EX-99.2 3 d39482dex992.htm EX-99.2 EX-99.2

Exhibit 99.2

 

LOGO


LOGO

 

   Second Quarter 2020

 

Table of Contents

   Page  

Summary

  

Company Profile

     3  

Financial Highlights

     4  

Selected Property Data

  

Property Summary Net Operating Income

     5  

Net Operating Income and Initial Free Rent Burn-Off

     6  

Leasing Activity

     7  

Portfolio Expirations and Vacates Summary

     9  

Property Detail

     10  

Tenant Lease Expirations

     11  

Largest Tenants and Portfolio Tenant Diversification by Industry

     14  

Capital Expenditures and Redevelopment Program

     15  

Observatory Summary

     16  

Financial information

  

Condensed Consolidated Balance Sheets

     17  

Condensed Consolidated Statements of Operations

     18  

Core FFO, Modified FFO, FFO, FAD and EBITDA

     19  

Consolidated Debt Analysis

  

Debt Summary

     20  

Debt Detail

     21  

Debt Maturities

     22  

Ground Leases

     22  

Supplemental Definitions

     23  

Forward-looking Statements

This presentation includes “forward looking statements” within the meaning of the federal securities laws. Forward-looking statements may be identified by the use of words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” “contemplates,” “aims,” “continues,” “would” or “anticipates” or the negative of these words and phrases or similar words or phrases.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: (i) economic, political and social impact of, and uncertainty relating to, the COVID-19 pandemic, including (a) the effectiveness or lack of effectiveness of governmental relief in providing assistance to businesses that have suffered significant declines in revenues as a result of mandatory business shut-downs, “shelter-in-place” or “stay-at-home” orders and social distancing practices, as well as individuals adversely impacted by the COVID-19 pandemic, (b) the duration of any such orders or other formal recommendations for social distancing and the speed and extent to which revenues of the Company’s tenants, particularly retail, and the Observatory recover following the lifting of any such orders or recommendations, (c) the potential impact of any such events on the obligations of the Company’s tenants to make rent and other payments or honor other commitments, including such tenants’ ability to pay rent following the termination of temporary governmental assistance and benefits programs, (d) government moratoriums and/or limits (including temporary closure of certain court systems) which directly or indirectly abridge the enforcement of lease obligations and related guarantees, (e) the potential impact on the Company’s human capital management, including restrained productivity associated with work-from-home and risks associated with employees returning to the office, (f) international and national disruption of travel and tourism with a resulting decline in Observatory visitors, and (g) macroeconomic conditions, such as a disruption of, or lack of access to, the capital markets, and general volatility adversely impacting the market price of the Company’s Class A common stock and publicly-traded partnership units of the Operating Partnership; (ii) resolution of legal proceedings involving the Company; (iii) reduced demand for office or retail space, including as a result of the COVID-19 pandemic; (iv) changes in our business strategy; (v) changes in technology and market competition that affect utilization of our office, retail, broadcast or other facilities; (vi) changes in domestic or international tourism, including due to health crises such as the COVID-19 pandemic, geopolitical events and/or currency exchange rates, which may cause a decline in Observatory visitors; (vii) defaults on, early terminations of, or non-renewal of, leases by tenants; (viii) increases in the Company’s borrowing costs as a result of changes in interest rates and other factors, including the potential phasing out of LIBOR after 2021; (ix) declining real estate valuations and impairment charges; (x) termination or expiration of our ground leases; (xi) changes in our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due and potential limitations on our ability to borrow additional funds in compliance with drawdown conditions and financial covenants; (xii) decreased rental rates or increased vacancy rates; (xiii) our failure to redevelop and reposition properties, or to execute any newly planned capital project successfully or on the anticipated timeline or at the anticipated costs; (xiv) difficulties in identifying properties to acquire and completing acquisitions; (xv) risks related to our development projects (including our Metro Tower development site) and capital projects, including the cost of construction delays and cost overruns; (xvi) impact of changes in governmental regulations, tax laws and rates and similar matters; (xvii) our failure to qualify as a REIT; and (xviii) environmental uncertainties and risks related to adverse weather conditions, rising sea levels and natural disasters. For a further discussion of these and other factors that could impact the Company’s future results, performance or transactions, see the section entitled “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2020, 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 update or revise publicly any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events, or other changes after the date of this press release, except as required by applicable law. Prospective investors should not place undue reliance on any forward-looking statements, which are based only on information currently available to the Company (or to third parties making the forward-looking statements).

 

Page 2


LOGO

 

   Second Quarter 2020

 

COMPANY PROFILE

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

BOARD OF DIRECTORS

 

Anthony E. Malkin    Chairman and Chief Executive Officer
William H. Berkman    Director, Chair of Finance Committee (will leave the Board of Directors on July 31, 2020)
Leslie D. Biddle    Director
Thomas J. DeRosa    Director
Steven J. Gilbert    Director, Lead Director
S. Michael Giliberto    Director, Chair of Audit Committee
Patricia S. Han    Director
R. Paige Hood    Director (will join the Board of Directors on August 1, 2020)
James D. Robinson IV    Director, Chair of Compensation and Nominating/Corporate Governance Committees

EXECUTIVE MANAGEMENT

 

Anthony E. Malkin    Chairman, President and Chief Executive Officer
Christina Chiu    Executive Vice President and Chief Financial Officer
Thomas P. Durels    Executive Vice President, Real Estate
Thomas N. Keltner, Jr.    Executive Vice President, General Counsel and Secretary

COMPANY INFORMATION

 

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

RESEARCH COVERAGE

 

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

 

Page 3


LOGO   

Second Quarter 2020

Financial Highlights

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

 

     Three Months Ended  

Selected Items:

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

Revenue

   $ 141,030     $ 170,224     $ 194,933     $ 192,873     $ 176,244  

Net income (loss)

   $ (19,618   $ 8,288     $ 28,720     $ 26,784     $ 18,930  

Cash net operating income (1)

   $ 78,368     $ 81,528     $ 103,992     $ 98,757     $ 93,737  

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

   $ 39,498     $ 53,712     $ 74,935     $ 71,810     $ 64,476  

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

   $ 37,786     $ 37,738     $ 41,903     $ 54,650     $ 48,235  

Core FFO per share—diluted

   $ 0.14     $ 0.18     $ 0.25     $ 0.24     $ 0.22  

Diluted weighted average shares

     283,384,000       292,645,000       296,852,000       298,151,000       298,131,000  

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

     10,132,492       10,135,413       10,138,057       10,134,495       10,134,435  

Percent occupied (2)

     85.6     88.7     88.6     89.4     90.2

Percent leased (3)

     89.6     91.1     91.2     91.7     92.2

Observatory Metrics:

          

Number of visitors (4)

     —         422,000       894,000       1,042,000       968,000  

Change in visitors year over year

     N/A       (29.8 %)      (5.5 %)      (10.7 %)      (7.7 %) 

Observatory revenues (5)

   $ 86     $ 19,544     $ 37,730     $ 37,575     $ 32,895  

Change in revenues year over year

     N/A       (5.0 %)      9.2     (6.6 %)      (6.6 %) 

Ratios:

          

Consolidated Debt to Total Market Capitalization (6)

     54.3     47.8     28.2     27.7     29.8

Consolidated Net Debt to Total Market Capitalization (6)

     43.7     35.5     25.2     24.1     23.6

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

     56.2     49.5     29.7     28.2     30.2

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

     46.1     37.6     26.8     24.5     24.0

Consolidated Debt to EBITDA (7)

     8.0x       7.3x       4.8x       4.6x       5.3x  

Consolidated Net Debt to EBITDA (7)

     5.2x       4.4x       4.1x       3.8x       3.9x  

Interest Coverage Ratio

     2.6x       4.3x       5.0x       4.8x       4.4x  

Core FFO Payout Ratio (8)

     83     61     43     45     50

Core FAD Payout Ratio (9)

     86     87     76     59     66

Class A common stock price at quarter end

   $ 7.00     $ 8.96     $ 13.96     $ 14.27     $ 14.81  

Average closing price

   $ 7.72     $ 12.24     $ 14.04     $ 14.12     $ 15.48  

Dividends per share—annualized

   $ 0.42     $ 0.42     $ 0.42     $ 0.42     $ 0.42  

Dividend yield (10)

     6.0     4.7     3.0     2.9     2.8

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

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

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

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

Class A common stock

     172,332,358       176,112,860       180,877,597       179,131,090       176,991,123  

Class B common stock

     1,014,221       1,015,149       1,016,799       1,018,463       1,029,782  

Operating partnership units

     117,475,995       120,548,216       117,757,653       124,107,019       126,870,876  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total common stock and operating partnership units outstanding (11)

     290,822,574       297,676,225       299,652,049       304,256,572       304,891,781  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

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

(2)

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

(3)

Represents occupancy and includes signed leases not commenced.

