What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-02-26 compared with 2020-02-28 · 482 added, 347 removed, 1111 unchanged (43% of the section changed)

2 unchanged sentences

We maintain disclosure controls and procedures (as such term is defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and regulations and that such information is accumulated and communicated to management, including ESRT's Chief Executive Officer and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

In designing and evaluating the

disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As of December 31, 2020, the end of the period covered by this Report, we carried out an evaluation, under the supervision and with the participation of ESRT management, including ESRT's Chief Executive Officer and Principal Financial Officer, regarding the effectiveness of our disclosure controls and procedures at the end of the period covered by this Report.

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The following financial statement schedules should be read in conjunction with the financial statements included in Item 8 of this Annual Report on Form 10-K.

Schedule II-Valuation and Qualifying Accounts for the years ended December 31, 2019, 2018 and 2017 on page F-39.

Schedule II-Valuation and Qualifying Accounts for the year ended December 31, 2018 on page F-39.

Schedule III-Real Estate and Accumulated Depreciation as of December 31, 2020 on page F-40.

45 unchanged sentences

Indemnification Agreement among Empire State Realty Trust, Inc.

Karp, dated October 7, 2013, incorporated by reference to Exhibit 10.6 to Empire State Realty Trust, Inc.'s Form 10-Q filed with the SEC on November 12, 2013.

Indemnification Agreement among Empire State Realty Trust, Inc.

and Thomas P.

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Indemnification Agreement among Empire State Realty Trust, Inc.

Kessler, dated February 1, 2015, incorporated by reference to Exhibit 10.24 to Empire State Realty Trust's Form 10-K filed with the SEC on February 27, 2015.

and Christina Chiu, dated April 20, 2020 incorporated by reference to Exhibit 10.4 to the Registrant's Form 10-Q filed with the SEC on May 6, 2020.

Form of Empire State Realty Trust, Inc.

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Malkin, dated April 5, 2016, incorporated by reference to Exhibit 10.32 to the Registrant's Form 10-Q filed with the SEC on May 5, 2016.

Amended and Restated Change in Control Severance Agreement between Empire State Realty Trust, Inc.

Karp, dated April 5, 2016, incorporated by reference to Exhibit 10.33 to the Registrant's Form 10-Q filed with the SEC on May 5, 2016.

Change in Control Severance Agreement between Empire State Realty Trust, Inc.

and Christina Chiu, dated April 13, 2020 incorporated by reference to Exhibit 10.5 to the Registrant's Form 10-Q filed with the SEC on May 6, 2020.

Amended and Restated Change in Control Severance Agreement between Empire State Realty Trust, Inc.

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Durels, dated April 5, 2016, incorporated by reference to Exhibit 10.35 to the Registrant's Form 10-Q filed with the SEC on May 5, 2016.

Change in Control Severance Agreement between Empire State Realty Trust, Inc.

Kessler, dated February 1, 2015, incorporated by reference to Exhibit 10.36 to the Registrant's Form 10-K filed with the SEC on February 27, 2015.

Note Purchase Agreement, dated March 27, 2015, among Empire State Realty OP, L.P., Empire State Realty Trust, Inc.

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333-231544), filed with the SEC on May 16, 2019.

Empire State Realty OP, L.P.,Empire State Realty Trust, Inc.

$100,000,000 3.61% Series G Senior Notes due March 17, 2032, $75,000,000 3.73% Series H Senior Notes due March 17, 2035 Note Purchase Agreement dated March 17, 2020 incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on March 23, 2020.

Credit Agreement Dated as of March 19, 2020 among Empire State Realty OP, L.P., as Borrower, Empire State Realty Trust, Inc., Wells Fargo Bank, National Association, as Administrative Agent, and The Lenders Party Hereto, Capital One, National Association, as Syndication Agent, U.S.

Bank National Association and Truist Bank as Documentation Agents, Wells Fargo Securities, LLC, as Sole Bookrunner, Wells Fargo Securities, LLC, Capital One, National Association, U.S.

Bank National Association and Suntrust Robinson Humphrey, Inc., as Joint Lead Arrangers incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K filed with the SEC on March 23, 2020.

First Amendment to Credit Agreement, dated as of March 19, 2020 (this “Amendment”), to that certain Amended and Restated Credit Agreement referenced below, is among Empire State Realty Trust, Inc., a Maryland corporation (the “Parent”), Empire State Realty OP, L.P.

(the “Borrower”), the Subsidiary Guarantors party hereto, the Lenders party hereto, Bank of America, N.A.

(“Bank of America”), as Administrative Agent, and Bank of America, Wells Fargo Bank, National Association and Capital One, National Association, as L/C Issuers incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K filed with the SEC on March 23, 2020.

First Amended and Restated Empire State Realty Trust, Inc.

Empire State Realty OP, L.P.

2019 Equity Incentive Plan As Amended and Restated as of July 13, 2020 incorporated by reference to Exhibit 10.6 to Empire State Realty Trust, Inc.

Form 10-Q filed with the SEC on August 10, 2020.

Subsidiaries of Registrant

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1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Document

XBRL Taxonomy Extension Definitions Document

XBRL Taxonomy Extension Labels Document

XBRL Taxonomy Extension Presentation Document

101.INS* XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.

101.SCH* XBRL Taxonomy Extension Schema Document

101.CAL* XBRL Taxonomy Extension Calculation Document

101.DEF* XBRL Taxonomy Extension Definitions Document

101.LAB* XBRL Taxonomy Extension Labels Document

101.PRE* XBRL Taxonomy Extension Presentation Document

104* Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.)

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/s/ Anthony E.

Chairman and Chief Executive Officer

Chairman, President and Chief Executive Officer

February 26, 2021 By:

President and Chief Operating Officer (Principal Financial Officer)

/s/ Christina Chiu

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

February 26, 2021 By:

/s/ Andrew J.

Acting Chief Financial Officer and

Chief Accounting Officer

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Pursuant to the requirements of the Exchange Act, this report has been signed below by the following persons on behalf of Empire State Realty Trust, Inc., as general partner of the registrant and in the capacities and on the dates indicated.

Signature Title Date

/s/ Anthony E.

Chairman of the Board of Directors and Chief Executive Officer

February 28, 2020

Malkin Chairman of the Board of Directors, President and Chief Executive Officer February 26, 2021

(Principal Executive Officer)

President and Chief Operating Officer

/s/ Christina Chiu

Executive Vice President and Chief Financial Officer

(Principal Financial Officer)

February 26, 2021

Christina Chiu

/s/ Andrew J.

Acting Chief Financial Officer and Chief Accounting Officer

February 28, 2020

(Principal Accounting Officer)

/s/ William H.

February 28, 2020

Prentice Chief Accounting Officer February 26, 2021

Prentice (Principal Accounting Officer)

/s/ Leslie D.

February 28, 2020

Biddle Director February 26, 2021

/s/ Thomas J.

February 28, 2020

DeRosa Director February 26, 2021

/s/ Steven J.

Lead Independent Director

February 28, 2020

Michael Giliberto

February 28, 2020

Gilbert Lead Independent Director February 26, 2021

Michael Giliberto Director February 26, 2021

Michael Giliberto

/s/ Patricia S.

February 28, 2020

Han Director February 26, 2021

Hill Director February 26, 2021

Paige Hood Director February 26, 2021

Robinson IV Director February 26, 2021

EMPIRE STATE REALTY OP, L.P.

INDEX TO FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2019 and 2018

Consolidated Statements of Income for the years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Comprehensive Income for the years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Capital for the years ended December 31, 2019, 2018 and 2017

Consolidated Statements of Cash Flows for the years ended December 31, 2019, 2018 and 2017

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm F- 1

Consolidated Balance Sheets as of December 31, 2020 and 2019 F- 3

Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018 F- 4

Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2020, 2019 and 2018 F- 5

Consolidated Statements of Capital for the years ended December 31, 2020, 2019 and 2018 F- 6

Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018 F- 7

Notes to Consolidated Financial Statements F- 9

Financial Statement Schedules:

Schedule II - Valuation and Qualifying Accounts

Schedule III - Real Estate and Accumulated Depreciation

Schedule II - Valuation and Qualifying Accounts F- 43

Schedule III - Real Estate and Accumulated Depreciation F- 44

Report of Independent Registered Public Accounting Firm

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We have audited the accompanying consolidated balance sheets of Empire State Realty OP, L.P.

(the Operating Partnership) as of December 31, 2019 and 2018, the related consolidated statements of income, comprehensive income , capital and cash flows for each of the three years in the period ended December 31, 2019, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

(the Operating Partnership) as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income (loss), capital and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Operating Partnership at December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2020, in conformity with U.S.

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Valuation of goodwill - observatory

Description of the matter

At December 31, 2019, the Operating Partnership’s goodwill related to the observatory reporting unit was $227.5 million as disclosed in Note 3 to the consolidated financial statements.

Description of the matter At December 31, 2020, the Company’s goodwill related to the observatory reporting unit was $227.5 million as disclosed in Note 3 to the consolidated financial statements.

As discussed in Note 2 to the consolidated financial statements, goodwill is tested for impairment at least annually or more frequently if there are indicators of impairment.

Auditing management’s annual goodwill impairment test was complex as considerable management judgment was necessary to assess and weigh the effect of relevant events and circumstances on management’s evaluation of whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.

The Operating Partnership’s impairment assessment is sensitive to assumptions related to potential adverse events and circumstances, including, the impact of new competition, trends in New York City tourism and cost factors.

How we addressed the matter in our audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Operating Partnership’s goodwill impairment assessment process.

This included controls over management's review of the significant assumptions underlying the impairment evaluation.

Our testing of the Operating Partnership’s goodwill impairment assessment included, among other procedures, evaluating the assumptions management made regarding macroeconomic conditions, the impact of new competition, cost factors, overall financial performance and other relevant entity-specific events.

We compared the significant assumptions used by management to current industry and economic trends, changes in competition, operating costs, New York City tourist trends and other relevant factors.

In addition, we performed analytical procedures and evaluated the historical and current period financial results for the reporting unit.

Given the adverse global economic and market conditions, the Company determined that interim impairment evaluations of goodwill were necessary for the observatory reporting unit and engaged a third-party valuation specialist, as a potential impairment existed.

Similarly, the Company performed its annual impairment testing as of October 1, 2020.

Auditing management’s goodwill impairment tests were complex due to the highly judgmental nature of the assumptions used.

The fair value estimates were sensitive to significant assumptions such as revenue and cost projections, the weighted average cost of capital, and income tax considerations, which are affected by expectations about future market and economic conditions.

How we addressed the matter in our audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s goodwill impairment process, including controls over management’s review of the significant assumptions described above.

To test the implied fair value of the Company’s observatory reporting unit, we performed audit procedures that included, among other procedures, assessing the methodologies and testing the significant assumptions and underlying data used by the Company.

We utilized internal valuation specialists in assessing the fair value methodologies applied and evaluating the reasonableness of certain assumptions selected by management.

We compared the significant assumptions used by management to current industry and economic trends, recent historical performance, and other relevant factors, and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of the observatory reporting unit that would result from changes in the assumptions.

