, November 1, 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 the live webcast, go to the site at least five minutes prior to the scheduled start time in order to register, download and install any necessary audio software. Shortly after the call, a replay of the webcast will be available for 90 days on the Company’s website.

The conference call can also be accessed by dialing 1-877-407-3982 for domestic callers or 1-201-493-6780 for international callers. A dial-in replay will be available starting shortly after the call until November 8, 2017, which can be accessed by dialing 1-844-512-2921 for domestic callers or 1-412-317-6671 for international callers. The passcode for this dial-in replay is 13672125.

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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 September 30, 2017, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan, three in Fairfield County, Connecticut, and two in Westchester County, New York; and approximately 700,000 rentable square feet in the retail portfolio.

Forward-Looking Statements

This press release includes “forward looking statements” within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “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 legal proceedings 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 operating partnership units; changes in our business strategy; 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; termination or expiration of our ground leases; our failure to obtain or maintain necessary outside financing, including our unsecured revolving credit facility; our leverage;

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decreased rental rates or increased vacancy rates; our failure to redevelop and reposition properties, or to execute any newly planned capital project, successfully or on the anticipated timeline or at the anticipated costs; difficulties in identifying properties to acquire and completing acquisitions; risks of real estate development (including our Metro Tower development site) and capital projects, including the cost of construction delays and cost overruns; impact of changes in governmental regulations, tax law and rates and similar matters; and our failure to qualify as a real estate investment trust, or REIT. 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, 2016, and other risks described in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission.

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, new information, data or methods, future events, or other changes after the date of this press release, except as required by applicable law. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

Contact:

Investors

Empire State Realty Trust Investor Relations

(212) 850-2678

IR@empirestaterealtytrust.com

Media

Sard Verbinnen & Co.

(212) 687-8080

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Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

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

	Three Months Ended September 30,
	2017			2016
Revenues
Rental revenue	$	122,391		$	115,634
Tenant expense reimbursement		20,346			19,176
Observatory revenue		39,306			38,093
Third-party management and other fees		345			404
Other revenue and fees		4,932			2,541
Total revenues		187,320			175,848
Operating expenses
Property operating expenses		41,270			38,585
Ground rent expenses		2,331			2,331
General and administrative expenses		12,899			11,798
Observatory expenses		8,648			7,250
Real estate taxes		26,901			24,691
Acquisition expenses		—			—
Depreciation and amortization		38,490			37,607
Total operating expenses		130,539			122,262
Total operating income		56,781			53,586
Other expenses:
Interest expense		(16,890	)		(17,939	)
Loss on early extinguishment of debt		(2,157	)		—
Loss from derivative financial instruments		—			—
Income before income taxes		37,734			35,647
Income tax expense		(2,245	)		(2,750	)
Net income		35,489			32,897
Preferred unit distributions		(234	)		(234	)
Net income attributable to non-controlling interests		(16,449	)		(16,690	)
Net income attributable to common stockholders	$	18,806		$	15,973
Total weighted average shares
Basic		158,102			136,831
Diluted		297,871			280,614
Net income per share attributable to common stockholders
Basic	$	0.12		$	0.12
Diluted	$	0.12		$	0.12

10

Empire State Realty Trust, Inc.

Condensed Consolidated Statements of Income

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

	Nine Months Ended September 30,
	2017			2016
Revenues
Rental revenue	$	360,348		$	343,155
Tenant expense reimbursement		53,889			56,350
Observatory revenue		94,212			91,112
Third-party management and other fees		1,088			1,372
Other revenue and fees		19,861			6,748
Total revenues		529,398			498,737
Operating expenses
Property operating expenses		122,009			115,075
Ground rent expenses		6,994			6,994
General and administrative expenses		36,566			35,623
Observatory expenses		23,079			21,900
Real estate taxes		76,001			71,773
Acquisition expenses		—			98
Depreciation and amortization		119,868			115,382
Total operating expenses		384,517			366,845
Total operating income		144,881			131,892
Other expenses:
Interest expense		(52,109	)		(52,758	)
Loss on early extinguishment of debt		(2,157	)		(552	)
Loss from derivative financial instruments		(289	)		—
Income before income taxes		90,326			78,582
Income tax expense		(4,333	)		(4,340	)
Net income		85,993			74,242
Preferred unit distributions		(702	)		(702	)
Net income attributable to non-controlling interests		(39,916	)		(39,050	)
Net income attributable to common stockholders	$	45,375		$	34,490
Total weighted average shares
Basic		157,796			126,740
Diluted		298,089			271,028
Net income per share attributable to common stockholders
Basic	$	0.29		$	0.27
Diluted	$	0.29		$	0.27

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 September 30,
	2017			2016
Net income	$	35,489		$	32,897
Preferred unit distributions		(234	)		(234	)
Real estate depreciation and amortization		38,134			37,318
FFO attributable to common stockholders and non-controlling interests		73,389			69,981
Amortization of below-market ground leases		1,957			1,957
Modified FFO attributable to common stockholders and non-controlling interests		75,346			71,938
Loss on early extinguishment of debt		2,157			—
Acquisition expenses		—			—
Core FFO attributable to common stockholders and non-controlling interests	$	77,503		$	71,938
Total weighted average shares
Basic		296,389			278,739
Diluted		297,871			280,614
FFO per share
Basic	$	0.25		$	0.25
Diluted	$	0.25		$	0.25
Modified FFO per share
Basic	$	0.25		$	0.26
Diluted	$	0.25		$	0.26
Core FFO per share
Basic	$	0.26		$	0.26
Diluted	$	0.26		$	0.26

12

Empire State Realty Trust, Inc.

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

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

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

	Nine Months Ended September 30,
	2017			2016
Net income	$	85,993		$	74,242
Preferred unit distributions		(702	)		(702	)
Real estate depreciation and amortization		118,690			114,779
FFO attributable to common stockholders and non-controlling interests		203,981			188,319
Amortization of below-market ground leases		5,873			5,873
Modified FFO attributable to common stockholders and non-controlling interests		209,854			194,192
Loss on early extinguishment of debt		2,157			552
Acquisition expenses		—			98
Core FFO attributable to common stockholders and non-controlling interests	$	212,011		$	194,842
Total weighted average shares
Basic		296,389			270,388
Diluted		298,089			271,028
FFO per share
Basic	$	0.69		$	0.70
Diluted	$	0.68		$	0.69
Modified FFO per share
Basic	$	0.71		$	0.72
Diluted	$	0.70		$	0.72
Core FFO per share
Basic	$	0.72		$	0.72
Diluted	$	0.71		$	0.72

13

Empire State Realty Trust, Inc.