(4)

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

(5)

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

(6)

Market capitalization represents the sum of (i) Company’s common stock per share price as of June 30, 2020 multiplied by the total outstanding number of shares of common stock and operating partnership units as of June 30, 2020; (ii) the number of Series 2014 perpetual preferred units at June 30, 2020 multiplied by $16.62, (iii) the number of Series 2019 perpetual preferred units at June 30, 2020 multiplied by $13.52, and (iv) our outstanding indebetedness as of June 30, 2020.

(7)

Calculated based on trailing 12 months EBITDA.

(8)

Represents the amount of Core FFO paid out in distributions.

(9)

Represents the amount of Core FAD paid out in distributions.

(10)

Based on the closing price per share of Class A common stock on June 30, 2020.

(11)

As of June 30, 2020, the Company has had conversions from operating partnership units and Class B common shares to Class A common shares totaling 58.2 million shares or approximately $407 million at a closing share price of $7.00. This represents a 71% increase in the number of Class A shares since the IPO.

 

 

Page 4


LOGO   

Second Quarter 2020

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

(unaudited and dollars in thousands)

 

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

Same Store Total Portfolio

          

Revenues

   $ 139,610     $ 150,123     $ 155,664     $ 152,633     $ 142,655  

Operating expenses

     (61,661     (73,053     (76,051     (79,824     (70,826
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     77,949       77,070       79,613       72,809       71,829  

Straight-line rent

     2,710       (8,193     (6,276     (5,174     (3,203

Above/below-market rent revenue amortization

     (1,366     (908     (1,530     (1,682     (1,745

Below-market ground lease amortization

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

   $ 81,251     $ 69,927     $ 73,765     $ 67,910     $ 68,839  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Percent increase over prior year

     18.0     4.8     6.9     2.0     0.2
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Property cash NOI

   $ 81,251     $ 69,927     $ 73,765     $ 67,910     $ 68,839  

Observatory cash NOI

     (3,916     11,390       28,987       28,486       24,535  

Lease termination fees

     1,033       211       1,240       2,361       363  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total portfolio same store cash NOI

   $ 78,368     $ 81,528     $ 103,992     $ 98,757     $ 93,737  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Manhattan Office Portfolio (1)

          

Revenues

   $ 119,445     $ 128,909     $ 132,672     $ 130,214     $ 120,249  

Operating expenses

     (52,619     (62,670     (65,509     (68,516     (60,152
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     66,826       66,239       67,163       61,698       60,097  

Straight-line rent

     1,774       (8,338     (6,705     (5,319     (4,163

Above/below-market rent revenue amortization

     (1,366     (908     (1,530     (1,682     (1,745

Below-market ground lease amortization

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     69,192       58,951       60,886       56,654       56,147  

Lease termination fees

     863       159       995       835       301  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 70,055     $ 59,110     $ 61,881     $ 57,489     $ 56,448  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Greater New York Metropolitan Area Office Portfolio

          

Revenues

   $ 16,529     $ 16,915     $ 18,771     $ 18,137     $ 17,798  

Operating expenses

     (7,230     (8,479     (8,663     (9,373     (8,784
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     9,299       8,436       10,108       8,764       9,014  

Straight-line rent

     331       12       285       (42     655  

Above/below-market rent revenue amortization

     —         —         —         —         —    

Below-market ground lease amortization

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     9,630       8,448       10,393       8,722       9,669  

Lease termination fees

     170       52       245       710       62  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 9,800     $ 8,500     $ 10,638     $ 9,432     $ 9,731  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same Store Standalone Retail Portfolio

          

Revenues

   $ 3,636     $ 4,299     $ 4,221     $ 4,282     $ 4,608  

Operating expenses

     (1,812     (1,904     (1,879     (1,935     (1,890
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Same store property NOI

     1,824       2,395       2,342       2,347       2,718  

Straight-line rent

     605       133       144       187       305  

Above/below-market rent revenue amortization

     —         —         —         —         —    

Below-market ground lease amortization

     —         —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI—excluding lease termination fees

     2,429       2,528       2,486       2,534       3,023  

Lease termination fees

     —         —         —         816       —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total same store property cash NOI

   $ 2,429     $ 2,528     $ 2,486     $ 3,350     $ 3,023  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Note:

Includes 506,452 rentable square feet of retail space in the Company’s nine Manhattan office properties.

 

Page 5


LOGO   

Second Quarter 2020

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

(unaudited and dollars in thousands)

 

     Three Months Ended  
Reconciliation of Net Income to NOI and Cash NOI    June 30,
2020
    March 31,
2020
    December 31,
2019
    September 30,
2019
    June 30,
2019
 

Net income (loss)

   $ (19,618   $ 8,288     $ 28,720     $ 26,784     $ 18,930  

Add:

          

General and administrative expenses

     18,149       15,951       16,618       14,421       15,998  

Depreciation and amortization

     52,783       46,093       46,409       44,260       44,821  

Interest expense

     23,928       19,704       18,534       19,426       20,597  

Income tax expense (benefit)

     (2,450     (382     1,210       1,338       611  

Impairment charges

     4,101       —         —         —         —    

Less:

          

Third-party management and other fees

     (301     (346     (299     (304     (331

Interest income

     (1,526     (637     (1,352     (2,269     (3,899
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net operating income

     75,066       88,671       109,840       103,656       96,727  

Straight-line rent

     2,710       (8,193     (6,276     (5,174     (3,203

Above/below-market rent revenue amortization

     (1,366     (908     (1,530     (1,682     (1,745

Below-market ground lease amortization

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cash NOI—including Observatory and lease termination income

     78,368       81,528       103,992       98,757       93,737  

Less: Observatory NOI

     3,916       (11,390     (28,987     (28,486     (24,535

Less: Lease termination income

     (1,033     (211     (1,240     (2,361     (363
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total property cash NOI—excluding Observatory and lease termination income

   $ 81,251     $ 69,927     $ 73,765     $ 67,910     $ 68,839  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Burn-off of Free Rent and Signed Leases Not Commenced

 

     Incremental
Annual

Revenue
     Base Cash Rent Contributing to Cash NOI in the Following Years  

Total Portfolio

   2020      2021      2022      2023  

Commenced leases in free rent period

   $ 10,991      $ 4,485      $ 10,991      $ 10,991      $ 10,991  

Signed leases not commenced

     31,450        138        10,027        26,613        28,965  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 42,441      $ 4,623      $ 21,018      $ 37,604      $ 39,956  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Commenced leases in free rent period

 

     Square
Feet
     Cash
Rent Date
     Incremental
Annual

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

Third quarter 2020 - 14 leases

     156,180        Jul. 2020 - Sept. 2020      $ 9,218      $ 3,685  (1)    $ 9,218      $ 9,218      $ 9,218  

Fourth quarter 2020 - 3 leases

     20,841        Oct. 2020 - Dec. 2020        1,030        158       1,030        1,030        1,030  

First quarter 2021 - 1 lease

     2,652        Jan. 2021 - Mar. 2021        681        611       681        681        681  

Second quarter 2021 - 1 lease

     2,578        Apr. 2021 - Jun. 2021        62        31       62        62        62  
        

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 
         $ 10,991      $ 4,485     $ 10,991      $ 10,991      $ 10,991  
        

 

 

    

 

 

   

 

 

    

 

 

    

 

 

 

Signed leases not commenced (“SLNC”)

 

    

Square

     Expected Base Rent
Commencement
  

Incremental

Annual

     Base Cash Rent Contributing to Cash NOI in the Following Years  

Tenant

   Feet      GAAP    Cash    Revenue (2)      2020      2021      2022      2023  

Winged Keel Group, Inc.