/s/ Ernst & Young LLP

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(amounts in thousands, except unit and per unit amounts)

December 31, 2019

December 31, 2018

ASSETS December 31, 2020 December 31, 2019

Commercial real estate properties, at cost:

Land $ 201,196 $ 201,196

Development costs 7,966 7,989

Building and improvements 2,924,804 2,900,248

3,133,966 3,109,433

accumulated depreciation ( 941,612 ) ( 862,534 )

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Cash and cash equivalents

526,714 233,946

Restricted cash

Short-term investments

Tenant and other receivables, net of allowance of $488 in 2018

Deferred rent receivables, net of allowance of $19 in 2018

41,225 37,651

Tenant and other receivables 21,541 25,423

Deferred rent receivables 222,508 220,960

Prepaid expenses and other assets

77,182 65,453

Deferred costs, net

203,853 228,150

Acquired below market ground leases, net

344,735 352,566

Right of use assets

29,104 29,307

491,479 491,479

Total assets $ 4,150,695 $ 3,931,834

LIABILITIES AND CAPITAL

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Senior unsecured notes, net 973,159 798,392

Unsecured term loan facility, net

Unsecured term loan facilities, net 387,561 264,640

Unsecured revolving credit facility — —

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Private perpetual preferred units:

Series 2019 preferred units, $13.52 per unit liquidation preference, 4,610,383 issued and outstanding in 2019

Series 2014 preferred units, $16.62 per unit liquidation preference, 1,560,360 issued and outstanding in 2019 and 2018, respectively

Series 2019 preferred units, $ 13.52 per unit liquidation preference, 4,664,038 and 4,610,383 issued and outstanding in 2020 and 2019, respectively

21,936 21,147

Series 2014 preferred units, $ 16.62 per unit liquidation preference, 1,560,360 issued and outstanding in 2020 and 2019

Series PR operating partnership units:

ESRT partners' capital ( 2,852,787 and 2,996,520 general partner operating partnership units and 168,712,617 and 178,897,876 limited partner operating partnership units outstanding at December 31, 2020 and 2019, respectively)

1,055,249 1,228,520

Limited partners' interests ( 80,355,297 and 81,387,763 limited partner operating partnership units outstanding at December 31, 2020 and 2019, respectively)

648,543 680,580

Series ES operating partnership units ( 23,677,975 and 25,809,604 limited partner operating partnership units outstanding at December 31, 2020 and 2019, respectively)

( 1,348 ) 7,262

Series 60 operating partnership units ( 6,424,567 and 7,025,089 limited partner operating partnership units outstanding at December 31, 2020 and 2019, respectively)

( 721 ) 1,593

Series 250 operating partnership units ( 3,255,480 and 3,535,197 limited partner operating partnership units outstanding at December 31, 2020 and 2019, respectively)

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Empire State Realty OP, L.P.

Consolidated Statements of Income

Consolidated Statements of Operations

(amounts in thousands, except per unit amounts)

For the Year Ended December 31,

2020 2019 2018

Rental revenue $ 563,071 $ 586,414 $ 493,231

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Real estate taxes 121,923 115,916 110,000

Impairment charges 6,204 — —

Depreciation and amortization 191,006 181,588 168,508

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Total operating income

58,661 154,706 190,857

Other income (expense):

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Loss on early extinguishment of debt ( 86 ) — —

Loss from derivative financial instruments

Income before income taxes

Income tax expense

IPO litigation expense ( 1,165 ) — —

Income (loss) before income taxes ( 29,860 ) 86,719 121,895

Income tax benefit (expense) 6,971 ( 2,429 ) ( 4,642 )

Net income (loss) ( 22,889 ) 84,290 117,253

Private perpetual preferred unit distributions ( 4,197 ) ( 1,743 ) ( 936 )

Net income attributable to common unitholders

Net income (loss) attributable to common unitholders $ ( 27,086 ) $ 82,547 $ 116,317

Total weighted average units:

Net income per unit:

Basic 283,826 297,798 297,258

Diluted 283,837 297,798 297,259

Net income (loss) per unit:

Basic $ ( 0.10 ) $ 0.27 $ 0.39

Diluted $ ( 0.10 ) $ 0.27 $ 0.39

The accompanying notes are an integral part of these financial statements

Empire State Realty OP, L.P.

Consolidated Statements of Comprehensive Income

Consolidated Statements of Comprehensive Income (Loss)

(amounts in thousands)

For the Year Ended December 31,

Other comprehensive loss:

Unrealized loss on valuation of interest rate swap agreements

2020 2019 2018

Net income (loss) $ ( 22,889 ) $ 84,290 $ 117,253

Other comprehensive income (loss):

Unrealized gain (loss) on valuation of interest rate swap agreements

( 19,322 ) ( 21,813 ) ( 2,721 )

Amount reclassified into interest expense 8,870 1,231 1,845

Other comprehensive loss

Comprehensive income

Other comprehensive income (loss) ( 10,452 ) ( 20,582 ) ( 876 )

Comprehensive income (loss) $ ( 33,341 ) $ 63,708 $ 116,377

The accompanying notes are an integral part of these financial statements

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(amounts in thousands)

Series PR Operating Partnership Units

Series ES Operating Partnership Units Limited Partners

Series 60 Operating Partnership Units Limited Partners

Series 250 Operating Partnership Units Limited Partners

General Partner

Limited Partners

Private Perpetual Preferred Units

Operating Partnership Units

Operating Partnership Unitholders

Operating Partnership Units

Operating Partnership Unitholders

Operating Partnership Units

Operating Partnership Unitholders

Operating Partnership Units

Operating Partnership Unitholders

Operating Partnership Units

Operating Partnership Unitholders

Total Capital

Series PR Operating Partnership Units Series ES Operating Partnership Units Limited Partners Series 60 Operating Partnership Units Limited Partners Series 250 Operating Partnership Units Limited Partners

General Partner Limited Partners

Private Perpetual Preferred Units Private Perpetual Preferred Units Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Operating Partnership Units Operating Partnership Unitholders Total Capital

Balance at December 31, 2017 1,560 8,004 161,477 1,168,282 91,760 778,279 33,774 17,132 8,988 3,992 4,410 2,048 1,977,737

Issuance of OP units, net of costs

— — 284 4,749 — — — — — — — — 4,749

Conversion of operating partnership units and Class B shares to ESRT Partner's Capital

— — 13,127 70,779 ( 8,168 ) ( 68,386 ) ( 3,645 ) ( 1,809 ) ( 968 ) ( 423 ) ( 346 ) ( 161 ) —

Equity compensation — — 24 417 2,610 18,368 — — — — — — 18,785

Distributions — ( 936 ) — ( 70,854 ) — ( 36,284 ) — ( 13,161 ) — ( 3,532 ) — ( 1,772 ) ( 126,539 )

Net income — 936 — 65,603 — 33,383 — 12,330 — 3,373 — 1,628 117,253

Other comprehensive income (loss)

— — — ( 494 ) — ( 252 ) — ( 93 ) — ( 25 ) — ( 12 ) ( 876 )

Balance at December 31, 2018 1,560 8,004 174,912 1,238,482 86,202 725,108 30,129 14,399 8,020 3,385 4,064 1,731 1,991,109

Issuance of OP units, net of costs

Issuance of private perpetual preferred in exchange for OP units

4,610 21,147 — — ( 2,488 ) ( 20,613 ) ( 1,632 ) ( 432 ) ( 303 ) ( 63 ) ( 187 ) ( 39 ) —

Conversion of operating partnership units and Class B shares to ESRT Partner's Capital

— — 6,929 27,495 ( 3,208 ) ( 26,323 ) ( 2,687 ) ( 918 ) ( 692 ) ( 171 ) ( 342 ) ( 83 ) —

Equity compensation — — 53 618 882 20,239 — — — — — — 20,857

Distributions — ( 1,743 ) — ( 75,192 ) — ( 34,314 ) — ( 11,736 ) — ( 3,169 ) — ( 1,607 ) ( 127,761 )

Net income — 1,743 — 49,445 — 21,958 — 7,925 — 2,146 — 1,073 84,290

Other comprehensive income (loss)

— — — ( 12,328 ) — ( 5,475 ) — ( 1,976 ) — ( 535 ) — ( 268 ) ( 20,582 )

Balance at December 31, 2019 6,170 29,151 181,894 1,228,520 81,388 680,580 25,810 7,262 7,025 1,593 3,535 807 1,947,913

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Conversion of operating partnership units and Class B shares to ESRT Partner's Capital — — 6,807 29,863 ( 3,751 ) ( 29,803 ) ( 2,175 ) ( 92 ) ( 601 ) 22 ( 280 ) 10 —

Repurchases of common units — — ( 17,279 ) ( 143,713 ) — — — — — — — — ( 143,713 )

Equity compensation — — 143 921 2,815 24,574 — — — — — — 25,495

Distributions — ( 4,197 ) — ( 37,181 ) — ( 16,247 ) — ( 5,264 ) — ( 1,435 ) — ( 723 ) ( 65,047 )

Net income (loss) — 4,197 — ( 16,712 ) — ( 7,043 ) — ( 2,356 ) — ( 650 ) — ( 325 ) ( 22,889 )

Other comprehensive income (loss) — — — ( 6,449 ) — ( 2,718 ) — ( 909 ) — ( 251 ) — ( 125 ) ( 10,452 )

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For the Year Ended December 31,

2020 2019 2018

Cash Flows From Operating Activities

Adjustments to reconcile net income to net cash provided by operating activities:

Net income (loss) $ ( 22,889 ) $ 84,290 $ 117,253

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization 191,006 181,588 168,508

Impairment charges 6,204 — —

Amortization of non-cash items within interest expense 9,482 7,328 7,215

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Settlement of derivative contract

( 20,281 ) ( 11,802 ) —

Loss on early extinguishment of debt

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Short-term investments — 400,000 ( 400,000 )

Additions to building and improvements

Development costs

Net cash provided by (used in) investing activities

Additions to building and improvements and development costs ( 143,118 ) ( 250,256 ) ( 243,023 )

Net cash (used in) provided by investing activities ( 143,118 ) 149,744 ( 643,023 )

The accompanying notes are an integral part of these financial statements

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For the Year Ended December 31,

2020 2019 2018

Cash Flows From Financing Activities

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Repayment of mortgage notes payable ( 3,938 ) ( 3,790 ) ( 266,613 )

Proceeds from senior unsecured notes

Repayment of senior unsecured notes

Proceeds from unsecured senior notes 175,000 — 335,000

Repayment of unsecured senior notes — ( 250,000 ) —

Proceeds from unsecured term loan 175,000 — —

Repayment of unsecured term loan ( 50,000 ) — —

Proceeds from unsecured revolving credit and term loan facility

Proceeds from unsecured revolving credit facility 550,000 — —

Repayment of unsecured revolving credit facility ( 550,000 ) — —

Deferred financing costs ( 10,135 ) — ( 1,980 )

Net proceeds from the issuance of operating partnership units — — 4,749

Repurchases of common units ( 143,713 ) — —

Private perpetual preferred unit distributions ( 4,197 ) ( 1,743 ) ( 936 )

Distributions ( 60,850 ) ( 126,018 ) ( 125,603 )

Net cash (used in) provided by financing activities

Net cash provided by (used in) financing activities 257,167 ( 381,551 ) 104,617

Net increase (decrease) in cash and cash equivalents and restricted cash 296,342 784 ( 259,384 )

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Restricted cash at beginning of period

37,651 65,832 65,853

Cash and cash equivalents and restricted cash at beginning of period $ 271,597 $ 270,813 $ 530,197

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Derivative instruments at fair values included in accounts payable and accrued expenses

8,849 13,330 5,243

Conversion of operating partnership units and Class B shares to Class A shares 29,863 27,495 70,779

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Nine of these properties are located in the midtown Manhattan market and encompass in the aggregate approximately 7.6 million rentable square feet of office space, including the Empire State Building.

Our Manhattan office properties also contain an aggregate of 511,984 rentable square feet of premier retail space on their ground floor and/or lower levels.

Our Manhattan office properties also contain an aggregate of 0.5 million rentable square feet of premier retail space on their ground floor and/or lower levels.

Our remaining five office properties are located in Fairfield County, Connecticut and Westchester County, New York, encompassing in the aggregate approximately 1.8 million rentable square feet.

The majority of square footage for these five properties is located in densely populated metropolitan communities with immediate access to mass transportation.

Additionally, we have entitled land at the Stamford Transportation Center in Stamford, Connecticut, adjacent to one of our office properties, that will support the development of an approximately 415,000 rentable square foot office building and garage, which we refer to herein as Metro Tower.

As of December 31, 2019 , our portfolio also included four standalone retail properties located in Manhattan and two standalone retail properties located in the city center of Westport, Connecticut, encompassing 205,595 rentable square feet in the aggregate.

Additionally, we have entitled land at the Stamford Transportation Center in Stamford, Connecticut, adjacent to one of our office properties, that will support the development of an approximately 0.4 million rentable square foot office building and garage, which we refer to herein as Metro Tower.

