Empire State Realty Trust (ESRT) 8-K Empire State Realty Trust Announces Second Quarter 2018 Results

Exhibit 99.2

  Second Quarter 2018  

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 RentBurn-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 Income		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

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 legal proceedings involving our company; reduced demand for office or retail space; new office or observatory development in our market; 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, ornon-renewal of, leases by tenants; 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 or to execute any 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 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; inability to comply with applicable rules and regulations and, in particular, public companies and damages resulting from security breaches through cyberattacks, cyber intrusions or otherwise, as well as other significant disruptions of our technology (IT) networks related systems. 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 Form10-K for the year ended December 31, 2017 and other risks described in documents we subsequently file from time to time with the Securities and Exchange Commission.

Page 2

  Second Quarter 2018  

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, Real Estate
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	Jeffrey Spector	(646)855-1363	jeff.spector@baml.com
	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	Steve Sakwa	(212)446-9462	steve.sakwa@evercoreisi.com
	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
	Daniel Ismail	(949)640-8780	dismail@greenstreetadvisors.com
KeyBanc Capital Markets	Jordan Sadler	(917)368-2280	jsadler@key.com
	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

  Second Quarter 2018 Financial Highlights (unaudited and dollars in thousands, except per share amounts)  

	Three Months Ended
	June 30, 2018				March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Selected Items:
Revenue	$	178,529			$	167,271		$	182,297		$	186,546		$	176,349
Net income	$	30,184			$	18,058		$	32,260		$	35,489		$	31,359
Cash net operating income(1) (2)	$	96,580			$	81,149		$	98,898		$	100,540		$	96,495
Core funds from operations (“Core FFO”)(1)	$	70,957			$	59,250		$	74,914		$	77,503		$	73,215
Core funds available for distribution (“Core FAD”)(1)	$	60,830			$	51,170		$	57,467		$	64,201		$	61,546
Core FFO per share - diluted	$	0.24			$	0.20		$	0.25		$	0.26		$	0.25
Diluted weighted average shares		297,244,000				296,827,000			297,898,000			297,871,000			298,398,000
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		10,140,545		��		10,143,376			10,144,638			10,137,074			10,139,660
Percent occupied(3)		88.4	%			88.1	%		89.6	%		89.8	%		89.2	%
Percent leased(4)		91.4	%			91.5	%		92.2	%		91.7	%		91.3	%
Observatory Metrics:
Number of visitors		1,078,000				660,000			1,014,000			1,276,000			1,126,000
Change in visitors year over year		(4.3	%)			3.8	%		(5.1	%)		(4.8	%)		0.2	%
Observatory revenues	$	35,201			$	21,249		$	32,906		$	39,306		$	33,966
Change in revenues year over year		3.6	%			1.5	%		(2.4	%)		3.1	%		6.9	%
Ratios:
Consolidated Debt to Total Market Capitalization(5)		27.0	%			27.4	%		21.5	%		20.4	%		20.2	%
Consolidated Net Debt to Total Market Capitalization(5)		19.7	%			19.5	%		16.6	%		15.7	%		15.5	%
Consolidated Debt and Perpetual Preferred Units to
Total Market Capitalization(5)		27.4	%			27.8	%		21.9	%		20.7	%		20.6	%
Consolidated Net Debt and Perpetual Preferred Units to
Total Market Capitalization(5)		20.1	%			19.9	%		17.0	%		16.1	%		15.8	%
Consolidated Debt to EBITDA(6)		5.5x				5.5x			4.8x			4.5x			4.5x
Consolidated Net Debt to EBITDA(6)		3.6x				3.5x			3.5x			3.3x			3.3x
Interest Coverage Ratio		4.8x				4.4x			5.8x			5.6x			5.5x
Core FFO Payout Ratio(7)		45	%			53	%		42	%		41	%		43	%
Core FAD Payout Ratio(8)		52	%			62	%		55	%		49	%		51	%
Class A common stock price at quarter end	$	17.10			$	16.79		$	20.53		$	20.54		$	20.77
Average closing price	$	16.89			$	18.10		$	20.46		$	20.48		$	21.05
Dividends per share - annualized	$	0.42			$	0.42		$	0.42		$	0.42		$	0.42
Dividend yield(9)		2.5	%			2.5	%		2.0	%		2.0	%		2.0	%
Private Perpetual Preferred Units outstanding ($16.62 liquidation value)		1,560,360				1,560,360			1,560,360			1,560,360			1,560,360
Class A common stock		166,658,962				163,321,049			160,424,575			158,349,708			157,493,025
Class B common stock		1,045,670				1,048,161			1,052,469			1,077,740			1,080,475
Operating partnership units		135,628,967				138,627,149			138,932,443			140,989,373			141,844,339
Total common stock and operating partnership units outstanding(10)		303,333,599				302,996,359			300,409,487			300,416,821			300,417,839

Notes:

(1) Representsnon-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 6 and 19.

(2) Interest income has been reclassed from Other Revenues and Fees to Other Income (Expense) and is not included in Revenues.

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

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

(5) Market capitalization represents the sum of (i) Company’s common stock per share price as of June 30, 2018 multiplied by the total outstanding number of shares of common stock and operating partnership units as of June 30, 2018; (ii) the number of perpetual preferred units at June 30, 2018 multiplied by $16.62 and (iii) our outstanding indebtedness or net indebtedness as of June 30, 2018.

(6) Calculated based on trailing 12 months EBITDA.

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

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

(9) Based on the closing price per share of Class A common stock on June 30, 2018.

(10) As of June 30, 2018, the Company has had conversions from operating partnership units and Class B common shares to Class A common shares totaling 42 million shares or approximately $721 million at a closing share price of $17.10. This represents a 51% increase in the number of Class A shares since the IPO.

Page 4

  Second Quarter 2018 Property Summary - Net Operating Income (“NOI”) by  Quarter (unaudited and dollars in thousands)  

	Three Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Total Portfolio(1)
Revenues	$	142,952		$	145,559		$	149,079		$	146,895		$	141,991
Operating expenses		(68,493	)		(73,260	)		(70,319	)		(70,502	)		(65,403	)
Net operating income (“NOI”)		74,459			72,299			78,760			76,393			76,588
Straight-line rent		(5,809	)		(5,853	)		(5,963	)		(6,861	)		(7,722	)
Above/below-market rent revenue amortization		(1,551	)		(1,168	)		(1,567	)		(1,607	)		(1,119	)
Below-market ground lease amortization		1,958			1,958			1,958			1,957			1,958
Total cash NOI - excluding Observatory		69,057			67,236			73,188			69,882			69,705
Observatory cash NOI		27,523			13,913			25,710			30,658			26,790
Total cash NOI - including Observatory	$	96,580		$	81,149		$	98,898		$	100,540		$	96,495
Manhattan Office Portfolio(1)(2)
Revenues	$	119,384		$	122,303		$	124,422		$	123,421		$	117,239
Operating expenses		(58,457	)		(63,218	)		(59,760	)		(60,052	)		(55,230	)
NOI		60,927			59,085			64,662			63,369			62,009
Straight-line rent		(4,970	)		(6,089	)		(5,840	)		(6,825	)		(7,305	)
Above/below-market rent revenue amortization		(1,551	)		(1,168	)		(1,567	)		(1,607	)		(1,119	)
Below-market ground lease amortization		1,958			1,958			1,958			1,957			1,958
Cash NOI	$	56,364		$	53,786		$	59,213		$	56,894		$	55,543
Greater New York Office Portfolio
Revenues	$	18,741		$	18,697		$	19,710		$	18,582		$	19,721
Operating expenses		(8,326	)		(8,425	)		(8,800	)		(8,565	)		(8,425	)
NOI		10,415			10,272			10,910			10,017			11,296
Straight-line rent		(895	)		(285	)		(272	)		(190	)		(460	)
Above/below-market rent revenue amortization		—			—			—			—			—
Below-market ground lease amortization		—			—			—			—			—
Cash NOI	$	9,520		$	9,987		$	10,638		$	9,827		$	10,836
Standalone Retail Portfolio
Revenues	$	4,827		$	4,559		$	4,947		$	4,892		$	5,031
Operating expenses		(1,710	)		(1,617	)		(1,759	)		(1,885	)		(1,748	)
NOI		3,117			2,942			3,188			3,007			3,283
Straight-line rent		56			521			149			154			43
Above/below-market rent revenue amortization		—			—			—			—			—
Below-market ground lease amortization		—			—			—			—			—
Cash NOI	$	3,173		$	3,463		$	3,337		$	3,161		$	3,326