     12,724      Jan. 2021    Mar. 2022    $ 920      $ —        $ —        $ 761      $ 920  

Uber Technologies, Inc.

     32,927      Jan. 2021    May 2021      2,300        —          1,530        2,300        2,300  

Concord Music Group, Inc.

     46,329      Jan. 2021    Nov. 2021      2,870        —          396        2,870        2,870  

Kaplan Hecker & Fink LLP

     26,997      Feb. 2021    Mar. 2021      2,000        —          1,576        2,000        2,000  

First Republic Bank

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

Starbucks Corporation

     22,916      Feb. 2022    Feb. 2022      900        —          —          820        900  

LinkedIn Corporation:

                       

LinkedIn Corporation

     52,939      May 2021    Jan. 2022      3,870        —          —          3,854        3,870  

LinkedIn Corporation

     52,666      Nov. 2021    Nov. 2021      3,840        —          630        3,840        3,840  

LinkedIn Corporation

     52,574      Jul. 2022    Jul. 2022      3,840        —          —          1,908        3,840  

LinkedIn Corporation

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

Target

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

Other SLNC

     98,037      Jul. 2020 - Apr. 2021    Aug. 2020 - Sept. 2021      6,220        138        4,879        6,220        6,220  
  

 

 

          

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     475,401            $ 31,450      $ 138      $ 10,027      $ 26,613      $ 28,965  
  

 

 

          

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Notes:

 

(1)

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

(2)

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

 

Page 6


LOGO   

Second Quarter 2020

Property Summary - Leasing Activity by Quarter

(unaudited)

 

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

Total Portfolio

          

Total leases executed

     19       35       47       25       55  

Weighted average lease term

     6.1 years       6.8 years       8.6 years       10.7 years       6.4 years  

Average free rent period

     4.4 months       4.1 months       5.3 months       6.9 months       2.8 months  

Office

          

Total square footage executed

     99,229       117,481       313,027       374,256       228,346  

Average cash rent psf—leases executed

   $ 52.82     $ 57.29     $ 59.74     $ 62.83     $ 59.13  

Previously escalated cash rents psf

   $ 51.40     $ 52.43     $ 54.02     $ 51.10     $ 51.72  

Percentage of new cash rent over previously escalated rents

     2.8     9.3     10.6     23.0     14.3

Retail

          

Total square footage executed

     14,202       31,662       32,579       14,430       32,706  

Average cash rent psf—leases executed

   $ 145.58     $ 101.03     $ 122.78     $ 141.68     $ 71.52  

Previously escalated cash rents psf

   $ 158.58     $ 108.81     $ 60.79     $ 104.66     $ 72.08  

Percentage of new cash rent over previously escalated rents

     (8.2 %)      (7.1 %)      102.0     35.4     (0.8 %) 

Total Portfolio

          

Total square footage executed

     113,431       149,143       345,606       388,686       261,052  

Average cash rent psf—leases executed

   $ 64.43     $ 66.58     $ 65.68     $ 65.76     $ 61.25  

Previously escalated cash rents psf

   $ 64.82     $ 64.40     $ 54.66     $ 53.09     $ 54.58  

Percentage of new cash rent over previously escalated rents

     -0.6     3.4     20.2     23.9     12.2

Leasing commission costs per square foot

   $ 13.52     $ 20.19     $ 19.84     $ 23.75     $ 15.61  

Tenant improvement costs per square foot

     21.68       100.79       55.65       65.59       47.06  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 35.20     $ 120.98     $ 75.49     $ 89.34     $ 62.67  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     85.6     88.7     88.6     89.4     90.2

Manhattan Office Portfolio (1)

          

Total leases executed

     13       26       36       18       40  

Office—New Leases

          

Total square footage executed

     24,859       63,153       170,247       266,769       119,235  

Average cash rent psf—leases executed

   $ 66.94     $ 62.78     $ 64.82     $ 71.36     $ 65.08  

Previously escalated cash rents psf

   $ 61.55     $ 52.56     $ 52.12     $ 53.83     $ 53.26  

Percentage of new cash rent over previously escalated rents

     8.7     19.4     24.4     32.6     22.2

Office—Renewal Leases

          

Total square footage executed

     27,123       30,712       54,345       18,826       56,211  

Average cash rent psf—leases executed

   $ 58.35     $ 60.20     $ 66.62     $ 53.83     $ 62.37  

Previously escalated cash rents psf

   $ 58.39     $ 60.02     $ 66.27     $ 53.64     $ 55.88  

Percentage of new cash rent over previously escalated rents

     -0.1     0.3     0.5     0.4     11.6

Retail—New and Renewal Leases

          

Total square footage executed

     10,702       26,432       —         14,430       3,711  

Average cash rent psf—leases executed

   $ 149.50     $ 76.73     $ —       $ 141.68     $ 405.41  

Previously escalated cash rents psf

   $ 150.16     $ 103.75     $ —       $ 104.66     $ 317.25  

Percentage of new cash rent over previously escalated rents

     (0.4 %)      (0     0.0     35.4     27.8

Total Manhattan Office Portfolio

          

Total square footage executed

     62,684       120,297       224,592       300,025       179,157  

Average cash rent psf—leases executed

   $ 77.32     $ 65.19     $ 65.26     $ 73.64     $ 71.28  

Previously escalated cash rents psf

   $ 75.31     $ 65.71     $ 55.54     $ 56.26     $ 59.55  

Percentage of new cash rent over previously escalated rents

     2.7     -0.8     17.5     30.9     19.7

Leasing commission costs per square foot

   $ 19.84     $ 20.57     $ 19.81     $ 28.93     $ 20.53  

Tenant improvement costs per square foot

     39.23       107.77       70.39       78.31       56.60  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 59.07     $ 128.34     $ 90.20     $ 107.24     $ 77.13  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     86.8     89.8     89.7     89.6     90.6

 

Page 7


LOGO   

Second Quarter 2020

Property Summary - Leasing Activity by Quarter - (Continued)

(unaudited

 

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

Greater New York Metropolitan Area Office Portfolio

          

Total leases executed

     5       7       10       7       12  

Total square footage executed

     47,247       23,616       88,435       88,661       52,900  

Average cash rent psf—leases executed

   $ 42.21     $ 38.85     $ 45.73     $ 39.08     $ 42.30  

Previously escalated cash rents psf

   $ 42.04     $ 42.23     $ 50.15     $ 42.36     $ 43.82  

Percentage of new cash rent over previously escalated rents

     0.4     (8.0 %)      (8.8 %)      (7.7 %)      (3.5 %) 

Leasing commission costs per square foot

   $ 5.78     $ 7.34     $ 8.00     $ 6.22     $ 6.05  

Tenant improvement costs per square foot

     —         51.56       26.02       22.53       37.37  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 5.78     $ 58.90     $ 34.02     $ 28.75     $ 43.42  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     79.1     83.0     83.0     88.0     87.8

Standalone Retail Portfolio

          

Total leases executed

     1       2       1       —         3  

Total square footage executed

     3,500       5,230       32,579       —         28,995  

Average cash rent psf—leases executed

   $ 133.59     $ 223.86     $ 122.78     $ —       $ 28.78  

Previously escalated cash rents psf

   $ 184.31     $ 134.41     $ 60.79     $ —       $ 40.70  

Percentage of new cash rent over previously escalated rents

     (27.5 %)      66.5     102.0     0.0     (29.3 %) 

Leasing commission costs per square foot

   $ 4.71     $ 69.53     $ 52.21     $ —       $ 2.68  

Tenant improvement costs per square foot

     —         162.60       34.47       —         5.79  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total LC and TI per square foot (2)

   $ 4.71     $ 232.13     $ 86.68     $ —       $ 8.47  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Occupancy

     95.2     95.2     93.7     93.7     93.7

Notes:

 

(1)

Includes 506,452 rentable square feet of retail space in the Company’s nine Manhattan office properties.