As of December 31, 2020, our portfolio also included four standalone retail properties located in Manhattan and two standalone retail properties located in the city center of Westport, Connecticut, encompassing 0.2 million rentable square feet in the aggregate.

We have two entities that elected, together with ESRT, to be treated as taxable REIT subsidiaries, or TRSs, of ESRT.

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Summary of Significant Accounting Policies

There have been no material changes to the summary of significant accounting policies included in the section entitled "Summary of Significant Accounting Policies" in our December 31, 2018 Annual Report on Form 10-K, with the exception of the adoption of Financial Accounting Standards Board ("FASB") Topic 842, Lease Accounting on January 1, 2019.

We adopted FASB Topic 842, Lease Accounting, using the modified retrospective approach on January 1, 2019 and elected to apply the transition provisions of the standard at adoption.

As such, the prior period amounts presented under Topic 840 were not restated to conform with the 2019 presentation.

We adopted the practical expedient in Topic 842, which allows us to avoid separating lease and non-lease rental income.

Consequently, all rental income earned pursuant to tenant leases in 2019 is reflected as one category, “Rental Revenue,” in the 2019 consolidated statement of income.

Topic 842 also requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

The adoption of this standard resulted in the recognition of right-of-use assets and lease liabilities for our operating leases on our balance sheet of approximately $ 29.5 million .

In addition, under Topic 842, lessors may only capitalize incremental direct leasing costs.

As a result, we no longer capitalize our non-contingent leasing costs and instead expense these costs as incurred.

These costs totaled $ 5.1 million for the year ended December 31, 2019.

Basis of Presentation and Principles of Consolidation

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The preparation of the consolidated financial statements in accordance with GAAP requires management to use estimates and assumptions that in certain circumstances affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses.

Significant items subject to such estimates and assumptions include allocation of the purchase price of acquired real estate properties among tangible and intangible assets, determination of the useful life of real estate properties and other long-lived assets, valuation and impairment analysis of commercial real estate properties, goodwill, right-of-use-assets and other long-lived assets, estimate of tenant expense reimbursements, valuation of derivative instruments, senior unsecured notes, mortgage notes payable, unsecured notes, unsecured revolving credit and term loan facilities, and equity based compensation.

Significant items subject to such estimates and assumptions include allocation of the purchase price of acquired real estate properties among tangible and intangible assets, determination of the useful life of real estate properties and other long-lived assets, valuation and impairment analysis of commercial real estate properties, goodwill, right-of-use-assets and other long-lived assets, estimate of tenant expense reimbursements, valuation of the allowance for doubtful accounts, and valuation of derivative instruments, ground lease liabilities, senior unsecured notes, mortgage notes payable, unsecured revolving credit and term loan facilities, and equity based compensation.

These estimates are prepared using management’s best judgment, after considering past, current, and expected events and economic conditions.

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We account for all of our leases as operating leases.

Deferred rent receivables, including free rental periods and leasing arrangements allowing for increased base rent payments, are accounted for in a manner that provides an even amount of fixed

lease revenues over the respective non-cancellable lease terms.

Deferred rent receivables, including free rental periods and leasing arrangements allowing for increased base rent payments, are accounted for in a manner that provides an even amount of fixed lease revenues over the respective non-cancellable lease terms.

Differences between rental income recognized and amounts due under the respective lease agreements are recognized as an increase or decrease to deferred rent receivables.

1 unchanged sentence

In some leases, in lieu of paying additional rent based upon increases in building operating expenses, the tenant will pay additional rent based upon increases in an index such as the Consumer Price Index over the index value in effect during a base year, or contain fixed percentage increases over the base rent to cover escalations.

For Coronavirus 2019 (“COVID-19”) pandemic related rent deferral agreements, we will generally elect to record rental revenue and a receivable during the deferral period.

We recognize rental revenue of acquired in-place above- and below-market leases at their fair values over the terms of the respective leases, including, for below-market leases, fixed option renewal periods, if any.

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Advertising and marketing costs are expensed as incurred.

The expense for the years ended December 31, 2019 , 2018, and 2017 was $ 9.7 million , $ 8.9 million and $ 7.6 million , respectively, and is included within operating expenses in our consolidated statements of income.

The expense for the years ended December 31, 2020, 2019, and 2018 was $ 7.4 million, $ 9.7 million and $ 8.9 million, respectively, and is included within operating expenses in our consolidated statements of operations.

Real Estate Properties and Related Intangible Assets

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Costs include construction costs, professional services such as architectural and legal costs, capitalized interest and direct payroll costs.

begin capitalization when the project is probable.

We begin capitalization when the project is probable.

The assets relating to the project are stated at cost and are not depreciated.

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Capitalization of interest ceases when the asset is ready for its intended use, which is generally near the date that a certificate of occupancy is obtained.

Total capitalized interest for the years ended December 31, 2019, 2018 and 2017 was $ 1.4 million , $ 1.6 million and $ 0.5 million , respectively.

Total capitalized interest for the years ended December 31, 2019 and 2018 was $ 1.4 million and $ 1.6 million, respectively.

There was no capitalized interest for the year ended December 31, 2020.

Depreciation and amortization are computed using the straight-line method for financial reporting purposes.

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The fair value of tangible assets acquired is determined by valuing the property as if it were vacant, applying methods similar to those used by independent appraisers of income-producing property.

The resulting value is then allocated to land, buildings and improvements, and tenant improvements based on our determination of the fair value of these assets.

The resulting value is then allocated to land, buildings and improvements, and tenant

improvements based on our determination of the fair value of these assets.

The assumptions used in the allocation of fair values to assets acquired are based on our best estimates at the time of evaluation.

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Non-amortizing intangible assets, such as trade names and trademarks, are subject to an annual impairment test based on fair value and amortizing intangible assets are tested whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

In compliance with the requirements of authorities, we closed the Empire State Building Observatory on March 16, 2020 due to the COVID-19 pandemic and it remained closed until the 86th floor observation deck was reopened on July 20, 2020.

The 102nd observation deck was reopened on August 24, 2020.

The closure of our Observatory and subsequent reopening under international, national, and local travel restrictions and quarantines caused us during the quarter to choose to perform an impairment test related to goodwill.

We engaged a third-party valuation consulting firm to perform the valuation process.

The analysis used a combination of the discounted cash flow method (a form of the income approach) utilizing Level 3 unobservable inputs and the guideline company method (a form of the market approach).

Significant assumptions under the former included revenue and cost projections, weighted average cost of capital, long-term growth rate and income tax considerations while the latter included guideline company enterprise values, revenue multiples and control premium rates.

Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred.

Based upon the results of the goodwill impairment test of the stand-alone Observatory reporting unit, which is after the intercompany rent expense paid to the Real Estate reporting unit, we determined that the fair value of the Observatory reporting unit exceeded its carrying value by less than 5.0 %.

Many of the factors employed in determining whether or not goodwill is impaired are outside of our control and it is reasonably likely that

assumptions and estimates will change in future periods.

We will continue to assess the impairment of the Observatory reporting unit goodwill going forward and that continued assessment may again utilize a third-party valuation consulting firm.

Fair value is a market-based measurement, not an entity-specific measurement, and should be determined based on the assumptions that market participants would use in pricing the asset or liability.

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Cash and cash equivalents, restricted cash, short term investments, tenant and other receivables, prepaid expenses and other assets, deferred revenue, tenant security deposits, accounts payable and accrued expenses carrying values approximate their fair values due to the short term maturity of these instruments.

The fair value of our senior unsecured notes - exchangeable was derived from quoted prices in active markets and is classified as Level 2 since trading volumes are low.

The fair value of derivative instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative.

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As a result, all of our derivatives were classified as Level 2 of the fair value hierarchy.

The fair value of our mortgage notes payable, senior unsecured notes - Series A, B, C, D, E and F, unsecured term loan facility and ground lease liabilities which are determined using Level 3 inputs, are estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made to us.

The fair value of our mortgage notes payable, senior unsecured notes - Series A, B, C, D, E, F, G and H, and unsecured term loan facilities which are determined using Level 3 inputs, are estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made to us.

Derivative Instruments

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Share-based compensation for time-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the shorter of (i) the stated vesting period, which is generally three or four years, or (ii) the period from the date of grant to the date the employee becomes retirement eligible, which may occur upon grant.

An employee is retirement eligible when the employee attains the (i) age of 60 and (ii) the date on which the employee has first completed ten years of continuous service with ESRT or its affiliates.

An employee is retirement eligible when the employee attains the (i) age of 60 or 65, as applicable, and (ii) the date on which the employee has first completed ten years of continuous service with ESRT or its affiliates.

The determination of fair value of these awards is subjective and involves significant estimates and assumptions including expected volatility of ESRT stock, expected dividend yield, expected term, and assumptions of whether these awards will achieve parity with other operating partnership units or achieve performance thresholds.

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We account for intersegment sales and rent as if the sales or rent were to third parties, that is, at current market prices.

Reclassification

Certain prior year balances have been reclassified to conform to our current year presentation.

The 2017 balance of other revenues and fees has been reclassified to separately present lease termination fees and interest income and conform to our current year presentation.

Recently Issued or Adopted Accounting Standards

During April 2020, the Financial Accounting Standards Board ("FASB") staff issued a question and answer document (the “Lease Modification Q&A”) focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 global pandemic.

Under existing lease guidance, the entity would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant, which would be accounted for under the lease modification framework, or if a lease concession was under the enforceable rights and obligations that existed in the original lease, which would be accounted for outside the lease modification framework.

The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease.

This election is only available when total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease.

During March 2020, the FASB issued Accounting Standards Update ("ASU") 2020-04, Reference Rate Reform (Topic 848).

ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

During the first quarter 2020, we elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

During January 2017, the FASB issued ASU No.

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Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017.

We do not anticipate the adoption of this new accounting standard to have a material impact on our consolidated financial statements.

We adopted this standard and related amendments on January 1, 2020 and such adoption did not have a material impact our consolidated financial statements.

During June 2016, the FASB issued ASU No.

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The amendments must be adopted through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified retrospective approach).

We do not anticipate the adoption of these new accounting standards to have a material impact on our consolidated financial statements.

During February 2016, the FASB issued ASU No.

2016-02, Leases (Topic 842), which requires that a lessee recognize in the statement of financial position a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term.

For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities.

In addition, lessors may only capitalize incremental direct leasing costs.

Subsequent amendments to ASU No.

2016-02 also provide lessors with a practical expedient, by class of underlying asset, to not separate nonlease components from the associated lease component provided that (1) the timing and pattern of transfer are the same for the nonlease components and associated lease component and (2) the lease component, if accounted separately, would be classified as an operating lease.

We adopted this standard and related amendments on January 1, 2019 and elected the available practical expedients.

Such adoption resulted in the recognition of right-of-use assets and lease liabilities for our operating leases on our balance sheet of approximately $ 29.5 million .

We adopted these standards on January 1, 2020 and such adoption did not have a material impact our consolidated financial statements.

Deferred Costs, Acquired Lease Intangibles and Goodwill

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Acquired above-market leases 40,398 49,213

425,639 448,542

accumulated amortization ( 223,918 ) ( 224,598 )

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Acquired below-market ground leases, net

$ 344,735 $ 352,566

Acquired below-market leases $ ( 78,451 ) $ ( 100,472 )

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For the year ending:

Future Ground Rent Amortization

Future Amortization Expense

Future Rental Revenue

Future Ground Rent Amortization Future Amortization Expense Future Rental Revenue

2021 $ 7,831 $ 10,977 $ 2,850

2022 7,831 10,175 3,169

2023 7,831 9,622 3,129

2024 7,831 7,757 2,566

2025 7,831 6,652 2,558

Thereafter 305,580 16,740 4,082

$ 344,735 $ 61,923 $ 18,354

As of December 31, 2020, we had goodwill of $ 491.5 million.

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for an amount in excess of their net tangible and identified intangible assets and liabilities and as a result we recorded goodwill related to the transaction.

allocated $ 227.5 million to the observatory operations of the Empire State Building, $ 250.8 million to Empire State Building, and $ 13.2 million to 501 Seventh Avenue.

We performed an annual review of goodwill for impairment and concluded there was no impairment of goodwill.