Condensed Consolidated Balance Sheets

(unaudited and amounts in thousands)

	September 30,			December 31,
	2017			2016
Assets
Commercial real estate properties, at cost	$	2,608,138		$	2,458,629
Less: accumulated depreciation		(631,916	)		(556,546	)
Commercial real estate properties, net		1,976,222			1,902,083
Cash and cash equivalents		432,105			554,371
Restricted cash		64,020			61,514
Tenant and other receivables		34,661			22,542
Deferred rent receivables		172,665			152,074
Prepaid expenses and other assets		39,463			53,749
Deferred costs, net		268,132			277,081
Acquired below market ground leases, net		370,187			376,060
Goodwill		491,479			491,479
Total assets	$	3,848,934		$	3,890,953
Liabilities and equity
Mortgage notes payable, net	$	720,830		$	759,016
Senior unsecured notes, net		592,914			590,388
Unsecured term loan facility, net		263,546			262,927
Unsecured revolving credit facility		—			—
Accounts payable and accrued expenses		142,690			134,064
Acquired below market leases, net		70,013			82,300
Deferred revenue and other liabilities		41,320			32,212
Tenants’ security deposits		47,395			47,183
Total liabilities		1,878,708			1,908,090
Total equity		1,970,226			1,982,863
Total liabilities and equity	$	3,848,934		$	3,890,953

14

EX-99.2

Exhibit 99.2

Third Quarter 2017

Table of Contents	Page
Summary
Company Profile		3
Financial Highlights		4
Selected Property Data
Property Summary and Initial Free Rent Burn-Off		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, 2016 and other risks described in documents we subsequently file from time to time with the Securities and Exchange Commission.

Page 2

Third Quarter 2017

COMPANY PROFILE

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

BOARD OF DIRECTORS

Anthony E. Malkin	Chairman and Chief Executive Officer
William H. Berkman	Director, Chair of Finance Committee
Leslie D. Biddle	Director
Thomas J. DeRosa	Director
Steven J. Gilbert	Director, Lead Director
S. Michael Giliberto	Director, Chair of Audit Committee
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, 12th Floor	Greg Faje	Trading Symbol: ESRT
New York, NY 10120	IR@empirestaterealtytrust.com
www.empirestaterealtytrust.com
(212) 687-8700

RESEARCH COVERAGE

Bank of America Merrill Lynch	James Feldman	(646) 855-5808	james.feldman@baml.com
BMO Capital Markets Corp.	John Kim	(212) 885-4115	jp.kim@bmo.com
BTIG	Thomas Catherwood	(212) 738-6140	tcatherwood@btig.com
Evercore ISI	Robert Simone	(212) 446-9459	robert.simone@evercoreisi.com
Goldman Sachs & Co. LLC	Andrew Rosivach	(212) 902-4736	rosivach@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

Third Quarter 2017

Financial Highlights

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

	Three Months Ended
Selected Items:	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Revenue	$	187,320		$	177,124		$	164,954		$	179,263		$	175,848
Net income	$	35,489		$	31,359		$	19,145		$	33,008		$	32,897
Cash net operating income (1)	$	101,314		$	97,270		$	82,781		$	96,338		$	93,715
Core funds from operations (“Core FFO”) (1)	$	77,503		$	73,215		$	61,293		$	74,158		$	71,938
Core funds available for distribution (“Core FAD”) (1)	$	64,201		$	61,546		$	53,721		$	60,472		$	59,712
Core FFO per share - diluted	$	0.26		$	0.25		$	0.21		$	0.25		$	0.26
Diluted weighted average shares		297,871,000			298,398,000			297,962,000			297,046,000			280,614,000
Dividends declared and paid per share	$	0.105		$	0.105		$	0.105		$	0.105		$	0.105
Portfolio Statistics:
Number of properties		20			20			20			20			20
Total rentable square footage		10,137,074			10,139,660			10,145,676			10,138,999			10,125,119
Percent occupied (2)		89.8	%		89.2	%		88.8	%		88.1	%		87.9	%
Percent leased (3)		91.7	%		91.3	%		89.5	%		90.2	%		90.3	%
Observatory Metrics:
Number of visitors		1,276,000			1,126,000			636,000			1,068,000			1,340,000
Change in visitors year over year		-4.8	%		0.2	%		-11.5	%		12.5	%		1.0	%
Observatory revenues	$	39,306		$	33,966		$	20,940		$	33,702		$	38,093
Change in revenues year over year		3.1	%		6.9	%		-1.4	%		22.1	%		6.7	%
Ratios:
Consolidated Debt to Total Market Capitalization (4)		20.4	%		20.2	%		20.6	%		21.1	%		20.5	%
Consolidated Net Debt to Total Market Capitalization (4)		15.7	%		15.5	%		14.8	%		14.9	%		14.0	%
Consolidated Debt and Perpetual Preferred Units to Total Market Capitalization (4)		20.7	%		20.6	%		20.9	%		21.4	%		20.8	%
Consolidated Net Debt and Perpetual Preferred Units to Total Market Capitalization (4)		16.1	%		15.8	%		15.2	%		15.3	%		14.4	%
Consolidated Debt to EBITDA (5)		4.5x			4.5x			4.7x			4.8x			4.9x
Consolidated Net Debt to EBITDA (5)		3.3x			3.3x			3.2x			3.1x			3.1x
Interest Coverage Ratio		5.6x			5.5x			4.9x			5.8x			5.7x
Core FFO Payout Ratio (6)		41	%		43	%		51	%		42	%		44	%
Core FAD Payout Ratio (7)		49	%		51	%		58	%		52	%		53	%
Class A common stock price at quarter end	$	20.54		$	20.77		$	20.64		$	20.19		$	20.95
Average closing price	$	20.48		$	21.05		$	20.66		$	19.82		$	20.67
Dividends per share - annualized	$	0.42		$	0.42		$	0.42		$	0.42		$	0.42
Dividend yield (8)		2.0	%		2.0	%		2.0	%		2.1	%		2.0	%
Private Perpetual Preferred Units outstanding ($16.62 liquidation value)		1,560,360			1,560,360			1,560,360			1,560,360			1,560,360
Class A common stock		158,349,708			157,493,025			156,689,477			154,744,740			153,828,060
Class B common stock		1,077,740			1,080,475			1,095,114			1,095,737			1,097,584
Operating partnership units		140,989,373			141,844,339			142,583,324			143,252,598			144,173,889
Total common stock and operating partnership units outstanding		300,416,821			300,417,839			300,367,915			299,093,075			299,099,533

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 September 30, 2017 multiplied by the total outstanding number of shares of common stock and operating partnership units as of September 30, 2017; (ii) the number of perpetual preferred units at September 30, 2017 multiplied by $16.62 and (iii) our outstanding indebtedness or net indebtedness as of September 30, 2017.