Note:

⁽¹⁾  Interest income has been reclassed from Other Revenues and Fees to Other Income (Expense) and is not included in Revenues. For the three months ended June 30, 2018, March 31, 2018, December 31, 2017, September 30, 2017 and June 30, 2017, interest income was $2,499, $1,225, $773, $774 and $775, respectively.

⁽²⁾  Includes 513,196 rentable square feet of retail space in the Company’s nine Manhattan office properties.

Page 5

  Second Quarter 2018 Net Operating Income (“NOI”), Initial Free Rent Burn-Off and Signed Leases Not Commenced (unaudited and dollars in thousands)  

	Three Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Reconciliation of Net Income to NOI and Cash NOI
Net income	$	30,184		$	18,058		$	32,260		$	35,489		$	31,359
Add:
General and administrative expenses		13,225			12,628			13,749			12,899			12,579
Depreciation and amortization		39,468			39,883			40,842			38,490			40,532
Interest expense		20,525			17,591			16,364			16,890			17,477
Loss on early extinguishment of debt		—			—			—			2,157			—
Loss from derivative financial instruments		—			—			—			—			42
Income tax expense (benefit)		1,455			(260	)		2,340			2,245			2,556
Less:
Third-party management and other fees		(376	)		(463	)		(312	)		(345	)		(392	)
Interest income		(2,499	)		(1,225	)		(773	)		(774	)		(775	)
Net operating income		101,982			86,212			104,470			107,051			103,378
Straight-line rent		(5,809	)		(5,853	)		(5,963	)		(6,861	)		(7,722	)
Above/below-market rent revenue amortization		(1,551	)		(1,168	)		(1,567	)		(1,607	)		(1,119	)
Below-market ground lease amortization		1,958			1,958			1,958			1,957			1,958
Total cash NOI - including Observatory		96,580			81,149			98,898			100,540			96,495
Less: Observatory NOI		(27,523	)		(13,913	)		(25,710	)		(30,658	)		(26,790	)
Total cash NOI - excluding Observatory	$	69,057		$	67,236		$	73,188		$	69,882		$	69,705
Cash NOI by Portfolio
Manhattan Office Portfolio	$	56,364		$	53,786		$	59,213		$	56,894		$	55,543
Greater New York Office Portfolio		9,520			9,987			10,638			9,827			10,836
Standalone Retail Portfolio		3,173			3,463			3,337			3,161			3,326
Total cash NOI - excluding Observatory		69,057			67,236			73,188			69,882			69,705
Observatory cash NOI		27,523			13,913			25,710			30,658			26,790
Total cash NOI - including Observatory	$	96,580		$	81,149		$	98,898		$	100,540		$	96,495

Schedule of Initial Free RentBurn-Off

As of June 30, 2018, the Company had approximately $42 million of annualized cash rents that have yet to contribute to Cash NOI:

	Annualized Initial Base Cash Rent		Cumulative Contribution to Annualized Base Rent in the Following Years
Total Portfolio			Remaining 2018		2019		2020		2021
Commenced leases in free rent period	$	23,476	$	3,261	$	20,241	$	23,476	$	23,476
Signed leases not commenced		18,750		5,269		17,998		18,750		18,750
Total	$	42,226	$	8,530	$	38,239	$	42,226	$	42,226

Signed leases not commenced

	Square		6/30/18 Escalated		New		Expected Base Rent Commencement		Incremental Annual
Tenant	Feet		Annual Rent		Annual Rent		GAAP	Cash	Revenue
BTS USA, Inc.		11,552	$	—	$	790	Jul. 2018	Feb. 2019	$	790
Hoguet Newman Regal & Kenney		12,732		—		850	Sep. 2018	Feb. 2019		850
RZO, LLC		12,635		—		820	Sep. 2018	May 2019		820
Michael J. Fox Foundation		10,533		—		670	Oct. 2018	May 2019		670
Nespresso		41,835		—		2,380	Oct. 2018	Jun. 2019		2,380
LinkedIn Corporation		30,165		—		2,020	Dec. 2018	Jul. 2019		2,020
TJX Companies		18,965		—		1,900	May 2019	Jul. 2019		1,900
Fragoman, Del Rey, Bernsen & Loewy LLP		107,680		1,520		5,920	Jun. 2019	Mar. 2020		4,400
Other SLNC		90,403		—		4,920	Jul. 2018 - Mar. 2019	Jul. 2018 - May 2019		4,920
Total		336,500	$	1,520	$	20,270			$	18,750

Page 6

  Second Quarter 2018 Property Summary - Leasing Activity by Quarter (unaudited)  

