Good morning. Thank you for attending this presentation for Empire State Realty Trust. My name is John Kim with BMO Capital Markets. It's my pleasure to be moderating this presentation. We have Christina Chiu, President of the company, and Tom Durels, Executive Vice President of Real Estate. I thought we'd just start off with opening remarks and why people should be investing in ESRT today. Sure. Thanks, John. Hi, everyone. Christina Chiu, President at ESRT, and Thomas Durels, EVP of Real Estate. I will provide you sort of a quick overview on some of the key items. ESRT is a New York City-focused REIT. We own a high-quality portfolio that is well-diversified across sectors and sources of income that uniquely benefit from live, work, play, and visit. New York City has significantly outperformed other gateway cities in terms of vibrancy and full recovery from COVID, and this is now widely recognized. Our portfolio was built to withstand and perform in all cycles. In terms of net operating income, our portfolio mix is approximately 60% office, 25% from the iconic Empire State Building Observatory attraction, and just under 20% from New York City retail and multifamily. We are well-leased across each property type. Our New York City office assets are 93% leased, our retail assets are 94% leased, and our multifamily is 99% leased. All three of these sectors benefit from a backdrop of very limited new supply today, which we expect to continue for the foreseeable future due to the increasing cost of new construction and long development timelines. ESRT's office portfolio offers a great value proposition that targets the deepest and broadest segment of the office tenant demand in Manhattan, and that should play out well in the current environment. Our tenant base is well-diversified in terms of both industry type and size, and demand for our properties has been solid, as demonstrated by leasing performance. We leased 1.3 million sq ft in 2024, picked up nearly 600 bps of positive lease rate absorption in Manhattan since the end of 2021 to bring our portfolio to 93% leased, and first quarter 2025 was our 15th consecutive quarter of positive mark-to-market spreads in our Manhattan portfolio. We continue to have a solid leasing pipeline with prospects for continued rental growth. There have been a lot of questions asked about the observatory, and we continue to believe it serves as an excellent complement to our property portfolio business. It features low CapEx, high operating margins, and dynamic pricing with better potential to adjust with inflation. The Empire State Building Observatory is true, authentic New York City and has shown immense resiliency over the years through economic cycles, through new competition, and worldwide pandemic. We recognize that we're in a period of heightened uncertainty around tourism, and there could be headwinds in the balance of the year. Our focus is to continue to run the operations well, cultivate our brand, control expenses, and be transparent with the market as external factors play out. Year to date, performance has been impacted by poor weather days and headwinds to international demand. International is about 50% of 2024 admissions. The business may ebb and flow in the near term but has favorable cash flow characteristics, and we expect it to remain a positive bottom-line contributor. It is important to note that the observatory earnings are typically weighted towards the second half of the year, which has historically represented 60% of NOI due to seasonality. As mentioned in our Q1 earnings call, we plan to provide further updates regarding our outlook for the observatory business once we have a full look at the entire first half of the year. Our retail portfolio is best characterized as a collection of well-located, high-foot traffic retail assets that includes a balance of everyday retail and our growing street retail portfolio on North 6th Street in Williamsburg, where in-place rents are well below market. Our retail portfolio is well-leased with six and a half years of weighted average lease term, and across our portfolio, we have a strong roster of high-credit quality tenants that are also positioned well in an uncertain environment. Multifamily was added to our portfolio a few years ago and has been a great addition and adds to the resiliency of our cash flows. Fundamentals remain strong, and as mentioned, there's virtually no new supply. Replacement costs remain high, and frequent rent resets relative to office allow cash flows from this segment to better adjust with inflation. All of our portfolio is backed by a strong and flexible balance sheet that enables us to weather any environment. We manage our balance sheet proactively with strong liquidity, no floating-rate debt exposure, a well-laddered debt maturity schedule, no unaddressed debt maturity until December 2026, and the lowest leverage among all New York City-focused REITs at 5.2 times net debt to EBITDA as of quarter end. This positions us well for both leasing as well as capital allocation. Subsequent to 1 Q, we did opportunistically repurchase about $2 million of shares. We'll consider share buybacks as part of our capital allocation strategy with nearly $300 million of share buybacks since 2020. That said, buybacks will be measured given the uncertain environment and our focus on operating runway and continued flexibility to be in a position to go on offense when attractive investment opportunities arise. The transaction environment became more active at the end of last year through early this year, and we will continue to monitor how that shifts as there's more uncertainty today. We continue to actively underwrite deals across three sectors where we target: retail, multifamily, and office, with a focus on New York City, and we'll be prepared to act when those transaction opportunities are attractive and make sense. Lastly, a comment on sustainability. We continue to be industry leaders in sustainability and healthy building