Empire State Realty OP, L.P. 10-K

ITEM 2. PROPERTIES Summary of Office and Retail Portfolio As of December 31, 2022, our office and retail portfolio consisted of approximately 9.7 million rentable square feet and was approximately 85.2% occupied, yielding approximately $526.9 million of annualized rent. We have 12 office properties and our retail properties are comprised of retail space at the base of our Manhattan office and multifamily properties, four standalone retail properties in Manhattan and two contiguous standalone retail properties in Westport, Connecticut (1) . All of the Manhattan properties are located in dynamic retail corridors with convenient access to mass transportation, a diverse te nant base and high pedestrian traffic. Giving effect to leases signed but not yet commenced, our office and retail portfolio was approximately 88.6% leased as of December 31, 2022. Our real estate segment includes all activities related to the ownership, management, operation, acquisition, repositioning and disposition of all of our real estate assets other than the 86th and 102nd floor observatories at the Empire State Building, which are operated by our observatory segment. (1) On February 1, 2023, the two retail properties in Westport, Connecticut were sold. The tables below present an overview as of December 31, 2022. Annualized Rentable Rent per Square Percent Annualized Occupied Number of Property Name Location or Sub-Market Feet (1) Occupied (2) Rent (3) Square Foot (4) Leases (5) Manhattan Office Properties - Office The Empire State Building (6) Penn Station -Times Sq. South 2,714,737 82.4 % $ 141,668,705 $ 63.34 144 One Grand Central Place Grand Central 1,245,439 87.1 % 65,602,130 60.48 161 1400 Broadway (7) Penn Station -Times Sq. South 916,579 94.0 % 47,963,370 55.64 18 111 West 33rd Street (8) Penn Station -Times Sq. South 641,036 96.2 % 39,930,094 64.76 22 250 West 57th Street Columbus Circle - West Side 466,642 84.8 % 24,667,590 62.32 33 501 Seventh Avenue Penn Station -Times Sq. South 461,370 85.0 % 19,602,186 49.98 22 1359 Broadway Penn Station -Times Sq. South 457,313 76.5 % 20,912,746 59.81 29 1350 Broadway (9) Penn Station -Times Sq. South 373,003 83.2 % 18,650,756 60.13 51 1333 Broadway Penn Station -Times Sq. South 296,360 90.0 % 15,621,887 58.55 14 Manhattan Office Properties - Office 7,572,479 86.0 % 394,619,464 60.58 494 Greater New York Metropolitan Area Office Properties First Stamford Place (10) Stamford, CT 776,386 75.8 % 25,161,553 42.74 43 Metro Center Stamford, CT 284,786 81.8 % 13,209,172 56.72 21 500 Mamaroneck Avenue (11) Harrison, NY 286,335 90.4 % 7,681,621 29.69 34 Sub-Total/Weighted Average Greater New York Metropolitan Office Properties 1,347,507 80.2 % 46,052,346 42.63 98 Manhattan Office Properties - Retail The Empire State Building Penn Station -Times Sq. South 91,554 76.6 % 6,920,076 98.62 12 One Grand Central Place Grand Central 68,733 99.4 % 8,675,896 126.99 13 1400 Broadway (7) Penn Station -Times Sq. South 18,618 75.1 % 1,471,265 105.24 6 112 West 34th Street (8) Penn Station -Times Sq. South 93,057 96.4 % 22,875,282 255.04 3 28 250 West 57th Street Columbus Circle - West Side 67,231 89.1 % 8,896,423 148.47 7 501 Seventh Avenue Penn Station -Times Sq. South 34,564 73.2 % 1,609,862 63.64 6 1359 Broadway Penn Station -Times Sq. South 27,467 68.9 % 1,079,511 57.01 4 1350 Broadway Penn Station -Times