	Three Months Ended
	June 30, 2018				March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Total Portfolio
Total leases executed		37				41			55			34			51
Weighted average lease term		6.1 years				7.1 years			8.1 years			12.2 years			9.3 years
Average free rent period		4.5 months				4.8 months			6.4 months			9.3 months			6.9 months
Office
Total square footage executed		142,286				253,626			252,244			487,854			300,269
Average rent psf - leases executed	$	55.45			$	54.51		$	56.14		$	52.52		$	55.22
Previously escalated rents psf	$	46.86			$	48.53		$	44.85		$	41.12		$	40.61
Percentage of new rent over previously escalated rents		18.3	%			12.3	%		25.2	%		27.7	%		36.0	%
Retail
Total square footage executed		1,131				5,904			22,744			—			29,597
Average rent psf - leases executed	$	122.02			$	175.43		$	115.33		$	—		$	40.66
Previously escalated rents psf	$	122.83			$	175.43		$	86.38		$	—		$	48.13
Percentage of new rent over previously escalated rents		(0.7	%)			0.0	%		33.5	%		0.0	%		(15.5	%)
Total Portfolio
Total square footage executed		143,417				259,530			274,988			487,854			329,866
Average rent psf - leases executed	$	55.99			$	57.29		$	61.42		$	52.52		$	54.39
Previously escalated rents psf	$	47.48			$	51.44		$	48.45		$	41.12		$	41.52
Percentage of new rent over previously escalated rents		17.9	%			11.4	%		26.8	%		27.7	%		31.0	%
Leasing commission costs per square foot	$	10.66		��	$	15.35		$	18.06		$	22.15		$	17.74
Tenant improvement costs per square foot		66.27				49.54			65.95			72.92			68.24
Total LC and TI per square foot(2)	$	76.93			$	64.89		$	84.01		$	95.07		$	85.98
Occupancy		88.4	%			88.1	%		89.6	%		89.8	%		89.2	%
Manhattan Office Portfolio(1)
Total leases executed		30				31			41			27			43
Office - New Leases
Total square footage executed		83,251				158,932			170,669			276,964			208,594
Average rent psf - leases executed	$	62.88			$	59.51		$	61.31		$	58.79		$	60.11
Previously escalated rents psf	$	49.69			$	48.05		$	45.80		$	40.24		$	40.11
Percentage of new rent over previously escalated rents		26.5	%			23.8	%		33.9	%		46.1	%		49.9	%
Office - Renewal Leases
Total square footage executed		27,738				33,964			43,237			38,180			42,447
Average rent psf - leases executed	$	53.48			$	56.31		$	53.72		$	56.12		$	58.07
Previously escalated rents psf	$	49.35			$	56.22		$	47.65		$	50.02		$	54.92
Percentage of new rent over previously escalated rents		8.4	%			0.2	%		12.7	%		12.2	%		5.7	%
Retail - New and Renewal Leases
Total square footage executed		1,131				—			20,366			—			2,454
Average rent psf - leases executed	$	122.02			$	—		$	99.98		$	—		$	111.42
Previously escalated rents psf	$	122.83			$	—		$	70.61		$	—		$	128.87
Percentage of new rent over previously escalated rents		(0.7	%)			0.0	%		41.6	%		0.0	%		(13.5	%)
Total Manhattan Office Portfolio
Total square footage executed		112,120				192,896			234,272			315,144			253,495
Average rent psf - leases executed	$	61.15			$	58.94		$	63.27		$	58.46		$	60.26
Previously escalated rents psf	$	50.35			$	49.49		$	48.30		$	41.42		$	43.45
Percentage of new rent over previously escalated rents		21.5	%			19.1	%		31.0	%		41.1	%		38.7	%
Leasing commission costs per square foot	$	11.70			$	18.56		$	19.02		$	26.21		$	21.97
Tenant improvement costs per square foot		68.11				63.22			69.16			80.69			79.19
Total LC and TI per square foot(2)	$	79.81			$	81.78		$	88.18		$	106.90		$	101.16
Occupancy		88.1	%			87.3	%		89.0	%		89.2	%		88.7	%

Page 7

  Second Quarter 2018 Property Summary - Leasing Activity byQuarter - (Continued) (unaudited)  

	Three Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Greater New York Office Portfolio
Total leases executed		7			8			11			7			6
Total square footage executed		31,297			60,730			38,338			172,710			49,228
Average rent psf - leases executed	$	34.31		$	39.85		$	35.89		$	41.68		$	32.02
Previously escalated rents psf	$	35.43		$	45.36		$	37.45		$	40.57		$	30.41
Percentage of new rent over previously escalated rents		(3.2	%)		(12.1	%)		(4.2	%)		2.7	%		5.3	%
Leasing commission costs per square foot	$	6.95		$	4.21		$	10.35		$	14.74		$	5.71
Tenant improvement costs per square foot		59.68			7.89			50.40			58.76			49.50
Total LC and TI per square foot(2)	$	66.63		$	12.10		$	60.75		$	73.50		$	55.21
Occupancy		88.9	%		90.8	%		91.2	%		91.3	%		90.5	%
Standalone Retail Portfolio
Total leases executed		—			2			3			—			2
Total square footage executed		—			5,904			2,378			—			27,143
Average rent psf - leases executed	$	—		$	175.42		$	246.78		$	—		$	34.26
Previously escalated rents psf	$	—		$	175.42		$	221.47		$	—		$	40.83
Percentage of new rent over previously escalated rents		—			0.0	%		0.0	%		—			0.0	%
Leasing commission costs per square foot	$	—		$	25.20		$	48.45		$	—		$	—
Tenant improvement costs per square foot		—			31.31			—			—			—
Total LC and TI per square foot(2)	$	—		$	56.51		$	48.45		$	—		$	—
Occupancy		95.4	%		97.3	%		99.4	%		99.4	%		99.4	%

Notes:

⁽¹⁾  Includes 513,196 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

  Second Quarter 2018 Total Portfolio Expirations and Vacates Summary (unaudited and in square feet)  

	Actual						Forecast(1)
	Three Months Ended						Three Months Ended						Forecast (1)			Forecast (1)
	March 31, 2018			June 30, 2018			September 30, 2018			December 31, 2018			July to Dec. 2018			Full Year 2019
Total Portfolio(2)
Total Expirations		419,086			188,127			278,217			161,159			439,376			734,383
Less: Broadcasting		(19,511	)		(21,776	)		(26,038	)		(10,529	)		(36,567	)		(586	)
Office and Retail Expirations		399,575			166,351			252,179			150,630			402,809			733,797
Renewal & Relocations(3)		76,747			46,274			54,776			49,068			103,844			198,825
Short-term renewals(4)		37,034			7,246			—			—			—			—
New Leases(5)		67,614			44,058			39,252			35,916			75,168			19,420
Tenant Vacates(6)		108,114			55,243			59,810			33,973			93,783			232,530
Intentional Vacates(7)		99,626			12,419			88,062			28,168			116,230			154,634
Holdover(8)		10,440			1,111			—			—			—			—
Unknown(9)		—			—			10,279			3,505			13,784			128,388
Total Portfolio expirations and vacates		399,575			166,351			252,179			150,630			402,809			733,797
Manhattan Office Portfolio
Total Expirations		344,883			133,636			202,295			123,706			326,001			485,103
Less: Broadcasting		(19,511	)		(21,776	)		(26,038	)		(10,529	)		(36,567	)		(586	)
Office Expirations		325,372			111,860			176,257			113,177			289,434			484,517
Renewal & Relocations(3)		53,121			20,536			48,101			21,095			69,196			105,404
Short-term renewals(4)		37,034			242			—			—			—			—
New Leases(5)		67,614			44,058			8,662			35,916			44,578			19,420
Tenant Vacates(6)		70,092			33,494			53,650			24,493			78,143			102,973
Intentional Vacates(7)		87,071			12,419			65,844			28,168			94,012			131,442
Holdover(8)		10,440			1,111			—			—			—			—
Unknown(9)		—			—			—			3,505			3,505			125,278
Total expirations and vacates		325,372			111,860			176,257			113,177			289,434			484,517
Greater New York Office Portfolio
Office Expirations		54,661			50,369			73,675			37,209			110,884			222,824
Renewal & Relocations(3)		22,316			25,496			6,675			27,729			34,404			90,157
Short-term renewals(4)		—			7,004			—			—			—			—
New Leases(5)		—			—			30,590			—			30,590			—
Tenant Vacates(6)		32,345			17,869			4,155			9,480			13,635			129,557
Intentional Vacates(7)		—			—			21,976			—			21,976			—
Holdover(8)		—			—			—			—			—			—
Unknown(9)		—			—			10,279			—			10,279			3,110
Total expirations and vacates		54,661			50,369			73,675			37,209			110,884			222,824
Retail Portfolio
Retail Expirations		19,542			4,122			2,247			244			2,491			26,456
Renewal & Relocations(3)		1,310			242			—			244			244			3,264
Short-term renewals(4)		—			—			—			—			—			—
New Leases(5)		—			—			—			—			—			—
Tenant Vacates(6)		5,677			3,880			2,005			—			2,005			—
Intentional Vacates(7)		12,555			—			242			—			242			23,192
Holdover(8)		—			—			—			—			—
Unknown(9)		—			—			—			—			—			—
Total expirations and vacates		19,542			4,122			2,247			244			2,491			26,456

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 2018.