(2)

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

 

Page 8


LOGO   

Second Quarter 2020

Total Portfolio Expirations and Vacates Summary

(unaudited and in square feet)

 

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

Total Portfolio (2)

            

Total expirations

     92,373       393,584       151,647       157,192       308,839       664,552  

Less: broadcasting

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Office and retail expirations

     91,467       392,678       150,741       156,439       307,180       663,503  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     35,005       76,411       30,059       75,012       105,071       210,354  

Short-term renewals (4)

     —         3,024       —         —         —         —    

New leases (5)

     2,286       171,834       9,367       12,850       22,217       23,247  

Tenant vacates (6)

     30,445       97,727       101,043       39,228       140,271       289,929  

Intentional vacates (7)

     23,731       43,682       3,024       3,625       6,649       9,265  

Holdover (8)

     —         —         —         —         —         —    

Unknown (9)

     —         —         7,248       25,724       32,972       130,708  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Portfolio expirations and vacates

     91,467       392,678       150,741       156,439       307,180       663,503  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Manhattan Office Portfolio

            

Total expirations

     53,312       256,551       136,248       115,390       251,638       406,943  

Less: broadcasting

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Office expirations

     52,406       255,645       135,342       114,637       249,979       405,894  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     16,958       15,141       19,802       55,816       75,618       88,596  

Short-term renewals (4)

     —         3,024       —         —         —         —    

New leases (5)

     2,286       164,520       9,367       12,850       22,217       23,247  

Tenant vacates (6)

     27,106       36,715       95,901       31,334       127,235       222,006  

Intentional vacates (7)

     6,056       36,245       3,024       3,625       6,649       9,265  

Holdover (8)

     —         —         —         —         —         —    

Unknown (9)

     —         —         7,248       11,012       18,260       62,780  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     52,406       255,645       135,342       114,637       249,979       405,894  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Greater New York Metropolitan Area Office Portfolio

 

         

Office expirations

     17,148       126,162       15,399       32,237       47,636       234,433  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     13,809       57,836       10,257       17,525       27,782       110,215  

Short-term renewals (4)

     —         —         —         —         —         —    

New leases (5)

     —         7,314       —         —         —         —    

Tenant vacates (6)

     3,339       61,012       5,142       —         5,142       56,455  

Intentional vacates (7)

     —         —         —         —         —         —    

Holdover (8)

     —         —         —         —         —         —    

Unknown (9)

     —         —         —         14,712       14,712       67,763  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     17,148       126,162       15,399       32,237       47,636       234,433  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Retail Portfolio

            

Retail expirations

     21,913       10,871       —         9,565       9,565       23,176  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Renewal & relocations (3)

     4,238       3,434       —         1,671       1,671       11,543  

Short-term renewals (4)

     —         —         —         —         —         —    

New leases (5)

     —         —         —         —         —         —    

Tenant vacates (6)

     —         —         —         7,894       7,894       11,468  

Intentional vacates (7)

     17,675       7,437       —         —         —         —    

Holdover (8)

     —         —         —         —         —         —    

Unknown (9)

     —         —         —         —         —         165  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expirations and vacates

     21,913       10,871       —         9,565       9,565       23,176  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

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

(2)

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

(3)

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

(4)

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

(5)

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

(6)

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

(7)

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

(8)

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

(9)

For forecasted periods, “Unknown” represents tenants’ existing leases which do not fall into any of the above categories: Renewals & Relocations, New Leases, Tenant Vacates or Intentional Vacates and tenants’ whose intention is unknown.

 

Page 9


LOGO   

Second Quarter 2020

Property Detail

(unaudited)

 

                           Annualized
Rent
       

Property Name

  

Location or Sub-Market

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

Manhattan Office Properties—Office

         

The Empire State Building (6)

   Penn Station -Times Sq. South     2,710,823       87.6   $  144,394,079     $ 60.84       162  

One Grand Central Place

  

Grand Central

    1,247,764       86.6     64,361,553       59.55       180  

1400 Broadway (8)

  

Penn Station -Times Sq. South

    916,834       89.7     44,415,793       54.04       25  

111 West 33rd Street (9)

  

Penn Station -Times Sq. South

    641,133       97.5     38,209,981       61.15       23  

250 West 57th Street

  

Columbus Circle -West Side

    474,119       71.2     20,956,696       62.08       37  

501 Seventh Avenue

  

Penn Station -Times Sq. South

    461,652       82.8     18,897,823       49.46       29  

1359 Broadway

  

Penn Station -Times Sq. South

    455,873       95.1     23,884,943       55.07       32  

1350 Broadway (10)

  

Penn Station -Times Sq. South

    372,955       83.2     18,442,460       59.46       54  

1333 Broadway

  

Penn Station -Times Sq. South

    292,835       77.1     12,261,924       54.28       8  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Manhattan Office Properties—Office

       7,573,988       87.0     385,825,252       58.54       550  

Manhattan Office Properties—Retail

            

The Empire State Building (7)

   Penn Station -Times Sq. South     99,572       46.7     11,214,102       240.94       11  

One Grand Central Place

  

Grand Central

    68,732       79.0     6,594,878       121.45       13  

1400 Broadway (8)

  

Penn Station -Times Sq. South

    20,176       77.2     2,050,919       131.71       7  

112 West 34th Street (9)

  

Penn Station -Times Sq. South

    90,132       100.0     23,273,069       258.21       4  

250 West 57th Street

  

Columbus Circle -West Side

    67,927       100.0     10,316,195       151.87       8  

501 Seventh Avenue

  

Penn Station -Times Sq. South

    33,632       87.3     2,028,797       69.11       8  

1359 Broadway

  

Penn Station -Times Sq. South

    27,506       92.9     1,912,176       74.79       5  

1350 Broadway (10)

  

Penn Station -Times Sq. South

    31,774       95.6     7,238,797       238.20       5  

1333 Broadway

  

Penn Station -Times Sq. South

    67,001       100.0     9,330,744       139.26       4  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Manhattan Office Properties—Retail

       506,452       84.3     73,959,677       173.29       65  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

       8,080,440       86.8     459,784,929       65.52       615  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Greater New York Metropolitan Area Office Properties

            

First Stamford Place (11)

  

Stamford, CT

    778,848       84.9     28,785,770       43.54       45  

Metro Center

  

Stamford, CT

    287,929       71.6     11,856,164       57.52       23  

383 Main Avenue

  

Norwalk, CT

    260,546       54.1     4,173,619       29.59       21  

500 Mamaroneck Avenue

  

Harrison, NY

    287,157       81.1     7,031,746       30.19       29  

10 Bank Street

  

White Plains, NY

    232,084       94.5     8,011,993       36.53       35  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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

    1,846,564       79.1     59,859,292       40.98       153  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Standalone Retail Properties

            

10 Union Square

  

Union Square

    57,984       94.7     6,696,820       121.98       11  

1542 Third Avenue

  

Upper East Side

    56,250       100.0     4,160,189       73.96       4  

1010 Third Avenue

  

Upper East Side

    44,662       100.0     3,612,691       80.89       2  

77 West 55th Street

  

Midtown

    25,388       100.0     2,824,593       111.26       3  

69-97 Main Street

  

Westport, CT

    16,874       59.7     1,143,384       113.49       3  

103-107 Main Street

  

Westport, CT

    4,330       100.0     776,442       179.32       1  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Sub-Total/Weighted Average Standalone Retail Properties

       205,488       95.2     19,214,118       98.23       24  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio Total

       10,132,492       85.6   $ 538,858,339     $ 62.13       792  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total/Weighted Average Office Properties

       9,420,552       85.5   $ 445,684,544     $ 55.36       703  

Total/Weighted Average Retail Properties

       711,940       87.4     93,173,795       149.70       89  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Portfolio Total

       10,132,492       85.6   $ 538,858,339     $ 62.13       792  
    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

(1)

Excludes (i) 193,895 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(2)

Based on leases signed and commenced as of June 30, 2020.

(3)

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

(4)

Represents annualized rent under leases commenced as of June 30, 2020 divided by occupied square feet.