performance and partner with our tenants to help them achieve their sustainability objectives. Our sustainability work was never about chasing a trend, as we began this work over a decade ago with the deep energy retrofit of the Empire State Building. We have always been return-on-investment focused, and our projects drive improved financial performance, and we are committed to delivering long-term value to our shareholders through continued excellence and results. With that, John, we will turn it over to your questions. I don't have any more questions. We're done. We give time back. You've addressed everything, but I guess I'll follow through on some of them. You were a pure-play office and observatory historically, New York and suburban. Now you're more of a New York City investor, office, multifamily, retail, observatory. Where do you see that mix going to ideally, and where do you see the best growth prospects? Yeah. So we're pleased with our mix. We would be interested in more retail and more multifamily over time, but as we've mentioned, it will really be opportunity-dependent, right? Ultimately, we want to deliver returns to our shareholders and cash flow growth over time. As investment opportunities become available with attractive entry points, that's when we will be prepared to act, but would definitely be comfortable with the two smaller segments of retail and multifamily becoming larger. It wasn't too long ago there was a lot of discussion about distressed sellers and refinancing issues. Are there any opportunities that you're seeing in the market today in any of those asset classes? Yeah. Look, two years ago, we were hoping for distress. Our thought was, get the basis reset, do what we do well, reposition assets, and help generate really strong returns through these opportunities. As it turns out, New York City fundamentals have been quite strong, and lenders have been extremely willing to extend and modify and kick the can down the road. It turns out that in New York City, that worked really, really well, right? Nurtured with time and capital, New York City did improve. Towards the end of last year, especially after the CMBS market demonstrated strength through the refinancings of Rockefeller Center and subsequently Spiral and other deals, as banks became more willing to lend and maintain their CRE exposures, more capital came into the market, and we started to see core-type transactions in the office market. I'd say, you know, if you fast forward, it doesn't mean all the problems are solved, so there could still be opportunities, but it definitely demonstrates that there's a lot of money that's interested in a vibrant market like New York City. We think that we should continue to seek those opportunities where the capital stacks may not be in the right spot, where we can add value through repositioning and leasing, because there's a ton of capital out there that's ready to invest, but not an equal amount of capital that's ready to operate and reposition assets. We'll be patient, prudent, disciplined, but we think we can find some of those interesting opportunities. You have one asset right now remaining in the suburban office market, Metro Center, that's currently being marketed for sale. Can you talk about the expectations as far as when you're going to sell it, the buyers out there, what kind of pricing you expect to get? Yeah, we're in the middle of that process now. I'd say what's interesting about the suburban markets, there's a good amount of interest, you know, and the key is whether buyers can obtain financing, right? Like that's sort of the million-dollar question across the market, which is, you know, access to financing. We'll see how that plays out. From our perspective, that asset has attractive current financing in place, so if it's not the right time to sell now, we can wait. If it turns out we can strike a deal, then from a capital allocation perspective, it allows us an opportunity to redeploy capital from suburban office, where we've exited almost all except this remaining asset, into more New York City, which we believe makes a lot of sense. Tom, can you talk about the office leasing market? I mean, since Liberation Day, a lot of the office REITs got hit pretty hard, and there is a perception of, you know, businesses slowing down, not growing, shrinking the office footprint, or taking longer to make decisions. I think we have heard differently from you and some others. Tell us about the New York office market. Sure, John. The office leasing environment in New York City is incredibly strong. The momentum is strong since the Liberation Day or over the last two months. Out of approximately 185,000 sq ft of leases that we have in negotiation, we have not had a single deal that was put on pause or pulled back. I think that that says a lot. We did 230,000 sq ft of leases in the first quarter, and the second quarter is shaping up really well. We're positioned to increase our lease percentage through this year and our occupancy percentage. We have very modest lease expiration and a very modest amount of known tenant vacates this year, and so we're setting up really nicely to improve our occupancy. We've increased our rents twice since the start of the year, once at the very beginning, and then two months later, we went through another round of rental increases. We do receive less pushback on our rent increases, as well as we've pulled back on free rent concessions, for which we receive less pushback than we have in the past. Our net effective rent has been trending positive, and so overall, you know, New York City is the strongest office market in the country and incredibly resilient in that's what we're seeing today. You mentioned you expect the lease rate to go up. You were at 92.5% in the first quarter. It's going to go up from here? Based upon 185,000 sq ft of leases in negotiation, our office space in New York City is 93% leased at the end of the first quarter. Given that we only have, for the balance of