(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 not provided in this section.

(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 2018.

(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

  Second Quarter 2018 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		2,711,148		93.8	%	$	142,714,509	$	56.10		181
One Grand Central Place		Grand Central		1,245,384		88.8	%		62,362,923		56.38		220
1400 Broadway(8)		Penn Station -Times Sq. South		910,238		77.4	%		34,065,142		48.35		28
111 West 33rd Street(9)		Penn Station -Times Sq. South		638,813		66.5	%		23,757,765		55.93		15
250 West 57th Street		Columbus Circle - West Side		468,224		91.7	%		24,557,914		57.19		74
501 Seventh Avenue		Penn Station -Times Sq. South		460,150		93.3	%		18,783,912		43.75		29
1359 Broadway		Penn Station -Times Sq. South		455,661		96.1	%		22,496,743		51.39		36
1350 Broadway(10)		Penn Station -Times Sq. South		373,206		85.0	%		17,858,142		56.32		61
1333 Broadway		Penn Station -Times Sq. South		292,544		94.6	%		13,873,235		50.13		12
Manhattan Office Properties - Office				7,555,368		88.3	%		360,470,283		54.05		656
Manhattan Office Properties - Retail
The Empire State Building (7)		Penn Station -Times Sq. South		104,558		69.8	%		13,416,332		183.84		14
One Grand Central Place		Grand Central		68,563		79.0	%		6,370,933		117.69		13
1400 Broadway(8)		Penn Station -Times Sq. South		20,418		71.9	%		1,885,087		128.39		7
112 West 34th Street(9)		Penn Station -Times Sq. South		90,132		100.0	%		22,404,847		248.58		4
250 West 57th Street		Columbus Circle - West Side		67,927		72.1	%		8,037,423		164.16		8
501 Seventh Avenue		Penn Station -Times Sq. South		35,558		88.3	%		1,983,248		63.15		9
1359 Broadway		Penn Station -Times Sq. South		27,265		100.0	%		2,185,162		80.15		6
1350 Broadway(10)		Penn Station -Times Sq. South		31,774		100.0	%		6,780,827		213.41		6
1333 Broadway		Penn Station -Times Sq. South		67,001		100.0	%		8,696,056		129.79		4
Manhattan Office Properties - Retail				513,196		85.4	%		71,759,916		163.71		71
Sub-Total/Weighted Average
Manhattan Office Properties - Office and Retail				8,068,564		88.1	%		432,230,200		60.81		727
Greater New York Metropolitan Area Office Properties
First Stamford Place(11)		Stamford, CT		792,863		91.4	%		30,991,133		42.76		54
Metro Center		Stamford, CT		284,816		80.1	%		13,323,522		58.39		26
383 Main Avenue		Norwalk, CT		263,031		87.2	%		7,340,889		32.01		21
500 Mamaroneck Avenue		Harrison, NY		293,202		85.9	%		7,187,054		28.54		32
10 Bank Street		White Plains, NY		232,361		96.9	%		8,045,908		35.72		35
Sub-Total/Weighted Average Greater New York Metropolitan Area Office Properties				1,866,273		88.9	%		66,888,506		40.31		168
Standalone Retail Properties
10 Union Square		Union Square		58,007		100.0	%		6,709,152		115.66		13
1542 Third Avenue		Upper East Side		56,250		100.0	%		3,800,915		67.57		4
1010 Third Avenue		Upper East Side		44,662		100.0	%		3,735,464		83.64		2
77 West 55th Street		Midtown		25,388		100.0	%		2,637,533		103.89		3
69-97 Main Street		Westport, CT		17,071		44.2	%		1,116,211		147.92		3
103-107 Main Street		Westport, CT		4,330		100.0	%		715,852		165.32		1
Sub-Total/Weighted Average Standalone Retail Properties				205,708		95.4	%		18,715,127		95.40		26
Portfolio Total				10,140,545		88.4	%	$	517,833,833	$	57.77		921
Total/Weighted Average Office Properties				9,421,641		88.4	%	$	427,358,790	$	51.31		824
Total/Weighted Average Retail Properties				718,904		88.3	%		90,475,043		142.59		97
Portfolio Total				10,140,545		88.4	%	$	517,833,833	$	57.77		921

Notes:

(1) Excludes (i) 157,338 square feet of space across the Company’s portfolio attributable to building management use and tenant amenities and (ii) 69,789 square feet of space attributable to the Company’s observatory.

(2) Based on leases signed and commenced as of June 30, 2018.

(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, 2018 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 67,686 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 45 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 59 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 32 years (expiring July 31, 2050).

(11) First Stamford Place consists of three buildings.

Page 10

  Second Quarter 2018 Tenant Lease Expirations (unaudited)  

	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
Total Lease Expirations
Available		—		874,907		8.6	%	$	—		0.0	%	$	—
Signed leases not commenced		32		302,134		3.0	%		—		0.0	%		—
2Q 2018(4)		15		48,928		0.5	%		2,738,147		0.5	%		55.96
3Q 2018		66		278,217		2.7	%		14,528,051		2.8	%		52.22
4Q 2018		43		161,159		1.6	%		7,390,732		1.4	%		45.86
Total 2018		124		488,304		4.8	%		24,656,930		4.8	%		50.50
1Q 2019		22		87,723		0.9	%		5,034,161		1.0	%		57.39
2Q 2019		33		177,191		1.7	%		9,550,796		1.8	%		53.90
3Q 2019		39		184,202		1.8	%		10,026,752		1.9	%		54.43
4Q 2019		41		285,267		2.8	%		13,333,629		2.6	%		46.74
Total 2019		135		734,383		7.2	%		37,945,338		7.3	%		51.67
2020		135		805,149		7.9	%		44,671,363		8.6	%		55.48
2021		99		699,736		6.9	%		39,044,865		7.5	%		55.80
2022		89		523,735		5.2	%		33,051,150		6.4	%		63.11
2023		76		660,971		6.5	%		38,298,015		7.4	%		57.94
2024		53		558,295		5.5	%		31,748,137		6.1	%		56.87
2025		52		374,868		3.7	%		27,648,319		5.3	%		73.75
2026		40		972,885		9.6	%		53,275,096		10.3	%		54.76
2027		41		539,247		5.3	%		30,805,616		5.9	%		57.13
Thereafter		77		2,605,931		25.8	%		156,689,002		30.3	%		60.13
Total		953		10,140,545		100.0	%	$	517,833,833		100.0	%	$	57.77
Manhattan Office Properties(5)
Available		—		613,532		8.1	%	$	—		0.0	%	$	—
Signed leases not commenced		26		272,164		3.6	%		—		0.0	%		—
2Q 2018(4)		10		33,779		0.4	%		1,915,978		0.5	%		56.72
3Q 2018		54		202,295		2.7	%		10,804,796		3.0	%		53.41
4Q 2018		33		123,706		1.6	%		6,664,925		1.8	%		53.88
Total 2018		97		359,780		4.8	%		19,385,699		5.4	%		53.88
1Q 2019		16		81,321		1.1	%		4,848,047		1.3	%		59.62
2Q 2019		22		96,680		1.3	%		4,921,565		1.4	%		50.91
3Q 2019		33		172,853		2.3	%		8,536,636		2.4	%		49.39
4Q 2019		34		134,249		1.8	%		7,341,975		2.0	%		54.69
Total 2019		105		485,103		6.4	%		25,648,223		7.1	%		52.87
2020		106		594,839		7.9	%		32,875,142		9.1	%		55.27
2021		61		459,135		6.1	%		24,743,245		6.9	%		53.89
2022		65		343,319		4.5	%		19,704,701		5.5	%		57.39
2023		55		489,233		6.5	%		26,594,469		7.4	%		54.36
2024		34		342,986		4.5	%		17,771,053		4.9	%		51.81
2025		31		221,532		2.9	%		12,841,859		3.6	%		57.97
2026		28		841,824		11.1	%		46,993,498		13.0	%		55.82
2027		27		387,245		5.1	%		21,095,590		5.9	%		54.48
Thereafter		47		2,144,676		28.5	%		112,816,802		31.2	%		52.60
Total Manhattan office properties		682		7,555,368		100.0	%	$	360,470,283		100.0	%	$	54.05

