Earnings call transcript Q2 2023

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Operator

Greeting and welcome to the Empire State Realty Trust Second Quarter 2023 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It’s now my pleasure to introduce Heather Houston, Senior Vice President, Chief Counsel, Corporate and Secretary. you. Thank

begin. may You

Heather Houston

you second us call. quarter Thank State for Realty Trust XXXX for afternoon. today joining Empire Good earnings conference

addition Company’s on release package press posted in latest to a section were esrtreit.com. In supplemental of Investors quarterly the investor distributed presentation with at results our yesterday, detail the and website our further the

related property in answers contain forward-looking may capital today’s On applicable laws, expense, and your securities to financial call, conditions, management’s events. proposed prepared questions to including income, expenditures, transactions those as operations, remarks defined market and results statements and

As management’s may subject cause are forward-looking those a which to to results reminder, from differ statements current estimates. actual uncertainties, discussed represent risks and today. They

forward-looking the the to in SEC. State encourage listeners detailed We more the statement the in these Empire assumes Company’s update Trust Realty forward-looking review future. related no discussions to obligation with statements filings any to

and non-GAAP same-store will During NOI, believe as NOI, FFO, which the of in the EBITDA, certain and today’s The are FFO, we definitions supplemental core release we the are meaningful available most financial evaluating included call, property and GAAP reconciliations Company’s in earnings the these measures, adjusted measures each and such discuss the package, Company’s directly performance. EBITDA website. cash modified comparable on to measures

Officer. Now I Executive Chairman, will Chief turn the and call over our to Tony President Malkin,

Tony Malkin

afternoon and good to everyone. Heather, Thanks

year. of leasing We put solid and are half and on the performance. We pleased the to another with Observatory report points first board strong quarter

remains best-in-class. balance positioning sheet Our

the positive XXXX. a for outlook of half have We second

make and us quality, indoor flight sheet modernization, a balance to focus amenities, the on Our efficiency, industry-leading quality. environmental energy destination in an

you This of and to diverse busy city take really continued New with New work focused landlord advantage people of here, to walk highly York is and recovery. of of is and that person draws clear a here, four regular a New this in visit diverse value. drivers migration want is people here. we want talent and primed is resilient it now City live are City’s York work a the how to York streets to ESRT young, to hungry, learn. People city educated, want When

to were three is companies a York person, a to uncertain for top together, to to forward leasing mentor, want return feet XXX,XXX tools. they execute top through in retention city than be buildings spreads. which gather as more times. quarter, post-pandemic, place We offered to ours, serve in And square office talent positive Placer.ai, according office plan, and attraction at leased double-digit talent those learn, leases this build, move New like and in and

leased up and Manhattan office percentage of sequentially reflects XX XXX basis an basis XX.X% points to year-over-year. Our points is increase and

than as the space properties consistently simple basis future make ready. as had investment volume on percentage occupancy and total Flight to our to is More ESRT measured we fully because leasing offers ESRT in XX% properties new leased are has versus pre-war percentage, a ESRT’s modernized an performed made and to assets. quality assets stripped as old. studs not of the amenitized. our been office experience trophy and redeveloped.

at meets progress and the We leasing and fully modernized, located, propositions newly office A built healthy compelling energy offer Our properties. value performance amenitized of well buildings points. attractive Class efficient, price our

portfolio. difference big and balance accessible obligations landlord. winning to with This are a makes us set in sheet helps an we a the economically stand its landlord apart a as environment and today’s behind who has Importantly, also commitments

volumes to our times, get that goal through draw deals good get is said have the times, best in and challenged the leasing deals We always in consistent cycles.

are Observatory absolutely do have we continues to what and know well. to we perform The focused. We

the in to in with year the the admissions by half first ranked relative the attraction of was of levels levels. our XX% comparable NOI XXXX TripAdvisor. one X% number In exceeded experience second Observatory XXXX Observatory the year, by a row, the United For States

expenses, We manage top growth, continue unmatched with to line visitors drive experience. customer and provide