Our methodology to review goodwill impairment, which includes a significant amount of judgment and estimates, provides a reasonable basis to determine whether impairment has occurred.

However, many of the factors employed in determining whether or not goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods.

Goodwill was allocated $ 227.5 million to the observatory operations of the Empire State Building, $ 250.8 million to Empire State Building, and $ 13.2 million to 501 Seventh Avenue.

The 102nd observation deck was reopened on August 24, 2020.

The closure of our Observatory and subsequent

reopening under international, national, and local travel restrictions and quarantines caused us during the quarter to choose to perform an impairment test related to goodwill.

We engaged a third-party valuation consulting firm to perform the valuation process.

Our methodology to review goodwill impairment, which included a significant amount of judgment and estimates, provided a reasonable basis to determine whether impairment had occurred.

Many of the factors employed in determining whether or not goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods.

We will continue to assess the impairment of the Observatory reporting unit goodwill going forward and that continued assessment may again utilize a third-party valuation consulting firm.

Debt consisted of the following as of December 31, 2020 and 2019 (amounts in thousands):

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Principal Balance as

of December 31, 2019

Principal Balance as

of December 31, 2018

of December 31, 2020 Principal Balance as

of December 31, 2019 Stated

Rate Effective

Fixed rate mortgage debt

Metro Center $ 87,382 $ 89,650 3.59 % 3.68 % 11/5/2024

10 Union Square 50,000 50,000 3.70 % 3.97 % 4/1/2026

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First Stamford Place (3)

180,000 180,000 4.28 % 4.78 % 7/1/2027

1010 Third Avenue and 77 West 55th Street 37,477 38,251 4.01 % 4.23 % 1/5/2028

250 West 57th Street 180,000 — 2.83 % 3.27 % 12/1/2030

10 Bank Street 32,025 32,920 4.23 % 4.36 % 6/1/2032

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Total mortgage debt 786,884 610,821

Senior unsecured notes - exchangeable

Senior unsecured notes:

Series A 100,000 100,000 3.93 % 3.96 % 3/27/2025

Series B 125,000 125,000 4.09 % 4.12 % 3/27/2027

Series C 125,000 125,000 4.18 % 4.21 % 3/27/2030

Series D 115,000 115,000 4.08 % 4.11 % 1/22/2028

Series E 160,000 160,000 4.26 % 4.27 % 3/22/2030

Series F 175,000 175,000 4.44 % 4.45 % 3/22/2033

Series G 100,000 — 3.61 % 4.89 % 3/17/2032

Series H 75,000 — 3.73 % 5.00 % 3/17/2035

Unsecured revolving credit facility (4)

— — LIBOR plus 1.10 %

— % 8/29/2021

Unsecured term loan facility (4)

215,000 265,000 LIBOR plus 1.20 %

3.84 % 3/19/2025

Unsecured term loan facility (4)

175,000 — LIBOR plus 1.50 %

3.04 % 12/31/2026

Total principal 2,151,884 1,675,821

Unamortized discount

Deferred financing costs, net ( 15,235 ) ( 7,247 )

Total $ 2,136,649 $ 1,668,574

_____________

The effective rate is the yield as of December 31, 2019, including the effects of debt issuance costs.

(1) The effective rate is the yield as of December 31, 2020, including the effects of debt issuance costs and interest rate swaps.

(2) Pre-payment is generally allowed for each loan upon payment of a customary pre-payment penalty.

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(4) At December 31, 2020, we were in compliance with all debt covenants.

At December 31, 2019, the unsecured revolving credit facility bears a floating rate at 30 day LIBOR plus 1.10 % .

The rate at December 31, 2019 was 2.86 % .

The unsecured term loan facility bears a floating rate at 30 day LIBOR plus 1.20 % .

Pursuant to an interest rate swap agreement, the LIBOR rate is fixed at 2.1485 % through maturity.

The rate at December 31, 2019 was 3.35 % .

Principal Payments

Aggregate required principal payments at December 31, 2020 are as follows (amounts in thousands):

Year Amortization Maturities Total

2021 $ 4,090 $ — $ 4,090

2022 5,628 — 5,628

2023 7,876 — 7,876

2024 7,958 77,675 85,633

2025 5,826 315,000 320,826

Thereafter 20,084 1,707,747 1,727,831

Total principal maturities $ 51,462 $ 2,100,422 $ 2,151,884

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Amortization expense related to deferred financing costs was $ 4.1 million, $ 3.8 million, and $ 4.1 million, for the years ended December 31, 2020, 2019 and 2018, respectively, and was included in interest expense.

Unsecured Revolving Credit and Term Loan Facility

The senior unsecured revolving credit and term loan facility (the “Facility”) has a principal amount of up to $ 1.365 billion which consists of a $ 1.1 billion revolving credit facility and a $ 265.0 million term loan facility.

We may request the Facility be increased through one or more increases in the revolving credit facility or one or more increases in the term loan facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $ 1.75 billion .

Mortgage Debt

During November 2020, we closed on a $ 180.0 million mortgage loan for 250 West 57th Street.

This new interest-only loan bears a fixed interest rate of 2.83 % and matures in December 2030.

Unsecured Revolving Credit and Term Loan Facilities

On March 19, 2020, we entered into an amendment to an existing credit agreement with the lenders party thereto, Bank of America, N.A., as administrative agent, and Bank of America, Wells Fargo Bank, National Association and Capital One, National Association, as the letter of credit issuers party thereto.

The amendment amends the amended and restated senior unsecured revolving credit and term loan facility, entered into as of August 29, 2017, with Bank of America, N.A., as administrative agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Wells Fargo Securities, LLC as Joint Lead Arrangers and Joint Bookrunners, Wells Fargo, National Association and Capital One, National Association, as co-syndication agents, and the lenders party thereto.

This new amended and restated senior unsecured revolving credit and term loan facility (the "Credit Facility") is in the original principal amount of up to $ 1.315 billion, which consists of a $ 1.1 billion revolving credit facility and a $ 215.0 million term loan facility.

We borrowed the term loan facility in full at closing.

We may request the Credit Facility be increased through one or more increases in the revolving credit facility or one or more increases in the term loan facility or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $ 1.75 billion.

As of December 31, 2020, we had no borrowings under the revolving credit facility and $ 215.0 million outstanding under the term loan facility.

The initial maturity of the unsecured revolving credit facility is August 2021.

We have the option to extend the initial term for up to two additional 6 -month periods, subject to certain conditions, including the payment of an extension fee equal to

0.0625 % and 0.075 % of the then outstanding commitments under the unsecured revolving credit facility on the first and the second extensions, respectively.

The term loan facility matures on August 2022.

We may prepay the loans under the Facility at any time, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of Eurodollar Rate borrowings.

The Facility includes the following financial covenants:

(i) maximum leverage ratio of total indebtedness to total asset value (as defined in the agreement) of the loan parties and their consolidated subsidiaries will not exceed 60 % , (ii) consolidated secured indebtedness will not exceed 40 % of total asset value, (iii) tangible net worth will not be less than $ 1.2 billion plus 75 % of net equity proceeds received by us (other than proceeds received within ninety (90) days after the redemption, retirement or repurchase of ownership or equity interests in us up to the amount paid by us in connection with such redemption, retirement or repurchase, where, the net effect is that we shall not have increased our net worth as a result of any such proceeds), (iv) adjusted EBITDA (as defined in the Facility) to consolidated fixed charges will not be less than 1.50 x, (v) the aggregate net operating income with respect to all unencumbered eligible properties to the portion of interest expense attributable to unsecured indebtedness will not be less than 1.75 x, and (vi) the ratio of total unsecured indebtedness to unencumbered asset value will not exceed 60 % .

The Facility contains customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates, and requires certain customary financial reports.

The Facility contains customary

events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control (defined in the agreement for the Facility).

As of December 31, 2019 , we were in compliance with the covenants under the Facility.

We have the option to extend the initial term for up to two additional 6 -month periods, subject to certain conditions, including the payment of an extension fee equal to 0.0625 % and 0.075 % of the then outstanding commitments under the unsecured revolving credit facility on the first and the second extensions, respectively.

We recently began a process to recast the credit facility and exercise an extension option.

The term loan facility matures in March 2025.

We may prepay the loans under the Credit Facility at any time in whole or in part,

subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of Eurodollar Rate borrowings.

On March 19, 2020, we entered into a senior unsecured term loan facility (the “Term Loan Facility”) with Wells Fargo Bank, National Association, as administrative agent, Wells Fargo Securities, LLC as sole bookrunner, Wells Fargo Securities, LLC, Capital One, National Association, U.S.

Bank National Association and SunTrust Robinson Humphrey, Inc.

as Joint Lead Arrangers, Capital One, National Association, as syndication agent, U.S.

Bank National Association and Truist Bank, as documentation agents, and the lenders party thereto.

The Term Loan Facility is in the original principal amount of $ 175 million which we borrowed in full at closing.

We may request the Term Loan Facility be increased through one or more increases or the addition of new pari passu term loan tranches, for a maximum aggregate principal amount not to exceed $ 225 million.

As of December 31, 2020, our borrowings amounted to $ 175.0 million under the Term Loan Facility.

The Term Loan Facility matures on December 31, 2026.

We may prepay loans under the Term Loan Facility at any time in whole or in part, subject to reimbursement of the lenders’ breakage and redeployment costs in the case of prepayment of Eurodollar rate borrowings and, if the prepayment occurs on or before December 31, 2021, a prepayment fee.

If the prepayment occurs on or prior to December 31, 2020, the prepayment fee is equal to 2.0 % of the principal amount prepaid, and if the prepayment occurs after December 31, 2020 but on or prior to December 31, 2021, the prepayment fee is equal to 1.0 % of the principal amount prepaid.

The terms of both the Credit Facility and the Term Loan Facility include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports.

It also requires compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio.

The agreement also contains customary events of default (subject in certain cases to specified cure periods), including but not limited to non-payment, breach of covenants, representations or warranties, cross defaults, bankruptcy or other insolvency events, judgments, ERISA events, invalidity of loan documents, loss of real estate investment trust qualification, and occurrence of a change of control.

As of December 31, 2020, we were in compliance with the covenants under the Credit Facility and the Term Loan Facility.

Senior Unsecured Notes Exchangeable

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On August 15, 2019, we settled the principal amount of the 2.625 % Exchangeable Senior Notes in cash.

For the years ended December 31, 2019 , 2018 and 2017, total interest expense related to the 2.625 % Exchangeable Senior Notes was $ 6.1 million , $ 9.9 million and $ 9.9 million , respectively, consisting of (i) contractual interest expense of $ 4.1 million , $ 6.6 million and $ 6.6 million , respectively, (ii) additional non-cash interest expense of $ 1.6 million , $ 2.7 million and $ 2.7 million , respectively, related to the accretion of the debt discount, and (iii) amortization of deferred financing costs of $ 0.4 million , $ 0.6 million and $ 0.6 million , respectively.

For the years ended December 31, 2019 and 2018, total interest expense related to the 2.625 % Exchangeable Senior Notes was $ 6.1 million and $ 9.9 million, respectively, consisting of (i) contractual interest expense of $ 4.1 million and $ 6.6 million, respectively, (ii) additional non-cash interest expense of $ 1.6 million and $ 2.7 million, respectively, related to the accretion of the debt discount, and (iii) amortization of deferred financing costs of $ 0.4 million and $ 0.6 million, respectively.

Senior Unsecured Notes

The terms of the Series A, B, C, D, E, and F senior notes agreements include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports.

It also requires compliance with financial ratios including a maximum leverage ratio, a maximum secured leverage ratio, a minimum amount of tangible net worth, a minimum fixed charge coverage ratio, a minimum unencumbered interest coverage ratio, and a maximum unsecured leverage ratio.

On March 17, 2020, we entered into an agreement to issue and sell an aggregate $ 175 million of senior unsecured notes, consisting of (a) $ 100 million aggregate principal amount of 3.61 % Series G Senior Notes due March 17, 2032 (the “Series G Notes”) and (b) $ 75 million aggregate principal amount of 3.73 % Series H Senior Notes due March 17, 2035 (the “Series H Notes”).

The issue price for the Series G and H Notes was 100 % of the aggregate principal amount thereof.

The terms of the Series A, B, C, D, E, F, G and H Notes agreements include customary covenants, including limitations on liens, investment, distributions, debt, fundamental changes, and transactions with affiliates and require certain customary financial reports.

transactions and loss of real estate investment trust qualification.

As of December 31, 2020, we were in compliance with the covenants under the outstanding Senior Unsecured Notes.

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If we had breached any of these provisions at December 31, 2020, we could have been required to settle our obligations under the agreements at their termination value of $ 8.9 million.

As of December 31, 2019 and 2018, we had interest rate LIBOR swaps with an aggregate notional value of $ 390.0 million and $ 515.0 million , respectively, which were designated as cash flow hedges of interest rate risk.

We are hedging variability in future cash flows associated with our existing variable-rate term loan facility and with a forecast refinancing of our exchangeable senior notes.

As of December 31, 2020 and 2019, we had interest rate LIBOR swaps with an aggregate notional value of $ 265.0 million and $ 390.0 million, respectively.

The notional value does not represent exposure to credit, interest rate or market risks.

As of December 31, 2019, the fair value of these derivative instruments amounted to ( $ 13.3 million ) which is included in accounts payable and accrued expenses on the consolidated balance sheet.

As of December 31, 2018, the fair value of these derivative instruments amounted to $ 2.5 million which is included in prepaid expenses and other assets and ( $ 5.2 million ) which is included in accounts payable and accrued expenses on the consolidated balance sheet.

For the years ended December 31, 2019 and 2018, a net unrealized loss of $ 20.6 million and $ 0.9 million , respectively, is reflected in the consolidated statements of comprehensive income (loss) relating to both active and terminated cash flow hedges of interest rate risk.

As of December 31, 2020 and 2019, the fair value of our derivative instruments amounted to ($ 8.8 million) and ($ 13.3 million), respectively, which is included in accounts payable and accrued expenses on the consolidated balance sheet.

These interest rate swaps have been designated as cash flow hedges and hedge the variability in future cash flows associated with our existing variable-rate term loan facilities.

As of December 31, 2020 and 2019, our cash flow hedges are deemed highly effective and for the years ended December 31, 2020 and 2019, net unrealized losses of $ 10.5 million and $ 20.6 million, respectively, are reflected in the consolidated statements of comprehensive income (loss) relating to both active and terminated cash flow hedges of interest rate risk.

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the debt.

We estimate that $ 11.5 million net loss of the current balance held in accumulated other comprehensive loss will be reclassified into interest expense within the next 12 months.

For the year ended December 31, 2017, we recognized a loss of $ 0.3 million from derivative financial instruments, incurred in connection with the partial termination and re-designation of related cash flow hedges.

The table below summarizes the terms of agreements and the fair values of our derivative financial instruments as of December 31, 2020 and 2019 (dollar amounts in thousands):

December 31, 2019

December 31, 2018

Notional Amount

Effective Date

Expiration Date

Interest rate swap

1 Month LIBOR

August 31, 2017

August 24, 2022

Interest rate swap

3 Month LIBOR

Interest rate swap

3 Month LIBOR

December 31, 2020 December 31, 2019

Derivative Notional Amount Receive Rate Pay Rate Effective Date Expiration Date Asset Liability Asset Liability

Interest rate swap $ 265,000 1 Month LIBOR 2.1485 % August 31, 2017 August 24, 2022 $ — $ ( 8,849 ) $ — $ ( 4,247 )

Interest rate swap 125,000 3 Month LIBOR 2.9580 % July 1, 2019 July 1, 2026 — — — ( 9,083 )

$ — $ ( 8,849 ) $ — $ ( 13,330 )

During the year ended December 31, 2020, we terminated the $ 125.0 million swap and paid a settlement fee of $ 20.3 million.

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on accumulated other comprehensive income (loss) for the years ended December 31, 2020, 2019 and 2018 (amounts in thousands):

Effects of Cash Flow Hedges

December 31, 2019

Effects of Cash Flow Hedges December 31, 2020

December 31, 2019

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The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the consolidated statements of income for the years ended December 31, 2020, 2019 and 2018 (amounts in thousands):

Effects of Cash Flow Hedges

December 31, 2019

Effects of Cash Flow Hedges December 31, 2020

December 31, 2019

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statements of income in which the effects of cash flow hedges are recorded

$ ( 89,907 ) $ ( 79,246 ) $ ( 79,623 )

Amount of gain (loss) reclassified from accumulated other comprehensive income (loss) into interest expense ( 8,870 ) ( 1,231 ) ( 1,845 )

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December 31, 2020

Carrying Value

Estimated Fair Value

Carrying Value Estimated Fair Value

Total Level 1 Level 2 Level 3

Interest rate swaps included in accounts payable and accrued expenses $ 8,849 $ 8,849 $ — $ 8,849 $ —

Mortgage notes payable 775,929 808,294 — — 808,294

Senior unsecured notes - Series A, B, C, D, E and F

Unsecured term loan facility

Ground lease liabilities

Senior unsecured notes - Series A, B, C, D, E, F, G and H 973,159 1,039,857 — — 1,039,857

Unsecured term loan facilities 387,561 390,000 — — 390,000

December 31, 2019

Carrying Value

Estimated Fair Value

Interest rate swaps included in prepaid expenses and other assets

Carrying Value Estimated Fair Value

Total Level 1 Level 2 Level 3

Interest rate swaps included in accounts payable and accrued expenses 13,330 13,330 — 13,330 —

Mortgage notes payable 605,542 629,609 — — 629,609

Senior unsecured notes - Exchangeable

Senior unsecured notes - Series A, B, C, D, E and F 798,392 843,394 — — 843,394

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The leases provide for base monthly rentals and reimbursements for real estate taxes, escalations linked to the consumer price index or common area maintenance known as operating expense escalation.

Operating expense reimbursements are reflected in our December 31, 2019 consolidated statement of income as rental revenue and in our December 31, 2018 consolidated statement of income as tenant expense reimbursement.

Operating expense reimbursements are reflected in our December 31, 2020 and 2019 consolidated statements of operations as rental revenue and in our December 31, 2018 consolidated statement of operations as tenant expense reimbursement.

Rental revenue includes fixed and variable payments.

Fixed payments primarily relate to base rent and variable payments primarily relate to tenant expense reimbursements for certain property operating costs.

The components of rental revenue for the year ended December 31, 2019 are as follows (amounts in thousands):

For the Year Ended December 31, 2019

The components of rental revenue for the year ended December 31, 2020 and 2019 are as follows (amounts in thousands):

Year Ended December 31,

Fixed payments $ 496,515 $ 510,799

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Total rental revenue $ 563,071 $ 586,414

As of December 31, 2019 and 2018, we were entitled to the following future contractual minimum lease payments (excluding operating expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2038 (amounts in thousands):

As of December 31, 2020, we were entitled to the following future contractual minimum lease payments (excluding operating expense reimbursements) on non-cancellable operating leases to be received which expire on various dates through 2038 (amounts in thousands):

2021 $ 492,574

Thereafter 1,846,423

The above future minimum lease payments exclude tenant recoveries, amortization of deferred rent receivables and the net accretion of above-below-market lease intangibles.

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The weighted average remaining lease term as of December 31, 2020 was 49.3 years.

As of December 31, 2019 and 2018, the following table summarizes our future minimum lease payments with amounts for 2019 discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):

Total undiscounted lease payments

As of December 31, 2020, the following table summarizes our future minimum lease payments with the amounts discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):

Thereafter 65,262

Total undiscounted lease payments 72,852

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We believe that the costs and related liabilities, if any, which may result from such actions will not materially affect our consolidated financial position, operating results or liquidity.

As previously disclosed, in October 2014, 12 former investors in Empire State Building Associates L.L.C.

As previously disclosed, in October 2014, 12 former investors (the "Claimants") in Empire State Building Associates L.L.C.

(“ESBA”), which prior to the initial public offering of our company (the "Offering"), owned the fee title to the Empire State Building, filed an arbitration with the American Arbitration Association against Peter L.

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Malkin, Thomas N.

Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA, as respondents.

Keltner, Jr., and our subsidiary ESRT MH Holdings LLC, the former supervisor of ESBA, (the "Respondents").

The statement of claim (also filed later in federal court in New York for the expressed purpose of tolling the statute of limitations) alleges breach of fiduciary duty and related claims in connection with the Offering and formation transactions and seeks monetary damages and declaratory relief.

These investors had opted out of a prior class action bringing similar claims that was settled with court approval.

The respondents filed an answer and counterclaims.

Claimants had opted out of a prior class action bringing similar claims that was settled with court approval.

Respondents filed an answer and counterclaims.

In March 2015, the federal court action was stayed on consent of all parties pending the arbitration.

Arbitration hearings for a select number of sessions started in May 2016 and concluded in August 2018.

Post-hearing briefing is currently scheduled to be completed by April 2020.

The respondents believe the allegations in the arbitration are entirely without merit, and they intend to continue to defend them vigorously.

Arbitration hearings started in May 2016 and concluded in August 2018.

On August 26, 2020, the arbitration panel issued an award that denied all Claimants’ claims with one exception, on which it awarded Claimants approximately $ 1.2 million, inclusive of seven years of interest through October 2, 2020.

This amount was recorded as an IPO litigation expense in the consolidated statement of operations for the nine months ended September 30, 2020.

Respondents believe that such award in favor of the Claimants is entirely without merit, and have sought vacatur of that portion of the award.

In addition, certain of the Claimants have stated in the federal court action that they intend to pursue claims in that case against Respondents.

Respondents believe that any such claims are meritless.

Pursuant to indemnification agreements which were made with our directors, executive officers and chairman emeritus as part of our formation transactions, Anthony E.

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We may require tenants to provide some form of credit support such as corporate guarantees and/or other financial guarantees and we perform ongoing credit evaluations of tenants.

Although the tenants operate in a variety of industries, to

the extent we have a significant concentration of rental revenue from any single tenant, the inability of that tenant to make its lease payments could have an adverse effect on our company.

Although the tenants operate in a variety of industries, to the extent we have a significant concentration of rental revenue from any single tenant, the inability of that tenant to make its lease payments could have an adverse effect on our company.

Major Customers and Other Concentrations

For the year ended December 31, 2020, other than two tenants who accounted for 6.9 % and 3.5 % of rental revenues, no other tenant in our portfolio accounted for more than 2.0% of rental revenues.

For the year ended December 31, 2019, other than three tenants who accounted for 6.8 %, 3.2 % and 3.2 % of rental revenues, no other tenant in our portfolio accounted for more than 2.0% of rental revenues.

For the year ended December 31, 2018, other than five tenants who accounted for 6.0 %, 3.1 %, 2.9 %, 2.0 % and 2.0 % of rental revenues, no other tenant in our portfolio accounted for more than 2.0% of rental revenues.

For the year ended December 31, 2017, other than five tenants who accounted for 6.3 % , 3.2 % , 2.9 % , 2.1 % and 2.0 % of rental revenues, no other tenant in our portfolio accounted for more than 2.0% of rental revenues.

For the years ended December 31, 2020, 2019 and 2018, the six properties listed below accounted for the indicated percentage of total rental revenues.

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Year Ended December 31,

2020 2019 2018

Empire State Building 32.8 % 32.9 % 31.9 %

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Multiemployer Pension and Defined Contribution Plans

We contribute to a number of multiemployer defined benefit pension plans under the terms of collective bargaining

agreements that cover our union-represented employees.

We contribute to a number of multiemployer defined benefit pension plans under the terms of collective bargaining agreements that cover our union-represented employees.

The risks of participating in these multiemployer plans are different from single-employer plans in the following respects:

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For the Year Ended December 31,

Benefit Plan 2020 2019 2018

Pension Plans (pension and annuity)*

$ 2,383 $ 3,418 $ 3,327

Health Plans** 6,873 10,055 9,373

Other*** 416 641 814

Total plan contributions

$ 9,672 $ 14,114 $ 13,514

* Pension plans include $ 0.8 million, $ 1.0 million and $ 1.0 million for the years ended 2020, 2019 and 2018, respectively, to multiemployer plans not discussed above.

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Other includes $ 0.3 million, $ 0.4 million and $ 0.2 million for the years ended 2020, 2019 and 2018, respectively, in connection with other multiemployer plans not discussed above.

Benefit plan contributions are included in operating expenses in our consolidated statements of income.

The decrease in plan contributions in 2020 is mainly due to the reduction in payroll levels as a result of the COVID-19 pandemic.

Benefit plan contributions are included in operating expenses in our consolidated statements of operations.

Shares and Units

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Performance based LTIP units receive 10 % of such distributions currently, unless and until such LTIP units are earned based on performance, at which time they will receive the accrued and unpaid 90 % and will commence receiving 100 % of such distributions thereafter.

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

On December 31, 2019 our board authorized the repurchase of up to $ 500 million of our Class A common stock and the Operating Partnership’s Series ES, Series 250 and Series 60 operating partnership units from January 1, 2020 through December 31, 2020.

On December 11, 2020, our board approved a new authorization for the repurchase of up to $ 500 million of such securities from January 1, 2021 through December 31, 2021.

Under the repurchase program, we may purchase our Class A common stock and the Operating Partnership’s Series ES, Series 250 and Series 60 operating partnership units in accordance with applicable securities laws from time to time in the open market or in privately negotiated transactions.

The timing, manner, price and amount of any repurchases will be determined by us at our discretion and will be subject to stock price, availability, trading volume and general market conditions.

The authorization does not obligate us to acquire any particular amount of securities, and the program may be suspended or discontinued at our discretion without prior notice.

The following table summarizes our purchases of equity securities for the year ended December 31, 2020:

Period Total Number of Shares Purchased Average Price Paid Per Share Total Number of Shares Purchased as Part of Publicly Announced Plan Maximum Approximate Dollar Value Available for Future Purchase (in thousands)

Year ended December 31, 2020 17,279,252 $ 8.32 17,279,252 $ 356,287

Private Perpetual Preferred Units

During December 2019, we completed an exchange offer whereby we issued 4,610,383 new Series 2019 Private Perpetual Preferred Units ("Series 2019 Preferred Units") in exchange for 4,610,383 OP Units, consisting of 1,632,667 Series ES OP Units, 186,799 Series 250 OP Units, 302,608 Series 60 OP Units and 2,488,309 Series PR OP Units.

The OP Units acquired in the exchange offer were retired upon receipt.

The Series 2019 Preferred Units were issued in the exchange offer in reliance on the exemption set forth in Section 3(a)(9) of the Securities Act of 1933, as amended, for securities exchanged by an issuer with its existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange.

In connection with the exchange offer, we incurred $ 0.5 million of costs, which were expensed as incurred and included in general and administrative expenses.

As of December 31, 2019 , there were 4,610,383 Series 2019 Preferred Units and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units").

The Series 2019 Preferred Units have a liquidation preference of $ 13.52 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.70 per unit payable in arrears

on a quarterly basis.

As of December 31, 2020, there were 4,664,038 Series 2019 Preferred Units ("Series 2019 Preferred Units") and 1,560,360 Series 2014 Private Perpetual Preferred Units ("Series 2014 Preferred Units").

The Series 2019 Preferred Units have a liquidation preference of $ 13.52 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.70

per unit payable in arrears on a quarterly basis.

The Series 2019 Preferred Units are not redeemable at the option of the holders and are redeemable at our option only in the case of specific defined events.

The Series 2014 Preferred Units which have a liquidation preference of $ 16.62 per unit and which are entitled to receive cumulative preferential annual cash distributions of $ 0.60 per unit payable in arrears on a quarterly basis.

The Series 2014 Preferred Units which have a liquidation preference of $ 16.62 per unit and are entitled to receive cumulative preferential annual cash distributions of $ 0.60 per unit payable in arrears on a quarterly basis.

The Series 2014 Preferred Units are not redeemable at the option of the holders and are redeemable at our option only in the case of specific defined events.

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The following table summarizes the distributions paid on our operating partnership units for the years ended December 31, 2020, 2019 and 2018:

Amount per Operating Partnership Unit

December 23, 2019

December 31, 2019

September 16, 2019

September 30, 2019

June 14, 2019

June 28, 2019

March 15, 2019

March 29, 2019

December 17, 2018

December 31, 2018

September 14, 2018

September 28, 2018

June 15, 2018

June 29, 2018

March 15, 2018

March 30, 2018

December 15, 2017

December 29, 2017

September 15, 2017

September 29, 2017

June 15, 2017

June 30, 2017

March 15, 2017

March 31, 2017

Record Date Payment Date Amount per Operating Partnership Unit

June 19, 2020 June 30, 2020 $ 0.105

March 16, 2020 March 31, 2020 $ 0.105

December 23, 2019 December 31, 2019 $ 0.105

September 16, 2019 September 30, 2019 $ 0.105

June 14, 2019 June 28, 2019 $ 0.105

March 15, 2019 March 29, 2019 $ 0.105

December 17, 2018 December 31, 2018 $ 0.105

September 14, 2018 September 28, 2018 $ 0.105

June 15, 2018 June 29, 2018 $ 0.105

March 15, 2018 March 30, 2018 $ 0.105

We paid a dividend in the first and second quarters of 2020 and suspended the dividend for the third and fourth quarters of 2020.

Total distributions paid to OP unitholders and Preferred unitholders during 2020, 2019 and 2018 totaled $ 65.0 million, $ 127.8 million and $ 126.5 million, respectively.

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An aggregate of 11.0 million shares of ESRT common stock are authorized for issuance under awards granted pursuant to the 2019 Plan, and as of December 31, 2020, approximately 8.5 million shares of ESRT common stock remain available for future issuance under the Plans.

In October and May 2019, we made grants of LTIP units to our non-employee directors under the 2019 Plan.

At such times, we granted a total of 76,718 LTIP units that are subject to time-based vesting with fair market values of $ 1.1 million .

The awards vest ratably over three years from the date of the grant, subject generally to the director's continued service on our Board of Directors.

In December and August 2020, we granted Grant H.

Paige Hood, respectively, our new non-employee directors, a total of 31,117 LTIP units that are subject to time-based vesting with a fair market value of $ 0.2 million.

These awards vest ratably on each of the first three anniversaries of May 15, 2020, subject generally to their continued service on our Board of Directors.

In May 2020, we made grants of LTIP units under the 2019 Plan.

At such time, we granted our non-employee directors a total of 171,153 LTIP units that are subject to time-based vesting with fair market values of $ 1.1 million.

These awards vest ratably over three years from the date of the grant, subject generally to the director's continued service on our Board of Directors.

We also granted Christina Chiu, our Executive Vice President and Chief Financial Officer, a total of 82,199 LTIP units that are subject to time-based vesting and 116,927 LTIP units that are subject to market-based vesting, with fair market values of $ 0.5 million for the time-based vesting awards and $ 0.5 million for the market-based vesting awards.

We also granted

certain other employees a total of 63,229 LTIP units that are subject to time-based vesting with a fair market value of $ 0.4 million.

The awards subject to time-based vesting vest ratably over three or four years from the date of grant, subject generally to the grantee's continued employment.

The first installment vests on the respective grant dates in May 2021 and the remainder will vest thereafter in two or three equal annual installments.

The vesting of the LTIP units subject to market-based vesting is based on the achievement of relative total stockholder return hurdles over a three-year performance period, commencing on May 7, 2020.

Following the completion of the three-year performance period, our Compensation and Human Capital Committee will determine the number of LTIP units to which the grantee is entitled based on our performance relative to the performance hurdles set forth in the LTIP unit award agreements the grantee entered into in connection with the award grant.

These units then vest in two installments, with the first installment vesting on May 7, 2023 and the second installment vesting on May 7, 2024, subject generally to the grantee's continued employment on those dates.

In March 2020, we made grants of LTIP units to executive officers under the 2019 Plan.

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The vesting of the LTIP units subject to market-based vesting is based on the achievement of relative total stockholder return hurdles over a three-year performance period, commencing on January 1, 2020.

Following the completion of the three -year performance period, our compensation committee will determine the number of LTIP units to which the grantee is entitled based on our performance relative to the performance hurdles set forth in the LTIP unit award agreements the

grantee entered into in connection with the award grant.

These units then vest in two installments, with the first installment vesting on January 1, 2023 and the second installment vesting on January 1, 2024, subject generally to the grantee's continued employment on those dates.

Our named executive officers can elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIP's at the face amount of such bonus or (ii) time-vesting LTIP's which would vest over three years , subject to continued employment, at 125 % of such face amount.

For awards granted in 2017, 2018, 2019 and 2020, our named executive officers could elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIP's at the face amount of such bonus or (ii) time-vesting LTIP's which would vest over three years , subject to continued employment, at 125 % of such face amount (the "bonus election program").

In March 2020, we made grants of LTIP units to executive officers under the 2019 Plan in connection with the 2019 bonus election program.

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The first installment vests on January 1, 2021 and the remainder will vest thereafter in two equal annual installments.

In May 2018, we made grants of LTIP units to our non-employee directors under the 2013 Plan.

At such time, we granted a total of 65,000 LTIP units that are subject to time-based vesting with fair market values of $ 1.0 million .

In COVID-19 disrupted markets during the first quarter of 2020, the LTIP units that are subject to market-based vesting were undervalued on initial appraisal, and the resulting number of LTIP units issued in March 2020 was reduced on final appraisal to match the original board-approved dollar value.

In June 2020, we reduced the grants of LTIP units that are subject to market-based vesting which were awarded to executive officers and certain other employees by 666,933 LTIP units with fair market values of $ 2.8 million and 99,630 LTIP units with fair market values of $ 0.5 million, respectively.

In October and May 2019, we made grants of LTIP units to our non-employee directors under the 2019 Plan.

At such times, we granted a total of 76,718 LTIP units that are subject to time-based vesting with fair market values of $ 1.1 million.

The awards vest ratably over three years from the date of the grant, subject generally to the director's continued service on our Board of Directors.

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The first installment vests on January 1, 2020 and the remainder will vest thereafter in three equal annual installments.

The vesting of the LTIP units subject to market-based vesting is based on the achievement of absolute and relative total stockholder return hurdles over a three -year performance period, commencing on January 1, 2018.

The vesting of the LTIP units subject to market-based vesting is based on the achievement of relative total

stockholder return hurdles over a three-year performance period, commencing on January 1, 2019.

Following the completion of the three-year performance period, our compensation committee will determine the number of LTIP units to which the grantee is entitled based on our performance relative to the performance hurdles set forth in the LTIP unit award agreements the grantee entered into in connection with the award grant.

These units then vest in two installments, with the first installment vesting on January 1, 2022 and the second installment vesting on January 1, 2023, subject generally to the grantee's continued employment on those dates.

In 2017, our board of directors determined to reinforce the alignment of our executive officers’ interests with that of stockholders by designing a new bonus election program, under which named executive officers could elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIP's at the face amount of such bonus or (ii) time-vesting LTIP's which would vest over three years , subject to continued employment, at 125 % of such face amount.

In February 2018, we made grants of LTIP units to executive officers under the 2013 Plan in connection with the 2017 bonus election program.

We granted to executive officers a total of 238,609 LTIP units that are subject to time-based vesting with a fair market value $ 4.0 million .

In March 2019, we made grants of LTIP units to executive officers under the 2013 Plan in connection with the 2018 bonus election program.

We granted to executive officers a total of 334,952 LTIP units that are subject to time-based vesting with a fair market value of $ 4.6 million.

Of these LTIP units, 26,056 LTIP units vested immediately on the grant date and 308,896 LTIP units vest ratably over three years from January 1, 2019, subject generally to the grantee's continued employment.

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Share-based compensation for time-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over the shorter of (i) the stated vesting period, which is generally three or four years , or (ii) the period from the date of grant to the date the employee becomes retirement eligible, which may occur upon grant.

An employee is retirement eligible when the employee attains the (i) age of 60 and (ii) the date on which the employee has first completed ten years of continuous service with ESRT or its affiliates.