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) 157,338 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.

(4) Represents leases that are included in occupancy as of June 30, 2018 and expire on June 30, 2018.

(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

\   Second Quarter 2018 Tenant Lease Expirations (unaudited)  

	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
Greater New York Metropolitan Area Office Properties
Available		—		197,081		10.6	%	$	—		0.0	%	$	—
Signed leases not commenced		4		9,874		0.5	%		—		0.0	%		—
2Q 2018(4)		5		15,149		0.8	%		822,169		1.2	%		54.27
3Q 2018		10		73,675		3.9	%		3,428,464		5.1	%		46.53
4Q 2018		9		37,209		2.0	%		699,699		1.0	%		18.80
Total 2018		24		126,033		6.8	%		4,950,332		7.4	%		39.28
1Q 2019		6		6,402		0.3	%		186,114		0.3	%		29.07
2Q 2019		10		77,738		4.2	%		3,278,565		4.9	%		42.17
3Q 2019		2		5,099		0.3	%		168,518		0.3	%		33.05
4Q 2019		6		133,585		7.2	%		4,714,685		7.0	%		35.29
Total 2019		24		222,824		11.9	%		8,347,882		12.5	%		37.46
2020		20		181,677		9.7	%		8,232,121		12.3	%		45.31
2021		31		210,934		11.3	%		9,363,823		14.0	%		44.39
2022		15		120,775		6.5	%		4,479,652		6.7	%		37.09
2023		12		117,405		6.3	%		5,342,875		8.0	%		45.51
2024		7		186,890		10.0	%		8,228,362		12.3	%		44.03
2025		13		116,011		6.2	%		3,910,482		5.8	%		33.71
2026		4		60,710		3.3	%		1,824,532		2.7	%		30.05
2027		6		64,229		3.4	%		2,328,224		3.5	%		36.25
Thereafter		12		251,830		13.5	%		9,880,221		14.8	%		39.23
Total greater New York metropolitan area office properties		172		1,866,273		100.0	%	$	66,888,506		100.0	%	$	40.31
Retail Properties
Available		—		64,294		8.9	%	$	—		0.0	%	$	—
Signed leases not commenced		2		20,096		2.8	%		—		0.0	%		—
2Q 2018(4)		—		—		0.0	%		—		0.0	%		—
3Q 2018		2		2,247		0.3	%		294,791		0.3	%		131.19
4Q 2018		1		244		0.0	%		26,108		0.0	%		107.00
Total 2018		3		2,491		0.3	%		320,899		0.4	%		128.82
1Q 2019		—		—		0.0	%		—		0.0	%		—
2Q 2019		1		2,773		0.4	%		1,350,666		1.5	%		487.08
3Q 2019		4		6,250		0.9	%		1,321,598		1.5	%		211.46
4Q 2019		1		17,433		2.4	%		1,276,969		1.4	%		73.25
Total 2019		6		26,456		3.7	%		3,949,233		4.4	%		149.28
2020		9		28,633		4.0	%		3,564,100		3.9	%		124.48
2021		7		29,667		4.1	%		4,937,797		5.5	%		166.44
2022		9		59,641		8.3	%		8,866,797		9.8	%		148.67
2023		9		54,333		7.6	%		6,360,671		7.0	%		117.07
2024		12		28,419		4.0	%		5,748,722		6.4	%		202.28
2025		8		37,325		5.2	%		10,895,978		12.0	%		291.92
2026		8		70,351		9.8	%		4,457,066		4.9	%		63.35
2027		8		87,773		12.2	%		7,381,802		8.2	%		84.10
Thereafter		18		209,425		29.0	%		33,991,978		37.5	%		162.31
Total retail properties		99		718,904		100.0	%	$	90,475,043		100.0	%	$	142.59

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) 157,338 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.

(4) Represents leases that are included in occupancy as of June 30, 2018 and expire on June 30, 2018.

Page 12

  Second Quarter 2018 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		—		120,824		4.5	%	$	—		0.0	%	$	—
Signed leases not commenced		3		46,380		1.7	%		—		0.0	%		—
2Q 2018(6)		3		8,173		0.3	%		552,569		0.4	%		67.61
3Q 2018		12		51,150		1.9	%		3,071,850		2.2	%		60.06
4Q 2018		5		15,719		0.6	%		969,611		0.7	%		61.68
Total 2018		20		75,042		2.8	%		4,594,030		3.2	%		61.22
1Q 2019		6		10,649		0.4	%		562,437		0.4	%		52.82
2Q 2019		1		1,738		0.1	%		90,437		0.1	%		52.04
3Q 2019		1		5,588		0.2	%		314,590		0.2	%		56.30
4Q 2019		6		41,195		1.5	%		2,269,612		1.6	%		55.09
Total 2019		14		59,170		2.2	%		3,237,076		2.3	%		54.71
2020		35		295,150		10.9	%		17,242,260		12.1	%		58.42
2021		19		126,599		4.7	%		7,178,352		5.0	%		56.70
2022		21		95,218		3.5	%		5,949,216		4.2	%		62.48
2023		15		83,429		3.1	%		5,256,606		3.7	%		63.01
2024		13		92,516		3.4	%		5,723,375		4.0	%		61.86
2025		7		63,165		2.3	%		3,495,673		2.4	%		55.34
2026		11		502,152		18.5	%		28,989,412		20.3	%		57.73
2027		4		16,613		0.6	%		1,132,853		0.8	%		68.19
Thereafter		22		1,134,890		41.9	%		59,915,656		42.0	%		52.79
Total Empire State Building office		184		2,711,148		100.0	%	$	142,714,509		100.0	%	$	56.10
Empire State Building Broadcasting Licenses and Leases					Annualized Base Rent (7)			Annualized Expense Reimbursements		Annualized Rent(4) (8)			Percent of Annualized Rent
2Q 2018(6)					$	487,150		$	102,936	$	590,086			3.3	%
3Q 2018						1,424,351			591,474		2,015,825			11.4	%
4Q 2018						1,290,646			747,368		2,038,014			11.5	%
Total 2018						3,202,147			1,441,778		4,643,925			26.3	%
1Q 2019						212,240			47,729		259,969			1.5	%
2Q 2019						—			—		—			0.0	%
3Q 2019						—			—		—			0.0	%
4Q 2019						—			—		—			0.0	%
Total 2019						212,240			47,729		259,969			1.5	%
2020						955,809			153,232		1,109,041			6.3	%
2021						55,685			95,271		150,956			0.9	%
2022						1,124,545			254,552		1,379,097			7.8	%
2023						82,480			20,327		102,807			0.6	%
2024						45,894			59,186		105,080			0.6	%
2025						1,496,090			183,420		1,679,510			9.5	%
2026						768,750			68,658		837,408			4.7	%
2027						750,000			54,727		804,727			4.5	%
Thereafter						6,001,974			632,876		6,634,850			37.5	%
Total Empire State Building broadcasting licenses and leases					$	14,695,614		$	3,011,756	$	17,707,370			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 $8.0 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, 2018 and expire on June 30, 2018.