(5)

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

(6)

Includes 38,912 rentable square feet of space leased by the Company’s broadcasting tenants.

(7)

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

(8)

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

(9)

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

(10)

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

(11)

First Stamford Place consists of three buildings.

 

Page 10


LOGO   

Second Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Total Lease Expirations

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

Available

     —          1,049,673        10.4   $ —          0.0   $ —    

Signed leases not commenced

     20        409,505        4.0     —          0.0     —    

2Q 2020 (4)

     18        44,240        0.4     2,333,535        0.4     52.75  

3Q 2020

     25        138,777        1.4     7,746,282        1.4     55.82  

4Q 2020

     26        157,192        1.6     8,860,222        1.6     56.37  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     69        340,209        3.4     18,940,039        3.5     55.67  

1Q 2021

     29        101,390        1.0     7,360,756        1.4     72.60  

2Q 2021

     26        190,934        1.9     10,407,336        1.9     54.51  

3Q 2021

     29        175,016        1.7     10,513,171        2.0     60.07  

4Q 2021

     23        197,212        1.9     9,719,605        1.8     49.29  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     107        664,552        6.6     38,000,868        7.1     57.18  

2022

     113        585,348        5.8     37,573,202        7.0     64.19  

2023

     98        745,946        7.4     45,377,311        8.4     60.83  

2024

     83        802,770        7.9     49,111,946        9.1     61.18  

2025

     79        495,458        4.9     36,608,261        6.8     73.89  

2026

     56        711,228        7.0     38,367,583        7.1     53.95  

2027

     51        561,392        5.5     33,552,189        6.2     59.77  

2028

     29        1,027,220        10.1     56,308,691        10.4     54.82  

2029

     35        872,679        8.6     61,482,785        11.4     70.45  

2030

     30        684,251        6.8     42,839,350        8.0     62.61  

Thereafter

     42        1,182,261        11.6     80,696,114        15.0     68.26  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total

     812        10,132,492        100.0   $ 538,858,339        100.0   $ 62.13  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Manhattan Office Properties (5)

                                       

Available

     —          642,118        8.5   $ —          0.0   $ —    

Signed leases not commenced

     12        341,554        4.5     —          0.0     —    

2Q 2020 (4)

     11        19,047        0.3     1,042,311        0.3     54.72  

3Q 2020

     21        130,386        1.7     7,346,551        1.9     56.34  

4Q 2020

     19        115,390        1.5     5,678,215        1.5     49.21  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     51        264,823        3.5     14,067,077        3.6     53.12  

1Q 2021

     15        45,272        0.6     2,631,836        0.7     58.13  

2Q 2021

     20        132,908        1.8     7,174,891        1.9     53.98  

3Q 2021

     16        105,093        1.4     6,647,359        1.7     63.25  

4Q 2021

     16        123,670        1.6     6,819,779        1.8     55.14  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     67        406,943        5.4     23,273,865        6.0     57.19  

2022

     82        392,965        5.2     23,410,732        6.1     59.57  

2023

     74        542,101        7.2     32,107,846        8.3     59.23  

2024

     61        572,265        7.6     34,054,763        8.8     59.51  

2025

     48        315,198        4.2     19,963,407        5.2     63.34  

2026

     38        529,346        7.0     30,335,692        7.9     57.31  

2027

     38        431,669        5.7     24,619,080        6.4     57.03  

2028

     19        944,700        12.5     52,381,828        13.6     55.45  

2029

     23        629,599        8.3     36,800,046        9.5     58.45  

2030

     19        583,922        7.7     33,866,762        8.8     58.00  

Thereafter

     30        976,785        12.7     60,944,154        15.8     62.39  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Manhattan office properties

     562        7,573,988        100.0   $  385,825,252        100.0   $  58.54  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

(1)

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

(2)

Excludes (i) 193,895 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(3)

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

(4)

Represents leases that are included in occupancy as of June 30, 2020 and expire on June 30, 2020.

(5)

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

 

Page 11


LOGO   

Second Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Greater New York Metropolitan
Area Office Properties

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

Available

     —          360,539        19.5   $ —          0.0   $ —    

Signed leases not commenced

     4        25,420        1.4     —          0.0     —    

2Q 2020 (4)

     4        14,322        0.8     703,269        1.2     49.10  

3Q 2020

     4        8,391        0.5     399,731        0.7     47.64  

4Q 2020

     5        32,237        1.7     1,331,790        2.2     41.31  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     13        54,950        3.0     2,434,790        4.1     41.31  

1Q 2021

     10        42,800        2.3     2,129,575        3.6     49.76  

2Q 2021

     4        55,035        3.0     2,896,037        4.8     52.62  

3Q 2021

     11        63,354        3.4     2,676,591        4.5     42.25  

4Q 2021

     7        73,542        4.0     2,899,826        4.8     39.43  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     32        234,731        12.7     10,602,029        17.7     45.17  

2022

     22        133,636        7.2     5,003,416        8.4     37.44  

2023

     15        157,542        8.5     7,190,914        12.0     45.64  

2024

     12        205,193        11.1     9,244,116        15.4     45.05  

2025

     23        142,935        7.7     4,964,266        8.3     34.73  

2026

     11        113,471        6.1     3,876,004        6.5     34.16  

2027

     8        73,457        4.0     2,507,401        4.2     34.13  

2028

     6        74,533        4.0     2,696,619        4.5     36.18  

2029

     6        144,998        7.9     5,796,456        9.7     39.98  

2030

     4        36,578        2.0     1,795,169        3.0     49.08  

Thereafter

     1        88,581        4.9     3,748,112        6.2     42.31  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total greater New York metropolitan area office properties

     157        1,846,564        100.0   $ 59,859,292        100.0   $ 40.98  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Retail Properties

                                       

Available

     —          47,016        6.6   $ —          0.0   $ —    

Signed leases not commenced

     4        42,531        6.0     —          0.0     —    

2Q 2020 (4)

     3        10,871        1.5     587,955        0.6     54.08  

3Q 2020

     —          —          0.0     —          0.0     —    

4Q 2020

     2        9,565        1.3     1,850,217        2.0     193.44  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     5        20,436        2.9     2,438,172        2.6     119.43  

1Q 2021

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

2Q 2021

     2        2,991        0.4     336,408        0.4     112.47  

3Q 2021

     2        6,569        0.9     1,189,221        1.3     181.04  

4Q 2021

     —          —          0.0     —          0.0     —    
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     8        22,878        3.2     4,124,974        4.4     180.30  

2022

     9        58,747        8.3     9,159,054        9.8     155.91  

2023

     9        46,303        6.5     6,078,551        6.5     131.28  

2024

     10        25,312        3.6     5,813,067        6.2     229.66  

2025

     8        37,325        5.2     11,680,588        12.5     312.94  

2026

     7        68,411        9.6     4,155,887        4.5     60.75  

2027

     5        56,266        7.9     6,425,708        6.9     114.20  

2028

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

2029

     6        98,082        13.8     18,886,283        20.3     192.56  

2030

     7        63,751        9.0     7,177,419        7.7     112.59  

Thereafter

     11        116,895        16.3     16,003,848        17.3     136.91  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total retail properties

     93        711,940        100.0   $ 93,173,795        100.0   $
 
 
149.70
 
 
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Notes:

(1)

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

(2)

Excludes (i) 193,895 rentable square feet of space across the Company portfolio attributable to building management use and tenant amenities and (ii) 79,613 square feet of space attributable to the Company’s observatory.

(3)

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

(4)

Represents leases that are included in occupancy as of June 30, 2020 and expire on June 30, 2020.

