Empire State Realty Trust (ESRT) investor relations material

Portfolio performance and strategy

• Achieved 93.6% leased commercial portfolio with over 1 million sq ft leased in 2025, marking four consecutive years of occupancy growth and positive rent spreads in NYC.

• Delivered resilient bottom-line performance through disciplined cost management and price execution, despite lower international tourist visitation.

• Completed $417 million in all-cash transactions for high-quality office and retail assets and exited the last suburban commercial asset, sharpening NYC focus.

• Upgraded portfolio with $1 billion in NYC acquisitions, improving cash flow prospects and durability without recognizing taxable gain.

• Maintains a strong, flexible balance sheet, enabling opportunistic leasing and transactions, with leverage slightly above 6x but below peer averages.

Capital allocation and acquisitions

• Capital allocation decisions are based on risk-adjusted returns across office, retail, and multifamily, with recent focus on opportunistic office acquisitions like the Scholastic Building in SoHo.

• The Scholastic Building (now 130 Mercer) was acquired at 70% occupancy, with a 5.5% initial yield and expected 8% stabilized yield after lease-up of three floors.

• Asset was acquired all-cash and unlevered, providing flexibility for future capital structure.

• Share buybacks remain a key component, with over $300 million executed to date, balanced against growth and value opportunities.

Market trends and leasing environment

• NYC transaction volumes and lender interest are up from 2024, though still below 2019 peaks; pricing is 20%-30% below last peak, with institutional investors returning.

• Residential transaction volume is slowest due to political uncertainty, while office and retail demand remains strong.

• Mark-to-market opportunities in the portfolio are in the double-digit teens, with net effective rent growth driven by rising asking rents and stable concessions.

• Leasing pipeline is actionable, with most deals expected to close in H1 2025; focus is on creating larger blocks of space to attract high-credit tenants.