Empire York experience. New the City The Building authentic is State Observatory

Observatory’s presentation. ESRT’s investor the simple. clean cash demonstrated XX are reliable and on as of structure flows Slide Our is balance our sheet capital is

owns office future and We assets leverage all and structures and our allows floating New capitalization. financing York for amongst debt have the lowest near-term exposure. office and nor joint rate complex venture no debt great optionality with flexibility City for have neither REITs maturities of that ESRT XXX%

we can financially look or partner who recycling, best, landlord Tenants quality their capital acquisitions, be will as think it to a capital repurchases. high allocate We stable with new at assets. maintain standards share

environmental and year shareholders. healthy performance and to stewardship tenants, and industry matters each landlords, building more and Our more

which tenants, X.X and event standards. in our LEED early June, the with this this City, test WELL the are was quarter For in the Realty Trust’s environmental New Wildfire to version during quality indoor impacted Canadian aligned York testing air put wildfires greatly Empire version the standards, IEQ when Canadian X rigorous State met

Our uphold and encourage make. add-on in details read during report new investments values based sustainability all on decision return reporting. adhere platform. isn’t second goals. It We our our to XXXX the within our that we sustainability was quarter Earth Day you which integrated contains the to to and recent at Week, work every in I released full our accomplishments, ESRT an standards is highest

is see we created ahead, act on arise and we which manage the through from ESRT disruption. them. opportunities opportunities will As the and market we prepared disruptions to through look credit

These shareholder priorities tickets put the Observatory, the achieve Our enhance value. and unchanged, balance board. In the on our short, to sell space, goals. together sheet, are manage actions lease points sustainability

four in City Building State the New retail multifamily. to and offer York play Empire observatory, ways and we it believe We office,

Empire in is XXXX. value City well and and resilient future shareholders drive ready to New Realty Trust York State for our is positioned

Tom provide our plan goals how of and Christina Tom? on accomplish detail these balance will in and year. we to progress more the the

Tom Durels

and spreads upon at percentage with of square leased quarter for we’ve for leased office positive leasing Year-to-date, This in square office another We positive lease our a total Manhattan our quarter portfolio. and had feet. portfolio. we based sixth strong eighth and feet retail represents office our retail rent our and good XXX,XXX our total with Tony which of XXX,XXX consecutive Thanks, quarter mark-to-market positive afternoon, everyone. in straight spreads mark-to-market portfolio absorption achieved XX%

and to Our an leasing We results at demonstrate located access buildings compared XXX the quality in our increased price that amenities, mass basis in office XXX convenient quarter XXXX. fully end points quality year our point increased points indoor is leased quality XX.X% last basis up to with Manhattan environmental a sustainability has the Midtown tenants. of to second transit, modernized since and percentage offered to continues which to points basis ago increased to XX attract quarter, accessible best-in-class compared

campus and quarter, in per portfolio of XX,XXX our per office rent the growing of greater allowance achieved we where continue York and foot. average our XXX,XXX The our lease free to levels X.X of rent second the XXX,XXX date our square we where $XX.XX foot square an signed seven with services properties. and in of our which from a years feet to assigned to properties starting office tenant include demand we leases, retail signed square feet square all New highest XX,XXX In wellness lease office in two over office properties of was support Manhattan bring $XX.XX average properties in feet lease of Manhattan Metropolitan with in square rent users. to improvement feet our food, square months term

office American Place at a Breakthru A of wines year Grand leased XX Signature XXXX consulting And at feet square happy XX,XXX quarter Rising floor square assumed a Building project that organization. lease and leased foot XXXX XX this spirits. a XX with feet year were Notable feet at the to XX,XXX tenants And for and company. earlier lease square year XXX,XXX entirety a North assigned Ground, we feet square square lease include with year and at for construction in suites Central technology a quarter, non-for-profit with Capco, at XXXX. pre-built the management XX for Building the Empire full XX Broadway. and One development Empire XX,XXX XX,XXX Bank’s of luxury announce distributor State second group and Beverage, with ESB Broadway since lease world State Skanska, Flagstar leading the Leases global leading

our of roll, renewals new commenced managed expect and tenants As to not we signed executed have Page well XXX,XXX free We million proactively supplemental, our be are which shown of $XX the end. by X of positioned by percentage in any feet will square by XXXX, year vacate leases rent before our remain revenue signed since leases from end rent only that lease offset on about burn-off. and we increase early cash incremental initial to year-end

and have activity We pipeline to have space. our healthy lease lease of a demonstrated ability

fully nearly modernized to We into our billion assets healthy, buildings. $X have invested create