(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 September 30, 2017.

Page 4

Third Quarter 2017

Property Summary and Initial Free Rent Burn-Off

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

	Three Months Ended September 30, 2017
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,137,074			8,064,444			1,868,180			204,450
Occupancy (2)		89.8	%		89.2	%		91.3	%		99.4	%
Revenue	$	186,975		$	124,195		$	18,582		$	4,892		$	39,306
Operating expenses		(79,150	)		(60,052	)		(8,565	)		(1,885	)		(8,648	)
Net operating income		107,825			64,143			10,017			3,007			30,658
Straight-line rent		(6,861	)		(6,825	)		(190	)		154			—
Above/below-market rent revenue amortization		(1,607	)		(1,607	)		—			—			—
Below-market ground lease amortization		1,957			1,957			—			—			—
Cash net operating income	$	101,314		$	57,668		$	9,827		$	3,161		$	30,658
Leasing activity
Total leases executed		34			27			7			—
Total square footage executed		487,854			315,144			172,710			—
Average rent psf - leases executed	$	52.52		$	58.46		$	41.68		$	—
Previously escalated rents psf	$	41.12		$	41.42		$	40.57		$	—
Percentage of new rent over previously escalated rents		27.7	%		41.1	%		2.7	%		—
Weighted average lease term		12.2 years
Leasing commission costs per square foot	$	22.15		$	26.21		$	14.74		$	—
Tenant improvement costs per square foot		72.92			80.69			58.76			—
Total LC and TI per square foot (3)	$	95.07		$	106.90		$	73.50		$	—
	Office			Retail			Total
Total Portfolio
Total square footage executed		487,854			—			487,854
Average rent psf - leases executed	$	52.52		$	—		$	52.52
Previously escalated rents psf	$	41.12		$	—		$	41.12
Percentage of new rent over previously escalated rents		27.7	%		—			27.7	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		315,144			—			315,144
Average rent psf - leases executed	$	58.46		$	—		$	58.46
Previously escalated rents psf	$	41.42		$	—		$	41.42
Percentage of new rent over previously escalated rents		41.1	%		—			41.1	%

Schedule of Initial Free Rent Burn-Off

As of September 30, 2017, the Company had approximately $42 million of annualized cash rents that have yet to contribute to Cash NOI:

• $30 million from commenced leases in free rent periods

• $12 million from signed leases not commenced

	Annualized		Cash Base Rent Contributing to the Following Years:
	Initial Base		Remaining
Total Portfolio	Cash Rent		2017		2018		2019		2020		2021
Commenced leases in free rent period	$	30,250	$	1,911	$	19,611	$	30,076	$	30,250	$	30,250
Signed leases not commenced		12,292		37		2,200		7,923		11,852		12,292
Total	$	42,542	$	1,948	$	21,811	$	37,999	$	42,102	$	42,542

Page 5

Third Quarter 2017

Property Summary

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

	Three Months Ended June 30, 2017
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,139,660			8,066,529			1,868,679			204,452
Occupancy (2)		89.2	%		88.7	%		90.5	%		99.4	%
Revenue	$	176,732		$	118,014		$	19,721		$	5,031		$	33,966
Operating expenses		(72,579	)		(55,230	)		(8,425	)		(1,748	)		(7,176	)
Net operating income		104,153			62,784			11,296			3,283			26,790
Straight-line rent		(7,722	)		(7,305	)		(460	)		43			—
Above/below-market rent revenue amortization		(1,119	)		(1,119	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	97,270		$	56,318		$	10,836		$	3,326		$	26,790
Leasing activity
Total leases executed		51			43			6			2
Total square footage executed		329,866			253,495			49,228			27,143
Average rent psf - leases executed	$	54.39		$	60.26		$	32.02		$	34.26
Previously escalated rents psf	$	41.52		$	43.45		$	30.41		$	40.83
Percentage of new rent over previously escalated rents		31.0	%		38.7	%		5.3	%		-16.1	%
Weighted average lease term		9.3 years
Leasing commission costs per square foot	$	17.74		$	21.97		$	5.71		$	—
Tenant improvement costs per square foot		68.24			79.19			49.50			—
Total LC and TI per square foot (3)	$	85.98		$	101.16		$	55.21		$	—
	Office			Retail			Total
Total Portfolio
Total square footage executed		300,269			29,597			329,866
Average rent psf - leases executed	$	55.22		$	40.66		$	54.39
Previously escalated rents psf	$	40.61		$	48.13		$	41.52
Percentage of new rent over previously escalated rents		36.0	%		-15.5	%		31.0	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		251,041			2,454			253,495
Average rent psf - leases executed	$	59.76		$	111.42		$	60.26
Previously escalated rents psf	$	42.61		$	128.87		$	43.45
Percentage of new rent over previously escalated rents		40.3	%		-13.5	%		38.7	%

Page 6

Third Quarter 2017

Property Summary

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

	Three Months Ended March 31, 2017
				Manhattan			Greater New York			Standalone
	Total			Office			Office			Retail
	Portfolio			Portfolio (1)			Portfolio			Portfolio			Observatory
Number of properties		20			9			5			6
Square feet		10,145,676			8,071,337			1,869,887			204,452
Occupancy (2)		88.8	%		88.1	%		90.7	%		99.4	%
Revenue	$	164,603		$	116,746		$	22,121		$	4,796		$	20,940
Operating expenses		(76,354	)		(59,105	)		(8,300	)		(1,694	)		(7,255	)
Net operating income		88,249			57,641			13,821			3,102			13,685
Straight-line rent		(5,998	)		(6,550	)		467			85			—
Above/below-market rent revenue amortization		(1,428	)		(1,428	)		—			—			—
Below-market ground lease amortization		1,958			1,958			—			—			—
Cash net operating income	$	82,781		$	51,621		$	14,288		$	3,187		$	13,685
Leasing activity
Total leases executed		27			24			3			—
Total square footage executed		200,992			128,179			72,813			—
Average rent psf - leases executed	$	61.33		$	73.04		$	40.71		$	—
Previously escalated rents psf	$	42.58		$	40.84		$	45.66		$	—
Percentage of new rent over previously escalated rents		44.0	%		78.9	%		-10.8	%		—
Weighted average lease term		10.6 years
Leasing commission costs per square foot	$	28.01		$	36.49		$	13.08		$	—
Tenant improvement costs per square foot		48.84			45.02			55.57			—
Total LC and TI per square foot (3)	$	76.85		$	81.51		$	68.65		$	—
	Office			Retail			Total
Total Portfolio
Total square footage executed		157,973			43,019			200,992
Average rent psf - leases executed	$	50.81		$	99.96		$	61.33
Previously escalated rents psf	$	47.48		$	24.60		$	42.58
Percentage of new rent over previously escalated rents		7.0	%		306.3	%		44.0	%
	Office			Retail			Total
Manhattan Office Portfolio
Total square footage executed		85,160			43,019			128,179
Average rent psf - leases executed	$	59.45		$	99.96		$	73.04
Previously escalated rents psf	$	49.04		$	24.60		$	40.84
Percentage of new rent over previously escalated rents		21.2	%		306.3	%		78.9	%

Page 7

Third Quarter 2017

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 8

Third Quarter 2017

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	%

Notes:

⁽¹⁾  Includes 494,935 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.

