Empire State Realty Trust Announces Third Quarter 2016 Results

Empire State Realty Trust, Inc. (NYSE:ESRT) (the "Company"), a real estate investment trust with office and retail properties in Manhattan and the greater New York metropolitan area, today reported its operational and financial results for the third quarter of 2016.

"We are pleased with our strong third quarter results, which reflect the continued successful execution of our strategy as we consolidate, redevelop and re-lease space to larger, higher credit quality tenants at materially higher rents. We saw another solid quarter of concluded leases and new leasing activity as our newly renovated space allowed us to achieve market-leading spreads on new Manhattan office and total portfolio leases of 59.3% and 30.2%, respectively, this quarter. Prospective tenants continued to be attracted to our modernized spaces within well-located, redeveloped amenity-rich office buildings," stated John B. Kessler, Empire State Realty Trust's President and Chief Operating Officer.

"For the year-to-date Observatory revenues grew 7.8% driven by increased tourist visits, improved revenue mix and favorable weekend weather conditions. As previously disclosed, on August 23 rd we closed on a $622 million new issuance of common shares to an affiliate of the Qatar Investment Authority, and our performance for the quarter represents one month of our increased share count from that investment. Additionally, as we previously disclosed, we increased the capacity of our line of credit from $800 million to $1.1 billion. As we continue to unlock the embedded, de-risked growth within our portfolio, the added strength and flexibility in our balance sheet positions us to create long-term value for our shareholders," added Kessler.

Third Quarter Highlights
  • Achieved net income attributable to the Company of $0.12 per fully diluted share and Core Funds From Operations ("Core FFO") of $0.26 per fully diluted share.
    • This reflects our increased share count from the issuance of 9.9% of fully diluted shares on August 23 rd.
  • Occupancy and leased percentages at September 30, 2016:
    • Total portfolio was 87.9% occupied; including signed leases not commenced ("SLNC"), the total portfolio was 90.3% leased.
    • Manhattan office portfolio (excluding the retail component of these properties) was 86.6% occupied; including SLNC, the Manhattan office portfolio was 89.5% leased.
    • Retail portfolio was 86.3% occupied; including SLNC, the retail portfolio was 88.3% leased.
    • Empire State Building was 90.1% occupied; including SLNC, the Empire State Building was 91.5% leased.
  • Executed 51 leases, representing 348,770 rentable square feet across the total portfolio, achieving a portfolio-wide 30.2% increase in mark-to-market rent over previous fully escalated rents on new, renewal, and expansion leases.
  • Signed 20 new leases representing 224,125 rentable square feet in the third quarter 2016 for the Manhattan office portfolio (excluding the retail component of these properties), achieving an increase of 59.3% in mark-to-market rent over previous fully escalated rents.
  • The Empire State Building Observatory revenue for the third quarter 2016 grew 6.7% to $38.1 million from $35.7 million in the third quarter 2015.
  • Issued 29,610,854 Class A common shares at $21.00 per share in a private placement transaction with an affiliate of the Qatar Investment Authority which raised approximately $622 million in gross proceeds.
  • Increased the Company's committed borrowing capacity under the unsecured revolving credit facility from $800 million to $1.1 billion.
  • Declared a dividend in the amount of $0.105 per share for the third quarter 2016.

Financial Results for the Third Quarter 2016

Net income attributable to common stockholders was $16.0 million, or $0.12 per fully diluted share, compared to $11.2 million, or $0.10 per fully diluted share, in the third quarter of 2015.

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