Our built tenant leading with our newly sustainability. spaces are and for standards IEQ

our amenities. adding in-building near are robust to located campus are assets mass We transit. centrally All and our

As industry leader, in latest quality. tenants indoor and sustainability offer the we an advancements our environmental

deliver of gives we Our strong high and an a promises brokers our balance we environment service have to confidence compete tenants. tenants that in to our and team us today’s delivers on that sheet exceptional allows level will and dedicated

our performance. portfolio property and with fundamentals occupancy market future that multi-family are reflect will strong Within we average enhance the underway XX.X% improvements of

total solid our expectations. XXX,XXX retail and office quarter experience that leasing had strong acquired mark-to-market continues of exceeds Mulberry recently we Our positive to XXX spreads. strong feet demand another again, with at square Once

XX.X%. We points XX to a the reach basis percentage and prior points year over portfolio quarter increased basis office our from Manhattan XXX by lease ago by

of are our the portfolio. continue strong to We multi-family our in percentage second XXXX, to half performance increase well positioned growing and further in lease see we

over I’ll to now And the call Christina? Christina. turn

Christina Chiu

Thanks, Tom.

to is board. focus put on points the Our

FFO of of fees. is share, lease reported million XXXX, second excluding up $X.XX we the diluted XX% For which year-over-year, per core termination or quarter $XX

the $X.XX $X.X second a As of second reserve in $X.X had straight as a of XXXX reversed the announced impact the our at quarter assumption million on first line XXXX, FFO quarter we taken Broadway. previously of quarter Flagstar the XXXX lease positive result. This result in million of

XXXX. year-over-year, Same-store timing by real property of increase increases property XX% same of tenant an recapture period revenue in expense year-over-year. fees of expenses and an observatory NOI and the $XX.X rental the taxes. and to in in compared represents increase cash offset increase generated termination NOI This the by of excluding X.X% as XXX% million, reimbursements, estate In driven lease cash quarter, NOI partially second primarily operating

$X.X quarter. Observatory expense the million in second was

these sheet We have uncertain the generate times value. shareholder to flexibility demand balance

the billion, comprised cash $XXX of facility. credit company of million As of liquidity undrawn revolving XXXX, XX, million $X.X of a of had capacity on $XXX and June total which was

share net of quarter billion of a of X.X% rate interest At average weighted X.X $X.X company weighted to had the years. debt a end, maturity and term at with average

below well averages was Our EBITDA of X.Xx. peer debt ratio of net to adjusted

floating We are recycle rate sheet, shares. portfolio laddered November pursue a no have choose balance opportunities investment no $XX that City when schedule our well mortgage additive debt matures. maturity until We million and XXXX focused repurchase and maturity to debt exposure, York New a our to can our

which share million share, approximately and the of million buyback X, X.X per began. $XXX.X the repurchased July amount repurchased share. weighted company date $X.XX at through a price the outstanding common to its March brings In as shares of at weighted our XX, second XXXX, XXXX, of cumulative average the XX% quarter average per total of stock a This $X.XX price represents program of

XXXX partially the utilized office Mulberry was executed acquisition December property $XX million sale Mamaroneck XXX deferral in that the we completed quarter, the reverse were the of and In for transaction in a into XXXX. XXX Residential our proceeds tax second

We prudent and remain our new and to in underwriting. in opportunities recycle invest sheet balance evaluate continue to assets our

of year. And now onto our XXXX guidance balance our as adjusted the the We’ve follows. outlook for

to and basis cash the XXX subsequent assumption points. to Flagstar previously Signature guidance lease reserve XXXX straight Our increase per share. taken the the from $X.XX by range full related same-store by diluted XXXX positive quarter is NOI of impact the reversal second reflects our the at first in Bank outlook in year $X.XX $X.XX fully the FFO quarter Broadway of the increased updated The to and line

team in below and and compared efficiencies some year expected XXXX levels, managed will utilization reduced COVID achieved normalize from actively are XXXX. X% said, expenses expenses year. reflect to full which As significantly building operating this be operating savings property a approximately still we expenses With reminder, to XXXX levels. permanent pre-COVID cost our and amid Expenses XXXX that and

expense Additionally, reimbursements. are the year-over-year increases tenant expense by offset partially