 

Page 12


LOGO   

Second Quarter 2020

Tenant Lease Expirations

(unaudited)

 

Empire State Building Office (1)

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

Available

     —          153,048        5.6   $ —          0.0   $ —    

Signed leases not commenced

     2        184,393        6.8     —          0.0     —    

2Q 2020 (6)

     2        1,853        0.1     41,203        0.0     22.24  

3Q 2020

     5        24,519        0.9     1,553,026        1.1     63.66  

4Q 2020

     6        37,592        1.4     1,994,228        1.4     53.05  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2020

     13        63,964        2.4     3,588,457        2.5     56.10  

1Q 2021

     1        2,488        0.1     210,704        0.1     84.69  

2Q 2021

     13        81,328        3.0     4,247,655        2.9     52.23  

3Q 2021

     3        16,066        0.6     1,167,452        0.8     72.67  

4Q 2021

     2        7,903        0.3     502,354        0.3     63.56  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total 2021

     19        107,785        4.0     6,128,165        4.2     56.86  

2022

     21        114,522        4.2     7,259,805        5.0     63.39  

2023

     25        112,852        4.2     7,600,136        5.3     67.35  

2024

     18        227,351        8.4     14,867,651        10.3     65.40  

2025

     14        106,823        3.9     7,113,073        4.9     66.59  

2026

     9        122,685        4.5     7,604,968        5.3     61.99  

2027

     9        35,511        1.3     2,082,393        1.4     58.64  

2028

     5        545,722        20.1     30,642,139        21.2     56.15  

2029

     7        282,020        10.4     17,247,180        11.9     61.16  

2030

     5        206,489        7.6     11,085,358        7.7     53.68  

Thereafter

     17        447,658        16.6     29,174,754        20.3     65.17  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

Total Empire State Building office

     164        2,710,823        100.0   $ 144,394,079        100.0   $ 60.84  
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

 

 

Empire State Building Broadcasting Licenses and Leases

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

2Q 2020 (6)

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

3Q 2020

     —          —          —          0.0

4Q 2020

     99,320        31,621        130,941        0.9
  

 

 

    

 

 

    

 

 

    

 

 

 

Total 2020

     131,030        44,239        175,269        1.2

1Q 2021

     —          —          —          0.0

2Q 2021

     —          44,482        44,482        0.3

3Q 2021

     —          —          —          0.0

4Q 2021

     —          —          —          0.0
  

 

 

    

 

 

    

 

 

    

 

 

 

Total 2021

     —          44,482        44,482        0.3

2022

     1,719,156        429,802        2,148,958        15.0

2023

     283,668        42,987        326,655        2.3

2024

     65,000        21,360        86,360        0.6

2025

     1,571,830        186,453        1,758,283        12.3

2026

     807,668        74,589        882,257        6.2

2027

     787,969        75,972        863,941        6.0

2028

     248,614        17,946        266,560        1.9

2029

     —          —          —          0.0

2030

     463,507        96,589        560,096        3.9

Thereafter

     6,394,911        786,033        7,180,944        50.3
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Empire State Building broadcasting licenses and leases

   $ 12,473,353      $ 1,820,452      $ 14,293,805        100.0
  

 

 

    

 

 

    

 

 

 

Notes:

(1)

Excludes retail space, broadcasting licenses and observatory operations.

(2)

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

(3)

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

(4)

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

(5)

Includes approximately $6.1 million of annualized rent related to physical space occupied by broadcasting tenants for their broadcasting operations. Does not include license fees charged to broadcasting tenants.

(6)

Represents leases that are included in occupancy as of June 30, 2020 and expire on June 30, 2020.

(7)

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

 

Page 13


LOGO   

Second Quarter 2020

20 Largest Tenants and Portfolio Tenant Diversification by Industry

(unaudited)

 

               Weighted           Percent of               
               Average    Total      Portfolio            Percent of  
               Remaining    Occupied      Rentable            Portfolio  
          Lease    Lease    Square      Square     Annualized      Annualized  

20 Largest Tenants

  

Property

  

Expiration (1)

  

Term(2)

   Feet (3)      Feet (4)     Rent (5)      Rent (6)  

1. Global Brands Group

   ESB, 1333 B’Way    Oct. 2023 - Oct. 2028    7.6 years      668,942        6.4   $ 36,558,903        6.8

2. LinkedIn

   ESB    Aug. 2036    16.2 years      312,947        3.0     18,330,896        3.4

3. PVH Corp.

   501 Seventh Avenue    Oct. 2028    8.4 years      237,281        2.3     11,716,228        2.2

4. Sephora

   112 West 34th Street    Jan. 2029    8.6 years      11,334        0.1     10,468,996        1.9

5. Coty

   ESB    Jan. 2030    9.6 years      156,970        1.5     8,022,839        1.5

6. Macy’s

   111 West 33rd Street    May 2030    9.9 years      131,117        1.3     7,813,096        1.4

7. Li & Fung

   1359 Broadway    Oct. 2021 - Oct. 2027    3.8 years      149,436        1.4     7,701,934        1.4

8. Signature Bank

   1333 & 1400 Broadway    Jul. 2030 - Apr. 2035    14.3 years      124,884        1.2     7,540,459        1.4

9. Federal Deposit Insurance Corp.

   ESB    Dec. 2024    4.5 years      119,226        1.1     7,511,238        1.4

10. Urban Outfitters

   1333 Broadway    Sept. 2029    9.3 years      56,730        0.5     7,367,374        1.4

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

   111 West 33rd St & 1400 B’way    Jul. 2024 - Feb. 2025    4.3 years      128,296        1.2     7,232,743        1.3

12. Footlocker

   112 West 34th Street    Sept. 2031    11.3 years      34,192        0.3     6,898,262        1.3

13. Duane Reade/Walgreen’s

   ESB, 1350 B’Way, 250 West 57th    Feb. 2021 - Sept. 2027    4.4 years      47,541        0.5     6,704,508        1.2

14. HNTB Corporation

   ESB    Feb. 2029    8.7 years      105,143        1.0     6,629,258        1.2

15. Legg Mason

   First Stamford Place    Sept. 2024    4.3 years      137,583        1.3     6,409,614        1.1

16. WDFG North America

   ESB    Dec. 2025    5.5 years      5,300        0.1     6,037,484        1.1

17. Shutterstock

   ESB    Apr. 2029    8.8 years      104,386        1.0     5,938,370        1.1

18. Fragomen

   1400 Broadway    Feb. 2035    14.7 years      107,680        1.0     5,922,400        1.1

19. The Michael J. Fox Foundation

   111 West 33rd Street    Nov. 2029    9.4 years      86,492        0.8     5,390,818        1.0

20. ASCAP

   250 West 57th Street    Aug. 2034    14.2 years      87,943        0.8     5,345,814        1.0
           

 

 

    

 

 

   

 

 

    

 

 

 

Total

              2,813,423        26.8   $ 185,541,234        34.2
           

 

 

    

 

 

   

 

 

    

 

 

 

Notes:

 

(1)

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

(2)

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

(3)

Based on leases signed and commenced as of June 30, 2020.

(4)

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

(5)

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

(6)

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

Portfolio Tenant Diversification by Industry (based on annualized rent)

 

LOGO

 

Page 14


LOGO   

Second Quarter 2020

Capital Expenditures and Redevelopment Program and Leasing Opportunity

(unaudited and dollars in thousands)

 

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

Tenant improvements—first generation

   $ 4,562      $ 4,913      $ 22,479      $ 17,639      $ 17,255  

Tenant improvements—second generation

     5,243        8,151        12,581        8,734        10,513  

Leasing commissions—first generation

     1,272        4,001        578        574        4,742  

Leasing commissions—second generation

     2,048        3,347        13,244        2,651        3,016  

Building improvements—first generation

     358        8,379        14,457        10,988        12,910  

Building improvements—second generation

     8,075        3,846        6,556        4,931        6,296  

Observatory capital project (1)

     829        1,175        17,574        18,185        14,539  

Development (2)

     525        811        —          —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

   $ 22,912      $ 34,623      $ 87,469      $ 63,702      $ 69,271  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Note:

 

(1)

Total Observatory capital project spent-to-date was $157.4 million as of June 30, 2020.

(2)

Primarily represents design and engineering costs.

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

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

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

- Redevelopment completed – 7,500,000 square feet

Inventory of vacant space (3)

- Developed – 560,000 square feet, 90%

- Undeveloped – 60,000 square feet, 10%

Inventory of undeveloped space (3)

- Vacant – 60,000 square feet, 13%

- Expires in 2020 – 80,000 square feet, 17%

- Expires in 2021 and thereafter – 330,000 square feet, 70%

Developed no square feet in the second quarter 2020 and 80,000 square feet as of June 30, 2020 YTD.