Page 9

Third Quarter 2017

Property Detail

(unaudited)

Property Name	Location or Sub-Market	Rentable Square Feet (1)		Percent Occupied (2)			Annualized Rent (3)		Annualized Rent per Occupied Square Foot (4)		Number of Leases (5)
Manhattan Office Properties - Office
The Empire State Building (6)	Penn Station -Times Sq. South		2,711,465		93.8	%	$	138,285,881	$	54.38		187
One Grand Central Place	Grand Central		1,241,624		89.0	%		61,393,224		55.56		235
1400 Broadway (8)	Penn Station -Times Sq. South		908,332		86.9	%		37,168,377		47.07		43
111 West 33rd Street (9)	Penn Station -Times Sq. South		637,821		72.6	%		24,971,931		53.96		17
250 West 57th Street	Columbus Circle - West Side		488,849		71.3	%		19,862,124		56.99		83
501 Seventh Avenue	Penn Station -Times Sq. South		459,743		92.9	%		18,408,510		43.10		31
1359 Broadway	Penn Station -Times Sq. South		455,583		97.4	%		22,561,889		50.87		36
1350 Broadway (10)	Penn Station -Times Sq. South		373,463		88.4	%		18,158,438		55.03		64
1333 Broadway	Penn Station -Times Sq. South		292,629		100.0	%		14,501,159		49.55		12
Manhattan Office Properties - Office			7,569,509		89.1	%		355,311,533		52.70		708
Manhattan Office Properties - Retail
The Empire State Building (7)	Penn Station -Times Sq. South		104,163		81.7	%		13,820,077		162.46		15
One Grand Central Place	Grand Central		69,029		79.1	%		6,173,037		113.06		14
1400 Broadway (8)	Penn Station -Times Sq. South		21,073		72.8	%		1,982,189		129.24		7
112 West 34th Street (9)	Penn Station -Times Sq. South		90,132		100.0	%		22,551,208		250.20		4
250 West 57th Street	Columbus Circle - West Side		48,962		100.0	%		8,039,729		164.20		8
501 Seventh Avenue	Penn Station -Times Sq. South		35,558		96.9	%		1,985,661		57.65		9
1359 Broadway	Penn Station -Times Sq. South		27,243		100.0	%		2,184,241		80.18		6
1350 Broadway (10)	Penn Station -Times Sq. South		31,774		100.0	%		6,765,426		212.92		6
1333 Broadway	Penn Station -Times Sq. South		67,001		100.0	%		8,522,403		127.20		4
Manhattan Office Properties - Retail			494,935		91.8	%		72,023,971		158.45		73
Sub-Total/Weighted Average Manhattan Office Properties - Office and Retail			8,064,444		89.2	%		427,335,504		59.38		781
Greater New York Metropolitan Area Office Properties
First Stamford Place (11)	Stamford, CT		793,448		92.9	%		31,351,328		42.55		55
Metro Center	Stamford, CT		285,258		88.4	%		14,227,656		56.40		29
383 Main Avenue	Norwalk, CT		262,557		89.4	%		7,428,364		31.64		21
500 Mamaroneck Avenue	Harrison, NY		294,519		90.9	%		7,637,863		28.53		35
10 Bank Street	White Plains, NY		232,398		91.9	%		7,675,904		35.95		34
Sub-Total/Weighted Average Greater New York Metropolitan Area Office Properties			1,868,180		91.3	%		68,321,114		40.07		174
Standalone Retail Properties
10 Union Square	Union Square		58,003		98.0	%		6,380,729		112.30		12
1542 Third Avenue	Upper East Side		56,250		100.0	%		3,862,453		68.67		4
1010 Third Avenue	Upper East Side		44,662		100.0	%		3,738,322		83.70		2
77 West 55th Street	Midtown		24,102		100.0	%		2,707,236		112.32		3
69-97 Main Street	Westport, CT		17,103		100.0	%		2,330,849		136.28		5
103-107 Main Street	Westport, CT		4,330		100.0	%		715,852		165.32		1
Sub-Total/Weighted Average Standalone Retail Properties			204,450		99.4	%		19,735,441		97.09		27
Portfolio Total			10,137,074		89.8	%	$	515,392,060	$	56.61		982
Total/Weighted Average Office Properties			9,437,689		89.5	%	$	423,632,647	$	50.15		882
Total/Weighted Average Retail Properties			699,385		94.1	%		91,759,413		139.49		100
Portfolio Total			10,137,074		89.8	%	$	515,392,060	$	56.61		982

Notes:

(1) Excludes (i) 155,968 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 September 30, 2017.

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

(4) Represents annualized rent under leases commenced as of September 30, 2017 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 70,288 rentable square feet of space leased by the Company’s broadcasting tenants.

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

(8) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 46 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 60 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 33 years (expiring July 31, 2050).

(11) First Stamford Place consists of three buildings.