The increase to to cash cash expense NOI in range our primarily later XXXX [ph] same-store initial revenue guidance higher rental due modestly our property our and increases is expectations. operating relative

track. on at unchanged XX% occupancy pipeline leasing is The Our to guidance same-store XX%. commercial remains

last we As quarter, of conservatism commencements. stated the range of some in our terms timing factors in lease

continue million XXXX. approximately to million we XXXX from expect $XX observatory, be to up million $XX NOI $XX the to For in

guidance XXXX. million NOI $X for assumes approximately average at Our quarter observatory per expenses on

manage period of dislocation. prudently take company advantage liquidity to and strong In of to may that and summary, opportunities the in continues this investment our attractive sheet uncertainty strategically balance and capital emerge have

share buybacks, inception buyback total at aggregate, the shares continued more second We pace measured XX% the In our of we’ve repurchased albeit of program. in a outstanding since quarter.

XX.X% Our commercial portfolio a landlord. balance and benefit proposition quality we value to and occupied is from XX.X% offer unique sheet tenants assets we that now and strength for our as continue demand leased, and the high

ESRTs resiliency of good momentum multifamily recovery fourth observatory the perform flows. and and to of well the our leg continues with growth to start Our continues to cash year, adds

the the the now session. Operator? to call with back Q&A I And turn for will operator that,

Operator

Instructions] with Evercore Steve line Please with first Thank questions. you. from come Sakwa proceed [Operator of questions ISI. your Our the

Steve Sakwa

Tom, Thanks. months months to you was today? more tenants six Maybe say, where you’re size the and seeing and and around maybe I just the for provide tenants of ago three little Good us you’re the could afternoon. that it is if that the of types help seeing versus wondering today bit color size pipeline detail a pipeline.

Tom Durels

of about Sure, tenants located tenant We’ve feet, our have that deliver square leases in there mostly relocations to got quarter a renewal our properties demand on product first execute up ability square And deals in for for XX,XXX for both and XXX,XXX XX so have Manhattan our our is pre-built well and we’re all, of between another our Well, early XXX,XXX a negotiation pipeline. I’d in amenitized and full then confidence that office had XX,XXX and promises. Steve. demonstrates quality of trading feet feet. and That square feet. or really XXX,XXX extension said, new floors. several both for range XX some deals we’ve a comprised over solid square or to to variety dozen sizes on feet for of say add and paper XX that that those proposals so square we then pre-built about healthy proposals

some are sector services, healthy pretty include variety and pipeline. fire The seeing with nonprofit, consumer So, past a quarters, overall represent good types quarter this tenant of a that prior professional we’re and which consistent that products tech industries tenants.

tenants. of mix diverse good So

we’re quarter we feel So ahead. at the overall, pretty good where in about

Steve Sakwa

when you of I guess of no, of kind evaluate, share from with sort or how if and the that on, sensitive buybacks, just in sort just the thanks. of follow you capital muted, guess guess the guess the activity Okay, share in other some And I into lean to buyback? price, stock that sort rise level price Christina, do buyback, Excuse just if I were deployment then at how the up, me. I of on the I looking was kind driven to share out to are don’t was opportunities, know how you say lean

Christina Chiu

Yes.

capital it started. buybacks that believe $XXX a we’ve that’s of strategic and So we done we overall our the part evident since from volume allocation it’s to million [ph] continue for in

other at recycling. we very runway in the reminder, value marketplace. we final operating also active we’ve opportunities factors. to So mentioned, pace it’s number also may to do And evaluate and can as for periods the period it’s from buybacks, right? As of well because on that of advantage beyond levels, period including have we discounted always but look XXbX-X that, liquidity But fluctuations beyond still vary in chance been and as the at share factors, take that, And capital a price. as and a arise

all We’ve are the certainly of list. are done in those priorities, the pace our it could buybacks vary. but on volume, So

Operator

you. Thank

Our Citi. next questions proceed of come Please with from with the your line Griffin Michael questions.

Michael Griffin

I seems heard them tenants over taking comes on there it the Great, Is market. there less quarters? thanks. to into mean, quicker uncertainty about first. it that, the commentary like few Maybe if I’m when we’ve last up leasing. more follow you’ve the if around question tenants noticed space that than about coming on decisions positive leasing curious was making more to are

Tom Durels

that kickers two tenants rates making our lot to conversion see we really are we’re fewer seeing what [indiscernible] conversion that more to say out actual tire by is, from I’d what a And there. committed from strong decision, that’s deals. a

somewhere. So, those as I with look at of all we’re right about, feel prospects to committed speaking now, landing we that good are they very

and for it’s marketing good overall us. so And good for the

Michael Griffin

just office, then buybacks. the recently; an opportunity out allocation we’ve I’m could consistent capital in some distress be potentially current office there you strategy? priorities, an various it the just food and multifamily, And touched Thanks. acquire share seen there your with the Great. curious reposition groups, on the asset maybe on to market with the

Tony Malkin

here. Tony Griff, Thanks. So

view real have our line, colleagues, tell you’ve are levels much interest to when could to low interest I borrowed more XXXX a as estate which as As through we gone period Bottom XXXX historical this and younger at the they as really people rates. for you where rates industry. afford raise

have this. because balance few to because borrowers is in of we have more our opportunity our than through going to take an that us go of a level execution sheet the the heads our windshield. current high to and a a at benefit You’re both And of advantage position

rent. we that what understand we very at costs opportunities do And our clearly believe what rent, to are we very there we and know clearly are

we amenitize, we quality what of at on that make though, deliver an energy efficient environmental type attractive importantly an to modernize, asset that price. we can and More execute the it and understand operate costs indoor

the we office. in right where at who definitely we we of locations know want tenants interested the types interested plates bogey, we price and are So our we the to know want, the are have we know floor we be,

Michael Griffin

for Great. Thanks That’s time. the it me. for

Operator

Thank you.

questions of with from next Please the America. Bank Our Camille come your Bonnel questions. with line proceed of

Camille Bonnel

factors same-store for growth Christina, you number spoke the the of quarter. NOI about a positive impacting

Just a the you bigger factor context a to wondering or moving sense played get here? bit if have another whether one could of more behind provide pieces and a trying may

Christina Chiu

Sure.

So the same-store factor. not a and cash And put burns our to large long the off, rental sign commence rent out free that drivers key free as and we a are reminder, a was as And that schedule contribute rents. NOI lease higher does cash revenue. primary have

was called The second as some out reimbursements item work. we of tenant timing the of

the would could net year a quarters pretty wash to between over that be bumpiness much course more the results. So the however little a of that lead same-store in

So the another But I contributor. is that why for, to out rent come. think provide on disclosure much is contractual we to was which of how free the revenues something rental look continue

Camille Bonnel

another the guidance more. your tracking is your Could expense utilizing factor of from operating talk projections tenants your you higher year? And just same-store how in core for that’s buildings to expectation been that against

Christina Chiu

Sure.

expense. remarks, We up utilization amidst our proactive continued fantastic to and reducing low due I really doing job, a expenses levels. it trend to But very in being in building was team operating mentioned as the

what X% permanent we which normalization due also called to and we some about savings. year out continues operating expense even increase, year. we’ve below with a property XXXX mentioned last beginning levels be So That to is this seeing still expect we’re now expenses said, this into

range. consistent So the the a guidance sort NOI with end same-store what seeing will normalization, we’re is year that of continue and of our through

Camille Bonnel

Thank you.

Christina Chiu

you. Thank

Operator

you. Thank

your the of Fargo. Our next questions with line questions. with Heck Please Blaine proceed from come Wells

Blaine Heck

afternoon. Okay, thanks. Good

feet occupancy you’ve commenced, dig guidance on just XX, surprised increased. a pipeline, XXX,XXX half. timing color I of end vacates guys it’s the think I issue page you some for know a the little to on Can out little whether more a are square And some occupancy guidance into bit you the as the leases but decrease the upper implies I’m that wasn’t range. occupancy haven’t guidance us anything or known given more still second else? leasing of wanted but lay that give Just about signed range and of the got the at in you

Tom Durels

feet XX% would XXX by is this expirations, of feet that Look, XX% square York And plus leases expire you part year. feet XXX,XXX XXX,XXX City partially of basis square The known. the end, – achieve said, vacates we for points only on commence XXX,XXX the of this year higher guidance about trend we offset higher and might to New This towards our remain portfolio uncovered that of of leases Yes, of That about have by for look vacant the that our That balance commences additional that. that office. a that at Blaine. mid through if do we are about space. This any we Tom. be we’ll to over leasing square year. should confident

when So timing vacates tenant of leases it’s and really those commence. new

Blaine Heck

or And jump Tony great. Okay, Tom. with to wants That’s helpful really sticking then in. you

TIs less We’re hearing that of on their some landlords to higher willing cost on spend are based capital.

to differentiate increasing guess tenants even environment? or compete how in can rates? with think rent I out to great free you play does And So you respect tenants all balance this or that with face do yourselves how with sheet for rental a lower

Tom Durels

Well, average is first trailing is line look last That cost lease if $XX heavily in per from TI you TI only from our And of foot. five-year average quarter quarter. lease the term quarter we per above of have said, our and it’s invested at average the course, square metrics, spaces. about actually our tenant with our cost XX-month And year into this our average. this you below of five-year – slightly decreased look

any a sheet pre-built then have really for previously And incurred to course allows how we at and it. that that’s we’ve We us cost, for deal. balance compete of lot of space the look our –

Tony Malkin

about Tony sorry, about brokers very shortsighted [indiscernible] landlord tenants tenants brokers there. rent broker’s with enlarged haven’t And a tenants of there talk tenants spaces out every to are enjoyment quality XX Will carefully look a paid? frankly, people TIs of landlord? began months tip we with of that have sponsorship ago, on quality. and not at look, brokers, lot free XX prolonged be they And We Yes. the quiet here, this months our and and And tongue. ago, their get of all their funded? Will benefit. Will now the it’s and

Blaine Heck

guys. Thanks Very helpful.

Operator

Thank you.

come of next questions. Our Dylan with proceed Please with from Green questions Burzinski the Street. line your

Dylan Burzinski

Hi for Thanks taking guys. the question.

scale changes tenants a all there’s to across thinking obviously, with building how regards been curious, their anything announcements to to space Just return as result? are sectors. you large various about Are out this seeing a

Tom Durels

really Not their design how of terms in space. they

Some of pre the today. develop is begin still of programming that space even relevant to COVID

is run, own importance constant policies that office for an recognize companies it’s I of every see being and business and the think the the their throughout, developing is to which – tenants we tenant has themes and creativity remain tenants their people work the their training importance But and their having to and own really generally and effectively. approach office. of collaboration from run same together

Tony Malkin

one the guess I recovery that office only the these Midtown say in number States. is that Manhattan and probably in are castle I the thing screwy. all Yes, Dylan United would stands is numbers out

New York City is a market. fantastic

were, people observatory streets. across on had upstream is from see hours ticket the Empire were can salmon we are The sales We’ve anyone extended street. as basically packed. to Our to reservations. new as at headed our dodge look online at Building for our swimming [ph] business XXrd going People corridors XXX is State strong. we as some the We over yesterday around XXX, people

of space feel we the yes, good about to and quite with where So use are we regard

Dylan Burzinski

it the on years are through than three spreads, last one releasing pandemic. the significantly cash year-to-date results better just then And call

it’s basis, rolling, to realize a I fair? term a on leases but which on that forward single are mean, just mean, I you’re digits on we to And the quarter, signing continue horizon. go momentum I over Just on expect going lease, low leases, time given curious do curious, longer where any in is front? this depend

Tony Malkin

starting prior Well, leased. I the it in leases, that mix for our near on our office And office are our positive will expect Manhattan escalated on fully office Manhattan our recent vacant, But the always the term. square around spreads is $XX foot. rent depend for spaces to rent square about of per that Since we’re leases Manhattan marketing $XX a compares that space foot.