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

(8) Excludes Fox Television whose lease expired during 2017 and was billed holdover rent as of June 30, 2018.

Page 13

  Second Quarter 2018 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	Oct. 2023 - Oct. 2028		9.6 years		668,942		6.6	%	$	31,409,092		6.1	%
2. Coty	ESB	Jan. 2030		11.6 years		309,757		3.1	%		16,327,268		3.2	%
3. LinkedIn	ESB	Feb. 2026		7.7 years		282,782		2.8	%		15,888,535		3.1	%
4. PVH Corp.	501 Seventh Avenue	Oct 2018 - Oct. 2028		9.5 years		238,392		2.4	%		10,572,562		2.0	%
5. Sephora	112 West 34th Street	Jan. 2029		10.6 years		11,334		0.1	%		10,445,021		2.0	%
6. Li & Fung	1359 Broadway	Oct.2021-Oct. 2027		5.8 years		149,436		1.5	%		7,297,593		1.4	%
7. Federal Deposit Insurance Corp.	ESB	Jan. 2020		1.6 years		121,879		1.2	%		6,923,222		1.3	%
8. Macy’s	111 West 33rd Street	May 2030		11.9 years		131,117		1.3	%		6,867,959		1.3	%
9. Urban Outfitters	1333 Broadway	Sept. 2029		11.3 years		56,730		0.6	%		6,831,727		1.3	%
10. Duane Reade	ESB, 1350 B’Way, 250 West 57th	Feb. 2021-Sept. 2027		6.4 years		47,541		0.5	%		6,279,846		1.2	%
11. Footlocker	112 West 34th Street	Sept. 2031		13.3 years		34,192		0.3	%		6,223,978		1.2	%
12. Legg Mason	First Stamford Place	Sept. 2024		6.3 years		137,583		1.4	%		6,215,355		1.2	%
13. WDFG North America	ESB	Dec. 2025		7.4 years		5,300		0.1	%		5,680,776		1.1	%
14. Shutterstock	ESB	Apr. 2029		10.8 years		104,386		1.0	%		5,582,973		1.1	%
15. ASCAP	111 West 33rd Street	Aug. 2034		16.2 years		87,943		0.9	%		5,250,464		1.0	%
16. Kohl’s	1400 Broadway	May 2029		10.9 years		113,032		1.1	%		4,919,135		0.9	%
17. The Gap, Inc.	111 West 33rd Street, OGCP	Jan.2023-Jan. 2030		11.5 years		83,408		0.8	%		4,686,621		0.9	%
18. HNTB Corporation	ESB	Feb. 2026		7.7 years		78,361		0.8	%		4,586,184		0.9	%
19. The Michael J. Fox Foundation	111 West 33rd Street	Nov. 2029		11.4 years		75,959		0.7	%		4,557,540		0.9	%
20. Target	112 West 34th Street	Jan. 2038		19.6 years		43,019		0.4	%		4,300,000		0.8	%
Total						2,781,093		27.6	%	$	170,845,851		32.9	%

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, 2018.

(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

  Second Quarter 2018 Capital Expenditures and Redevelopment Program and Leasing Opportunity (unaudited and dollars in thousands)  

	Three Months Ended
Capital expenditures	June 30, 2018		March 31, 2018		December 31, 2017		September 30, 2017		June 30, 2017
Tenant improvements - first generation	$	31,921	$	17,298	$	17,680	$	16,219	$	20,557
Tenant improvements - second generation		4,874		2,039		6,966		6,058		4,764
Leasing commissions - first generation		1,698		3,699		6,207		7,416		7,683
Leasing commissions - second generation		866		3,024		2,996		817		192
Building improvements - first generation		19,862		13,664		19,591		15,759		26,680
Building improvements - second generation		4,329		1,719		3,566		2,105		2,337
Observatory capital project		15,871		11,533		16,360		13,411		6,850
Total	$	79,421	$	52,976	$	73,366	$	61,785	$	69,063

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

• Future redevelopment (Empire State Building) - 230,000 square feet

• Future redevelopment (other Manhattan properties) - 630,000 square feet

• Redevelopment completed - 7,120,000 square feet

Inventory of vacant space ⁽²⁾

• Developed - 560,000 square feet, 88%⁽³⁾

• Undeveloped - 80,000 square feet, 12%

Inventory of undeveloped space ⁽²⁾

• Vacant - 80,000 square feet, 10%

• Expires in 2018 - 140,000 square feet, 16%

• Expires in 2019 and thereafter - 640,000 square feet, 74%

Developed 30,000 square feet in the second quarter 2018 and 110,000 square feetyear-to-date June 2018.

Leasing Opportunity - Inventory of Current Vacant Space as of June 30, 2018 (in square feet)

Total Portfolio vacant space	1,177,000
Signed leases not commenced (“SLNC”):
Manhattan Office Properties SLNC	272,000
Greater New York Office Properties SLNC	10,000
Retail Properties SLNC	20,000
Redeveloped Manhattan Office space	498,000
Greater New York Office Properties space	197,000
Retail Properties space	64,000
Undeveloped Manhattan Office space	47,000
Space held off market	29,000
Other	40,000
Total	1,177,000

Development of Space Expected to Vacate from June 30, 2018 through December 31, 2018 (in square feet)

	Expected Vacates		2018		2019		2020		Thereafter
Tenant Vacates
Developed		77,048
Undeveloped space to be developed		3,100		—		2,056		—		1,044
		80,148
Intentional Vacates
Developed		31,645
Undeveloped space to be developed		62,609		37,034		19,200		—		6,375
		94,254

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.

⁽³⁾  Includes 498,000 square feet of redeveloped Manhattan office space, 37,000 square feet of redeveloped retail space and the balance reflects space heldoff-market.

Page 15

  Second Quarter 2018 Observatory Summary (unaudited and in thousands)  

			Three Months Ended
Observatory NOI	Twelve Months to Date		June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Observatory revenue	$	128,662	$	35,201		$	21,249		$	32,906		$	39,306		$	33,966
Observatory expenses		30,858		7,678			7,336			7,196			8,648			7,176
NOI		97,804		27,523			13,913			25,710			30,658			26,790
Intercompany rent expense(1)		79,144		21,990			13,561			20,292			23,301			20,675
NOI after intercompany rent	$	18,660	$	5,533		$	352		$	5,418		$	7,357		$	6,115
Observatory Metrics
Number of visitors				1,078,000			660,000			1,014,000			1,276,000			1,126,000
Change in visitors year over year				(4.3	%)		3.8	%		(5.1	%)		(4.8	%)		0.2	%
Number of bad weather days (“BWD”)(2)				11			15			10			14			15
Estimated effect of BWD’s on number of visitors (3)				19,000			(14,000	)		(2,000	)		(38,000	)		(65,000	)
102nd floor revenue(4)			$	3,041		$	83		$	2,767		$	3,537		$	3,139

Notes:

(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.