Sq. South 30,787 77.6 % 5,975,808 250.24 5 1333 Broadway Penn Station -Times Sq. South 67,001 100.0 % 9,899,557 147.75 4 Manhattan Office Properties - Retail 499,012 87.6 % 67,403,680 154.17 60 Standalone Retail Properties 10 Union Square Union Square 58,006 85.5 % 6,944,628 139.95 8 1542 Third Avenue Upper East Side 56,250 100.0 % 2,652,308 41.15 4 1010 Third Avenue Upper East Side 38,235 26.1 % 412,120 41.24 1 77 West 55th Street Midtown 25,388 100.0 % 1,952,250 76.90 3 69-97 Main Street (12) Westport, CT 16,874 100.0 % 1,866,809 110.63 5 103-107 Main Street (12) Westport, CT 4,330 100.0 % 756,705 174.76 1 Sub-Total/Weighted Average Standalone Retail Properties 199,083 81.6 % 14,584,820 89.78 22 Multifamily Retail Properties 561 10th Avenue Hudson Yards 28,919 94.9 % 2,395,101 87.27 2 345 East 94th Street Upper East Side 3,700 100.0 % 247,782 66.97 1 298 Mulberry Street NoHo 10,365 100.0 % 1,645,002 158.71 1 Sub-Total/Weighted Average Multifamily Retail Properties 42,984 96.6 % 4,287,885 103.30 4 Office and Retail Portfolio Total 9,661,065 85.2 % $ 526,948,195 $ 63.98 678 Total/Weighted Average Office Properties 8,919,986 85.1 % $ 440,671,810 $ 58.02 592 Total/Weighted Average Retail Properties 741,079 86.5 % 86,276,385 134.56 86 Office and Retail Portfolio Total 9,661,065 85.2 % $ 526,948,195 $ 63.98 678 (1) Excludes (i) 197,242 square feet of space across our commercial portfolio attributable to building management use and tenant amenities and (ii) 80,225 square feet of space attributable to our observatory. (2) Based on leases signed and commenced as of December 31, 2022 and calculated as (i) rentable square feet less available square feet divided by (ii) rentable square feet. (3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes. (4) Represents annualized rent under leases commenced as of December 31, 2022 divided by occupied square feet. (5) Represents the number of leases at each property or on a portfolio basis. If a tenant has more than one lease, whether or not at the same property, but with different expirations, the number of leases is calculated equal to the number of leases with different expirations. (6) Includes 37,747 rentable square feet of space leased by our broadcasting tenants. (7) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 41 years (expiring December 31, 2063). (8) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to the Company, of approximately 55 years (expiring May 31, 2077). (9) Denotes a ground leasehold interest in the property with a remaining term, including unilateral extension rights available to us, of approximately 28 years (expiring July 31, 2050). (10) First Stamford Place consists of three buildings. (11) We have entered into an agreement to sell this property. The transaction is expected to close in the first quarter 2023, subject to customary closing conditions. 29 (12) Property was sold on February 1, 2023. Tenant Diversification As of December 31, 2022, our office and retail portfolios were leased to a diverse tenant base consisting of approximately 678 leases. Our tenants represent a broad array of industries as follows: Diversification by Industry Percent (1) Arts and entertainment 3.3 % Broadcast 1.0 % Consumer goods 15.5 % Finance, insurance, real estate 17.3 % Government entity 2.1 % Healthcare 1.7 % Legal services 5.3 % Non-profit 4.2 % Professional services (not including legal services) 9.4 % Retail 17.7 % Technology, media and advertising 18.0 % Others 4.5 % Total 100.0 % (1) Based on annualized rent. The following table sets forth information regarding the 20 largest tenants in our commercial portfolio based on annualized rent as of December 31, 2022. Weighted Percent of Average Total Portfolio Percent of Remaining Occupied Rentable Portfolio Lease Lease Square Square Annualized Annualized Tenant Property Expiration (1) Term (2) Feet (3) Feet (4) Rent (5) Rent (6) LinkedIn Empire State Building Aug. 2036 13.7 years 501,409 5.2 % $ 32,772,732 6.2 % Signature Bank 1333 & 1400 Broadway Jul. 2030 - Apr. 2035 12.1 years 308,207 3.2 % 18,175,128 3.4 % PVH Corp. 501 Seventh Avenue Oct. 2028 5.8 years 237,281 2.5 % 11,548,477 2.2 % Centric Brands Inc. Empire State Building Oct. 2028 5.8 years 221,365 2.3 % 11,289,615 2.1 % Sephora 112 West 34th Street Jan. 2029 6.1 years 11,334 0.1 % 10,533,628 2.0 % Li & Fung 1359 Broadway, ESB Oct. 2023 - Oct. 2028 4.8 years 173,273 1.8 % 9,260,886 1.8 % Target 112 West 34th St, 10 Union Sq. Mar. 2037 - Jan. 2038 14.7 years 81,340 0.8 % 8,825,395 1.7 % Macy's 111 West 33rd Street May 2030 7.4 years 131,117 1.4 % 8,382,100 1.6 % Urban Outfitters 1333 Broadway Sept. 2029 6.8 years 56,730 0.6 % 7,955,384 1.5 % Coty Empire State Building Jan. 2030 7.1 years 156,187 1.6 % 7,950,113 1.5 % Foot Locker 112 West 34th Street Sept. 2031 8.8 years 34,192 0.4 % 7,745,959 1.5 % Federal Deposit Insurance Corp. Empire State Building Dec. 2024 2.0 years 119,226 1.2 % 7,567,274 1.4 % HNTB Corporation Empire State Building Feb. 2029 6.2 years 105,143 1.1 % 6,982,050 1.3 % The Michael J. Fox Foundation 111 West 33rd Street Nov. 2029 6.9 years 86,492 0.9 % 6,219,167 1.2 % Shutterstock Empire State Building Apr. 2029 6.3 years 104,386 1.1 % 6,087,598 1.2 % Fragoman 1400 Broadway Feb. 2035 12.2 years 107,680 1.1 % 5,922,400 1.1 % Institutional Capital Network, Inc. One Grand Central Place Feb.2023 - Oct. 2035 9.8 years 89,300 0.9 % 5,617,792 1.1 % ASCAP 250 West 57th Street Aug. 2034 11.7 years 87,943 0.9 % 5,344,751 1.0 % Walgreens ESB, 1350 Broadway May 2025 - Sept. 2027 3.5 years 39,142 0.4 % 4,903,003 0.9 % The Interpublic Group of Co's, Inc. 111 West 33rd St & 1400 B'Way Jul. 2024 - Feb. 2025 1.8 years 77,364 0.8 % 4,744,134 0.9 % Total 2,729,111 28.3 % $ 187,827,586 35.6 % (1) Expiration dates are per lease and do not assume exercise of renewal or extension options. For tenants with more than two leases, the lease expiration is shown as a range. (2) Represents the weighted average remaining lease term, based on annualized rent. 30 (3) Based on leases signed and commenced as of December 31, 2022. (4) Represents the percentage of rentable square feet of our office and retail portfolios in the aggregate. (5) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes. (6) Represents the percentage of annualized rent of our office and retail portfolios in the aggregate. Lease Expirations The following table sets forth new and renewal leases entered into at our properties, the weighted average annualized cash rent per square foot for new and renewal leases executed during the year, the previous weighted average annualized cash rent prior to the renewal or re-leasing of these leases and the percent increase (decrease) in mark-to-market rent. Year Ended December 31, 2022 2021 2020 New and renewal leases entered into during the year (square feet) 1,118,579 1,005,630 923,379 Weighted average annualized cash rent per square foot for new and renewal leases executed during the year $ 59.42 $ 57.55 $ 57.45 Weighted average annualized cash rent per square foot for previous leases $ 58.58 $ 58.04 $ 61.18 Increase (decrease) in mark-to-market rent 1.4 % (0.8) % (6.1) % The following tables set forth a summary schedule of expirations for leases in place as of December 31, 2022 plus available space for each of the ten calendar years beginning with the year ended December 31, 2022 at the office and retail properties in our commercial portfolio. The information set forth in the table assumes that tenants exercise no renewal options and all early termination rights. Office and Retail Portfolio Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 1,105,719 11.4 % $ — — % $ — Signed leases not commenced 36 319,351 3.3 % — — % — Fourth quarter 2022 17 51,771 0.5 % 2,077,733 0.4 % 40.13 2023 89 494,016 5.1 % 30,276,946 5.7 % 61.29 2024 95 641,385 6.6 % 38,063,823 7.2 % 59.35 2025 83 523,666 5.4 % 34,354,748 6.5 % 65.60 2026 71 690,336 7.1 % 38,296,385 7.3 % 55.47 2027 89 716,550 7.4 % 44,105,885 8.4 % 61.55 2028 47 914,331 9.5 % 48,868,734 9.3 % 53.45 2029 47 962,150 10.0 % 70,258,628 13.3 % 73.02 2030 35 706,825 7.3 % 46,759,804 8.9 % 66.15 2031 23 171,061 1.8 % 20,665,463 3.9 % 120.81 2032 30 382,405 4.0 % 26,756,490 5.1 % 69.97 Thereafter 52 1,981,499 20.6 % 126,463,556 24.0 % 63.82 Total 714 9,661,065 100.0 % $ 526,948,195 100.0 % $ 63.98 31 Manhattan Office Properties (4) Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 789,933 10.4 % $ — — % $ — Signed leases not commenced 29 268,085 3.5 % — — % — Fourth quarter 2022 10 33,457 0.4 % 1,838,529 0.5 % 54.95 2023 75 384,161 5.1 % 23,610,627 6.0 % 61.46 2024 82 583,319 7.7 % 35,330,760 9.0 % 60.57 2025 61 372,985 4.9 % 24,405,244 6.2 % 65.43 2026 50 464,437 6.1 % 27,837,943 7.1 % 59.94 2027 66 571,936 7.6 % 32,887,868 8.3 % 57.50 2028 32 796,300 10.5 % 42,948,266 10.9 % 53.93 2029 33 724,521 9.6 % 43,731,139 11.1 % 60.36 2030 20 547,490 7.2 % 33,017,325 8.4 % 60.31 2031 11 82,182 1.1 % 5,782,918 1.5 % 70.37 2032 22 344,750 4.6 % 23,649,713 6.0 % 68.60 Thereafter 32 1,608,923 21.3 % 99,579,132 25.0 % 61.89 Total 523 7,572,479 100.0 % $ 394,619,464 100.0 % $ 60.58 Greater New York Metropolitan Area Office Properties Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 257,970 19.1 % $ — — % $ — Signed leases not commenced 2 9,161 0.7 % — — % — Fourth quarter 2022 5 6,922 0.5 % 60,189 0.1 % 8.70 2023 11 88,694 6.6 % 4,741,365 10.3 % 53.46 2024 6 39,232 2.9 % 1,443,769 3.1 % 36.80 2025 17 127,930 9.5 % 5,378,016 11.7 % 42.04 2026 14 154,669 11.5 % 6,129,451 13.3 % 39.63 2027 16 88,575 6.6 % 3,679,727 8.0 % 41.54 2028 11 111,044 8.2 % 4,216,464 9.2 % 37.97 2029 6 130,748 9.7 % 5,928,349 12.9 % 45.34 2030 4 78,526 5.8 % 3,457,648 7.5 % 44.03 2031 2 5,176 0.4 % 153,755 0.3 % 29.71 2032 2 4,718 0.4 % 147,782 0.3 % 31.32 Thereafter 4 244,142 18.1 % 10,715,831 23.3 % 43.89 Total 100 1,347,507 100.0 % $ 46,052,346 100.0 % $ 42.63 32 Retail (5) Percent of Rentable Portfolio Annualized Number Square Rentable Percent of Rent Per of Leases Feet Square Feet Annualized Annualized Rentable Year of Lease Expiration Expiring (1) Expiring (2) Expiring Rent (3) Rent Square Foot Available — 57,816 7.8 % $ — — % $ — Signed leases not commenced 5 42,105 