So about good post term. I near in positive the our ability to feel spreads

Dylan Burzinski

time. Thanks for the

Operator

you. Thank

BMO Kim next Please questions. your Our of the John line questions Markets. Capital with come proceed from with

Regan Sweeney

afternoon. Regan the good John. on line is Hi, This with Sweeney

that the up Just leases is positive spreads. on those or one XX.X%. or wanted Manhattan, spread of your to across concentrated that kind Was cash all asset, in follow out in of lease

Tony Malkin

for we just this straight positive leases. office portfolio. both our And for under spreads renewal spreads Manhattan office Manhattan then XX.X% eighth and portfolio. Well, And entire positive for our and our quarter retail office quarter, XX% new space with had that’s for our office

Tom Durels

no to important really important real it’s think message leave without should make most I here. call that the the, single one of this a understanding

proven narrative XXX only second we’ve for wrong that’s will quarter with of several brand quarter lease have in increase year-over-year. occupancy, that outperformed This an We rate leasing bps lease, got AAA the new our said in over XXX peers. We increased whole stuff bps second, results got the quarters. second year-over-year. We’ve

us and efficient look buildings are rents, modernized quality key value It here. energy attractive a at really, issue the great think the tenants board. the on that’s And and for are monetized them, for indoor pay and good prepared who points are get to with just which I environmental we quality. and And

think I the that’s So, most biggest, thing. important

I that you questions think if you have don’t your question. like. that, Regan, addresses might I know other if

Regan Sweeney

And just in and you. been sign appreciate to pickup the Yes, these the the percentage any versus or domestic, visitors are tourism then demand? there color. of has international observatory, international of shifting I Thank what

Tony Malkin

when think in are observatory what of on And attraction second of in is clearly people headline number we still NOI. the the XXXX for definitely indication we row. experience with to that our of value proposition, number the two, experience United yet a that the one. where in was, is deliver us, is it States one look, excess Number So and a not the the the our international Tripadvisor they’re quality back year have and, according terrific they of to

park experience, certain And allow a of at we’ve, people because and that maintain because we added quality reservations in we’re all to only a hours. number we said, we’ve want that, And as I time. of

We’re a.m. at a.m. right observatory. now the going X:XX to X:XX

good a demand. normalizes. Look, for right extremely Nonetheless, international It’s travel it’s positive. So that tailwind back forth visit going we’ve got and tourism us as now. across is go the Americans and forward we ocean mostly as

Regan Sweeney

very it. congrats Thank you appreciate And quarter. I on the much.

Tony Malkin

you. Thank

Operator

further at Malkin, call President, turn you. remarks. are over time. CEO the There no With I’ll back questions and Tony this for that, closing to Thank Chairman,

Tony Malkin

Thank everybody. final notes. very you few much, A

the the points team observatory team, a Jean-Yves, executed Ghazi, call faces will Tom Christina promised for First observatory win level pies property by Dan and we Rogoski entire a and from have and high Jean-Yves foremost, the Team. is Award in and a take on to at the years and board our I in entire of appreciation the that three we gratitude ESR team, Everyone Tripadvisor the team and row. entire if her

Tom State Pire. successfully new Abi me of has our Rickards to Hill, her and partner capital Grant Pete and and Schneider, efficiency, Observatory lease Dana and are Emma member analysis, callout made delivered with the and indoor on promises title added energy course, up. Horn, and team a spread Empire our and COO, word. just Christina Durels, their modernization, besties, Christina Sjolund financial to for engine and Steve behind it Hogg, planning also of Ryan her Kass, the tenants Special the fantastic Mike John have quality, partners. tremendous and board building’s our Chiu, been Prunty, reporting, environmental work amenities and and rookie Building

we can on All us and LinkedIn, do Instagram, what of and follow you TikTok.

your Bill salute reporting. who’s on done SVP contributions. decade job as Second a we transitions, Thank Bill Financial you, for fantastic Regan, of

our and look upward. to in future Until meet then, testimonials which quality Tassell and presentation, Yang conferences, numbers, for call. you you roadshows, not tours and here in your of chance We you non-deal thank your many with for also I fluffernutter. including now, everyone speak to onward Van the all flight improvements read science-based targets forward many to Thank latest benefits ahead. interest, shows our and the months Christina welcome investor Hannah to and property it today’s through great we the at to participation portfolio as the you to that board, includes encourage our our sustainability report Finally, from tenant

Operator

today’s This We you. does conclude appreciate teleconference. participation. your Thank

of this at the lines your your disconnect time. Enjoy day. may You rest

Empire State Realty Trust (ESRT) 27 Jul 232023 Q2 Earnings call transcript