(2) 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.

(3) Represents an estimated reduction in the number of visitors due to bad weather days compared to the same quarter in the prior year.

(4) Reflects revenues derived from the 102nd floor observatory. This revenue is included in total observatory revenues above and will be disclosed separately throughout the duration of the observatory capital improvement program.

Annual Observatory Revenues 2013 to 2017

Page 16

  Second Quarter 2018 Condensed Consolidated Balance Sheets (unaudited and dollars in thousands)  

Assets	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Commercial real estate properties, at cost:
Land	$	201,196		$	201,196		$	201,196		$	201,196		$	201,196
Development costs		7,987			7,986			7,986			7,978			7,978
Building and improvements		2,562,662			2,495,901			2,458,473			2,398,964			2,347,435
		2,771,845			2,705,083			2,667,655			2,608,138			2,556,609
Less: accumulated depreciation		(698,725	)		(678,250	)		(656,900	)		(631,916	)		(605,481	)
Commercial real estate properties, net		2,073,120			2,026,833			2,010,755			1,976,222			1,951,128
Cash and cash equivalents		251,797			690,471			464,344			432,105			440,958
Restricted cash		58,719			61,699			65,853			64,020			68,011
Short term investments		400,000			—			—			—			—
Tenant and other receivables, net		21,600			25,156			28,329			34,661			23,995
Deferred rent receivables, net		190,419			184,667			178,629			172,665			165,470
Prepaid expenses and other assets		64,695			39,393			61,028			39,463			54,624
Deferred costs, net		246,763			255,844			262,701			268,132			263,392
Acquired below-market ground leases, net		364,313			366,271			368,229			370,187			372,144
Goodwill		491,479			491,479			491,479			491,479			491,479
Total assets	$	4,162,905		$	4,141,813		$	3,931,347		$	3,848,934		$	3,831,201
Liabilities and Equity
Mortgage notes payable, net	$	610,026		$	610,826		$	717,164		$	720,830		$	724,312
Senior unsecured notes, net		1,044,573			1,043,677			707,895			592,914			592,073
Unsecured term loan facility, net		263,900			263,777			263,662			263,546			263,114
Unsecured revolving credit facility		—			—			—			—			—
Accounts payable and accrued expenses		129,944			106,830			110,849			142,690			136,617
Acquired below-market leases, net		58,960			62,418			66,047			70,013			74,083
Deferred revenue and other liabilities		29,553			37,499			40,907			41,320			27,380
Tenants’ security deposits		42,808			43,448			47,086			47,395			49,669
Total liabilities		2,179,764			2,168,475			1,953,610			1,878,708			1,867,248
Total equity		1,983,141			1,973,338			1,977,737			1,970,226			1,963,953
Total liabilities and equity	$	4,162,905		$	4,141,813		$	3,931,347		$	3,848,934		$	3,831,201

Page 17

  Second Quarter 2018 Condensed Consolidated Statements of Income (unaudited and in thousands, except per share amounts)  

	Three Months Ended
	June 30, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Revenues
Rental revenue	$	124,038		$	122,311		$	123,596		$	122,391		$	120,844
Tenant expense reimbursement		16,205			17,794			19,790			20,346			17,569
Observatory revenue		35,201			21,249			32,906			39,306			33,966
Lease termination fees		357			622			3,197			1,165			1,251
Third party management and other fees		376			463			312			345			392
Other revenue and fees		2,352			4,832	(1)		2,496			2,993			2,327
Total revenues		178,529			167,271			182,297			186,546			176,349
Operating expenses
Property operating expenses		39,418			44,185			41,522			41,270			38,529
Ground rent expenses		2,332			2,331			2,332			2,331			2,332
General and administrative expenses		13,225			12,628			13,749			12,899			12,579
Observatory expenses		7,678			7,336			7,196			8,648			7,176
Real estate taxes		26,743			26,744			26,465			26,901			24,542
Depreciation and amortization		39,468			39,883			40,842			38,490			40,532
Total operating expenses		128,864			133,107			132,106			130,539			125,690
Total operating income		49,665			34,164			50,191			56,007			50,659
Other income (expense)
Interest income		2,499			1,225			773			774			775
Interest expense		(20,525	)		(17,591	)		(16,364	)		(16,890	)		(17,477	)
Loss on early extinguishment of debt		—			—			—			(2,157	)		—
Loss from derivative financial instruments		—			—			—			—			(42	)
Income before income taxes		31,639			17,798			34,600			37,734			33,915
Income tax (expense) benefit		(1,455	)		260			(2,340	)		(2,245	)		(2,556	)
Net income		30,184			18,058			32,260			35,489			31,359
Perpetual preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Net income attributable tonon-controlling interests		(13,299	)		(8,056	)		(14,754	)		(16,449	)		(14,541	)
Net income attributable to common stockholders	$	16,651		$	9,768		$	17,272		$	18,806		$	16,584
Weighted average common shares outstanding
Basic		165,256			162,667			159,989			158,102			157,921
Diluted		297,244			296,827			297,898			297,871			298,398
Net income per share attributable to common stockholders
Basic and diluted	$	0.10		$	0.06		$	0.11		$	0.12		$	0.10
Dividends per share	$	0.105		$	0.105		$	0.105		$	0.105		$	0.105

Notes:

⁽¹⁾ Includes a $2.8 million settlement reached with a former broadcast tenant.

Page 18

  Second Quarter 2018 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, 2018			March 31, 2018			December 31, 2017			September 30, 2017			June 30, 2017
Reconciliation of Net Income to FFO, Modified FFO and Core FFO
Net Income	$	30,184		$	18,058		$	32,260		$	35,489		$	31,359
Preferred unit distributions		(234	)		(234	)		(234	)		(234	)		(234	)
Real estate depreciation and amortization		39,049			39,468			40,484			38,134			40,132
FFO attributable to common stockholders andnon-controlled interests		68,999			57,292			72,510			73,389			71,257
Amortization of below-market ground lease		1,958			1,958			1,958			1,957			1,958
Modified FFO attributable to common stockholders andnon-controlled interests		70,957			59,250			74,468			75,346			73,215
Deferred tax assetwrite-off		—			—			446			—			—
Loss on early extinguishment of debt		—			—			—			2,157			—
Core FFO attributable to common stockholders andnon-controlled interests	$	70,957		$	59,250		$	74,914		$	77,503		$	73,215
Total weighted average shares and Operating Partnership Units
Basic		297,244			296,824			296,654			296,389			296,388
Diluted		297,244			296,827			297,898			297,871			298,398
FFO attributable to common stockholders andnon-controlled interests per share
Basic	$	0.23		$	0.19		$	0.24		$	0.25		$	0.24
Diluted	$	0.23		$	0.19		$	0.24		$	0.25		$	0.24
Modified FFO attributable to common stockholders andnon-controlled interests per share
Basic	$	0.24		$	0.20		$	0.25		$	0.25		$	0.25
Diluted	$	0.24		$	0.20		$	0.25		$	0.25		$	0.25
Core FFO attributable to common stockholders andnon-controlled interests per share
Basic	$	0.24		$	0.20		$	0.25		$	0.26		$	0.25
Diluted	$	0.24		$	0.20		$	0.25		$	0.26		$	0.25
Reconciliation of Core FFO to Core FAD
Core FFO	$	70,957		$	59,250		$	74,914		$	77,503		$	73,215
Add:
Amortization of deferred financing costs		1,023			1,034			1,036			1,017			1,331
Non-real estate depreciation and amortization		419			415			358			356			400
Amortization ofnon-cash compensation expense		4,656			4,555			3,292			3,841			3,813
Amortization of debt discount		668			668			667			668			668
Amortization of loss on interest rate derivative		536			—			—			—			—
Deduct:
Straight-line rental revenues		(5,809	)		(5,853	)		(5,963	)		(6,861	)		(7,722	)
Amortization of debt premiums		—			(949	)		(1,737	)		(1,736	)		(1,737	)
Above/below-market rent revenue amortization		(1,551	)		(1,168	)		(1,567	)		(1,607	)		(1,119	)
Corporate capital expenditures		—			—			(5	)		—			(10	)
Tenant improvements - second generation		(4,874	)		(2,039	)		(6,966	)		(6,058	)		(4,764	)
Building improvements - second generation		(4,329	)		(1,719	)		(3,566	)		(2,105	)		(2,337	)
Leasing commissions - second generation		(866	)		(3,024	)		(2,996	)		(817	)		(192	)
Core FAD	$	60,830		$	51,170		$	57,467		$	64,201		$	61,546
Reconciliation of Net Income to EBITDA
Net income	$	30,184		$	18,058		$	32,260		$	35,489		$	31,359
Interest expense		20,525			17,591			16,364			16,890			17,477
Income tax expense (benefit)		1,455			(260	)		2,340			2,245			2,556
Depreciation and amortization		39,468			39,883			40,842			38,490			40,532
EBITDA	$	91,632		$	75,272		$	91,806		$	93,114		$	91,924

