Empire State Realty Trust, Inc. Q1 FY2026 earnings call

• Began the year with solid earnings and steady execution across portfolio, contribution from observatory. - Acquired high-quality retail asset on North 6th Street, completed financings addressing debt maturities into 2028. - Manhattan office leasing environment healthy, tenant demand strong, 93.2% leased, 19th consecutive quarter of positive mark-to-market rent spreads. - Observatory remains market leader, focus on domestic and direct sales program. - ESRT a leader in sustainability, Empire State Building first in NY State to achieve LEED version 5 platinum status. - Entire organization laser-focused on five priorities: lease space, sell observatory tickets, manage balance sheet, identify growth opportunities, achieve sustainability goals.

Manhattan office portfolio: Achieved 19th consecutive quarter of positive mark-to-market rent spreads, net effective rents on an upward trajectory. Observatory: NOI was $10.6 million in the first quarter, seasonally lightest quarter; revenue per capita increased approximately 1% year over year excluding gift shop license fees. Retail: Acquired a high-quality retail asset on North 6th Street for $46 million. Multifamily: Same-store NOI increased 9% year-over-year, net rents increased 6%; ended the quarter at 96.4% occupied, now over 98% leased.

• Full year 2026 guidance remains unchanged. - First quarter is seasonally light for observatory. - Balance of year typically represents approximately 85% of annual NOI, ~60% from second half. - Year-end occupancy guidance 90 to 92%.

• Today's environment presents wide range of macroeconomic outcomes that could adversely affect business. - Visitation from international and budget-conscious tourist-centric past programs remains soft. - Potential for macro risks and geopolitical tensions to weigh on economic growth and tourism. - Debt maturities and capital structure related risks.

Q: Touch on opportunities seen in market for 2026.

A: Sensed more recap opportunities may come online, look for situations where can extract and add value in office, retail, multifamily.

Q: Clarify on 15% of space held back for consolidation.

A: Number was higher before, now 15% due to success of Steve Madden transaction and bringing large block space online, four or five large blocks and full floors to come online soon.

Q: Difference in demand for spec/prebuilt suites vs full floors.

A: Prebuilt portion doing extremely well, single digit available, evaluate each space on case by case basis for best ROI, current market demands make sense for consolidations.

Q: Strategic rationale of buying vacant retail property vs share buybacks.

A: Deployment of Metro Center assets to avoid taxable gain, exit underperforming market, North 6th Street provides current yield and cash flow growth outlook, buybacks still part of consideration.

Q: Confidence in achieving observatory guide for rest of year.

A: 85% of year is ahead, keep eye on changes in factors like war, travel, fuel, not correct to make change off 15% of year to date.

Q: Compare 130 Mercer project to initial underwriting.

A: Lease supportive, rents high 90s, TIs consistent, free rent better, transaction occurred faster than underwrote, before start of capital improvement program.

Q: Yield on cost estimates for recent retail acquisition.

A: For portfolio, other assets acquired had high fours to five, expect North 6th Street around six including lease up.

Q: Opportunities within property types now.

A: More about different capital structures reaching end of road, most heard about in office, keep eyes open as debt out there with equity type risks.