5.7 % — — % — Fourth quarter 2022 2 11,392 1.5 % 179,015 0.2 % 15.71 2023 3 21,161 2.9 % 1,924,954 2.2 % 90.97 2024 7 18,834 2.5 % 1,289,294 1.5 % 68.46 2025 5 22,751 3.1 % 4,571,488 5.3 % 200.94 2026 7 71,230 9.6 % 4,328,991 5.0 % 60.77 2027 7 56,039 7.6 % 7,538,290 8.7 % 134.52 2028 4 6,987 0.9 % 1,704,004 2.0 % 243.88 2029 8 106,881 14.4 % 20,599,140 23.9 % 192.73 2030 11 80,809 10.9 % 10,284,831 11.9 % 127.27 2031 10 83,703 11.3 % 14,728,790 17.1 % 175.96 2032 6 32,937 4.4 % 2,958,995 3.4 % 89.84 Thereafter 16 128,434 17.4 % 16,168,593 18.8 % 125.89 Total 91 741,079 100.0 % $ 86,276,385 100.0 % $ 134.56 (1) If a lease has two different expiration dates, it is considered to be two leases (for the purposes of lease count and square footage). (2) Excludes (i) 184,725 rentable square feet across our commercial portfolio attributable to building management use and tenant amenities and (ii) 80,225 square feet of space attributable to our observatory. (3) Represents annualized base rent and current reimbursement for operating expenses and real estate taxes. (4) Excludes (i) retail space in our Manhattan office properties and (ii) the Empire State Building broadcasting licenses and observatory operations. (5) Includes an aggregate of 541,996 rentable square feet of retail space in our Manhattan office properties and multifamily properties. Excludes the Empire State Building broadcasting licenses and observatory operations. Portfolio Transaction Activity During April 2022, we transferred 383 Main Avenue, Norwalk CT, which was encumbered by a $30.0 million mortgage, back to the lender in a consensual foreclosure and recognized a non-cash gain of $27.2 million, which is included in Gain on sale/disposition of properties in our condensed consolidated statement of operations. Prior to the consummation of this transaction, in December 2021, we recorded a $7.7 million impairment charge on the property as we had concluded the cost basis of the asset exceeded its fair value given our reduced holding period and new intent to transfer property ownership to the lender. On December 7, 2022, we closed on the sale of 10 Bank Street, White Plains, NY, which was encumbered by a $30.0 million mortgage, at a gross asset valuation of $42.0 million. On December 20, 2022, we closed on the acquisition of a 100% free-market, full service multifamily asset located at 298 Mulberry Street in Manhattan for a purchase price of $114.9 million. The property has a total of 96 units and was 100% leased as of December 31, 2022. Subsequent to the year ended December 31, 2022, on February 1, 2023 we closed on the sale of 69-97 and 103-107 Main Street in Westport, Connecticut at a gross asset valuation of $40.0 million. The Westport sale was a related party transaction approved in accordance with the Company's protocols. See "Financial Statements - Note 11 Related Party Transactions ". In December 2022, we also entered into a purchase and sale agreement for 500 Mamaroneck Avenue in Harrison, NY at a gross asset valuation of $53.0 million. This transaction is expected to close in the first quarter of 2023, subject to customary closing conditions. 33 ITEM 3. LEGAL PROCEEDINGS Refer to “Financial Statements-Note 9 Commitments and Contingencies” in this Annual Report on Form 10-K for a description of any pending legal proceedings. ITEM 4. MINE SAFETY DISCLOSURE Not applicable. 34 PART II