Page 19

  Second Quarter 2018 Debt Summary (unaudited and dollars in thousands)  

	June 30, 2018								March 31, 2018
				Weighted Average								Weighted Average
				Interest			Maturity					Interest			Maturity
Debt Summary	Balance			Rate			(Years)		Balance			Rate			(Years)
Fixed rate mortgage debt	$	616,453			4.10	%		10.5	$	617,361			4.10	%		10.8
Senior unsecured notes		1,050,000			3.82	%		8.7		1,050,000			3.82	%		8.9
Unsecured term loan facility(1)		265,000			3.35	%		4.2		265,000			3.35	%		4.4
Total fixed rate debt		1,931,453			3.84	%		8.6		1,932,361			3.84	%		8.8
Unsecured revolving credit facility		—			—			3.2		—			—			3.4
Total variable rate debt		—			—			3.2		—			—			3.4
Total debt		1,931,453			3.84	%		8.6		1,932,361			3.84	%		8.8
Discount		(2,983	)							(3,651	)
Deferred financing costs, net		(9,971	)							(10,430	)
Total	$	1,918,499							$	1,918,280

Note:

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

			Outstanding at
			June 30,		Letters		Available
Available Capacity	Facility		2018		of Credit		Capacity
Unsecured revolving credit facility(1)	$	1,100,000	$	—	$	—	$	1,100,000

				Current			In
Covenant Summary	Required			Quarter			Compliance
Maximum Total Leverage (2)		< 60	%		28.6	%	Yes
Maximum Secured Debt		< 40	%		9.1	%	Yes
Minimum Fixed Charge Coverage		> 1.50	x		4.0	x	Yes
Minimum Unencumbered Interest Coverage		> 1.75	x		5.4	x	Yes
Maximum Unsecured Leverage		< 60	%		24.5	%	Yes
Minimum Tangible Net Worth	$	1,249,392		$	1,755,701		Yes

Notes:

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

  Second Quarter 2018 Debt Detail (unaudited and dollars in thousands)  

	Stated			Current
	Interest			Interest			Principal			Maturity
	Rate (%)			Rate (%)			Balance			Date		Amortization
Fixed rate mortgage debt:
Metro Center		3.59	%		3.59	%	$	92,903			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 years interest only; 30 years thereafter
1010 Third Avenue and 77 West 55th Street		4.01	%		4.01	%		39,356			1/5/2028	30 years
10 Bank Street		4.23	%		4.23	%		34,194			6/1/2032	25 years
383 Main Avenue		4.44	%		4.44	%		30,000			6/30/2032	5 years interest only; 30 years thereafter
1333 Broadway		4.21	%		4.21	%		160,000			2/5/2033	Interest only
Total mortgage debt								616,453
Exchangeable senior unsecured notes		2.63	%		2.63	%		250,000			8/15/2019	Interest only
Unsecured revolving credit facility		LIBOR plus 1.10	%		3.19	%		—			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
Series B		4.09	%		4.09	%		125,000			3/27/2027	Interest only
Series C		4.18	%		4.18	%		125,000			3/27/2030	Interest only
Series D		4.08	%		4.08	%		115,000			1/22/2028	Interest only
Series E		4.26	%		4.26	%		160,000			3/22/2030	Interest only
Series F		4.44	%		4.44	%		175,000			3/22/2033	Interest only
Total / weighted average debt					3.84	%		1,931,453
Discount								(2,983	)
Deferred financing costs, net								(9,971	)
Total(3)							$	1,918,499

Notes:

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

⁽²⁾  LIBOR is fixed at 2.1485% under a variable to fixed interest rate swap agreement.

⁽³⁾  Capitalized interest was $0.5 million for the three months ended June 30, 2018.

Page 21

  Second Quarter 2018 Debt Maturities and Ground Lease Commitments (unaudited and dollars in thousands)  

											Weighted
											Average
											Interest
								Percentage of			Rate of
Year	Amortization		Maturities(1)		Total			Total Debt			Maturing Debt
2018	$	1,841	$	—	$	1,841			0.1	%		n/a
2019		3,790		250,000		253,790			13.1	%		2.63	%
2020		3,938		—		3,938			0.2	%		n/a
2021		4,090		—		4,090			0.2	%		n/a
2022		5,628		265,000		270,628			14.0	%		3.35	%
Thereafter		41,744		1,355,422		1,397,166			72.4	%		4.15	%
Total debt	$	61,031	$	1,870,422		1,931,453			100.0	%		3.84	%
Discount						(2,983	)
Deferred financing costs, net						(9,971	)
Total					$	1,918,499

Note:

⁽¹⁾  Assumes no extension options are exercised.

Debt Maturity Profile

Ground Lease Commitments

Year	1350 Broadway		1400 Broadway		111 West 33rd Street		Total
2018	$	54	$	337	$	368	$	759
2019		108		675		735		1,518
2020		108		675		735		1,518
2021		108		675		735		1,518
2022		108		675		735		1,518
Thereafter		2,145		27,675		39,996		69,816
	$	2,631	$	30,712	$	43,304	$	76,647

Page 22

  Second Quarter 2018 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 inin-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 tonon-controlling interests and gains/losses from discontinued operations and after adjustments for unconsolidated partnerships and joint ventures. FFO is a widely recognizednon-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 thenon-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 thenon-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: deferred tax assetwrite-off, loss on early extinguishment of debt and acquisition expenses. The Company presents Core FFO because it considers it an important supplemental measure of its operating performance in that it excludesnon-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 FFOnon-real estate depreciation and amortization, the amortization of deferred financing costs, amortization of debt discounts andnon-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 anon-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, loss on early extinguishment of debt and loss from derivative financial instruments 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 maynot-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.

Page 23