the year, 160,000 sq ft of known tenant vacates, offset by generally, if we're doing, you know, roughly 1 million sq ft of leasing per year, that includes new or renewal, yeah, we're shaped up really well to increase both our lease percentage and our occupancy by year. Now our occupancy, which is dependent upon when those leases actually commence, will follow our lease percentage. Keep an eye on that lease percentage number, which again, is trending North, and our occupancy will follow. Can you provide some more color on the types of tenants looking for space today by industry? Also, are there new entrants coming into the market? Have international tenants softened a little bit with trade wars? Just some more color on your tenant base. Yeah, we've always attracted tenants in a wide variety of industries, and that's, and you see that in the composition of our rent roll, and we continue to see that in the inbound inquiries and the leases that we have in negotiation. We have deals underway with tenants in professional services, tech, and TAMI, some non-for-profit, some industrial, some consumer products. It's really broad-based. What we do see is tenants are making longer-term plans. The job market in New York City for office-using job market is strong. This is where employees want to live and work, and these companies are making long-term plans. I think that, you know, ultimately the view is that the tariff thing will settle down, and we've just seen no slowdown from any of the tenants in the wide variety of industries that I've just mentioned. Can you talk about the investment market? We recently saw that 590 Madison was sold to RXR. It seems like it was pretty competitively bid with multiple different buyers. Was that something that you looked at as an acquisition? Just talk about the overall investment market, how competitive it is today. Yeah, we look at everything in the market, and obviously these are all important data points. I think that transaction clearly demonstrates, right, very strong location. You know, it's a discount to replacement cost, even though it's a very strong valuation, cap rate with a five in front of it. It demonstrates that there is significant demand. We see it on the leasing front. We see it in the vibrancy of New York, and now we're seeing it in the investment market. You know, people are willing to lean in. In terms of what we'll do, I go back to my earlier comments, right? We're going to find ways to generate, you know, higher octane returns, especially when it's balance sheet capital and not just from capital recycling, where it's more of a pair trade. These are all worthwhile data points to assess strength and business plans on how they plan to execute following the acquisition. It's a very good sign for New York. Maybe just moving on to observatory. New York City tourism reduced its expectations for visitors to New York by 5%, and that includes a 17% drop on international tourists. Can you just remind us what percentage of visitors to the observatory are international versus domestic, and how do you combat this headwind? Yeah, so, you know, based on 2014, our mix between domestic and international was roughly 50/50. That compares to 2019 when it was about 2/3 international and, you know, the balance coming from domestic. Overall, what we said in our first quarter call was we recognize there are some headwinds, but we did not adjust our NOI guidance just yet. Easter fell into a different period, and we also wanted to continue to monitor how all of this plays out. After the full, you know, two quarters, we will provide another update. I would say, you know, in terms of ways to combat, we operate the business really well. It is a number one attraction in the U.S., three years in running, number one in the world. The business will continue to work hard to earn those tenant experiences and ratings. We do have some ability to vary expenses. If, in fact, traffic slows, our expense range is roughly $36 million-$40 million. We can come in lower. We can make adjustments to recoup some of that. And, you know, overall, high-margin business, no CapEx. So it will still be a very strong contributor to the business. We are talking variations of slowdown. The airline data and the hotel data speak to that trend towards slowing. I would say those have many more factors than just New York, you know, in a single attraction, but it will be a derivative of that, and we will continue to monitor. As a reminder, per my remarks, 40% comes in the first half, so there is still a long rest of the year where we generate more of it, and by then, more of the tariff news, geopolitical tension, tourism, a lot more, you know, facts, data, and reality will shake out. You've been able to offset maybe fewer visitors with a higher revenue per visitor. First quarter was up 6%. How much more juice can you squeeze out of lemon? Like, how much more pricing power do you have? Yeah, we exercise pricing power where we can. I do not think we have projected, you know, continuously more. In fact, our previous comments before Liberation Day and tariffs was that as we get more international travel, because that comes more from a wholesale model, the revenue per cap would actually come down, but you would make it up in volume, right? We are always working on the business holistically. If we tilt more towards domestic, you know, maybe overall visitors can come down a little, but we will be in a higher margin segment, you know, within our price points. Those are always going to be toggles. You know, I would say the benefit of having more attractions is the market now sees there has been some pretty good pricing power across the board. Customers are willing to spend, but only if you have a top-quality experience that is worthwhile. From recollection, you don't really spend a lot on marketing and promotion for the observatory. You have a lot of social media, and people just know the asset. Is that something that could change? Are you looking to maybe spend