ESRT - Earnings call transcript Q3 2024 | Empire State Realty Trust, Inc.

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Operator

Greetings, and welcome to the Empire State Realty Trust's Third Quarter 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to, Jason McGrath, Senior Associates, Investor Relations. Please go ahead, Jason.

Jason McGrath

Good afternoon. Thank you for joining us today for Empire State Realty Trust's third quarter 2024 conference call.

defined to expense, management's the press detail as events. yesterday, market transactions our today's on presentation operations, posted the expenditures, package answers quarterly latest income conditions, call, results to the forward-looking were further of with our in addition release and laws, at and a distributed supplemental and securities remarks investor company's your In website section esrtreit.com. On Investors results questions property applicable prepared contain including financial proposed may to statements in those related capital and

to statements detailed As discussed company's any a with those statements actual discussions the in reminder, more They management's encourage forward-looking forward-looking may in forward-looking to the and results represent today. Empire risks State subject to statement uncertainties, cause update which review We are the obligation SEC. future. related to Realty from estimates. listeners filings these Trust differ to current no assumes the

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

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

Anthony Malkin

ESRT's we Thanks, third Jason, and reported and strong year-to-date good Yesterday, everyone. to quarter results. afternoon

consensus. FFO today capital above activities. In more our and on We in our recycling strong and execution, quarter, third latest are continued happy to leasing, discuss Observatory the acquisition came

office leased in feet spreads. XXth quarter consecutive consecutive quarter, with team of our York again leasing put Our and growth, our board City on New the positive the percentage quarter XXth rent over square XXX,XXX leased points of

energy-efficient, draws modernized, portfolio ESRT's is for the stands value proposition assets. space, demand the growth. from York well-located, Flight sustainable, to in year-over-year of remains. ESRT and range, tenant of leased for well with City today and for The in rate its the in a New top-of-tier #X world, continued trophy performance pace deep demand a sequentially quarter commercial market. TripAdvisor's built third and today attraction amenitized, unique office Quality in mid-XX% the on the newly the destination office Observatory, performance Our market the

overall room details We visitation further for of below levels are our and Page of still plenty our year-to-date. performance XX of levels our upside XXXX as have supplemental improve. See quarterly volume for on

manage to Williamsburg our provide on ahead a previously Our story on contract portion with best assets an in growth, work value customer as and and never run have additional the Street street. The focus retail top-line of enough. best unmatched to an creation consider We good New in to prime long a acquisition acquire of remains the this City. has Brooklyn of expenses, visitors entered Williamsburg Xth closed announced our corridor drive on retail in York experience asset North retail one into of substantial and a

of a stable maintenance and shareholders. Tenants our Our service value balance acquire tremendous to to and high The create unaddressed quality flexibility great with foot look stand December front to assets. a partner lease sheet who for for at best-in-class and no allows maturity has until sheet our debt balance standards maintains financially and XXXX. ESRT properties landlord, their

real the at is liquidity market. ESRT sustainability that remains lowest York City REIT position attractive leverage in strong in any sector. the office a to leader the today's tenants, especially have estate of quantitative We New

inform more decade, and For been to portfolio-wide, happy have and help practice. policy a deliver we than innovation execution on with to

a ranked ESRT's row. the overall second U.S. Americas for X companies listed just first announced over the in week in amongst we ago, GRESB year As score all

the more group. fourth tremendous most on in as will year Of on provide Hats team were Steve Tom, accomplish all to third accomplishment. course, the off this quarter. in plan we to and the and finish that means goals competitive we detail these for work Tom? up Christina, as progress peer our first we how their quarter the well in the

Thomas Durels

Thanks, Tony, afternoon, good and everyone.

quarter, the Our retail our Manhattan XX stands to XXX percentage. points and to of with the positive by absorption quarter, to portfolio basis compared points increase an points of year-over-year compared XX increase year its third trajectory at office last up continued ago, basis fourth office and since our and of office our a quarter increased an basis of quarter. points leased to basis XX.X%. portfolio leased, basis XXth That was compared increased XX.X% points in XXX occupancy Today, up third consecutive the last XXX quarter, quarter XXXX. In is Manhattan

We portfolio. our with closed quarter straight in consecutive office also lease mark-to-market spreads our XXth positive Manhattan

were square the feet leases signed be quarter. include volumes the Notable during third XX-year, XX,XXX leasing square Publishing State renewal leases positive feet. of and quarter Bloomsbury with year-to-date signed total leases lease volume with Corp XX,XXX strong suites XXX,XXX XX XX-year foot foot with leasing and XX,XXX Empire lease foot This at total full Broadway, of new square feet. office to New spreads Fink the Building, new for square lease full-floor XXXX that an continue an to we brings X.X%. at office full mark-to-market XXX,XXX with Dynamic in Broadway, square XXXX with an rent Leasing pre-built XX-year at square floor floor Hecker the signed expansion XX,XXX

pipeline new the another feet square renewals. feet are We XXX,XXX have a leases which and in of healthy of balance are negotiation, square of deals XX,XXX

also not is from our burn-off Page on leases supplemental. commenced incremental shown We signed revenue XX rent in free of cash $XX and have million

desire fully transit, an sheet, with to sustainability and retain strong attract service quality buildings located that mass in quality and who and accessible balance tenants are great our continue amenities, convenient We modernized offered Manhattan point. leadership access to Midtown price at

XXXX, tenants. consistently to our have a we total signed existing for feet. presentation, our of X.X have investor leases we XXX ability expansion in As Page demonstrated expand on million square highlighted IPO our X of Since

X,XXX XXX-person We basketball Manhattan office Lounge portfolio we only Building, we faces modest that our the X the pickleball, well the positioned Empire vacates have occupancy XXX,XXX to Empire lease in from known for through years multi-sport area. a private our feet For ESB square fitness of office leasing and XXX,XXX quarter, The XXXX also of are roll undecideds remainder dining level presentation feet the tenants of remaining expirations. features of effectively brokers. our of golf known have rent we end and that XXXX. In of over already simulators, of states. feet such square XXX,XXX our activity State top-of-class and town only in by annual manage club for feet received a bar, Manhattan XXXX, square includes XXXX, XX,XXX-square-foot and With vacates new we average feedback many third XXXX. In square offered feet boost XXX,XXX portfolio, hall and We've undecideds. excellent an square opened and full-service club court and past

we Street Tony As continue our expand portfolio to Xth mentioned, retail on Brooklyn. in Williamsburg, North

Christina X additions, neighborhood we excited located own the very on the Brooklyn. best best in these details. within assets, retail blocks to will largest We're and frontage these retail own With more provide the

signed and to in and XXth increased at quarter quarter, exceptionally by percentage. lease points improvements. In lease XX.X% an to square over our with feet strong year of summary, ago portfolio, from office of consecutive XXX our Manhattan perform commercial with leases percentage increased closed basis a We continues end property occupancy third well quarter multifamily XXX,XXX we the from and market benefit Our recent fundamentals XX.X%.

consecutive office Manhattan to increased our lease XXth occupancy Our basis spreads year by compared points mark-to-market to XXX with Manhattan in portfolio. our quarter last positive We office had XX.X%.

We leasing have a activity. healthy pipeline of

portfolio, have We now made retail very to I'll portfolio in to the over Christina. in and a addition our our exciting continue strong turn call we've performance to multifamily Williamsburg. And

Christina Chiu

mark-to-market of will to these over previously and upside we an of in New prospects approximately cash the Great. million assets In Xth close assets, Williamsburg, we on the retail Nike, Work strategy tax-efficient steady X% balance compared $XXX of Everlane, capital high-quality the leases expected and significant acquisition Tom. third City closed quarter. In to X assets prime North in of X% in further construction anticipated Brooklyn, of cash and Parker, of retailer acquisitions manner years, roll. Notably, completion the and is in have leased including under with North Café, space million. to Williamsburg, flow in consistent non-core North quarter, York fourth acquire leased time term XX,XXX retail an Byredo, assets a XX% our balance strong prime The flow and Hermes, X.X suburban to approximately XXXX, with feet initial average $XX the yield a as capacity These a aggregate, sheet are expected Durga, DS of tenants, on from on in growth Chanel, upon this approximately Google. just announced million into with square by weighted to Brooklyn, Thanks, the space comprise prior entered the acquisition with transaction Street Warby $XXX company's and Buck the for is an lease yield Xth third the of asset Mason, late agreement Santander into of Street recycle retail state. Furthermore, new we over quarter, additional improvement Face, assets XXXX,

details will confidentiality maintain transactions, be on expected closer that to this past more asset is for with disclosed As mid-XXXX. and will in now, we closing

for on XXXX Williamsburg increasing largest a these retail Avenue. Please transactions North capital strength and execute dislocation completed Xth the very blocks in We Avenue Pro initial acquisitions, the to September in our our XX density, acquisition market are ESRT investment a color we recently In on underway. increase pleased have retail these that to shopping development our population high-quality and benefit and will and limited that in are to strong and after Bedford corridor hospitality Street of to this investor from opportunities very submarket. forma in markets, of own Slides on retail of household multifamily retail this Xth continues North more see prime income, pleased continues scale the following Wythe on new Street portfolio asset given relatively presentation to between XX transactions. the these of

that interest debt focus quarter weighted swap had In SOFR component we unsecured duration rate and million to average potential. At we interest with the will $X.X with rate expires. the average agreement XXXX opportunities forward, attractive of a of the investment a X.X facility when upside maturity its over to on term years. loan end, X.XX% fix total previous $XX continue term March Going weighted our billion of outstanding into swap entered August, to agreements effective of will company X.X%

leverage among no a manage in manner to a and strong We with X.Xx EBITDA. exposure, New sheet schedule, proactive lowest City-focused all balance well-laddered debt our continue maturity debt to rate liquidity, net York the debt at REITs floating

As as we for we our business. value said years, opportunities leverage have of logical to many grow advantage increase prepared to are to take

the the leverage unsecured offering to acquisitions Xx down to to the expect quarters, EBITDA tick in up cash and modestly in utilize after from in coming net maturing closing we March trending debt We of recent XXXX debts pay XXXX. our with notes earlier towards

our turn Steve over remainder to third the to the outlook for XXXX. I'll of call Now, and discuss quarter results

Stephen Horn

Christina. Thanks,

Included termination Okay, primarily partially million tenant XXXX, by same-store the revenues and excluding increased in or X.X% these year-over-year a fees, increases rent cash expenses. for reported adjusted generated and approximately from comprised cash year-over-year, termination the million was items, revenue of in cash operating of higher quarter lease a approximately diluted by driven lease from third core excluding of by share. fees $X.X per primarily short-term offset Same-store lease $X.XX revenue for non-recurring $XX recovery we non-recurring When property FFO net commencement X.X%. of NOI, rental prior from NOI, debt increase increased bad agreement. items

$XX net Observatory increase of year-over-year. the million an approximately generated income quarter. Observatory was our approximately third quarter, in in X% million, for the expense million to higher we business, was Year-to-date, the $XX $X.X third X% Moving Observatory year-over-year. operating of operating income net

guide repair the to increase, and related core as this, to maintenance increase items, FFO the We number Now, are primarily outlook to revenue is expenses. than and at in property cash a the increase portfolio well X% to commercial non-recurring end forecast XXXX increase to for XX% timing XXXX. operating within of as fourth midpoint X% the now key excluding This lease midpoint. The same-store X.X% approximate and XX% XXXX point for increase our by fees operating $X.XX guidance income, reimbursements, XXXX, expense expenses net to share, of operating range. offset per commercial we X% represents this onto the higher quarter's a year-over-year as drove year-over-year our assumptions year-end basis quarter. We occupancy initially fully the follows: the an rise now diluted We in Same-store relative tenant a by termination raised from levels. assume XXX of XXX is which this at for projects low of driven of points range expect in by now to basis partially the an that of our

We expect be million expenses and $XX tightening at XXXX maintaining Observatory Observatory approximately NOI while per $XXX of million, million average $X midpoint to approximately to quarter. range, $XX the million overall our

$XX which recognition expense associated within the markets transaction promotions included and in executives reflects approximately costs FFO result results balance variability is as takes NEO in of Observatory filings, range the our our well and all and tourism a retirement the as of capital compensation our account certain of non-cash guidance or G&A into year, the accelerated approaching announced with range eligibility. to activity million, bad impact Our of SEC due year-to-date. Also recent the weather guidance XXXX stock-based fluctuations additional of as reaching

formal impact include quarter currently provide recent an fourth adverse XXXX interest the adverse on few million will income aggregate a March on the $XXX our recognition impact $XXX uses positive to call, of the of revolver, the from of awards million to but earnings of our operator expense net an capital our from to now retirement we Q&A of FFO additional previously our detail Adverse $XXX the in of First We important rate, compensation quarter, the all-cash eligibility. from granted including call full the drawn and executives nearing that, stock-based results. With of for earlier private deposits will and net non-cash on turn that to at our acquisition XXXX of the impact we XXXX year session. back as maturing issuance are we interest that compared is the do following expect in paydown various believe the to debt loss outlook on of from million These outlook have provide between approximately items net retail when noted Again, for note impact from report XXXX cash, $X.XX. we it higher assets notes FFO Williamsburg movements Place. Stamford the disposition placement contribution a XXXX cash mentioned acquisition. And foregone last Operator?

Operator

is question from Evercore Steve first Our Instructions] coming [Operator Sakwa from ISI.

Steve Sakwa

Tom of And earlier. you with sense in conversations kind if I'm of there's off increase any to like starting Maybe to or having tenants. trying on sort just come I'm curious, a guys desire with renewals the for you're wondering urgency to of the get just tightening the market. just Durels, I'm

and leased. little for And they're tenants how good a getting done tighter and have wondering are about percent renewals. things if occupancy a guys up You I'm job bit pushing your just thinking

Thomas Durels

a have example extended Yes. term that them, HNTB's back and their connection renewals. in by term. to we on early is We lease lease X space that there. did took actually been then with Hecker, leased HNTB good Kaplan working a years with we extended lease We

And seeing so a examples we actively, managing of one. we're that's good are and rent that, always roll, our practically and

there are tenants landlords, In few the quality seeing quality we're why is quality terms that's of spaces properties, with of positive seeing that choices think that results. that recognize we're I urgency, inferred and

location, the -- offerings the for think, that headlines that they balance it's well landlords have amenitized, about transit, promises. see, gee, great marketplace, stats from So product, are quality look really now who build, of execute they market, waiting the maybe tenants buildings in choices the extra deliver to amount and the that there in sheet are overall few despite great the on modernized, as with and where on I

I to generated of results XX steadily quarters. the speaks that all So that think the last we've over

Steve Sakwa

manage kind year-by-year necessarily what the ultimately perspective, back gets X know you visitor note from a where down noticeably of I Observatory, quarters, curious, just interesting I'm visitors, coming the basis. been territory? it's New on do growth And growing slightly visitors last have York? the but your the up just into Tony, international don't Maybe, to for visitor sort competition Chinese tourism? it Is think just in it of they've been back count it been you again? Has gets What positive Is visitors other absent? the on

Anthony Malkin

out in Well, the second of shifted that keep mind in performance that was quarter. lower that of Easter component major the quarter a

So theme increased special that do have good third feel follow to visits. thing holiday really we you And that the softer for visitation will York City, the very the actually will quarter was that on to one visitors the next, a at of that throughout drive opted from see our shifts therefore, available see #X, visitor every the that #X. New components seen that, additional tourist scale Observatory numbers, have we Steve. We what's time buy.

person made same York able has and the tourist the And low it So reservation NOI. And travelers. Overall, of charge, able quarter, our travel in mind, with independent We our but course, visitors New what time, a control just driven been happy by years We Keep with see at do City, that to per in do how break at bus been net to don't model. to doubling of all. the ago. is with have we're we softer. high. expenses stronger with third we we've performance, very many actually, very a we've number, And that, our China, China. Chinese from visitors was off our we way,

Operator

Markets. Capital next Our Kim question from John coming is from BMO today

John Kim

acquisitions announced of closed you've Williamsburg. $XXX in retail or far, so So, million

of Empire but get this State, that X% wanted to X% know get seems you just yield, region, was from lease indication, pretty the Christina, and can there in doing maturity for the long. think like how to an it's how given I big initial more

Christina Chiu

Sure.

in time, short the of then million. initial acquisition September of $XX the $XX million, $XXX in we've think So, XXXX, I then amount and achieved a scale million

think good right have pretty scale I we So, now.

of we there as of especially come retail will in to good have opportunities yield very increase a about that a lot marketplace. The hasn't point in We opportunistic of way with, vacant a about in free very be terms off as space. is portfolio, the this work to the rent, prime this available where been feel on, market lease-up ton from get in burn well a

the components. have X years, into term as key lease and in are there weighted could those rents we So, be yields the is that I quoted. And the upside further below over movement movement, could average between, but to market translate

very and to have what We'll anything, but we'll scale, to not along, we about chase excited we're So, continue this comes good a opportunity. feel in as build, rush always. see

Anthony Malkin

might just I to that. add

some As until the I higher we think the as the of our we many transaction recent bought. under-recognized. and analysts and know, than Williamsburg And suggests pricing recent what investors was evidence reasonably a undiscovered that's anymore. sell-side of acquisitions, at think and don't much know, case We

mindful. we'll look to discipline with capital as forget where to So, we happy in be we forward. our exercise and Don't we're want our very goal up, here ended participate and we've recycling, was

Operator

Heck Blaine is Next Wells from Fargo. question coming from

Blaine Heck

same guidance were guidance, built by year about that some there amount guidance? any you by level $X.XX. as the during increased guide $X.XX Just already termination beat offsetting year can guys of the Or fee, you you full specific that into beat the Were only was increasing that quarter by quarter? there during talk from fees the with the factors starting term but that on kept just full

Stephen Horn

Sure.

other were guidance when adjust of fees right a out I the and termination the midpoint called and which $X.XX about NOI, implies in items cash set, level to the one-time fourth $X.XXX the out lease our same-store both the So, $X.XXX, you one-times, of quarter.

that SEC the G&A, promotions and the also that that previous additional we non-cash will call, a guidance XXXX quarter. Also, quarters. to filings. not stock-based Also, related NEO we too, now quarter modest of markets to that we that keep in noted costs our leave solution in our performance, in additional earlier capital includes there's room the Observatory comp larger recur expect our NOI keep mind in then for in again expense, FFO noted So, fourth considerations items those as result of mind, higher amount given variability of updated relative guidance activity. And and one-time and accelerated in contains fourth related the recent to recognition to as a transaction in

Blaine Heck

That's question, the into on leads is ask the wanted which me to transaction just, side. I helpful. And second

the a purchase of the concern of rate. think I Stamford Williamsburg cap First with and associated much sale of little around there's at a dilution bit lower

pursuing to any on going-in just purchases transactions other we you you'll balance just of higher is wanted guys might Or and kind these be kind opportunities specific what to thoughts get yields? So, mid you with about ask maybe of this from going single-digit out look with any yield guys forward? whether expect should

Christina Chiu

I the question. think, appreciate I Yes,

we and in few we've cash this City is, acquired after right? non-core NOI As and assets, always noted, started we've of We better basis, we remaining ago, York years that flow much recycling flow New part CapEx, And York very And capital asset. profile potential. to we're and down growth multifamily think City a a suburban out return, on cash retail. New our one was sold that much of and initiatives,

for so opportunity We'll was growth very get great look additive high-quality to ton, depends in decade, portfolio. a earlier, it and upside. with forward, when ESRT And hasn't upside trade very have we from go to have expect prime upside, opportunistic been little And look even that as attractive the balance the to it assets feel, deals will concept. it in think the potential over fair presents on for recycling. marketplace. And what for a capital, to very itself perspective. to we mentioned that comes more a there continue On the we a fresh further of continue much sheet attractive more deals We we generate capital to

Anthony Malkin

the the in much comments, specific to shift add in very recycling just on metrics. to the cash. Just we focus on Stamford First on not from We NOI and FFO general, focus Place Christina's

for there, So on what you and happy that, do we cash has will all And and to with very work have flexibility. accounts, we're able that we're are within very, the with to need types compressed seller off-market. We on transactions, of we've everything certainty it did over of you with to just we the performance, and those time, more very done when further recognize that very at as where really as execute. perhaps confines to the fact a thrilled act been we continue far we were the have need period. And within off-market, we've we -- happy comfortable for what what still of time new done and we look so far capital, deployment

handle -- have easily. higher for X And to returns. we uncertainty accounts and produce therefore the can execution on those more we of better We look trade-offs will

Operator

from Griffin Michael from coming is today Citi. question Next

Michael Griffin

recent seen maybe XXs, rents. give quarters? you is And or some if have concessions relative triple-digit then the or rents you if the to give down leasing paying in are your curious you of for be sense that pipeline, us that higher some trending, environment seeing not us affordable seen I'm point of a were whether just into price maybe we've of I it given, think, sort demand you still pretty insight an can more maybe improvement on move concessionary range, might those where Just any into stable those high tenants can

Thomas Durels

Sure.

local every we've be submarkets. Square of attracted whether tenants really submarkets, always to Station Midtown, Midtown the all, it parts of from all Penn from that's Xth Times Avenue, South, all First market

these we amenitized really active that's all that of and range we've to the tenants you market foot attract anywhere really location, and that cited we pay assets, accessible of the that pay that the square reasons $XX to a in and where is assets tenants look modernized an quality for we afford part point. tenants The attract, our $XX at from could choose times, And numerous at up So over. price are at per play. great most they

that's excellent best tier. range. choice the the we results again, really that product, services, And seeing the best in top We are We the offer that we're price best why are.

leasing net increased we Regarding focus concessions, from of look, effect We're benefiting rent. rents. on

our X This rent past quarters. highest the in quarter was quarter

this This of had we've any X quarter rent net quarter of past for years. and the quarter quarter, leasing we the in the past lowest costs the had years, any highest effective X

on from in tenant have we've where So modest TI spaces out turnkeying, released a renewed free years. tenant, turnkey X we a pre-built with to definitely space we're to spaces we've benefiting need that deliver free doing past and back investment we rent. that are or If raw X and we and for built rent. We've been tenant are that easily pulled and last

because So I reasons just square has our but changed, that of not seeing you're lease year come down cited. cost per foot per the lease

Michael Griffin

maybe then you've the a acquisitions maybe side in on obviously, might the transaction been be any busy see just And are you But going you'll a a up? starting you properties maybe with think that debt JV you ever outright opportunity Williamsburg. stick Or if or opportunities Appreciate a bit helpful. market, retail that. interesting? And further, then look on property on acquiring to the the office structure? provide comes Very to bit to little would

Anthony Malkin

as omnivorous we are had that we'll opportunivores, way. said deliver will to a We've group where of better shareholders. the remain take expertise we anything to presently. just will open is of we we number We've think and so a all redevelopment And or we that it's and We're on often value our We review is we the debt of to have, big got out very fat said, achieve that's conversations outcome we're pitches a help providers, opportunistic. Fundamentally, interesting marketplace. active We've to a different That the the where sort with investment headed produce expertise long-term goal lookout. providers. private of positions debt about opportunities. for had can conversations in where our property we our lot what really look, than in constantly and new be perhaps very value debt

Operator

[Operator from Burzinski Instructions] Our from Street. question next Green Dylan coming is

Dylan Burzinski

basis looking were relative lease a looks basis in percentage spread it of that been should points any of spread us around the should we occupied X And to historical suggests the, between to timing over high it curious, that over portfolio. time. XXX today, ESRT's little historically? wide percentage like versus just grow Just is call curious, towards it occupancy about the the when range at has the average, start which to those to continue that XXX compress guardrails sort But point

Thomas Durels

follow. percentage picture Well, look, lease lease XXXX. managed we're our laid we is well groundwork and our positioned. will rent percentage percentage we're occupancy But increasing We've our roll occupancies increase into to and the proactively and percentage focused both on our the big

If next you known of square have a about XXX,XXX quarters, over vacates. we feet X look the

-- offset not feet that offset by will be So will commence. or signed square XXX,XXX yet are XXXX of commenced when the over end that's of leases

XXXX. course, years And average success had portfolio, X leasing XXX,XXX so past the yet our leases point square and look, with New office in both annual that lease foot that known over that the the to our And I of square that the our we're occupancy the over in are percentage XXX,XXX will about positioned volume York help boost not well by commenced feet will occupancy to leasing XXXX. we've continue percentage signed, offset percentage. vacates would of to improve But end City

Dylan Burzinski

the part of and mentioned I earnings through leased. XX% sort an Christina, rather today perspective. think But acquisitions XXXX and portfolio But from think are than details vacant is just the then to to the those that perspective flow was leasing of And I appreciate related on looking yield space. a cash the back how detail. that of you growth going you at one Appreciate guys transactions

think get be? And So it potential around like rent you where just also sense sounds stabilized growth story is of a to potential. trying of sort market for part transactions narrative could occupancy then or these the

potential the if about just as rent you So are sort with any provide thinking guys how details related market to Retail Street could wondering of you growth acquisitions?

Christina Chiu

Sure.

already discussion. the space there's temporary one point, in and one vacant space there's On vacancy

tenancies. between any be easily less and feel we a movement about So good really that it portfolio it's full, could frictional

mark-to-market has much they potential, terms work there with tenants a in a still as in, result, to and first they neighborhood the certain come where getting growth, the any be there's very rent tenants, is the the experienced as number very done box. And of where at on the probably are street, On of they round in the retailers that well below of market are of street mix are a along size rents. strong

vacancy, So termination, really lease it's you the have we if an that in whereby not actually and translates potential back deal your here mark-to-market with coming opportunity early get oh, space it. market traditional, to have good re your a below it's to period, into

up, So we that X% that leased gets don't answer of have to to off to sort rent, rent anything help? burn is sort of known is goes but of But that vacancy the X% and specific more of free already increases front, and Does that temp your question. space another in on that's contractual. terms tenant in which

Operator

Markets. Kim from from John coming Capital Next BMO question is

John Kim

they they their tenant, to employee that space what basically I'm you largest of of second think impact with the base. your any and announced if as you lease as will you? layoffs expect come have fifth wondering far see back to you about on space Flagstar, that a

Anthony Malkin

long-term lease. on a is Flagstar

And view with tenant to I work Mnuchin's And a proactively they've head. team always right we to any will space. the lot so at of our the operation in wishes shed there. got feel share Steven with confidence who is group

in much that income You our income, every our see pretty non-recurring extraordinary quarter.

and prior recast anyone population Ryan will we current help are way super and to super very, very tenant the And space, maintain them a to early any at our would for group So lease of we active. opportunity utilize even active, our new renewals. Tom to rather Kass level we doesn't contact expiration long look directly tenant who same his at lease be tenants. time. close a with look us with a

John Kim

I very while balance your you, And Tony, has company sheet. structure, a clean have clean

wholly don't some assets? consider believe. owning at portfolio? your you You owned Or would part ventures, have your you joint joint office retail, to either I any are sailing or of How venture some point assets in committed

Anthony Malkin

we ventures maintained both of rates, believe which whom and considered anything capital for to with with will impact will needed generate the our inflationary to new to longer on again because are do to reason And We we've candidates we this else. date just popping had in President's term. opportunities, an haven't programs do balance interest spoken We that joint in capital. the believe back certainly have ventures. people and assets to when our particularly rates those more opportunities. have to we We and haven't on adverse in consider up sell We certainly sheet currently we've there'll certainly be environment anything attract joint believe cleanliness we need a we operate ownership interest

acquired of sheet, And to those we of recycling we governed on our new those assets. actions assets that the lot On the own activities. XXX% needed when a balance

forward, opportunivores. we As again, go omnivorous

We sheet need can so. do a get and partner not when it's by reason our available when liquidity, to what do, there's to get do and will choice. it's our it something look we can we With we'll at balance we logically something

Operator

the question-and-answer We Malkin turn session. reached remarks. back some Tony to floor our Chairman the I'd closing like over end CEO, and for of

Anthony Malkin

our Thank you you for sell sheet, focused We to space, our and sustainability of for Observatory, the your achieve creation the very goals attendance to manage balance value. tickets much, priorities: everyone, the lease remain purpose all on X the of shareholder today.

process our a wish Heather know in. the we now, we ability to listening drive and Houston, We she isn't in for right they continue believe her forward. Today, is Counsel shareholders we Corporate, opportunities and advantage she's delivering as value take the arise baby, new If going success of execute to in confident and are further happiness. greatest our and Senior

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Operator

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Empire State Realty Trust (ESRT) 22 Oct 242024 Q3 Earnings call transcript