Page 10

Third Quarter 2017

Tenant Lease Expirations

(unaudited)

Total Lease Expirations	Number of Leases Expiring (1)		Rentable Square Feet Expiring (2)		Percent of Portfolio Rentable Square Feet Expiring			Annualized Rent (3)		Percent of Annualized Rent			Annualized Rent Per Rentable Square Foot
Available		—		840,893		8.3	%	$	—		0.0	%	$	—
Signed leases not commenced		14		191,149		1.9	%		—		0.0	%		—
2017		65		261,442		2.6	%		12,569,916		2.4	%		48.08
2018		177		781,145		7.7	%		41,615,873		8.1	%		53.28
2019		143		719,587		7.1	%		36,800,762		7.1	%		51.14
2020		146		907,131		8.9	%		49,667,825		9.6	%		54.75
2021		92		683,020		6.7	%		37,403,005		7.3	%		54.76
2022		88		618,319		6.1	%		36,406,741		7.1	%		58.88
2023		50		545,332		5.4	%		31,525,520		6.1	%		57.81
2024		48		536,856		5.3	%		30,395,041		5.9	%		56.62
2025		41		314,580		3.1	%		23,928,707		4.6	%		76.07
2026		40		952,766		9.4	%		50,971,514		9.9	%		53.50
Thereafter		92		2,784,854		27.5	%		164,107,156		31.8	%		58.93
Total		996		10,137,074		100.0	%	$	515,392,060		100.0	%	$	56.61

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) 155,968 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

Third Quarter 2017

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		—		642,059		8.5	%	$	—		0.0	%	$	—
Signed leases not commenced		13		185,341		2.4	%		—		0.0	%		—
2017		57		243,413		3.2	%		11,960,479		3.4	%		49.14
2018		139		585,712		7.7	%		32,224,967		9.1	%		55.02
2019		111		484,039		6.4	%		24,762,789		7.0	%		51.16
2020		110		641,156		8.5	%		35,032,404		9.9	%		54.64
2021		54		437,912		5.8	%		23,046,127		6.5	%		52.63
2022		62		319,020		4.2	%		18,066,923		5.1	%		56.63
2023		37		399,040		5.3	%		21,157,795		6.0	%		53.02
2024		31		327,542		4.3	%		16,654,182		4.7	%		50.85
2025		22		171,378		2.3	%		9,691,565		2.7	%		56.55
2026		29		832,901		11.0	%		45,002,938		12.7	%		54.03
Thereafter		56		2,299,996		30.4	%		117,711,364		33.1	%		51.18
Total Manhattan office properties		721		7,569,509		100.0	%		355,311,533		100.0	%		52.70
Greater New York Metropolitan Area Office Properties
Available		—		157,275		8.4	%	$	—		0.0	%	$	—
Signed leases not commenced		1		5,808		0.3	%		—		0.0	%		—
2017		5		17,034		0.9	%		506,392		0.7	%		29.73
2018		33		172,233		9.2	%		6,778,691		9.9	%		39.36
2019		23		203,400		10.9	%		7,494,073		11.0	%		36.84
2020		26		209,663		11.2	%		9,119,563		13.3	%		43.50
2021		31		215,463		11.5	%		9,406,993		13.8	%		43.66
2022		16		236,998		12.7	%		9,072,608		13.3	%		38.28
2023		7		97,655		5.2	%		4,624,162		6.8	%		47.35
2024		6		183,736		9.8	%		8,137,668		11.9	%		44.29
2025		11		105,877		5.7	%		3,507,917		5.1	%		33.13
2026		2		45,361		2.4	%		1,367,879		2.0	%		30.16
Thereafter		14		217,677		11.7	%		8,305,168		12.2	%		38.15
Total greater New York metropolitan area office properties		175		1,868,180		100.0	%		68,321,114		100.0	%		40.07
Retail Properties
Available		—		41,559		5.9	%	$	—		0.0	%	$	—
Signed leases not commenced		—		—		0.0	%		—		0.0	%		—
2017		3		995		0.1	%		103,045		0.1	%		103.56
2018		5		23,200		3.3	%		2,612,215		2.8	%		112.60
2019		9		32,148		4.6	%		4,543,900		5.0	%		141.34
2020		10		56,312		8.1	%		5,515,858		6.0	%		97.95
2021		7		29,645		4.2	%		4,949,885		5.4	%		166.97
2022		10		62,301		8.9	%		9,267,210		10.1	%		148.75
2023		6		48,637		7.0	%		5,743,563		6.3	%		118.09
2024		11		25,578		3.7	%		5,603,191		6.1	%		219.06
2025		8		37,325		5.3	%		10,729,225		11.7	%		287.45
2026		9		74,504		10.7	%		4,600,697		5.0	%		61.75
Thereafter		22		267,181		38.2	%		38,090,624		41.5	%		142.56
Total retail properties		100		699,385		100.0	%		91,759,413		100.0	%		139.49
Total portfolio lease expirations		996		10,137,074		100.0	%	$	515,392,060		100.0	%	$	56.61

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) 155,968 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

Third Quarter 2017

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		—		162,992		6.0	%	$	—		0.0	%	$	—
Signed leases not commenced		1		5,669		0.2	%		—		0.0	%		—
2017		12		42,153		1.6	%		2,330,486		1.7	%		55.29
2018		18		76,273		2.8	%		4,574,068		3.3	%		59.97
2019		19		69,230		2.6	%		3,742,025		2.7	%		54.05
2020		39		303,202		11.2	%		17,745,117		12.8	%		58.53
2021		17		117,943		4.3	%		6,378,719		4.6	%		54.08
2022		22		96,214		3.5	%		5,753,099		4.2	%		59.79
2023		10		57,837		2.1	%		3,646,707		2.6	%		63.05
2024		10		76,595		2.8	%		4,611,094		3.3	%		60.20
2025		6		57,433		2.1	%		3,103,202		2.2	%		54.03
2026		11		502,152		18.5	%		27,760,115		20.1	%		55.28
Thereafter		23		1,143,772		42.3	%		58,641,249		42.4	%		51.27
Total Empire State Building office		188		2,711,465		100.0	%	$	138,285,881		100.0	%	$	54.38

Empire State Building Broadcasting Licenses and Leases	Annualized Base Rent (6)		Annualized Expense Reimbursements		Annualized Rent (4) (7)		Percent of Annualized Rent
2017	$	1,611,640	$	1,469,479	$	3,081,119		13.7	%
2018		3,292,775		1,819,870		5,112,645		22.8	%
2019		212,240		48,105		260,345		1.2	%
2020		1,579,354		418,960		1,998,314		8.9	%
2021		55,685		110,131		165,816		0.7	%
2022		1,088,769		275,991		1,364,760		6.1	%
2023		82,480		23,248		105,728		0.5	%
2024		45,894		67,040		112,934		0.5	%
2025		1,638,975		262,088		1,901,063		8.5	%
2026		768,750		138,226		906,976		4.0	%
Thereafter		6,490,763		948,175		7,438,938		33.1	%
Total Empire State Building broadcasting licenses and leases	$	16,867,325	$	5,581,313	$	22,448,638		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 $8.9 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.

(7) Excludes Fox Television whose lease expired in 2017 and was billed holdover rent as of September 30, 2017.

Page 13

Third Quarter 2017

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

20 Largest Tenants		Property	Lease Expiration (1)	Weighted Average Remaining Lease Term(2)		Total Occupied Square Feet (3)		Percent of Portfolio Rentable Square Feet (4)			Annualized Rent (5)		Percent of Portfolio Annualized Rent (6)
1.	Global Brands Group	ESB, 1333 B’Way, 111 West 33rd	Dec 2017-Oct. 2028		9.9 years		688,600		6.6	%	$	31,646,217		6.1	%
2.	Coty	ESB	Jan. 2030		12.3 years		312,700		3.0	%		15,811,172		3.1	%
3.	LinkedIn	ESB	Feb. 2026		8.4 years		282,782		2.7	%		15,031,208		2.9	%
4.	Sephora	112 West 34th Street	Jan. 2029		11.3 years		11,334		0.1	%		10,445,742		2.0	%
5.	PVH Corp.	501 Seventh Avenue	Oct. 2028		10.8 years		221,716		2.1	%		9,577,668		1.9	%
6.	Li & Fung	1359 Broadway	Oct. 2021-Oct. 2027		6.5 years		149,436		1.4	%		7,251,066		1.4	%
7.	Federal Deposit Insurance Corp.	ESB	Jan. 2020		2.3 years		121,879		1.2	%		7,013,460		1.4	%
8.	Urban Outfitters	1333 Broadway	Sept. 2029		12.0 years		56,730		0.5	%		6,670,084		1.3	%
9.	Macy’s	111 West 33rd Street	May 2030		12.6 years		131,117		1.3	%		6,645,808		1.3	%
10.	Duane Reade	ESB, 1350 B’Way, 250 West 57th	Feb. 2021-Sept. 2027		7.2 years		47,541		0.5	%		6,243,372		1.2	%
11.	Legg Mason	First Stamford Place	Sept. 2024		7.0 years		137,583		1.3	%		6,228,319		1.2	%
12.	Footlocker	112 West 34th Street	Sept. 2031		14.0 years		34,192		0.3	%		6,226,504		1.2	%
13.	On Deck Capital	1400 Broadway	Dec. 2026		9.3 years		107,800		1.0	%		5,825,445		1.1	%
14.	WDFG North America	ESB	Dec. 2025		8.3 years		5,300		0.1	%		5,512,587		1.1	%
15.	Shutterstock	ESB	Apr. 2029		11.6 years		104,386		1.0	%		5,484,904		1.1	%
16.	Kohl’s	1400 Broadway	May 2029		11.7 years		113,032		1.1	%		4,837,243		0.9	%
17.	Thomson Reuters	Metro Center	Apr. 2018-Apr. 2020		2.0 years		91,921		0.9	%		4,825,741		0.9	%
18.	The Gap, Inc.	111 West 33rd Street	Jan. 2030		12.3 years		80,903		0.9	%		4,611,471		0.9	%
19.	HNTB Corporation	ESB	Feb. 2026		8.4 years		78,361		0.8	%		4,592,963		0.9	%
20.	The Michael J. Fox Foundation	111 West 33rd Street	Nov. 2029		12.2 years		75,959		0.7	%		4,557,540		0.9	%
	Total						2,853,272		27.5	%	$	169,038,514		32.8	%

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 September 30, 2017.

(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

Third Quarter 2017

Capital Expenditures and Redevelopment Program

(unaudited)

	Three Months Ended
Capital expenditures	September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
Tenant improvements - first generation	$	16,219	$	20,557	$	25,254	$	28,575	$	31,959
Tenant improvements - second generation		6,058		4,764		2,464		3,122		949
Leasing commissions - first generation		7,416		7,683		2,538		3,077		7,141
Leasing commissions - second generation		817		192		1,071		467		388
Building improvements - first generation		15,759		26,680		19,935		21,800		17,970
Building improvements - second generation		2,105		2,337		30		1,754		2,061
Observatory capital project		13,411		6,850		—		—		—
Total	$	61,785	$	69,063	$	51,292	$	58,795	$	60,468

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

• Future redevelopment (Empire State Building) - 240,000 square feet

• Future redevelopment (other Manhattan properties) - 770,000 square feet

• Redevelopment completed - 6,970,000 square feet

Inventory of vacant space ⁽²⁾

• Developed - 570,000 square feet, 88%

• Undeveloped - 80,000 square feet, 12%

Inventory of undeveloped space ⁽²⁾

• Vacant - 80,000 square feet, 8%

• Expires in 2017 - 60,000 square feet, 6%

• Expires in 2018 and thereafter - 870,000 square feet, 86%

Notes:

⁽¹⁾  These estimates are based on the Company’s current budgets 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

Third Quarter 2017

Observatory Summary

(unaudited and in thousands)

			Three Months Ended
Observatory NOI	Twelve Months to Date		September 30, 2017		June 30, 2017		March 31, 2017		December 31, 2016		September 30, 2016
Observatory revenue	$	127,914	$	39,306	$	33,966	$	20,940	$	33,702	$	38,093
Observatory expenses		31,012		8,648		7,176		7,255		7,933		7,250
NOI		96,902		30,658		26,790		13,685		25,769		30,843
Intercompany rent expense (1)		77,823		23,301		20,675		13,378		20,469		22,983
NOI after intercompany rent	$	19,079	$	7,357	$	6,115	$	307	$	5,300	$	7,860

Note:

⁽¹⁾  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

Third Quarter 2017

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

Assets	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Commercial real estate properties, at cost:
Land	$	201,196		$	201,196		$	201,196		$	201,196		$	201,196
Development costs		7,978			7,978			7,977			7,951			7,946
Building and improvements		2,398,964			2,347,435			2,292,363			2,249,482			2,196,864
		2,608,138			2,556,609			2,501,536			2,458,629			2,406,006
Less: accumulated depreciation		(631,916	)		(605,481	)		(581,703	)		(556,546	)		(532,406	)
Commercial real estate properties, net		1,976,222			1,951,128			1,919,833			1,902,083			1,873,600
Cash and cash equivalents		432,105			440,958			532,442			554,371			594,297
Restricted cash		64,020			68,011			62,464			61,514			60,752
Tenant and other receivables, net		34,661			23,995			20,580			22,542			19,569
Deferred rent receivables, net		172,665			165,470			158,005			152,074			143,578
Prepaid expenses and other assets		39,463			54,624			36,815			53,749			33,685
Deferred costs, net		268,132			263,392			270,456			277,081			287,591
Acquired below-market ground leases, net		370,187			372,144			374,102			376,060			378,018
Goodwill		491,479			491,479			491,479			491,479			491,479
Total assets	$	3,848,934		$	3,831,201		$	3,866,176		$	3,890,953		$	3,882,569
Liabilities and Equity
Mortgage notes payable, net	$	720,830		$	724,312		$	754,548		$	759,016		$	763,457
Senior unsecured notes, net		592,914			592,073			591,232			590,388			589,546
Unsecured term loan facility, net		263,546			263,114			263,019			262,927			262,830
Unsecured revolving credit facility		—			—			—			—			—
Accounts payable and accrued expenses		142,690			136,617			125,910			134,064			154,573
Acquired below-market leases, net		70,013			74,083			78,246			82,300			87,708
Deferred revenue and other liabilities		41,320			27,380			31,097			32,212			24,176
Tenants’ security deposits		47,395			49,669			47,198			47,183			47,440
Total liabilities		1,878,708			1,867,248			1,891,250			1,908,090			1,929,730
Total equity		1,970,226			1,963,953			1,974,926			1,982,863			1,952,839
Total liabilities and equity	$	3,848,934		$	3,831,201		$	3,866,176		$	3,890,953		$	3,882,569

Page 17

Third Quarter 2017

Condensed Consolidated Statements of Income

(unaudited and in thousands, except per share amounts)

	Three Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Revenues
Rental revenue	$	122,391		$	120,844		$	117,113		$	117,498		$	115,634
Tenant expense reimbursement		20,346			17,569			15,974			17,109			19,176
Observatory revenue		39,306			33,966			20,940			33,702			38,093
Third party management and other fees		345			392			351			394			404
Other revenue and fees		4,932			4,353			10,576			10,560			2,541
Total revenues		187,320			177,124			164,954			179,263			175,848
Operating expenses
Property operating expenses		41,270			38,529			42,210			38,775			38,585
Ground rent expenses		2,331			2,332			2,331			2,332			2,331
General and administrative expenses		12,899			12,579			11,088			13,455			11,798
Observatory expenses		8,648			7,176			7,255			7,933			7,250
Real estate taxes		26,901			24,542			24,558			24,288			24,691
Depreciation and amortization		38,490			40,532			40,846			39,829			37,607
Total operating expenses		130,539			125,690			128,288			126,612			122,262
Total operating income		56,781			51,434			36,666			52,651			53,586
Other income (expense)
Interest expense		(16,890	)		(17,477	)		(17,742	)		(17,837	)		(17,939	)
Loss on early extinguishment of debt		(2,157	)		—			—			—			—
Loss from derivative financial instruments		—			(42	)		(247	)		—			—
Income before income taxes		37,734			33,915			18,677			34,814			35,647
Income tax (expense) benefit		(2,245	)		(2,556	)		468			(1,806	)		(2,750	)
Net income		35,489			31,359			19,145			33,008			32,897
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Net income attributable to non-controlling interests		(16,449	)		(14,541	)		(8,926	)		(15,808	)		(16,690	)
Net income attributable to common stockholders	$	18,806		$	16,584		$	9,985		$	16,966		$	15,973
Weighted average common shares outstanding
Basic		158,102			157,921			156,493			153,273			136,831
Diluted		297,871			298,398			297,962			297,046			280,614
Net income per share attributable to common stockholders
Basic and diluted	$	0.12		$	0.10		$	0.06		$	0.11		$	0.12
Dividends per share	$	0.105		$	0.105		$	0.105		$	0.105		$	0.105

Page 18

Third Quarter 2017

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
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Reconciliation of Net Income to FFO, Modified FFO and Core FFO
Net Income	$	35,489		$	31,359		$	19,145		$	33,008		$	32,897
Preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Real estate depreciation and amortization		38,134			40,132			40,424			39,426			37,318
FFO attributable to common stockholders and non-controlled interests		73,389			71,257			59,335			72,200			69,981
Amortization of below-market ground lease		1,957			1,958			1,958			1,958			1,957
Modified FFO attributable to common stockholders and non-controlled interests		75,346			73,215			61,293			74,158			71,938
Loss on early extinguishment of debt		2,157			—			—			—			—
Core FFO attributable to common stockholders and non-controlled interests	$	77,503		$	73,215		$	61,293		$	74,158		$	71,938
Total weighted average shares and Operating Partnership Units
Basic		296,389			296,388			296,388			296,084			278,739
Diluted		297,871			298,398			297,962			297,046			280,614
FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.24		$	0.20		$	0.24		$	0.25
Diluted	$	0.25		$	0.24		$	0.20		$	0.24		$	0.25
Modified FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.25		$	0.25		$	0.21		$	0.25		$	0.26
Diluted	$	0.25		$	0.25		$	0.21		$	0.25		$	0.26
Core FFO attributable to common stockholders and non-controlled interests per share
Basic	$	0.26		$	0.25		$	0.21		$	0.25		$	0.26
Diluted	$	0.26		$	0.25		$	0.21		$	0.25		$	0.26
Reconciliation of Core FFO to Core FAD
Core FFO	$	77,503		$	73,215		$	61,293		$	74,158		$	71,938
Add:
Amortization of deferred financing costs		1,017			1,331			1,294			1,293			1,291
Non-real estate depreciation and amortization		356			400			422			403			289
Amortization of non-cash compensation expense		3,841			3,813			3,154			2,476			2,604
Amortization of debt discount		668			668			668			668			668
Deduct:
Straight-line rental revenues		(6,861	)		(7,722	)		(5,998	)		(8,652	)		(9,619	)
Amortization of debt premiums		(1,736	)		(1,737	)		(1,737	)		(1,737	)		(1,736	)
Above/below-market rent revenue amortization		(1,607	)		(1,119	)		(1,428	)		(2,509	)		(1,210	)
Corporate capital expenditures		—			(10	)		(382	)		(285	)		(1,115	)
Tenant improvements - second generation		(6,058	)		(4,764	)		(2,464	)		(3,122	)		(949	)
Building improvements - second generation		(2,105	)		(2,337	)		(30	)		(1,754	)		(2,061	)
Leasing commissions - second generation		(817	)		(192	)		(1,071	)		(467	)		(388	)
Core FAD	$	64,201		$	61,546		$	53,721		$	60,472		$	59,712
Reconciliation of Net Income to EBITDA
Net income	$	35,489		$	31,359		$	19,145		$	33,008		$	32,897
Interest expense		16,890			17,477			17,742			17,837			17,939
Income tax expense (benefit)		2,245			2,556			(468	)		1,806			2,750
Depreciation and amortization		38,490			40,532			40,846			39,829			37,607
EBITDA	$	93,114		$	91,924		$	77,265		$	92,480		$	91,193

Page 19

Third Quarter 2017

Net Operating Income (“NOI”)

(unaudited and dollars in thousands)

	Three Months Ended
	September 30, 2017			June 30, 2017			March 31, 2017			December 31, 2016			September 30, 2016
Reconciliation of Net Income to NOI and Cash NOI
Net income	$	35,489		$	31,359		$	19,145		$	33,008		$	32,897
Add:
General and administrative expenses		12,899			12,579			11,088			13,455			11,798
Depreciation and amortization		38,490			40,532			40,846			39,829			37,607
Interest expense		16,890			17,477			17,742			17,837			17,939
Loss on early extinguishment of debt		2,157			—			—			—			—
Loss from derivative financial instruments		—			42			247			—			—
Income tax expense (benefit)		2,245			2,556			(468	)		1,806			2,750
Less:
Third-party management and other fees		(345	)		(392	)		(351	)		(394	)		(404	)
Net operating income		107,825			104,153			88,249			105,541			102,587
Straight-line rent		(6,861	)		(7,722	)		(5,998	)		(8,652	)		(9,619	)
Above/below-market rent revenue amortization		(1,607	)		(1,119	)		(1,428	)		(2,509	)		(1,210	)
Below-market ground lease amortization		1,957			1,958			1,958			1,958			1,957
Cash net operating income		101,314			97,270			82,781			96,338			93,715
Less: Observatory net operating income		(30,658	)		(26,790	)		(13,685	)		(25,769	)		(30,843	)
Total portfolio (excluding observatory) cash net operating income	$	70,656		$	70,480		$	69,096		$	70,569		$	62,872

Page 20

Third Quarter 2017

Debt Summary

(unaudited and dollars in thousands)

	September 30, 2017								June 30, 2017
				Weighted Average								Weighted Average
				Interest			Maturity					Interest			Maturity
Debt Summary	Balance			Rate			(Years)		Balance			Rate			(Years)
Fixed rate mortgage debt	$	723,221			4.78	%		6.4	$	725,136			4.78	%		6.6
Senior unsecured notes		600,000			3.47	%		6.6		600,000			3.47	%		6.9
Unsecured term loan facility (1)		265,000			3.35	%		4.9		—			—			—
Total fixed rate debt		1,588,221			4.05	%		6.2		1,325,136			4.19	%		6.7
Unsecured revolving credit facility		—			—			3.9		—			—			1.6
Unsecured term loan facility (1)		—			—			—		265,000			2.82	%		5.2
Total variable rate debt		—			—			3.9		265,000			2.82	%		5.2
Total debt		1,588,221			4.05	%		6.2		1,590,136			3.96	%		6.5
Premium/discount		(2,301	)							(1,232	)
Deferred financing costs, net		(8,630	)							(9,405	)
Total	$	1,577,290							$	1,579,499

Note:

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

Available Capacity	Facility		Outstanding at September 30, 2017		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	%		24.2	%	Yes
Maximum Secured Debt		< 40	%		10.9	%	Yes
Minimum Fixed Charge Coverage		> 1.50x			4.5x		Yes
Minimum Unencumbered Interest Coverage		> 1.75x			7.6x		Yes
Maximum Unsecured Leverage		< 60	%		18.9	%	Yes
Minimum Tangible Net Worth	$	1,249,392		$	1,683,912		Yes

Notes:

⁽¹⁾  The unsecured revolving credit facility has an accordion feature allowing for an increase in maximum aggregate principal balance to $1.75 billion under certain circumstances. This facility matures in August 2021 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

Third Quarter 2017

Debt Detail

(unaudited and dollars in thousands)

	Stated Interest Rate (%)			Current Interest Rate (%)			Principal Balance			Maturity Date		Amortization
Fixed rate mortgage debt:
1333 Broadway		6.32	%		6.32	%	$	66,872			1/5/2018		30 years
1400 Broadway (first lien mortgage loan)		6.12	%		6.12	%		66,909			2/5/2018		30 years
1400 Broadway (second lien mortgage loan)		3.35	%		3.35	%		9,226			2/5/2018		30 years
111 West 33rd Street (first lien mortgage loan)		6.01	%		6.01	%		74,356			4/5/2018		30 years
111 West 33rd Street (second lien mortgage loan)		6.56	%		6.56	%		9,405			4/5/2018		30 years
1350 Broadway		5.87	%		5.87	%		37,302			4/5/2018		30 years
Metro Center		3.59	%		3.59	%		94,464			11/5/2024		30 years
10 Union Square		3.70	%		3.70	%		50,000			4/1/2026		Interest only
1542 Third Avenue		4.29	%		4.29	%		30,000			5/1/2027		Interest only
First Stamford Place (1)		4.28	%		4.28	%		180,000			7/1/2027		5 year interest only; 30 years thereafter
1010 Third Avenue and 77 West 55th Street		4.01	%		4.01	%		39,885			1/5/2028		30 years
10 Bank Street		4.23	%		4.23	%		34,802			6/1/2032		25 years
383 Main Avenue		4.44	%		4.44	%		30,000			6/30/2032		5 year interest only; 30 years thereafter
Total mortgage debt								723,221
Exchangeable senior unsecured notes		2.63	%		2.63	%		250,000			8/15/2019		Interest only
Unsecured revolving credit facility		LIBOR plus 1.10	%		2.33	%		—			8/29/2021		Interest only
Unsecured term loan facility (2)		LIBOR plus 1.20	%		3.35	%		265,000			8/29/2022		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					4.05	%		1,588,221
Premium/discounts								(2,301	)
Deferred financing costs, net								(8,630	)
Total							$	1,577,290

Note:

⁽¹⁾  Represents a $164 million mortgage loan bearing interest of 4.09% and a $16 million loan bearing interest at 6.25%.

⁽²⁾  Beginning August 2017, LIBOR was fixed at 2.1485% under a variable to fixed interest rate swap agreement.

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Third Quarter 2017

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	$	1,983	$	—	$	1,983			0.1	%		n/a
2018		4,417		262,210		266,627			16.8	%		6.02	%
2019		3,790		250,000		253,790			16.0	%		2.63	%
2020		3,938		—		3,938			0.2	%		n/a
2021		4,090		—		4,090			0.3	%		n/a
Thereafter		43,407		1,014,386		1,057,793			66.6	%		3.89	%
Total debt	$	61,625	$	1,526,596		1,588,221			100.0	%		4.05	%
Premium/discount						(2,301	)
Deferred financing costs, net						(8,630	)
Total					$	1,577,290

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	$	27	$	169	$	184	$	380
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
	$	2,790	$	15,019	$	43,855	$	61,664

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Third Quarter 2017

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: acquisition expenses, 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 interest expense, income taxes and depreciation. 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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