some more money to attract? Yeah, our marketing team has done an excellent job to cultivate the brand as well as build a following, and we always have our eyes out on how to monetize that, whether it's through observatory ticket sales, better awareness, repeat travel, and other vectors to generate revenue. I think that's something definite to watch out for in the business. Okay, turning to Williamsburg Retail, how has that portfolio that you've accumulated over the last couple of years, how has that performed relative to your expectations? I think you originally acquired it at a 4% going in yield with expectation to go to 6%. Tell us how that's progressing. Mid-four is going to six, and the delta there will be inclusive of the completion of the Hermes flagship store that's under development, as well as the lease-up of one vacant space. You know, we love the assets. You know, there's a few reasons for that. When we studied the Williamsburg market, we noticed that it was a highly fragmented market, great residential density in recent years when you survey, you know, who lives there. You know, a lot of tech workers, they work at Google, they jump on the L train, and then you're in Williamsburg, right? It has the makings of, you know, a lot of activity, but unlike Soho, it's much earlier in the cycle. There's still more work to do, but there's also more upside, and there's kind of embedded 25%+ of mark-to-market potential because rents are all over the map. We have been really happy with that, but we do only have one vacant space. Weighted average lease term is about six years. As people ask a lot of questions on strength of retailers, you know, we go back to, at a minimum, we think we have a defensive rental price point, right? Because there is embedded mark-to-market upside. If we do get space back, then we get the roll-up mark-to-market upside quicker than the weighted average lease term of six years. Overall, you know, great presence on the street, really happy with the portfolio, a lot of tenant interest, and more recently, there have been comps for sales on the street, investment sales that demonstrate the strength in terms of both cap rate metrics as well as per square foot metrics, and it was from an institutional buyer. We think that, you know, that's great that more institutional capital, us and others coming on the street, will bring better tenancies, better credits, better discipline, and continue to add to the vibrancy on that area. Can you tell us who the buyer was and the comp as far as pricing? I'm going to leave that for you to publish. Help me out. Okay, is Williamsburg like a one-off? I mean, you focus specifically in that submarket, or are there other markets that are interesting to you from a leasing perspective? Williamsburg was interesting. We, you know, when we went in, we, as a reminder, we started with one corner at $26 million. It was a really good corner on North 6th Street, and it was part of our capital recycling, and we said, this is a market that we want to enter and look out for. We did not know at the time that we'd be able to accumulate scale so quickly. Now, at, you know, roughly $250 million, and we own the most consecutive square footage in terms of frontage along North 6th Street, which is a prime retail area, we feel pretty good. We do not have this need to bulk up just to get more on the street. At the same time, if something strategic comes along that makes sense, we'd be happy to add to it. We're very pleased with it. You know, overall, we say New York City, but we would definitely look out for characteristics that I mentioned, right? Demographic trends, added density, where we think that we can add value and is additive to our portfolio, and the continued theme, live, work, play, visit within New York City. Okay, and when I look at your retail portfolio overall, for some reason, the Empire State Building occupancy is a little bit lower than the rest of your portfolio. What's going on with some of that retail space? Yeah, it's really driven by just one vacant retail space of about 18,000 sq ft, but the vast majority of that sits below grade. It's only about 3,000 sq ft is on grade, so that skews that vacancy number quite a bit. We have two active proposals in negotiation on that space right now. We're going to be choosy because it's right at the front door of, you know, the Empire State Building. All of the space on 33rd Street has been leased to predominantly food and beverage, which helps support the 2.8 million sq ft of office space that sits atop the ground floor and also provides a nice amenity to our observatory visitors as well. This is the last remaining vacant retail space of about 3,000 sq ft on grade at the Empire State Building. We know a lot about 5th Avenue and Madison, like the rents really coming back strongly. What about Times Square South and the Penn Station District? How are market rents trending? Yeah, we only have nine vacant stores, and we have leases in negotiation on three of them. One signed lease since the end of the fourth quarter, and the balance of those five spaces we have active proposals in. As Christina mentioned before, we're in high-traffic pedestrian foot count areas, and the side street really provides opportunity to bring in amenities and services for our office tenants that sit above. We have quite a bit of activity from food and beverage right now down both the Union Square, Times Square South on Broadway, and a space up on 3rd Avenue and 86th Street. We have good activity, you know, really across the board. Again, quite a bit in food and beverage, and some, I'll call it cosmetic beauty type tenants. Out in Williamsburg, that was just discussed on the one vacant store, we're seeing interest from a variety of both national and international brands. At this point, I'll just stop. If there's any questions from the audience, feel free to ask. Yeah, what's the status of return to work? There's a number of key, you know, sites of employees in the office buildings. Just give us an update on that. I'll repeat the question. The question was, what's the status of return to work? It's funny, we haven't been asked that question in quite some time. It was a prevailing question, you know, certainly in 2020 and 2021. It's really not relevant anymore today because the office tenants are back. Employees want to be back in the office. I think the vast majority of tenants have adopted some form of hybrid, but with the majority of the work week in the office. You can get a sense of the tempo by walking around the streets of New York City, trying to get a reservation in a restaurant tonight, and you'll have a hard time trying to lease an apartment in New York City, and you'll need to stay in the line and move quickly. New York City is back. It's as vibrant as ever. The stats that are out there, including ourselves, probably about 75% of what it was pre-COVID, but I think that reflects that a little bit of flex work environment, but it has not resulted in a reduction in the need for office space. Tenants and employers want to provide their employees the best work environment, and so they're not being stingy. They're providing ample amenities and quality work environment to attract employees. All that translates, and if employees are in three days a week and everybody wants their own seat, it translates into basically, you know, not a reduction in office space. You're seeing that in the underlying fundamentals that I talked about earlier. There is a dwindling supply of quality product in Manhattan in the better buildings, and, you know, there's good momentum in the overall office market. Yeah, I would just add to that. Agree with all of Tom's comments, but they're very specific to a strong market like New York City, right? Clearly, in the country, there are some office markets that are not back, and you do need to look at return to office trends to find that inflection point. In New York City, because of the resiliency, the strength in the leasing data, the corporate return, the vibrancy, you know, for all those reasons, it's no longer as relevant. The other thing I just want to mention is, you know, Fridays are a lighter day, right? It has not made a difference on leasing, but there is also a structural reason for that, I think, in New York City that makes a lot of sense, which is part of the reason why New York City is such a great market to be for office is you hire not just from people living in the city, but easily from New Jersey, from Connecticut, from Westchester, from Long Island, the commuter hubs. That is why the buildings around those commuter hubs, such as ours, do really well. Also, when you survey an employee base and say, who really cares about having one, maybe two days of remote flexibility, by far and large, it is going to be the commuters because those are actual hours, right? That is not a negative thing in New York City. It creates a pool of talent, but we have to understand structurally how that fits in, and ultimately, it's whether it impacts leasing, and it doesn't, right? Leasing is going on with or without the Friday. Any other questions? I think we have time for maybe one more. Your, this may be a tough one, but cost of capital, what are you focused on as far as improving your cost of capital going forward? Yeah, I go back to the comment, right? Things we can control versus things we can't. You know, you can't control the stock market. The entry price is extremely attractive into ESRT. Now, usually you say, like, what's wrong? What's going on at the company? Hopefully, from our remarks and from our results, you could see, you know, office leasing doing really well, retail portfolio doing really well, multifamily doing really well. Observatory has some question marks, but it's still a super positive contributor to the bottom line without CapEx, high margin, great complement. It's not the business operations. On top of that, we've managed our balance sheet really well, right? We're really, you know, weather resistant in that we have no unanswered debt maturity until end of 2026. We continue to have strong liquidity, and we're ready to go on offense. The actions that we would take, we've done some buybacks, but we also want to make sure we preserve capital for operating runway, maintaining our portfolio really well, going after leases, and going after investment opportunities. I think it's the combination of delivering cash flow growth over time and identifying those investment opportunities where we can show the market those higher octane returns exist. The market moved on a little bit, went to core, but we still need to do our part. When you balance all of those things, it should narrow the gap. In the meantime, investors get a great entry point into the portfolio and shares. Are you comfortable with the observatory being 25% of NOI, or is it important to reduce that over time? You know, I think it got there because it's performed really well, you know? If it's a great performer and maintains its sake, that's fine, right? It's a great complement. As it ebbs and flows, if we're generating cash flow growth and performance from other parts of the business, that's great also. You know, I think there's a lot of question marks on what diversification means, but in New York City, you know, live, work, play, visit is real. Having multiple channels and access to financing is really important. You know, getting multifamily also means you get agency financing, right? Having that as a component. Back to the observatory, we love having a complement to the business. We're going to drive the business as far as we can, ticket sales and other sources of revenues, and we think it's a great complement. No need to size the business because people resize the business just because people are distracted by, you know, short-term tourism trends. I think overall the brand stands on its two feet, and we'll continue to work hard on it. That's great. Thank you so much, and thank you for attending. Thanks.