Prior to amendment of the 2019 Plan on July 13, 2020, an employee is retirement eligible when the employee attains the (i) age of 60 and (ii) the date on which the employee has first completed ten years of continuous service with ESRT or its affiliates.

On July 13, 2020, the board amended the 2019 Plan such that the retirement eligibility age was raised from 60 to 65 starting with grant awards issued after such amendment date, and amended certain grant agreements for equity awards issued in early 2020 such that the new retirement age would apply to such 2020 awards issued prior to July 13, 2020.

Share-based compensation for market-based equity awards is measured at the fair value of the award on the date of grant and recognized as an expense on a straight-line basis over three or four years depending on retirement eligibility.

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The volatilities of the returns on our stock price and the comparative indexes were estimated based on implied volatilities and historical volatilities using a six-year look-back period.

The expected growth rate of the stock prices over the performance

period is determined with consideration of the risk free rate as of the grant date.

The expected growth rate of the stock prices over the performance period is determined with consideration of the risk free rate as of the grant date.

For LTIP unit awards that are time-based, the fair value of the awards was estimated based on the fair value of our stock at the grant date discounted for the restriction period during which the LTIP units cannot be redeemed or transferred and the uncertainty regarding if, and when, the book capital account of the LTIP units will equal that of the common units.

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The per unit or share granted in 2019 was estimated on the respective dates of grant using the following assumptions:

an expected life of 2.8 years, a dividend rate of 2.30 % , a risk-free interest rate of 2.50 % , and an expected price volatility of 20.0 % .

an expected life from 2.0 to 5.3 years, a dividend rate of 2.40 %, a risk-free interest rate from 2.48 % to 2.63 %, and an expected price volatility from 17.0 % to 22.0 %.

The per unit or share granted in 2018 was estimated on the respective dates of grant using the following assumptions:

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The following is a summary of ESRT restricted stock and LTIP unit activity for the year ended December 31, 2020:

ESRT Restricted Stock

Weighted Average Grant Fair Value

ESRT Restricted Stock LTIP Units Weighted Average Grant Fair Value

Unvested balance at December 31, 2019 118,918 5,986,569 $ 9.73

Vested ( 58,326 ) ( 1,052,692 ) 14.04

Granted 161,449 5,042,810 5.44

Forfeited or unearned ( 4,341 ) ( 2,226,403 ) 7.55

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The total fair value of LTIP units and restricted stock that vested during 2020, 2019 and 2018 was $ 15.6 million, $ 10.1 million and $ 7.7 million, respectively.

The LTIP unit and ESRT restricted stock award agreements will immediately vest when a grantee attains the (i) age of 60 and (ii) the date on which grantee has first completed ten years of continuous service with our company or its affiliates.

The LTIP unit and ESRT restricted stock award agreements will immediately vest when a grantee attains the (i) age of 60 or 65 , as applicable, and (ii) the date on which the grantee has first completed ten years of continuous service with our company or its affiliates.

For award agreements that qualify, we recognize noncash compensation expense on the grant date for the time-based awards and ratably over the vesting period for the market-based awards, and accordingly, we recognized $ 2.6 million, $ 2.0 million and $ 1.8 million for the years ended December 31, 2020, 2019 and 2018, respectively.

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For the Year Ended December 31,

2020 2019 2018

Net income (loss) $ ( 22,889 ) $ 84,290 $ 117,253

Private perpetual preferred unit distributions ( 4,197 ) ( 1,743 ) ( 936 )

Earnings allocated to unvested shares ( 985 ) ( 885 ) ( 851 )

Net income attributable to common unitholders - basic and diluted

Net income (loss) attributable to common unitholders - basic and diluted $ ( 28,071 ) $ 81,662 $ 115,466

Weighted average units outstanding - basic 283,826 297,798 297,258

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Stock-based compensation plans 11 — 1

Exchangeable senior notes

Weighted average shares outstanding - diluted 283,837 297,798 297,259

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Under the tax protection agreement, we have agreed to use the “traditional method” for accounting for book-tax differences for the properties acquired by us in the consolidation.

Under the traditional method, which is the least favorable method from our perspective, the carryover basis of the acquired properties in our hands (i) may cause us to be allocated lower amounts of depreciation and other deductions for tax purposes than would be allocated to us if all of the acquired properties were to have a tax basis equal to their fair market value at the time of acquisition and (ii) in the event of a sale of such properties, could cause us to be allocated gain in excess of its corresponding economic or book gain (or taxable loss that is less than its economic or book loss), with a corresponding benefit to the partners transferring such properties to us for interests in us.

be allocated to us if all of the acquired properties were to have a tax basis equal to their fair market value at the time of acquisition and (ii) in the event of a sale of such properties, could cause us to be allocated gain in excess of its corresponding economic or book gain (or taxable loss that is less than its economic or book loss), with a corresponding benefit to the partners transferring such properties to us for interests in us.

In 2016, we entered into a tax protection agreement with Q REIT Holding LLC, a Qatar Financial Centre limited liability company and a wholly owned subsidiary of the Qatar Investment Authority, a governmental authority of the State of Qatar ("QREIT", and together with any eligible transferee, "QIA").

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In connection therewith, we have filed, and are obligated to maintain the effectiveness of, an automatically effective shelf registration statement, along with a prospectus supplement, with respect to, among other things, shares of ESRT Class A common stock that may be issued upon redemption of operating partnership units or issued upon conversion of shares of ESRT Class B common stock to continuing investors in the public existing entities.

Pursuant to the registration rights agreement, under certain circumstances, ESRT will also be required to undertake an underwritten offering upon the written request of the Malkin Group, which we refer to as the holder, provided (i) the registrable shares to be registered in such offering will have a market value of at least $ 150.0 million , (ii) ESRT will not be obligated to effect more

than two underwritten offerings during any 12-month period;

and (iii) the holder will not have the ability to effect more than four underwritten offerings.

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Durels, Thomas N.

and Christina Chiu.

Indemnification of Our Directors and Officers

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Malkin and Peter L.

Malkin control the general partners or managers of, the entities that own interests in eight multi-family properties, five net leased retail properties, (including one single tenant retail property in Greenwich, Connecticut), and a parcel that is being developed for residential use.

Malkin control the general partners or managers of, the entities that own interests in nine multi-family properties and five net leased retail properties, (including one single tenant retail property in Greenwich, Connecticut).

The Malkin Group also owns non-controlling interests in one Manhattan office property, two Manhattan retail properties and several retail properties outside of Manhattan, none of which were contributed to us in the formation transactions.

We refer to the non-controlling interests described above collectively as the excluded properties.

In addition, the Malkin Group owns interests in one mezzanine and senior equity fund, an industrial fund, and five residential properties, and which we refer to collectively as the excluded businesses.

In addition, the Malkin Group owns interests in one mezzanine and senior equity fund and five property managers, and which we refer to collectively as the excluded businesses.

Other than the Greenwich retail property, we do not believe that the excluded properties or the excluded businesses are consistent with our portfolio geographic or property type composition, management or strategic direction.

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ESRT's management of the excluded properties and provision of services to the five residential property managers and the existing managers of the other excluded businesses represent a minimal portion of our overall business.

There is no established time period in which we will manage such properties or provide services to the owners of certain of the excluded properties and the five residential property

managers and provide services and access to office space to the existing managers of the other excluded businesses;

There is no established time period in which we will manage such properties or provide services to the owners of certain of the excluded properties and the five residential property managers and provide services and access to office space to the existing managers of the other excluded businesses;

Malkin and Anthony E.

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Services are and were provided by us to excluded properties and businesses.

These transactions are reflected in our consolidated statements of income as third-party management and other fees.

These transactions are reflected in our consolidated statements of operations as third-party management and other fees.

We earned asset management (supervisory) and service fees from excluded properties and businesses of $ 0.9 million, $ 0.9 million and $ 1.1 million during the years ended December 31, 2020, 2019 and 2018, respectively.

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Total revenue aggregated $ 0.3 million, $ 0.3 million and $ 0.3 million for the years ended December 31, 2020, 2019 and 2018, respectively.

One of our directors, James D.

Robinson IV, is a general partner in an investment fund, which owns more than a 10% economic and voting interest in one of our tenants, OnDeck Capital, with an annualized rent of $ 4.7 million and $ 4.5 million as of December 31, 2019 and 2018, respectively.

TRS Holdings and Observatory TRS are taxable entities and their consolidated provision for income taxes consisted of the following for the years ended December 31, 2020, 2019 and 2018 (amounts in thousands):

For the Year Ended December 31,

2020 2019 2018

Federal $ 4,932 $ ( 1,077 ) $ ( 2,389 )

State and local 2,699 ( 872 ) ( 2,253 )

Total current 7,631 ( 1,949 ) ( 4,642 )

Federal ( 340 ) ( 248 ) —

State and local ( 320 ) ( 232 ) —

Total deferred ( 660 ) ( 480 ) —

Income tax expense

Income tax benefit (expense) $ 6,971 $ ( 2,429 ) $ ( 4,642 )

In December 2017, the Tax Cuts and Jobs Act (the “TCJA”) was enacted.

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corporate income tax rate from 35 percent to 21 percent, effective January 1, 2018.

In March 2020, the Coronavirus Aid, Relief, Economic Security (“CARES”) Act was enacted.

The CARES Act includes a number of federal tax reliefs, including the carryback of a net operating loss (“NOL”) incurred in 2018, 2019 and 2020 to each of the five preceding taxable years to generate a refund of previous paid income taxes.

Such NOLs may offset 100% of taxable income for taxable years beginning before 2021 (80% thereafter).

Many states, including New York, have not adopted the NOL provisions of the CARES Act and continue to have their own rules with respect to the application of NOLs.

The carryback of Observatory TRS’s NOL to previous tax years resulted in a 13 % increase of U.S.

corporation income tax benefit.

As of December 31, 2020, our parent and general partner, Empire State Realty Trust, Inc., had $ 67.9 million of NOL carryforwards that may be used in the future to reduce the amount otherwise required to be distributed by ESRT to meet REIT requirements.

However, for federal income tax purposes, the NOL will not be able to offset more than 80% of ESRT’s REIT taxable income and, therefore, may not be able to reduce the amount required to be distributed by ESRT to meet REIT requirements to zero, except for the tax year ended December 31, 2020, of which ESRT was able to offset 100% of its taxable income in accordance with the CARES Act.

The federal NOL may be carried forward indefinitely.

Other limitations may apply to ESRT’s ability to use its NOL to offset taxable income.

As of December 31, 2020, the observatory TRS had a federal, state, and local income tax receivable of $ 8.1 million due to a NOL for the year ended December 31, 2020.

Under special provisions of the CARES Act, the NOL can be carried back five years for federal income tax purposes.

Due to limitations on the use of net operating loss carrybacks for state and local tax, the observatory TRS will carry forward $ 3.8 million of NOL to offset future taxable income, if any.

The state and local NOL can be carried forward for up to 20 years.

We measure deferred tax assets using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid.

Accordingly, our deferred tax assets were remeasured to reflect the reduction in the U.S.

corporate income tax rate, resulting in a $ 0.4 million increase in income tax expense for the year ended December 31, 2017 and a corresponding decrease of the same amount in our deferred assets as of December 31, 2017.

The effective income tax rate is 47.0 %, 34.0 % and 34.0 % for the years ended December 31, 2020, 2019 and 2018, respectively.

1 unchanged sentence

For the Year Ended December 31,

Federal tax expense at statutory rate

State income taxes, net of federal benefit

2020 2019 2018

Federal tax benefit (expense) at statutory rate $ 2,544 $ ( 1,575 ) $ ( 2,844 )

State income tax benefit (expense), net of federal benefit 2,379 ( 854 ) ( 1,798 )

Corporate income tax rate adjustment 2,048 — —

Income tax expense

Income tax benefit (expense) $ 6,971 $ ( 2,429 ) $ ( 4,642 )

The income tax effects of temporary differences that give rise to deferred tax assets are presented below as of December 31, 2020, 2019 and 2018 (amounts in thousands):

2020 2019 2018

Deferred tax assets:

Deferred revenue on unredeemed observatory admission ticket sales $ 256 $ 916 $ 1,396

New York City net operating loss carryforward credit 334 — —

Deferred tax assets $ 590 $ 916 $ 1,396

Deferred tax assets at December 31, 2020, 2019 and 2018, respectively, are attributable to the inclusion of deferred revenue on observatory admission ticket sales not redeemed at year-end in determining income for tax reporting purposes and are included in prepaid expenses and other assets on the consolidated balance sheets.

The deferred tax assets at December 31, 2020, respectively, are attributable to the inclusion of the New York City net operating loss to be carried forward and utilized during income years for a period of 20 years.

No valuation allowance has been recorded against the deferred tax asset because the company believes that the deferred tax asset will, more likely than not, be realized.

10 unchanged sentences

The following tables provide components of segment profit for each segment for the years ended December 31, 2020, 2019 and 2018, as reviewed by management (amounts in thousands):

Intersegment Elimination

Real Estate Observatory Intersegment Elimination Total

Rental revenue $ 563,071 $ — $ — $ 563,071

12 unchanged sentences

Real estate taxes 121,923 — — 121,923

Impairment charges 6,204 — — 6,204

Depreciation and amortization 190,863 143 — 191,006

Total operating expenses 526,701 41,693 ( 17,827 ) 550,567

Total operating income

Total operating income (loss) 71,297 ( 12,636 ) — 58,661

Other income (expense):

1 unchanged sentence

Interest expense ( 89,907 ) — — ( 89,907 )

Income before income taxes

Income tax expense

Loss on early extinguishment of debt ( 86 ) — — ( 86 )

IPO litigation expense ( 1,165 ) — — ( 1,165 )

Loss before income taxes ( 17,319 ) ( 12,541 ) — ( 29,860 )

Income tax (expense) benefit ( 843 ) 7,814 — 6,971

Net loss $ ( 18,162 ) $ ( 4,727 ) $ — $ ( 22,889 )

Segment assets $ 3,903,884 $ 246,811 $ — $ 4,150,695

Expenditures for segment assets $ 101,306 $ 2,754 $ — $ 104,060

Intersegment Elimination

Real Estate Observatory Intersegment Elimination Total

Rental revenue $ 586,414 $ — $ — $ 586,414

Intercompany rental revenue 82,469 — ( 82,469 ) —

Tenant expense reimbursement

Observatory revenue — 128,769 — 128,769

13 unchanged sentences

Total operating income

142,203 12,503 — 154,706

Other income (expense):

1 unchanged sentence

Interest expense ( 79,246 ) — — ( 79,246 )

Loss on early extinguishment of debt

Loss from derivative financial instrument

Income before income taxes 74,216 12,503 — 86,719

Income tax expense ( 896 ) ( 1,533 ) — ( 2,429 )

Net income $ 73,320 $ 10,970 $ — $ 84,290

Segment assets $ 3,671,211 $ 260,623 $ — $ 3,931,834

Expenditures for segment assets $ 191,630 $ 64,294 $ — $ 255,924

Intersegment Elimination

Real Estate Observatory Intersegment Elimination Total

Rental revenue $ 493,231 $ — $ — $ 493,231

13 unchanged sentences

Real estate taxes 110,000 — — 110,000

Acquisition expenses

Depreciation and amortization 168,430 78 — 168,508

1 unchanged sentence

Total operating income

172,429 18,428 — 190,857

Other income (expense):

1 unchanged sentence

Interest expense ( 79,623 ) — — ( 79,623 )

Loss on early extinguishment of debt

Loss from derivative financial instrument

Income before income taxes 103,467 18,428 — 121,895

Income tax expense ( 1,114 ) ( 3,528 ) — ( 4,642 )

Net income $ 102,353 $ 14,900 $ — $ 117,253

Segment assets $ 3,930,330 $ 265,450 $ — $ 4,195,780

Expenditures for segment assets $ 201,685 $ 54,811 $ — $ 256,496

During the second quarter 2020, we wrote-off $ 4.1 million of prior expenditures on a potential energy efficiency project in our real estate segment that is not economically feasible in today's regulatory environment.

During the third quarter

2020, we also wrote off $ 2.1 million of prior expenditures on a build-to-suit development project in our real estate segment that was halted due to reconsideration by the user driven by the COVID-19 pandemic.

For the year ended December 31, 2020, the total $ 6.2 million write-off is shown as Impairment charges in the consolidated statement of operations.

Summary of Quarterly Financial Information (unaudited)

The quarterly results of operations of our company for the years ended December 31, 2020, 2019 and 2018 are as follows (amounts in thousands):

March 31, 2019

June 30, 2019

September 30, 2019

December 31, 2019

March 31, 2020 June 30, 2020 September 30, 2020 December 31, 2020

Revenues $ 170,224 $ 141,030 $ 146,575 $ 151,399

Operating income $ 26,973 $ 334 $ 11,928 $ 19,426

Net income attributable to common unitholders

Net income per share attributable to common unitholders:

Net income (loss) $ 8,288 $ ( 19,618 ) $ ( 12,269 ) $ 710

Net income (loss) attributable to common stockholders $ 7,238 $ ( 20,665 ) $ ( 13,319 ) $ ( 340 )

Net income (loss) per share attributable to common stockholders:

Basic and diluted $ 0.02 $ ( 0.07 ) $ ( 0.05 ) $ 0.00

March 31, 2018

June 30, 2018

September 30, 2018

December 31, 2018

March 31, 2019 June 30, 2019 September 30, 2019 December 31, 2019

Revenues $ 167,293 $ 176,244 $ 192,873 $ 194,933

Operating income $ 26,076 $ 36,239 $ 45,279 $ 47,112

Net income $ 9,856 $ 18,930 $ 26,784 $ 28,720

Net income attributable to common unitholders $ 9,622 $ 18,696 $ 26,550 $ 27,679

1 unchanged sentence

Basic and diluted $ 0.03 $ 0.06 $ 0.09 $ 0.09

March 31, 2017

June 30, 2017

September 30, 2017

December 31, 2017

March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018

Revenues $ 167,271 $ 178,529 $ 186,402 $ 199,309

Operating income $ 34,164 $ 49,665 $ 48,538 $ 58,490

Net income $ 18,058 $ 30,184 $ 29,230 $ 39,781

Net income attributable to common unitholders $ 17,824 $ 29,950 $ 28,996 $ 39,547

5 unchanged sentences

(amounts in thousands)

Uncollectible

Year ended December 31, 2018

Allowance for doubtful accounts

of Year Additions

Operations Uncollectible

Written-Off Balance

Year ended December 31, 2018

4 unchanged sentences

Initial Cost to

Cost Capitalized

the Company Cost Capitalized

Subsequent to

Gross Amount at

Acquisition Gross Amount at

which Carried

Land and Development Costs

111 West 33rd Street, New York, NY

1400 Broadway, New York, NY

1333 Broadway, New York, NY

1350 Broadway, New York, NY

250 West 57th Street, New York, NY

501 Seventh Avenue, New York, NY

1359 Broadway, New York, NY

350 Fifth Avenue (Empire State Building), New York, NY

Type Encumbrances Land and Development Costs Building &

Improvements Improvements Carrying

Costs Land and Development Costs Buildings &

Improvements Total Accumulated

Depreciation Date of

Construction Date

Acquired Life on

111 West 33rd Street, New York, NY office /

retail $ — $ 13,630 $ 244,461 $ 125,514 n/a $ 13,630 $ 369,975 $ 383,605 $ 70,495 1954 2014 various

1400 Broadway, New York, NY office /

retail — — 96,338 86,939 — — 183,277 183,277 46,694 1930 2014 various

1333 Broadway, New York, NY office /

retail 158,676 91,435 120,190 10,469 n/a 91,435 130,659 222,094 29,285 1915 2013 various

1350 Broadway, New York, NY office /

retail — — 102,518 38,180 — — 140,698 140,698 38,967 1929 2013 various

250 West 57th Street, New York, NY office/

retail 173,835 2,117 5,041 163,843 n/a 2,117 168,884 171,001 49,958 1921 1953 various

501 Seventh Avenue, New York, NY office/

retail — 1,100 2,600 96,842 n/a 1,100 99,442 100,542 45,220 1923 1950 various

1359 Broadway, New York, NY office/

retail — 1,233 1,809 63,075 n/a 1,233 64,884 66,117 32,420 1924 1953 various

350 Fifth Avenue (Empire State Building), New York, NY office/

retail — 21,551 38,934 970,966 n/a 21,551 1,009,900 1,031,451 275,648 1930 2013 various

One Grand Central Place,

First Stamford Place, Stamford, CT

One Station Place, Stamford, CT (Metro Center)

383 Main Avenue, Norwalk, CT

500 Mamaroneck Avenue, Harrison, NY

10 Bank Street, White Plains, NY

10 Union Square, New York, NY

1542 Third Avenue, New York, NY

1010 Third Avenue, New York, NY and 77 West 55th Street, New York, NY

69-97 Main Street, Westport, CT

103-107 Main Street, Westport, CT

Property for development at the Transportation Hub in Stamford, CT

New York, NY office/

retail — 7,240 17,490 268,333 n/a 7,222 285,841 293,063 123,509 1930 1954 various

First Stamford Place, Stamford, CT office 178,943 22,952 122,739 75,458 n/a 24,861 196,288 221,149 91,678 1986 2001 various

One Station Place, Stamford, CT (Metro Center) office 87,236 5,313 28,602 19,581 n/a 5,313 48,183 53,496 31,903 1987 1984 various

383 Main Avenue, Norwalk, CT office 29,668 2,262 12,820 30,878 n/a 2,262 43,698 45,960 15,901 1985 1994 various

500 Mamaroneck Avenue, Harrison, NY office — 4,571 25,915 26,708 n/a 4,571 52,623 57,194 26,760 1987 1999 various

10 Bank Street, White Plains, NY office 31,624 5,612 31,803 20,833 n/a 5,612 52,636 58,248 25,537 1989 1999 various

10 Union Square, New York, NY retail 49,365 5,003 12,866 2,579 n/a 5,003 15,445 20,448 8,687 1987 1996 various

1542 Third Avenue, New York, NY retail 29,592 2,239 15,266 464 n/a 2,239 15,730 17,969 8,644 1991 1999 various

1010 Third Avenue, New York, NY and 77 West 55th Street, New York, NY retail 36,990 4,462 15,817 1,251 n/a 4,463 17,067 21,530 9,500 1962 1998 various

69-97 Main Street, Westport, CT retail — 2,782 15,766 6,317 n/a 2,782 22,083 24,865 8,052 1922 2003 various

103-107 Main Street, Westport, CT retail — 1,243 7,043 360 n/a 1,260 7,386 8,646 2,754 1900 2006 various

Property for development at the Transportation Hub in Stamford, CT land — 4,542 — 8,071 — 12,508 105 12,613 — n/a n/a n/a

Totals $ 775,929 $ 199,287 $ 918,018 $ 2,016,661 $ — $ 209,162 $ 2,924,804 $ 3,133,966 $ 941,612

Empire State Realty OP, L.P.

3 unchanged sentences

The changes in our investment properties for the years ended December 31, 2020, 2019 and 2018 are as follows:

2020 2019 2018

Balance, beginning of year $ 3,109,433 $ 2,884,486 $ 2,667,655

Acquisition of new properties — — —

Improvements 104,060 255,924 256,496

Disposals ( 79,527 ) ( 30,977 ) ( 39,665 )

Balance, end of year $ 3,133,966 $ 3,109,433 $ 2,884,486

2 unchanged sentences

The changes in our accumulated depreciation for the years ended December 31, 2020, 2019 and 2018 are as follows:

2020 2019 2018

Balance, beginning of year $ 862,534 $ 747,304 $ 656,900

Depreciation expense 158,605 146,207 130,069

Disposals ( 79,527 ) ( 30,977 ) ( 39,665 )

Balance, end of year $ 941,612 $ 862,534 $ 747,304

Depreciation of investment properties reflected in the combined statements of income is calculated over the estimated original lives of the assets as follows:

Building improvements

39 years or useful life

Tenant improvements

Term of related lease

Buildings 39 years

Building improvements 39 years or useful life

Tenant improvements Term of related lease

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures