There have been no material changes to the risk factors included in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, except as disclosed below.
−Removed: The current COVID-19 pandemic has had, and any future public health crisis could have, serious adverse effects on our and our tenants’ businesses, operations, and financial condition, on local, national, and global economic activity, and on volatility and negative pressure in financial markets.
−Removed: The COVID-19 pandemic has impacted the entire U.S., including the states of New York and Connecticut where we own office and retail property assets and operate the Observatory.
−Removed: Measures taken by local, state and federal authorities to prevent, remediate or limit the impact of COVID-19, including quarantines, restrictions on travel, “stay-at-home” or “shelter-in-place” orders, social distancing practices, restrictions on business operations, construction projects and certain contract and judicial remedies, have had adverse effects on us and our tenants, which are largely continuing.
−Removed: As a result of such restrictions, we had to close the Observatory to the public on March 16, 2020 until its re-opening as an Outdoor Attraction (excluding the 102 nd Floor) on July 20, 2020, and during such closure all Observatory revenue was discontinued.
−Removed: Since then, with continued international and national travel restrictions, visitor volume has lagged our earlier expectations, and we cannot predict when we may achieve Observatory revenues comparable to 2019 when approximately 64% of our visitors were from other countries.
−Removed: The COVID-19 pandemic and the measures taken to limit its spread have adversely impacted and may continue to adversely impact adversely some or all of our tenants regarding, among other things, their ability or willingness to pay rent in full, or at all, or on a timely basis, and our ability to collect rent from them.
−Removed: A number of our tenants across various industries have announced temporary closures of their leased premises and requested rent deferral or abatement.
−Removed: For the second and third quarters of 2020, we collected a lower percentage of billings than in comparable periods in prior years across both our office and retail portfolios, and we have made rent deferral agreements with certain tenants.
−Removed: We have seen, and may continue to see, circumstances in which tenants request rent deferral, rent abatement or early lease termination and/or default in lease obligations.
−Removed: Additionally, we have seen, and may continue to see, certain tenants challenge the existence of such obligations and/or close temporarily or permanently and/or declare bankruptcy, all of which individually or collectively reduce our revenue and such reduction could be material.
−Removed: While some of our tenants have been able to qualify for COVID-related temporary government assistance, the termination of such assistance programs may increase the severity of the pandemic’s economic damage.
−Removed: Backlogs and obstacles from g overnment moratoriums and/or limits (including temporary closure of certain court systems) which directly or indirectly abridge the enforcement of lease obligations and related guarantees may also affect our ability to collect rent or enforce related remedies.
−Removed: The scope and duration of the foregoing events are uncertain and unpredictable.
−Removed: In addition, the COVID-19 pandemic, and any future public health crisis, could have a material adverse effect on our human capital management.
−Removed: While we have implemented enhanced health and safety protocols in accordance with New York State guidelines, our employees, including our senior management team, remain subject to risk of illness, which would create new challenges in leadership and execution.
−Removed: Although the majority of our corporate employees have returned to the office,
−Removed: certain employees continue to work remotely, which could strain our team efficiencies, collaboration culture, cybersecurity, employee morale, and management’s ability to supervise our employees and manage our business.
−Removed: Moreover, real estate companies like us may be subject to claims from employees, tenants, vendors, visitors or the public that they were exposed to COVID-19 by our inadequate protective measures or were unnecessarily inconvenienced or damaged by our excessive protective measures.
−Removed: The COVID-19 pandemic, and any future public health crisis, could have a material adverse effect on our results of operations, cash flows and financial condition due, among other factors to:
−Removed: prolonged reduction in business vitality which could impair our prospects for new and renewal leases, decrease demand for office and retail space, decrease rental rates, and/or increase lease terminations and vacancy rates, all with an adverse impact on the value or market price of our assets;
−Removed: temporary or long-term reduction in demand for commercial office space based on new acceptance of employees’ remote work from home;
−Removed: new obstacles to our plans to redevelop and reposition properties, or to execute any newly planned capital project, successfully or on the anticipated timeline or at the anticipated costs;
−Removed: impairment of our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due, to comply with covenants in existing credit agreements, to borrow additional funds in compliance with drawdown conditions of existing facilities, or to enter into new financings;
−Removed: volatility and downward pressure on the market price of our Class A common stock and publicly traded partnership units of the Operating Partnership which would also reduce our access to capital and/or our equity currency for new acquisitions;
−Removed: reduction of our cash flows and our ability to pay dividends.
−Removed: The rapid developments regarding the COVID-19 pandemic preclude reliable predictions as to its ultimate adverse impact, which largely arises from factors beyond our control.
−Removed: Many risk factors which were described in our 2019 Annual Report, prior to the emergence of the pandemic, should now be considered to have heightened significance as a result of the COVID-19 pandemic.
+Added: We may incur significant costs to comply with environmental laws, in particular New York City’s Local Law 97.
+Added: We may become subject to new compliance requirements and/or new costs or taxes associated with natural resource or energy usage and related emissions (such as a “carbon tax”), which could increase our operating costs.
+Added: In particular, as the owner of large commercial buildings in New York City, we are subject to Local Law 97 passed by the New York City Council in April 2019, which for each such building establishes annual limits for greenhouse gas emissions, requires yearly emissions reports beginning in May 2025, and imposes penalties for emissions above such limits.
+Added: While we are actively working to reduce
+Added: our carbon emissions, there can be no assurance that we will be able to operate within the limits of Local Law 97, or that the costs of compliance and/or penalties will not be material.
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.