 

Leasing Opportunity – Inventory of Current Vacant Space as of June 30, 2020 (in square feet)

  

Total Portfolio vacant space

     1,460,000  
  

 

 

 

Signed leases not commenced (“SLNC”):

  

Manhattan Office Properties SLNC

     342,000  

Greater New York Office Properties SLNC

     25,000  

Retail Properties SLNC

     43,000  

Redeveloped Manhattan Office space

     513,000  

Greater New York Office Properties space

     361,000  

Retail Properties space

     47,000  

Undeveloped Manhattan Office space

     42,000  

Space held off market

     41,000  

Other

     46,000  
  

 

 

 

Total

     1,460,000  
  

 

 

 

Notes:

 

(3)

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

(4)

Redevelopment program is for the Manhattan office assets only. Square footage based on market measurement. Developed space includes space that has been demolished and completed asbestos abatement and available for lease up or ready to be prebuilt.

Permanent building use spaces, amenity spaces and broadcasting spaces are excluded.

 

Page 15


LOGO   

Second Quarter 2020

Observatory Summary

(unaudited and dollars in thousands)

 

            Three Months Ended  

Observatory NOI

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

Observatory revenue (2)

   $ 94,935      $ 86      $ 19,544      $ 37,730      $ 37,575      $ 32,895  

Observatory expenses

     29,988        4,002        8,154        8,743        9,089        8,360  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI

     64,947        (3,916)        11,390        28,987        28,486        24,535  

Intercompany rent expense (3)

     62,546        4,053        11,536        23,715        23,242        21,491  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

NOI after intercompany rent

   $ 2,401      $ (7,969)      $ (146)      $ 5,272      $ 5,244      $ 3,044  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Observatory Metrics

                                         

Number of visitors (4)

        —          422,000        894,000        1,042,000        968,000  

Change in visitors year over year

        N/A        (29.8%)        (5.5%)        (10.7%)        (7.7%)  

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

 

     N/A        15        22        12        24  

Days closed due to COVID-19

        91        15        —          —          —    

102nd floor revenue (6)

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

Notes:

 

(1)

Due to the COVID-19 pandemic, the Observatory was closed on March 16, 2020. The Observatory reopened on July 20, 2020.

(2)

Observatory revenues include the fixed license fee received from WDFG North America, the Observatory gift shop operator. For the three months ended June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019 and June 30, 2019, the fixed license fee was $0, $1,314, $1,453, $1,453, and $1,453, respectively.

(3)

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

(4)

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

(5)

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

(6)

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

Annual Observatory Revenues 2015 to 2019

 

LOGO

Note:

 

(1)

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

 

Page 16


LOGO   

Second Quarter 2020

Condensed Consolidated Balance Sheets

(unaudited and dollars in thousands)

 

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

Assets

          

Commercial real estate properties, at cost:

          

Land

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

Development costs

     9,325       8,800       7,989       7,989       7,987  

Building and improvements

     2,914,528       2,913,312       2,900,248       2,830,353       2,784,472  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     3,125,049       3,123,308       3,109,433       3,039,538       2,993,655  

Less: accumulated depreciation

     (911,546     (886,822     (862,534     (829,495     (809,197
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Commercial real estate properties, net

     2,213,503       2,236,486       2,246,899       2,210,043       2,184,458  

Cash and cash equivalents

     872,970       1,008,983       233,946       293,710       375,335  

Restricted cash

     58,878       36,881       37,651       36,609       38,043  

Short term investments

     —         —         —         —         150,000  

Tenant and other receivables, net

     29,800       22,549       25,423       29,287       31,264  

Deferred rent receivables, net

     226,444       229,154       220,960       214,685       209,510  

Prepaid expenses and other assets

     68,109       40,583       65,453       41,927       60,818  

Deferred costs, net

     211,356       218,578       228,150       223,698       228,782  

Acquired below-market ground leases, net

     348,651       350,609       352,566       354,524       356,482  

Right of use assets

     29,205       29,256       29,307       29,355       29,404  

Goodwill

     491,479       491,479       491,479       491,479       491,479  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total assets

   $ 4,550,395     $ 4,664,558     $ 3,931,834     $ 3,925,317     $ 4,155,575  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Liabilities and Equity

          

Mortgage notes payable, net

   $ 603,974     $ 604,763     $ 605,542     $ 606,313     $ 607,072  

Senior unsecured notes, net

     973,053       973,002       798,392       798,347       1,047,939  

Unsecured term loan facility, net

     387,059       386,568       264,640       264,517       264,394  

Unsecured revolving credit facility, net

     546,778       546,436       —         —         —    

Accounts payable and accrued expenses

     104,992       142,315       143,786       143,201       131,842  

Acquired below-market leases, net

     35,170       37,623       39,679       42,655       45,651  

Ground lease liabilties

     29,205       29,256       29,307       29,355       29,404  

Deferred revenue and other liabilities

     62,996       64,176       72,015       68,742       48,858  

Tenants’ security deposits

     51,130       30,543       30,560       31,841       32,383  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities

     2,794,357       2,814,682       1,983,921       1,984,971       2,207,543  

Total equity

     1,756,038       1,849,876       1,947,913       1,940,346       1,948,032  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total liabilities and equity

   $ 4,550,395     $ 4,664,558     $ 3,931,834     $ 3,925,317     $ 4,155,575  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 17


LOGO   

Second Quarter 2020

Condensed Consolidated Statements of Operations

(unaudited and in thousands, except per share amounts)

 

 

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

Revenues

          

Rental revenue (1)

   $ 137,999     $ 148,113     $ 151,701     $ 150,225     $ 141,071  

Observatory revenue

     86       19,544       37,730       37,575       32,895  

Lease termination fees

     1,033       211       1,240       2,361       363  

Third party management and other fees

     301       346       299       304       331  

Other revenue and fees

     1,611       2,010       3,963       2,408       1,584  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     141,030       170,224       194,933       192,873       176,244  

Operating expenses

          

Property operating expenses

     29,750       41,468       43,901       47,894       40,227  

Ground rent expenses

     2,332       2,331       2,332       2,331       2,332  

General and administrative expenses

     18,149       15,951       16,618       14,421       15,998  

Observatory expenses

     4,002       8,154       8,743       9,089       8,360  

Real estate taxes

     29,579       29,254       29,818       29,599       28,267  

Impairment charge

     4,101 (2)      —         —         —         —    

Depreciation and amortization

     52,783       46,093       46,409       44,260       44,821  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     140,696       143,251       147,821       147,594       140,005  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

     334       26,973       47,112       45,279       36,239  

Other income (expense)

          

Interest income

     1,526       637       1,352       2,269       3,899  

Interest expense

     (23,928     (19,618     (18,534     (19,426     (20,597

Loss on early extinguishment of debt

     —         (86     —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Income (loss) before income taxes

     (22,068     7,906       29,930       28,122       19,541  

Income tax (expense) benefit

     2,450       382       (1,210     (1,338     (611
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

     (19,618     8,288       28,720       26,784       18,930  

Perpetual preferred unit distributions

     (1,047     (1,050     (1,041     (234     (234

Net (income) loss attributable to non-controlling interests

     7,872       (2,743     (10,880     (10,668     (7,609
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to common stockholders

   $ (12,793   $ 4,495     $ 16,799     $ 15,882     $ 11,087  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding

          

Basic

     175,433       181,741       180,166       178,352       176,796  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     283,384       292,645       296,852       298,151       298,131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) per share attributable to common stockholders

 

       

Basic and diluted

   $ (0.07   $ 0.02     $ 0.09     $ 0.09     $ 0.06  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Dividends per share

   $ 0.105     $ 0.105     $ 0.105     $ 0.105     $ 0.105  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Notes:

 

(1)

The following table reflects the components of rental revenue.

 

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

Base rent

   $ 122,374      $ 130,577      $ 130,234      $ 129,098      $ 125,170  

Billed tenant expense reimbursement

     15,625        17,536        21,467        21,127        15,901  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total rental revenue

   $ 137,999      $ 148,113      $ 151,701      $ 150,225      $ 141,071  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

The Company believes the preceding table of the components of rental revenue is not, and is not intended to be, a presentation in accordance with GAAP. The Company believes this information is frequently used by management, investors, securities analysts and other interested parties to evaluate the Company’s performance.

 

(2)

Reflects a $4.1 million non-cash write-off of prior capitalized expenditures on a combined heat and power generation project for the Empire State Building that has been rendered economically unfeasible due to New York City’s new Local Law 97.

 

Page 18


LOGO   

Second Quarter 2020

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

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

(unaudited and in thousands, except per share amounts)

 

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

Reconciliation of Net Income to FFO, Modified FFO and Core FFO

          

Net Income (loss)

   $ (19,618   $ 8,288     $ 28,720     $ 26,784     $ 18,930  

Preferred unit distributions

     (1,047     (1,050     (1,041     (234     (234

Real estate depreciation and amortization

     51,096       44,430       45,298       43,303       43,822  

Impairment charge

     4,101       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and non-controlled interests

     34,532       51,668       72,977       69,853       62,518  

Amortization of below-market ground lease

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

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified FFO attributable to common stockholders and non-controlled interests

     36,490       53,626       74,935       71,810       64,476  

Loss on early extinguishment of debt

     —         86       —         —         —    

Severance expenses

     3,008       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FFO attributable to common stockholders and non-controlled interests

   $ 39,498     $ 53,712     $ 74,935     $ 71,810     $ 64,476  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total weighted average shares and Operating Partnership Units

          

Basic

     283,384       292,645       296,852       298,151       298,131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

     283,384       292,645       296,852       298,151       298,131  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

FFO attributable to common stockholders and non-controlled interests per share

          

Basic

   $ 0.12     $ 0.18     $ 0.25     $ 0.23     $ 0.21  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.12     $ 0.18     $ 0.25     $ 0.23     $ 0.21  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Modified FFO attributable to common stockholders and non-controlled interests per share

          

Basic

   $ 0.13     $ 0.18     $ 0.25     $ 0.24     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.13     $ 0.18     $ 0.25     $ 0.24     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FFO attributable to common stockholders and non-controlled interests per share

          

Basic

   $ 0.14     $ 0.18     $ 0.25     $ 0.24     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Diluted

   $ 0.14     $ 0.18     $ 0.25     $ 0.24     $ 0.22  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Core FFO to Core FAD

          

Core FFO

   $ 39,498     $ 53,712     $ 74,935     $ 71,810     $ 64,476  

Add:

          

Amortization of deferred financing costs

     1,049       894       873       923       1,020  

Non-real estate depreciation and amortization

     1,686       1,664       1,110       958       998  

Amortization of non-cash compensation expense

     8,778       5,892       5,465       4,049       5,924  

Amortization of debt discount

     —         —         —         311       668  

Amortization of loss on interest rate derivative

     938       447       385       385       385  

Deduct:

          

Straight-line rental revenues

     2,710       (8,193     (6,276     (5,174     (3,203

Above/below-market rent revenue amortization

     (1,366     (908     (1,530     (1,682     (1,745

Corporate capital expenditures

     (141     (426     (678     (614     (463

Tenant improvements—second generation

     (5,243     (8,151     (12,581     (8,734     (10,513

Building improvements—second generation

     (8,075     (3,846     (6,556     (4,931     (6,296

Leasing commissions—second generation

     (2,048     (3,347     (13,244     (2,651     (3,016
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Core FAD

   $ 37,786     $ 37,738     $ 41,903     $ 54,650     $ 48,235  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of Net Income to EBITDA

          

Net income (loss)

   $ (19,618   $ 8,288     $ 28,720     $ 26,784     $ 18,930  

Interest expense

     23,928       19,618       18,534       19,426       20,597  

Income tax expense (benefit)

     (2,450     (382     1,210       1,338       611  

Depreciation and amortization

     52,783       46,093       46,409       44,260       44,821  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

EBITDA

     54,643       73,617       94,873       91,808       84,959  

Impairment charges

     4,101       —         —         —         —    
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted EBITDA

   $ 58,744     $ 73,617     $ 94,873     $ 91,808     $ 84,959  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

Page 19


LOGO   

Second Quarter 2020

Debt Summary

(unaudited and dollars in thousands)

 

     June 30, 2020      March 31, 2020  
           Weighted Average            Weighted Average  

Debt Summary

   Balance     Interest
Rate
    Maturity
(Years)
     Balance     Interest
Rate
    Maturity
(Years)
 

Fixed rate mortgage debt

   $ 608,871       4.10     8.5      $ 609,851       4.10     8.8  

Senior unsecured notes

     975,000       4.10     9.7        975,000       4.10     9.9  

Unsecured term loan facilities (1)

     265,000       3.40     5.1        390,000       3.70     5.8  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total fixed rate debt

     1,848,871       4.02     8.6        1,974,851       4.02     8.8  

Unsecured term loan facilities

     125,000       1.66     6.5        —         —         —    

Unsecured revolving credit facilities

     550,000       1.26     1.2        550,000       2.09     1.4  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total variable rate debt (2)

     675,000       1.34     2.2        550,000       2.09     1.4  
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Total debt

     2,523,871       3.41     6.9        2,524,851       3.60     7.2  
    

 

 

   

 

 

      

 

 

   

 

 

 

Deferred financing costs, net

     (13,007          (14,082    
  

 

 

        

 

 

     

Total

   $ 2,510,864          $ 2,510,769      
  

 

 

        

 

 

     

Note:

 

(1)

LIBOR is fixed at 2.1485% for $265 million under variable to fixed interest rate swap agreements.

 

Available Capacity

   Facility      Outstanding at
June 30,
2020
     Letters
of Credit
     Available
Capacity
 

Unsecured revolving credit facility (1)

   $ 1,100,000      $ 550,000      $ —        $ 550,000  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

Covenant Summary

   Required     Current
Quarter
    In
Compliance
 

Maximum Total Leverage(2)

     < 60     34.2     Yes  

Maximum Secured Debt

     < 40 %     8.2     Yes  

Minimum Fixed Charge Coverage

     > 1.50x       3.3x       Yes  

Minimum Unencumbered Interest Coverage

     > 1.75x       5.7x       Yes  

Maximum Unsecured Leverage

     < 60     30.6     Yes  

Notes:

 

(1)

The unsecured revolving credit and term loan facilities have an accordion feature allowing for an increase in maximum aggregate principal balance to $2.0 billion under certain circumstances. This unsecured revolving credit 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 20


LOGO   

Second Quarter 2020

Debt Detail

(unaudited and dollars in thousands)

 

     Stated
Interest
Rate (%)
    Effective
Interest
Rate (%) (1)
    Principal
Balance
    Maturity
Date
     Amortization  

Fixed rate mortgage debt:

           

Metro Center

     3.59     3.66   $ 88,526       11/5/2024        30 years  

10 Union Square

     3.70     3.97     50,000       4/1/2026        Interest only  

1542 Third Avenue

     4.29     4.53     30,000       5/1/2027        Interest only  

First Stamford Place (2)

     4.28     4.75     180,000       7/1/2027       

5 years interest only;

30 years thereafter

 

 

1010 Third Avenue and 77 West 55th Street

     4.01     4.20     37,868       1/5/2028        30 years  

10 Bank Street

     4.23     4.36     32,477       6/1/2032        25 years  

383 Main Avenue

     4.44     4.55     30,000       6/30/2032       
5 years interest only;
30 years thereafter
 
 

1333 Broadway

     4.21     4.29     160,000       2/5/2033        Interest only  
      

 

 

      

Total mortgage debt

         608,871       

Unsecured revolving credit facility

     LIBOR plus 1.10     2.17     550,000       8/29/2021        Interest only  

Unsecured term loan facility

     LIBOR plus 1.20     3.61     215,000       3/19/2025        Interest only  

Unsecured term loan facility

     LIBOR plus 1.50 %     2.98     175,000       12/31/2026        Interest only  

Senior unsecured notes: