What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2024-02-28 compared with 2023-02-28 · 341 added, 336 removed, 1267 unchanged (35% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

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.

As of December 31, 2022, 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.

Based on the foregoing, ESRT's Chief Executive Officer and Principal Financial Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including ESRT's Chief Executive Officer and Principal Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

As of December 31, 2023, 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, its President, and its Chief Financial Officer & Chief Accounting Officer, regarding the effectiveness of our disclosure controls and procedures at

the end of the period covered by this report.

Based on the foregoing, ESRT's Chief Executive Officer, its President, and its Chief Financial Officer & Chief Accounting Officer concluded, as of that time, that our disclosure controls and procedures were effective in ensuring that information required to be disclosed by us in reports filed or submitted under the Exchange Act (i) is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) is accumulated and communicated to our management, including ESRT's Chief Executive Officer, its President, and its Chief Financial Officer & Chief Accounting Officer, as appropriate to allow for timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

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is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in the Securities Exchange Act of 1934 Rule 13(a)-15(f).

Under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2022 as required by the Securities Exchange Act of 1934 Rule 13(a)-15(c).

Under the supervision and with the participation of our management, including our Chief Executive Officer, President and Chief Financial Officer & Chief Accounting Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2023 as required by the Securities Exchange Act of 1934 Rule 13(a)-15(c).

In making this assessment, we used the criteria set forth in the framework in Internal Control–Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the "COSO criteria").

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Our responsibility is to express an opinion on the Operating Partnership’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are

required to be independent with respect to the Operating Partnership in accordance with the U.S.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Operating Partnership in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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OTHER INFORMATION

(b) During the three months ended December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted , terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

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Registered under Section 12 of the Securities Exchange Act of 1934, as Amended

Indenture, dated August 12, 2014, by and among Empire State Realty OP, L.P., as issuer, Empire State Realty Trust, Inc., and Wilmington Trust, National Association, as trustee, incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed with the SEC on August 12, 2014.

Contribution Agreement among Empire Realty Trust, Inc., Empire Realty Trust, L.P.

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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.

Indemnification Agreement among Empire State Realty Trust, Inc.

and Stephen V.

Horn, dated February 20, 2024 .

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

and Stephen V.

Horn, dated February 20, 2024 .

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

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

Compensation Clawback Policy of Empire State Realty OP, L.P.

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.

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8 to Empire State Realty Trust, Inc.'s Form S-11 (Registration No.333-179485), filed with the SEC on September 27, 2013.

Third Amended and Restated Bylaws of Empire State Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K filed with the SEC on March 7, 2019.

Fourth Amended and Restated Bylaws of Empire State Realty Trust, Inc., incorporated by reference to Exhibit 3.1 to the Registrant's Form 8-K filed with the SEC on August 11, 2023.

* Filed herewith.

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February 28, 2024 By:

/s/ Anthony E.

Chairman, President and Chief Executive Officer

February 28, 2023 By:

/s/ Christina Chiu

Executive Vice President, Chief Operating Officer and Chief Financial Officer

(Principal Financial Officer)

February 28, 2023 By:

/s/ Stephen V.

Senior Vice President, Chief Accounting Officer

(Principal Accounting Officer)

Executive Vice President, Chief Financial Officer & Chief Accounting Officer

(Principal Financial and Accounting Officer)

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.

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/s/ Anthony E.

Malkin Chairman of the Board of Directors, President and Chief Executive Officer February 28, 2023

Malkin Chairman of the Board of Directors and Chief Executive Officer February 28, 2024

(Principal Executive Officer)

/s/ Christina Chiu

Executive Vice President, Chief Operating Officer and Chief Financial Officer

(Principal Financial Officer)

/s/ Christina Chiu President

February 28, 2024

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/s/ Stephen V.

Horn Senior Vice President, Chief Accounting Officer February 28, 2023

Horn (Principal Accounting Officer)

Horn Executive Vice President, Chief Financial Officer & Chief Accounting Officer February 28, 2024

(Principal Financial and Accounting Officer)

/s/ Thomas J.

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Robinson IV Director February 28, 2024

/s/ Christina Van Tassell Director February 28, 2024

Christina Van Tassell

/s/ Hannah Yang Director February 28, 2024

EMPIRE STATE REALTY OP, L.P.

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Valuation of goodwill - observatory

Description of the Matter At December 31, 2022, the Company’s goodwill related to the observatory reporting unit was $227.5 million as disclosed in Note 4 to the consolidated financial statements.

Description of the Matter At December 31, 2023, the Operating Partnership’s goodwill related to the observatory reporting unit was $227.5 million as disclosed in Note 4 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.

The Company determined that interim impairment evaluations of goodwill were necessary for the observatory reporting unit and engaged a third-party valuation specialist to perform valuation procedures.

Similarly, the Company performed its annual impairment testing as of October 1, 2022.

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

The Operating Partnership performed its annual impairment testing as of October 1, 2023 and engaged a third-party valuation specialist to perform valuation procedures.

Auditing management’s goodwill impairment test was 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 and the weighted average cost of capital, 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.

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 process, including controls over management’s review of the significant assumptions described above.

To test the implied fair value of the Operating Partnership’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 Operating Partnership.

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

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Acquired below-market ground leases, net 321,241 329,073

329,073 336,904

Right of use assets

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Private perpetual preferred units:

Series 2019 preferred units, $ 13.52 per unit liquidation preference, 4,664 issued and outstanding in 2022 and 2021, respectively

Series 2019 preferred units, $ 13.52 per unit liquidation preference, 4,664 issued and outstanding in 2023 and 2022

21,936 21,936

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Series ES operating partnership units ( 19,947 and 21,081 limited partner operating partnership units outstanding at December 31, 2023 and 2022, respectively)

1,391 ( 4,058 )

Series 60 operating partnership units ( 5,144 and 5,558 limited partner operating partnership units outstanding at December 31, 2023 and 2022, respectively)

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Loss on early extinguishment of debt — — ( 214 )

IPO litigation expense — — ( 1,165 )

Income (loss) before income taxes 87,122 64,758 ( 14,771 )

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Private perpetual preferred unit distributions ( 4,201 ) ( 4,201 ) ( 4,201 )

Net loss attributable to non-controlling interest in other partnerships 243 17 —

Net (income) loss attributable to non-controlling interest in other partnerships ( 68 ) 243 17

Net income (loss) attributable to common unitholders $ 80,138 $ 59,254 $ ( 17,221 )

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Other comprehensive income (loss):

Unrealized gain (loss) on valuation of interest rate swap agreements 40,044 348 ( 19,322 )

Unrealized gain on valuation of interest rate swap agreements 5,581 40,044 348

Amount reclassified into interest expense ( 7,819 ) 7,230 11,653

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Balance at December 31, 2020 6,224 $ 29,940 171,565 $ 1,055,249 80,355 $ 648,543 23,678 $ ( 1,348 ) 6,424 $ ( 721 ) 3,255 $ ( 356 ) $ — $ 1,731,307

Issuance of private perpetual preferred in exchange for OP units 54 789 — — ( 97 ) ( 800 ) 43 11 — — — — — —

Conversion of operating partnership units and Class B shares to ESRT Partner's Capital — — 3,498 10,426 ( 1,317 ) ( 10,643 ) ( 1,357 ) 105 ( 540 ) 73 ( 285 ) 39 — —

Repurchases of common units — — ( 4,887 ) ( 46,704 ) — — — — — — — — — ( 46,704 )

Contributions to consolidated joint venture interests — — — — — — — — — — — — 13,269 13,269

Equity compensation — — 41 513 782 19,747 — — — — — — — 20,260

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Net income (loss) — 4,201 — ( 10,711 ) — ( 4,513 ) — ( 1,429 ) — ( 379 ) — ( 189 ) ( 17 ) ( 13,037 )

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

Other comprehensive income — — — 7,465 3,144 996 264 132 — 12,001

Balance at December 31, 2021 6,224 $ 29,940 170,217 $ 998,128 79,820 $ 649,157 22,321 $ ( 4,058 ) 5,884 $ ( 1,395 ) 2,970 $ ( 692 ) $ 13,252 $ 1,684,332

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Distributions — ( 4,201 ) — ( 23,109 ) — ( 11,251 ) — ( 3,025 ) — ( 800 ) — ( 400 ) — ( 42,786 )

Net income (loss) — 4,201 — ( 10,711 ) — ( 4,513 ) — ( 1,429 ) — ( 379 ) — ( 189 ) ( 17 ) ( 13,037 )

Net income — 4,201 — 36,442 — 16,116 — 4,800 — 1,244 — 652 ( 243 ) 63,212

Other comprehensive income — — — 27,701 12,251 3,648 946 495 2,233 47,274

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Net income — 4,201 — 49,044 — 22,439 — 6,251 — 1,603 — 801 68 84,407

Other comprehensive income — — — 27,701 12,251 3,648 946 495 2,233 47,274

Other comprehensive loss — — — ( 1,178 ) ( 539 ) ( 150 ) ( 38 ) ( 19 ) ( 314 ) ( 2,238 )

Balance at December 31, 2023 6,224 $ 29,940 163,046 $ 985,518 80,189 $ 694,512 19,947 $ 4,427 5,144 $ 779 2,619 $ 462 15,407 $ 1,731,045

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Equity based compensation 20,026 21,011 20,260

Settlement of derivative contract

— — ( 20,281 )

Loss on early extinguishment of debt

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Cash Flows From Investing Activities

Acquisition of real estate property ( 26,910 ) ( 115,593 ) ( 117,540 )

Net proceeds from disposition of real estate 88,910 11,005 —

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Development costs ( 12 ) ( 35 ) ( 165 )

Acquisition of real estate property ( 115,593 ) ( 117,540 ) —

Net cash used in investing activities ( 77,340 ) ( 230,891 ) ( 212,742 )

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Cash Flows From Financing Activities

Proceeds from mortgage notes payable — — 180,000

Repayment of mortgage notes payable ( 8,632 ) ( 7,504 ) ( 4,091 )

Proceeds from unsecured senior notes — — 175,000

Proceeds from unsecured term loan — — 175,000

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

Proceeds from unsecured revolving credit facility — — 550,000

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

Contributions from consolidated joint ventures 187 224 —

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Distributions ( 37,122 ) ( 38,585 ) ( 28,563 )

Net cash (used in) provided by financing activities ( 140,242 ) ( 93,045 ) 257,167

Net cash used in financing activities ( 62,873 ) ( 140,242 ) ( 93,045 )

Net increase (decrease) in cash and cash equivalents and restricted cash 92,278 ( 159,960 ) ( 93,301 )

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

— 25,308 8,849

Conversion of operating partnership units and Class B shares to Class A shares 17,671 4,495 10,426

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Mortgage assumed in connection with sale of real estate — 30,117 —

Issuance of Series 2019 private perpetual preferred in exchange for operating partnership units

Debt assumed with the acquisition of real estate properties — — 177,453

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Empire State Realty OP, L.P.

is the entity through which Empire State Realty Trust, Inc.

("ESRT"), a self-administered and self-managed real estate investment trust, or REIT, conducts all of its business and owns (either directly or through subsidiaries) substantially all of its assets.

We own, manage, operate, acquire and reposition office, retail and multifamily properties in Manhattan and the greater New York metropolitan area.

Empire State Realty Trust, Inc.'s Class A common stock, par value $ 0.01 per share, is listed on the New York Stock Exchange under the symbol "ESRT." We were organized as a Delaware limited partnership on November 28, 2011.

ESRT as the sole general partner in our company, has responsibility and discretion in the management and control in our company, and our limited partners, in such capacity, have no authority to transact business for, or participate in the management activities of our company.

(the "Operating Partnership") is the entity through which Empire State Realty Trust, Inc.

ESRT), a NYC-focused REIT that owns and operates a portfolio of modernized, amenitized, and well-located office, retail, and multifamily assets, conducts all of its business and owns (either directly or through subsidiaries) substantially all of its assets.

The Company is a recognized leader in energy efficiency and indoor environmental quality.

ESRT’s flagship Empire State Building – the “World’s Most Famous Building” – includes its Observatory, the #1 attraction in the U.S.

in Tripadvisor’s Travelers’ Choice Awards:

Best of the Best for two consecutive years .

As of December 31, 2023, ESRT’s portfolio was comprised of approximately 8.6 million rentable square feet of office space, 0.7 million rentable square feet of retail space and 727 residential units.

Our office portfolio included 11 properties (including three long-term ground leasehold interests) encompassing approximately 8.6 million rentable square feet.

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

The remaining two office properties encompass approximately 1.1 million rentable square feet and are located in Stamford, Connecticut, with immediate access to mass transportation.

Additionally, we have entitled land adjacent to one of the Stamford office properties that can support the development of either office or residential per local zoning.

Our multifamily portfolio included 727 residential units in New York City.

We were organized as a Delaware limited partnership on November 28, 2011, and commenced operations upon completion of the initial public offering of ESRT’s Class A common stock and related formation transactions on October 7, 2013 (the "IPO").

ESRT's Class A common stock, par value $ 0.01 per share, is listed on the New York Stock Exchange under the symbol "ESRT." ESRT, as the sole general partner in our Company, has responsibility and discretion in the management and control of our Company, and our limited partners, in such capacity, have no authority to transact business for, or participate in the management activities, of our Company.

As of December 31, 2023, ESRT owned approximately 60.2 % of our operating partnership units.

As of December 31, 2022, our office and retail portfolio contained 9.7 million rentable square feet of office and retail space, and was 85.2 % occupied.

Including signed leases not yet commenced, our total office and retail portfolio was 88.6 % leased.

As of December 31, 2022, we owned 12 office properties (including three long-term ground leasehold interests) encompassing approximately 8.9 million rentable square feet of office space, which were approximately 85.1 % occupied or 88.3 % leased including signed leases not yet commenced.

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

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

Three office properties are located in Fairfield County, Connecticut and Westchester County, New York, encompassing approximately 1.3 million rentable square feet.

The majority of the square footage for these three 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 0.4 million rentable square foot office building and garage, which we refer to herein as Metro Tower.

As of December 31, 2022, our commercial 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.

On February 1, 2023, the two retail properties in Westport, Connecticut were sold.

Note 3 Acquisitions and Dispositions.

As of December 31, 2022, our standalone retail properties were 97.6 % leased.

Additionally, as of December 31, 2022, our portfolio included three multifamily properties located in Manhattan totaling 721 units of which 96.3 % were leased.

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

The TRSs, through several wholly owned limited liability companies, conduct third-party services businesses, which include the Empire State Building observatory, cleaning services, cafeteria, restaurant and health clubs, and asset and property management services.

The TRSs, through several wholly owned limited liability companies, conduct third-party services businesses, which include the Empire State Building Observatory, cleaning services, cafeterias, restaurant and health clubs, and asset and property management services.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements, have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) and with the rules and regulations of the Securities and Exchange Commission (the "SEC"), represent our assets and liabilities and operating results.

The accompanying consolidated financial statements prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP") and with the rules and regulations of the SEC, represent our assets and liabilities and operating results.

The consolidated financial statements include our accounts and our partially owned and wholly owned subsidiaries.

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We consolidate entities in which we have a controlling financial interest.

In determining whether we have a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity (“VIE”) and

whether we are the primary beneficiary.

For variable interest entities ("VIE"), we consolidate the entity if we are deemed to have a variable interest in the entity and through that interest we are deemed the primary beneficiary.

The primary beneficiary of a VIE is the entity that has (i) the power to direct the activities that most significantly impact the entity's economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

The primary beneficiary is required to consolidate the VIE.

As of December 31, 2022, we have a variable interest in and are deemed to be the primary beneficiary of ESRT 298 Mulberry, L.L.C.

which is the entity through which we acquired a multifamily asset located at 298 Mulberry Street in Manhattan in December 2022 (see Note 3 Acquisitions and Dispositions).

We had no VIEs as of December 31, 2021.

At December 31, 2022, we were the primary beneficiary of a variable interest in the intermediary entity which held title to 298 Mulberry Street, the multifamily asset acquired in December 2022.

The intermediary entity was utilized to execute a like-kind exchange and subsequent to March 31, 2023, the like-kind exchange was completed and we took title to 298 Mulberry Street.

Therefore, we had no VIEs at December 31, 2023.

We will assess the accounting treatment for each investment we may have in the future.

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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 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.

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 and indefinite-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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Fair value is assigned to above-market and below-market leases based on the difference between (a) the contractual amounts to be paid by the tenant based on the existing lease and (b) our estimate of current market lease rates for the corresponding in-place leases, over the remaining terms of the in-place leases.

Capitalized above-market lease amounts are amortized as a decrease to rental revenue over the remaining terms of the respective leases.

Capitalized above-market lease amounts are

amortized as a decrease to rental revenue over the remaining terms of the respective leases.

Capitalized below-market lease amounts are amortized as an increase to rental revenue over the remaining terms of the respective leases.

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Assets held for sale are recorded at the lower of cost or fair value less costs to sell and depreciation expense is no longer recorded.

During the fourth quarter 2021, we suspended debt service related to a $ 30 million mortgage secured by our property in Norwalk, Connecticut and we identified this action as an indicator of impairment.

We concluded that the cost basis of the asset exceeded its fair value when considering our reduced holding period given our intent to transfer property ownership to the lender.

As such, we incurred a $ 7.7 million impairment charge in the year ended December 31, 2021.

During the fourth quarter 2021, we concluded that the cost basis of 383 Main Avenue, Norwalk, Connecticut exceeded its fair value when we reduced our hold period given our intent to transfer property ownership to the lender.

As such, we incurred a $ 7.7 million i mpairment charge in the year ended December 31, 2021.

Our methodology to calculate the fair value of the property involved a combination of the discounted cash flow method, utilizing Level 3 unobservable inputs such as market capitalization rates obtained from external sources, and the market-based approach utilizing recent sales comparables.

During April 2022, we transferred 383 Main Avenue, Norwalk CT back to the lender in a consensual foreclosure.

In April 2022, we transferred this asset back to the lender in a consensual foreclosure.

Refer to Note 3 Acquisitions and Dispositions.

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As of December 31, 2023 and 2022, we had no equity method investments.

Goodwill is tested annually for impairment and is tested for impairment more frequently if events and circumstances indicate that the asset might be impaired.

Goodwill is tested annually for impairment and more frequently if events and circumstances indicate that the asset might be impaired.

An impairment loss is recognized to the extent that the carrying amount, including goodwill, exceeds the reporting unit’s fair value and the implied fair value of goodwill is less than the carrying amount of that goodwill.

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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.

inputs that are classified within levels one and two of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

As a basis for considering market participant assumptions in fair value measurements, the FASB guidance establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within levels one and two of the hierarchy) and the reporting entity's own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

The methodologies used for valuing financial instruments have been categorized into three broad levels as follows:

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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, 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.

The fair value of our mortgage notes payable, senior unsecured notes (Series A, B, C, D, E, F, G and H), unsecured term loan facilities and unsecured revolving credit facility 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 by us.

Derivative Instruments

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Accordingly, no provision has been made for federal and state income taxes.

ESRT has elected, together with ESRT

Observatory TRS, L.L.C., our subsidiary that holds our observatory operations, to treat ESRT Observatory TRS, L.L.C.

ESRT has elected, together with ESRT Holdings TRS, L.L.C., our subsidiary that holds our third party management, restaurant, cafeteria, health clubs and certain cleaning operations, to treat ESRT Holdings TRS, L.L.C.

ESRT has elected, together with ESRT Observatory TRS, L.L.C., our subsidiary that holds our Observatory operations, to treat ESRT Observatory TRS, L.L.C.

ESRT has elected, together with ESRT Holdings TRS, L.L.C., our subsidiary that holds our third-party management, restaurant, cafeterias, health clubs and certain cleaning operations, to treat ESRT Holdings TRS, L.L.C.

TRSs may participate in non-real estate activities and/or perform non-customary services for tenants and their operations are generally subject to regular corporate income taxes.

Our TRSs account for their income taxes in accordance with GAAP, which includes an estimate of the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our financial statements or tax returns.

The calculation of the TRSs' tax provisions may require interpreting tax laws and regulations and could result in the use of judgments or estimates which could cause its recorded tax liability to differ from the actual amount due.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the

amounts used for income tax purposes.

The TRSs periodically assess the realizability of deferred tax assets and the adequacy of deferred tax liabilities, including the results of local, state, or federal statutory tax audits or estimates and judgments used.

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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 , four or five 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 65 for awards granted in 2020 and after and age of 60 for awards granted before 2020 and (ii) the date on which the employee has first completed ten years of continuous service with us or our affiliates.

An employee is retirement eligible when the employee attains the (i) age of 65 for awards granted in 2020 and after and age of 60 for awards granted before 2020 and (ii) the date on which the employee has first completed the requisite years of continuous service with us or our affiliates.

Share-based compensation for market-based equity awards and performance-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 .

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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.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848) Deferral of the Sunset Date of Topic 848 which defers the sunset date of ASU 2022-04, Reference Rate Reform (Topic 848):

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848) Deferral of the Sunset Date of Topic 848 which deferred the sunset date of ASU 2022-04, Reference Rate Reform (Topic 848):

Facilitation of the Effects of Reference Rate Reform to December 31, 2024.

ASU 2022-06 is effective immediately for all companies.

ASU 2022-06 did not have an impact on our consolidated financial statements for the year ended December 31, 2022.

As of December 31, 2023, we have transitioned all of our LIBOR-indexed debt and derivatives to SOFR and applied the practical expedient allowed under the guidance.

During November 2023, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, to improve the disclosures about reportable segments and add more detailed information about a reportable segment’s expenses.

The amendments in the ASU require public entities to disclose on an annual and interim basis significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and included within each reported measure of segment profit or loss, other segment

items and a description of its composition by reportable segment, the title and position of the CODM, and an explanation of how the CODM uses the reported measures of segment profit or loss in assessing segment performance and deciding how to allocate resources.

The ASU does not change the definition of a segment, the method for determining segments, the criteria for aggregating operating segments into reportable segments, or the current specifically enumerated segment expenses that are required to be disclosed.

The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

We are evaluating the impact of adopting this new accounting standard on our consolidated financial statements.

Acquisitions and Dispositions

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.

298 Mulberry Street is located at the intersection of East Houston Street and Mulberry Street, walking distance to New York University’s campus in the NoHo neighborhood of Manhattan.

Property Acquisitions

On September 14, 2023, we closed on the acquisition of a retail property in Williamsburg, Brooklyn, located on the corner of North 6 th Street and Wythe Avenue for a purchase price of $ 26.4 million.

The property has three retail tenants and six residential units and was fully leased as of December 31, 2023.

The transaction was executed as an exchange under Section 1031 of the Internal Revenue Code of 1986, as amended.

The purchase price is the fair value at the date of acquisition.

On December 20, 2022, we closed on the acquisition of a multifamily asset located at 298 Mulberry Street in Manhattan for a purchase price of $ 114.9 million.

In addition to the 96 residential units, the property also contains retail space leased to CVS and a garage.

The purchase price is the fair value at the date of acquisition.

On December 22, 2021, we acquired 90 % of two multifamily assets located in Manhattan, the Victory (561 10th Avenue) and 345 East 94th Street, previously owned by a joint venture of Fetner Properties and an institutional owner.

On December 22, 2021, we acquired 90 % of two multifamily assets located in Manhattan, the Victory (561 10th Avenue) and 345 East 94th Street.

The total transaction value was $ 307.0 million, inclusive of $ 134.0 million of debt on the Victory, that matures in 2033 and has an effective interest rate of 3.85 %, and $ 52.0 million of debt on 345 East 94th Street, that matures in 2030 and has an effective interest rate of 3.56 %.

Fetner Properties retained a 10 % equity stake and continues to manage onsite operations.

We will asset manage the properties and have control over all decision making through our voting interests in each entity.

Additionally, we have the right to assume day-to-day management for no additional consideration.

The fair value of the non-controlling interest retained by Fetner Properties was equivalent to 10 %, the equity stake they retained, of the gross purchase price less their pro-rata share of the debt assumed.

The previous owner retained a 10 % equity stake.

We asset manage the properties and have control over all decision making through our voting interests in each entity.

We currently use a third-party manager, but we have the right to assume day-to-day property management for no additional consideration.

The fair value of the non-controlling interest was equivalent to 10 % of the gross purchase price less the pro-rata share of the debt assumed.

The purchase price of the non-controlling interest is its fair value at the date of acquisition.

Assets and liabilities acquired are as follows (amounts in thousands):

Date Acquired Land Building and Improvements Assets Liabilities Total*

298 Mulberry Street 12/20/2022 $ 40,935 $ 69,508 $ 5,300 $ ( 150 ) $ 115,593

The Victory is a 417 unit, 45-story apartment building with an 11,000 square foot retail space leased to CVS through 2040.

It is a participant in an extendable 421a tax abatement program.

345 East 94th Street is a 208 unit, 30-story, apartment building.

It is a participant in an extendable 421a tax abatement program.

The following table summarizes properties acquired during the years ended December 31, 2023, 2022 and 2021 (amounts in thousands):

Property Date Acquired Land Building and Improvements Assets Liabilities Total*

Williamsburg Retail, Brooklyn 9/14/2023 $ 4,851 $ 20,936 $ 1,573 $ ( 300 ) $ 27,060

298 Mulberry Street, Manhattan 12/20/2022 $ 40,935 $ 69,508 $ 5,300 $ ( 150 ) $ 115,593

The Victory 12/21/2021 91,437 124,997 13,573 ( 19,895 ) $ 210,112

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*Includes total capitalized transaction costs of $ 3.8 million.

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 in White Plains, NY, which was encumbered by a $ 30.0 million mortgage, at a gross asset valuation of $ 42.0 million and recorded a gain of $ 6.8 million, which is included in Gain on sale/disposition of properties in our consolidated statement of operations.

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.

The assets and related liabilities of the 500 Mamaroneck property are classified as held for sale in our consolidated balance sheet as of December 31, 2022 having met the held for sale criteria set forth in ASC 360 Property, Plant, and Equipment.

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 Note 11 Related Party Transactions .

Property Dispositions

The following table summarizes properties disposed of during the years ended December 31, 2023 and 2022 (amounts in thousands):

Property Date of Disposal Sales Price Gain on Disposition

500 Mamaroneck Avenue, Harrison, New York* 4/5/2023 $ 53,000 $ 11,075

69-97 and 103-107 Main Street, Westport, Connecticut 2/1/2023 $ 40,000 $ 15,689

10 Bank Street, White Plains, New York 12/7/2022 $ 42,000 $ 6,818

383 Main Avenue, Norwalk, Connecticut** 4/1/2022 $ 30,000 $ 27,170

*The gain is net of approximately $ 4.5 million of post-closing costs we accrued related to expected contaminated soil remediation costs and our commitment to reimburse the buyer for a delay in rent commencement from a tenant impacted by the soil remediation efforts.

Subsequent to December 31, 2023, we funded the buyer for these costs and we have no further obligations or contingencies that relate to this property.

**We transferred the property, which was encumbered by a $ 30.0 million mortgage, back to the lender in a consensual foreclosure and recognized a non-cash gain upon the disposition.

There were no property dispositions for the year ended December 31, 2021.

Deferred Costs, Acquired Lease Intangibles and Goodwill

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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 (Expense)

2024 $ 7,831 $ 7,430 $ 1,977

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and 501 Seventh Avenue Associates, L.L.C.

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.

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.

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.

From the quarter ended June 30, 2020 and for each subsequent quarter through our annual goodwill testing in October 2022, we bypassed the optional qualitative goodwill impairment assessment and proceeded directly to a quantitative assessment of the observatory reportable segment and engaged a third-party valuation consulting firm to perform the valuation process.

This was done in response to the closure of the observatory on March 16, 2020, due to the COVID-19 pandemic, which was subsequently fully reopened on August 24, 2020.

We performed our annual goodwill testing in October 2023, where we bypassed the optional qualitative goodwill impairment assessment and proceeded directly to a quantitative assessment of the Observatory reportable segment and engaged a third-party valuation consulting firm to perform the valuation process.

The quantitative 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.

Each quantitative analysis performed concluded the fair value of the standalone observatory reporting unit exceeds its carrying value.

The quantitative analysis performed concluded the fair value of the reporting unit exceeds its carrying value.

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.

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250 West 57th Street 180,000 180,000 2.83 % 3.21 % 12/1/2030

10 Bank Street (4)

— 31,091 — % — % —

383 Main Avenue (5)

— 30,000 — % — % —

1333 Broadway 160,000 160,000 4.21 % 4.29 % 2/5/2033

345 East 94th Street - Series A 43,600 43,600 70.0 % of LIBOR plus 0.95 %

345 East 94th Street - Series A 43,600 43,600 70.0 % of SOFR plus 0.95 %

3.56 % 11/1/2030

345 East 94th Street - Series B 7,865 8,650 LIBOR plus 2.24 %

345 East 94th Street - Series B 7,209 7,865 SOFR plus 2.24 %

3.56 % 11/1/2030

561 10th Avenue - Series A 114,500 114,500 70.0 % of LIBOR plus 1.07 %

561 10th Avenue - Series A 114,500 114,500 70.0 % of SOFR plus 1.07 %

3.85 % 11/1/2033

561 10th Avenue - Series B 17,415 19,250 LIBOR plus 2.45 %

561 10th Avenue - Series B 15,801 17,415 SOFR plus 2.45 %

3.85 % 11/1/2033

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(3) Represents a $ 164.0 million mortgage loan bearing interest of 4.09 % and a $ 11.9 million loan bearing interest at 6.25 %.

(4) 10 Bank Street was sold in December 2022.

(5) Ownership of 383 Main Avenue, Norwalk CT was transferred to the lender during April 2022.

(4) At December 31, 2023, we were in compliance with all debt covenants.

(7) As of August 29, 2022, the benchmark index interest rate was converted from LIBOR to SOFR, plus a benchmark adjustment of 10.0 basis points.

Principal Payments

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Amortization expense related to deferred financing costs was $ 4.4 million, $ 4.9 million, and $ 4.5 million, for the years ended December 31, 2023, 2022 and 2021, respectively, and was included in interest expense.

Mortgage Debt

Mortgage debt of $ 30.0 million on our 383 Main Avenue property in Norwalk, Connecticut was in default as of December 31, 2021.

We had suspended debt service as of November 1, 2021 and we identified this action as an indicator of impairment.

We concluded that the cost basis of the asset exceeded its fair value when considering our reduced holding period given our intent to transfer property ownership to the lender.

We believe this action was in the best interest of our shareholders given the challenging fundamentals of the Norwalk, CT submarket.

During the quarter ended December 31, 2021, we had incurred an $ 7.7 million impairment charge on the same property.

Refer to Note 2 Summary of Significant Accounting Policies.

During April 2022, we transferred 383 Main Avenue, Norwalk CT back to the lender in a consensual foreclosure.

Refer to Note 3 Acquisitions and Dispositions.

Except as noted above, we were not in default on any of our loan agreements as of December 31, 2021.We were not in default on any of our loan agreements as of December 31, 2022.

Unsecured Revolving Credit and Term Loan Facilities

On August 29, 2022, we entered into a third amendment to our amended and restated credit agreement dated August 29, 2017 with Bank of America, N.A., as administrative agent and the other lenders party thereto, which governs our senior unsecured revolving credit facility and term loan facility (collectively, the “BofA Credit Facility”).

The BofA Credit Facility is in the initial maximum principal amount of up to $ 1.065 billion, which consists of a $ 850.0 million revolving credit facility that matures on March 31, 2025, and a $ 215.0 million term loan facility that matures on March 19, 2025.

The BofA Credit Facility is

in the initial maximum principal amount of up to $ 1.065 billion, which consists of a $ 850.0 million revolving credit facility that matures on March 31, 2025, and a $ 215.0 million term loan facility that matures on March 19, 2025.

The third amendment revised the terms of the BofA Credit Facility to (i) replace LIBOR with SOFR given the phase out of LIBOR and (ii) permit the addition of multifamily assets as Unencumbered Eligible Property (as defined therein) and add a capitalization rate for such assets.

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The terms of both the BofA Credit Facility and the Wells 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 agreements also contain 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.

Both facilities also require 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 agreements governing both facilities also contain 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, 2023, we were in compliance with these covenants.

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Accrued interest payable 3,687 3,509

Due to affiliated companies — 1,131

Total accounts payable and accrued expenses $ 99,756 $ 80,729

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These derivative instruments are typically in the form of interest rate swap and forward agreements, and the primary objective is to minimize interest rate risks associated with investing and financing activities.

The counterparties of these arrangements are major financial institutions with which we may also have other financial relationships.

The counterparties of

these arrangements are major financial institutions with which we may also have other financial relationships.

We are exposed to credit risk in the event of non-performance by these counterparties;

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We have agreements with our derivative counterparties that contain a provision where if we either default or are capable of being declared in default on any of our indebtedness, then we could also be declared in default on our derivative obligations.

As of December 31, 2022, we did not have any derivatives in a net liability position.

In May 2022, we entered into forward interest rate swaps with an aggregate notional value of $ 390.0 million that became effective in August 2022 and fixed the interest rate on 100 % of our term loans.

This replaced the $ 265.0 million swap which had fixed the interest rate on a portion of our outstanding term loans balance.

As of December 31, 2022 and 2021, we had interest rate LIBOR swaps and caps with an aggregate notional value of $ 574.8 million and $ 451.3 million, respectively.

As of December 31, 2023, the fair value of derivatives in a net liability position, which includes accrued interest but excludes any adjustment for nonperformance risk, related to these agreements was $ 0.1 million.

If we had breached any of these provisions at December 31, 2023, we could have been required to settle our obligations under the agreements at their termination value of $ 0.1 million.

As of December 31, 2023 and 2022, we had interest rate swaps and caps with an aggregate notional value of $ 573.2 million and $ 574.8 million, respectively.

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

As of December 31, 2022 and 2021, the fair value of our derivative instruments amounted to $ 17.9 million, which is included in prepaid expenses and other assets and ($ 25.3 million), which is included in accounts payable and accrued expenses on the consolidated balance sheets.

As of December 31, 2023, the fair values of our derivative instruments amounted to $ 11.8 million which is included in prepaid expenses and other assets, and ($ 0.1 million) which is included in accounts payable and accrued expenses on the consolidated balance sheet.

As of December 31, 2022, the fair value of our derivative instruments amounted to $ 17.9 million which is included in prepaid expenses and other assets 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.

Interest rate caps not designated as hedges are not speculative and are used to manage our exposure to interest rate movements, but do not meet the strict hedge accounting requirements.

As of December 31, 2022 and 2021, our cash flow hedges are deemed highly effective and for the years ended December 31, 2022 and 2021, net unrealized gains of $ 47.3 million and $ 12.0 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.

As of December 31, 2023 and 2022, our cash flow hedges are deemed highly effective and for the years ended December 31, 2023 and 2022, net unrealized gains (losses) of $( 2.2 ) million and $ 47.3 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 $ 6.3 million net gain of the current balance held in accumulated other comprehensive loss will be reclassified into interest expense within the next 12 months.

We estimate that $ 5.6 million net gain of the current balance held in accumulated other comprehensive income (loss) will be reclassified into interest expense within the next 12 months.

The table below summarizes the terms of agreement and the fair value of our derivative financial instruments as of December 31, 2023 and 2022 (dollar amounts in thousands):

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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 $ — $ — $ — $ ( 3,184 )

Interest rate swap 36,820 70 % of 1 Month LIBOR

Interest rate swap $ 36,820 70 % of 1 Month SOFR

2.5000 % December 1, 2021 November 1, 2030 $ 64 $ — $ 256 $ —

Interest rate swap 103,790 70 %of 1 Month LIBOR

Interest rate swap 103,790 70 % of 1 Month SOFR

2.5000 % December 1, 2021 November 1, 2033 — ( 85 ) 365 —

Interest rate swap 10,710 70 % of 1 Month LIBOR

Interest rate swap 10,710 70 % of 1 Month SOFR

1.7570 % December 1, 2021 November 1, 2033 546 — 643 —

Interest rate swap 17,544 1 Month LIBOR 2.2540 % December 1, 2021 November 1, 2030 1,070 — — ( 898 )

Interest rate cap 6,780 70 % of 1 Month LIBOR

Interest rate swap 15,942 1 Month SOFR 2.2540 % December 1, 2021 November 1, 2030 782 — 1,070 —

Interest rate cap 6,780 70 % of 1 Month SOFR

4.5000 % December 1, 2021 October 1, 2024 — — 8 —

Interest rate cap 9,188 1 Month LIBOR 5.5000 % December 1, 2021 October 1, 2024 26 — 8 —

Interest rate cap 9,188 1 Month SOFR 5.5000 % December 1, 2021 October 1, 2024 4 — 26 —

Interest rate swap 175,000 SOFR Compound 2.5620 % August 31, 2022 December 31, 2026 5,637 — 8,040 —

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$ 11,800 $ ( 85 ) $ 17,936 $ —

During the year ended December 31, 2020, we terminated a $ 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, 2022, 2021 and 2020 (amounts in thousands):

Effects of Cash Flow Hedges December 31, 2023 December 31, 2022 December 31, 2021

Amount of gain (loss) recognized in other comprehensive income (loss) $ 40,044 $ 348 $ ( 19,322 )

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense ( 7,230 ) ( 11,653 ) ( 8,870 )

Amount of gain recognized in other comprehensive income (loss) $ 5,581 $ 40,044 $ 348

Amount of loss (gain) reclassified from accumulated other comprehensive income (loss) into interest expense 7,819 ( 7,230 ) ( 11,653 )

The table below shows the effect of our derivative financial instruments designated as cash flow hedges on the consolidated statements of operations for the years ended December 31, 2023, 2022 and 2021 (amounts in thousands):

Effects of Cash Flow Hedges December 31, 2023 December 31, 2022 December 31, 2021

Total interest expense presented on the consolidated

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

$ ( 101,206 ) $ ( 94,394 ) $ ( 89,907 )

Amount of loss reclassified from accumulated other comprehensive income (loss) into interest expense ( 7,230 ) ( 11,653 ) ( 8,870 )

Total interest expense presented on the consolidated statements of income in which the effects of cash flow hedges are recorded $ ( 101,484 ) ( 101,206 ) ( 94,394 )

Amount of loss (gain) reclassified from accumulated other comprehensive income (loss) into interest expense 7,819 ( 7,230 ) ( 11,653 )

Fair Valuation

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Interest rate swaps included in prepaid expenses and other assets $ 11,800 $ 11,800 $ — $ 11,800 $ —

Interest rate swaps included in accounts payable and accrued expenses 85 85 — 85 —

Mortgage notes payable 877,388 774,280 — — 774,280

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Total Level 1 Level 2 Level 3

Interest rate swaps included in accounts payable and accrued expenses 25,308 25,308 — 25,308 —

Interest rate swaps included in prepaid expenses and other assets $ 17,936 $ 17,936 $ — $ 17,936 $ —

Mortgage notes payable 883,705 783,648 — — 783,648

Senior unsecured notes - Series A, B, C, D, E and F 973,373 994,389 — — 994,389

Senior unsecured notes - Series A, B, C, D, E, F, G and H 973,659 865,292 — — 865,292

Unsecured term loan facility 388,773 390,000 — — 390,000

Disclosure about the fair value of financial instruments is based on pertinent information available to us as of December 31, 2023 and 2022.

Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

We lease various spaces to tenants over terms ranging from one to 21 years.

Although we are not aware of any factors that would significantly affect the reasonable fair value amounts, such amounts have not been comprehensively revalued for purposes of these consolidated financial statements since that date and current estimates of fair value may differ significantly from the amounts presented herein.

We lease various commercial spaces to tenants over terms ranging from one to 22 years.

Certain leases have renewal options for additional terms.

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Year Ended December 31,

2022 2021 2020

Rental revenue 2023 2022 2021

Fixed payments $ 529,965 $ 531,740 $ 500,847

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Thereafter 1,646,769

The above future minimum lease payments exclude tenant recoveries and the net accretion of above-below-market lease intangibles.

The above future minimum lease payments exclude tenant recoveries and the net accretion of above-market leases and below-market lease intangibles.

Some leases are subject to termination options generally upon payment of a termination fee.

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Variable lease payments are excluded from the right-of-use assets and lease liabilities and are recognized in the period in which the obligation for those payments is incurred.

We make payments under ground leases related to three of our properties.

The ground leases are due to expire between the years 2050 and 2077, inclusive of extension options, and have no variable payments or residual value guarantees.

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The weighted average remaining lease term as of December 31, 2023 was 46.5 years.

As of December 31, 2022, 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):

As of December 31, 2023, the following table summarizes our future minimum lease payments discounted by our incremental borrowing rates to calculate the lease liabilities of our leases (amounts in thousands):

Thereafter 60,795

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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.

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

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

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This amount was recorded as an IPO litigation expense in the consolidated statement of operations for the year ended December 31, 2020.

Respondents believe that such award in favor of the Claimants is entirely without merit and sought to vacate that

portion of the award.

On September 27, 2021, the court denied Respondents' motion to vacate and entered judgement in the

aforementioned amount, inclusive of accumulated interest.

Respondents have appealed that ruling.

Respondents believe that such award in favor of the Claimants is entirely without merit and sought to vacate that portion of the award.

On September 27, 2021, a federal district court denied Respondents' petition to vacate and entered judgement in the aforementioned amount, inclusive of accumulated interest.

Respondents appealed that ruling.

On May 10, 2022, Respondents moved to dismiss the appeal and judgment on the grounds that a recent decision of the United States Supreme Court held that the federal courts have no subject matter jurisdiction over the case.

Claimants opposed the motion, which is pending.

The appeals court has scheduled argument on the appeal and motion for April 10, 2023.

In addition, certain of the Claimants in the federal court action sought to pursue claims in that case against Respondents.

On April 20, 2023, the federal appeals court granted the motion and the federal court action challenging the award was dismissed.

On April 21, 2023, the Respondents filed a petition to vacate in part and otherwise confirm in New York State court.

On April 28, 2023, the Claimants filed a petition to confirm in that same court.

On July 31, 2023, the New York State court denied the Respondents’ petition to vacate in part and confirmed the award.

On January 22, 2024, that court entered judgment in favor of the Claimants (save for one Claimant, whose petition to confirm is still pending in New York state court) in an amount of approximately $ 1.26 million, inclusive of interest.

The Respondents believe those rulings are incorrect and have appealed them.

In addition, certain of the Claimants in the federal court action brought to toll the statute of limitations sought to pursue claims in that case against Respondents.

Respondents believe that any such claims are meritless.

The magistrate judge assigned to the action has issued a Report and Recommendation rejecting Claimants’ claims;

The magistrate judge assigned to the action issued a Report and Recommendation rejecting Claimants’ claims;

the district judge will decide whether to adopt the Report and Recommendation.

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Unfunded Capital Expenditures

At December 31, 2022, we estimate that we will incur approximately $ 118.3 million of capital expenditures (including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements.

We expect to fund these capital expenditures with operating cash flow, additional property level mortgage financings, our unsecured credit facility, cash on hand and other borrowings.

At December 31, 2023, we estimate that we will incur approximately $ 101.2 million of capital expenditures

(including tenant improvements and leasing commissions) on our properties pursuant to existing lease agreements.

We expect to fund these capital expenditures with operating cash flow, cash on hand and other borrowings.

Future property acquisitions may require substantial capital investments for refurbishment and leasing costs.

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Real Estate Investments

Our properties are located in Manhattan, New York;

Fairfield County, Connecticut;

and Westchester County, New York.

The latter locations are suburbs of the city of New York.

Our properties are located in Manhattan and Brooklyn, New York;

and Stamford, Connecticut.

The ability of the tenants to honor the terms of their respective leases is dependent upon the economic, regulatory and social factors affecting the markets in which the tenants operate.

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Major Customers and Other Concentrations

For the year ended December 31, 2022, other than two tenants who accounted for 6.4 % 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, 2023, other than four tenants who accounted fo r 6.8 %, 2.5 %, 2.1 %, and 2.1 % of rental revenues, no other tenant in our portfolio accounted for more than 2.0% of rental revenues.

For the year ended December 31, 2022, other than two tenants who accounted fo r 6.4 % 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, 2021, other than four tenants who accounted for 4.6 %, 3.3 %, 2.8 % and 2.1 % of rental revenues, no other tenant in our commercial portfolio accounted for more than 2.0% of rental revenues.

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 years ended December 31, 2022, 2021 and 2020, the six properties listed below accounted for the highest respective percentages of total rental revenues.

For the years ended December 31, 2023, 2022 and 2021, the three properties listed below each exceeded 10% of total rental revenues.

Year Ended December 31,

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111 West 33rd Street 10.8 % 11.2 % 11.3 %

1400 Broadway 8.3 % 8.9 % 8.0 %

250 West 57th Street 6.0 % 5.8 % 5.7 %

First Stamford Place 4.7 % 5.2 % 5.4 %

Asset Retirement Obligations

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As of December 31, 2023, management has no plans to remove or alter these properties in a manner that would trigger federal and other applicable regulations for asbestos removal, and accordingly, the obligations to remove the asbestos or asbestos-containing building materials from these properties have indeterminable settlement dates.

As such, we are unable to reasonably estimate the fair value of the associated conditional asset retirement obligation.

As such, we are unable to reasonably estimate the fair value of the associated conditional asset

retirement obligation.

However ongoing asbestos abatement, maintenance programs and other required documentation are carried out as required and related costs are expensed as incurred.

Other Environmental Matters

Certain of our properties have been inspected for soil contamination due to pollutants, which may have occurred prior to our ownership of these properties or subsequently in connection with its development and/or its use.

Required remediation to such properties has been completed and, as of December 31, 2022, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents.

Under various federal, state and/or local laws, ordinances and regulations, as a current or former owner or operator of real property, we may be liable for costs and damages resulting from the presence or release of hazardous substances, waste, or petroleum products at, on, in, under or from such property, including costs for investigation or remediation, natural resource damages, or third-party liability for personal injury or property damage.

These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the presence or release of such materials, and the liability may be joint and several.

Some of our properties have been or may be impacted by contamination arising from current or prior uses of the property or adjacent properties for commercial, industrial or other purposes.

Such contamination may arise from spills of petroleum or hazardous substances or releases from tanks used to store such materials.

We also may be liable for the costs of remediating contamination at off-site disposal or treatment facilities when we arrange for disposal or treatment of hazardous substances at such facilities, without regard to whether we comply with environmental laws in doing so.

The presence of contamination or the failure to remediate contamination on our properties may adversely affect our ability to attract and/or retain tenants, and our ability to develop or sell or borrow against those properties.

In addition to potential liability for cleanup costs, private plaintiffs may bring claims for personal injury, property damage or for similar reasons.

Environmental laws also may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination.

Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which that property may be used or how businesses may be operated on that property.

Some of our properties are adjacent to or near other properties which are used for industrial or commercial purposes or have contained or currently contain underground storage tanks used to store petroleum products or other hazardous or toxic substances.

Releases from these properties could impact our properties.

In addition, some of our properties have previously been used by former owners or tenants for commercial or industrial activities, e.g., gas stations and dry cleaners, and a portion of the Metro Tower site is currently used for automobile parking and was formerly leased to a fueling facility that may release petroleum products or other hazardous or toxic substances at such properties or to surrounding properties.

While certain properties contain or contained uses that could have or have impacted our properties, we are not aware of any liabilities related to environmental contamination that we believe will have a material adverse effect on our operations.

We have post-closing obligations related to the 69-97 and 103-107 Main Street, Westport, Connecticut properties that we sold in February 2023 to (i) close out a voluntary remediation program at 69-97 Main Street to address residual impacts of prior presence of underground storage tanks and (ii) comply with a consent order issued by the Connecticut Department of Environmental Protection to investigate soil conditions at 103-107 Main Street.

We believe any expenses incurred to close out and comply with the remediation program and consent order, respectively, will be immaterial to the results of our operations.

Our property situated at 500 Mamaroneck Avenue in Harrison, New York was the subject of a voluntary remedial action work cleanup plan under an agreement with the New York State Department of Environmental Conservation, but we sold this property in April 2023 and the obligations have been transferred to the buyer.

Refer to Note 3 Acquisitions and Dispositions.

In addition, our properties are subject to various federal, state and local environmental and health and safety laws and regulations.

Noncompliance with these laws and regulations could subject us or our tenants to liability.

These liabilities could affect a tenant’s ability to make rental payments to us.

Moreover, changes in laws could increase the potential costs of compliance with such laws and regulations or increase liability for noncompliance.

This may result in significant unanticipated expenditures.

We sometimes require our tenants to comply with environmental and health and safety laws and regulations and to indemnify us for any related liabilities in our leases with them.

But in the event of the bankruptcy or inability of any of our tenants to satisfy such obligations, we may be required to satisfy such obligations.

We are not presently aware of any instances of material non-compliance with environmental or health and safety laws or regulations at our properties, and we believe that we and/or our tenants have all material permits and approvals necessary under current laws and regulations to operate our properties.

In addition, 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.

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.

Based upon our present understanding of the law and calculations related thereto, we expect to pay no fine on any building in our commercial portfolio in the 2024-2029 first period of enforcement.

As the owner or operator of real property, we may also incur liability based on various building conditions.

For example, environmental site assessments and investigations have identified asbestos or asbestos-containing material ("ACM") in certain of our properties, and it is possible that other properties that we currently own or operate or those we acquire or operate in the future contain, may contain, or may have contained ACM.

Environmental and health and safety laws require that ACM be properly managed and maintained and may impose fines or penalties on owners, operators or employers for non-compliance with those requirements.

These requirements include special precautions, such as removal, abatement or air monitoring, if ACM would be disturbed during maintenance, redevelopment or demolition of a building, potentially resulting in substantial costs.

In addition, we may be subject to liability for personal injury or property damage sustained as a result of releases of ACM into the environment.

We are not presently aware of any material liabilities related to building conditions, including any instances of material non-compliance with asbestos requirements or any material liabilities related to asbestos.

Our properties may contain or develop harmful mold or suffer from other indoor air quality issues, which could lead to liability for adverse health effects or property damage or costs for remediation.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time.

Some molds may produce airborne toxins or irritants.

Indoor air quality issues can also stem from inadequate ventilation, chemical contamination from indoor or outdoor sources, and other biological contaminants such as pollen, viruses and bacteria.

Indoor exposure to airborne toxins or irritants above certain levels can be alleged to cause a variety of adverse health effects and symptoms, including allergic or other reactions.

As a result, the presence of significant mold or other airborne contaminants at any of our properties could require us to undertake a costly remediation program to contain or remove the mold or other airborne contaminants from the affected property or increase indoor ventilation.

In addition, the presence of significant mold or other airborne contaminants could expose us to liability from our tenants, employees of our tenants or others if property damage or personal injury occurs.

We are not presently aware of any material adverse indoor air quality issues at our properties.

As of December 31, 2023, with the exception of the Westport assets, management believes that there are no obligations related to environmental remediation other than maintaining the affected sites in conformity with the relevant authority’s mandates and filing the required documents.

All such maintenance costs are expensed as incurred.

We expect that resolution of the environmental matters relating to the above will not have a material impact on our business, assets, consolidated and combined financial condition, results of operations or liquidity.

However, we cannot be certain that we have identified all environmental liabilities at our properties, that all necessary remediation actions have been or will be undertaken at our properties or that we will be indemnified, in full or at all, in the event that such environmental liabilities arise.

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• If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers.

• If we choose to stop participating in some of our multiemployer plans, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

• If we no longer employ union members, we may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability.

We participate in various unions.

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This Pension Plan is administered by a joint board of trustees consisting of union trustees and employer trustees and operates under employer identification number 13-1879376.

The Pension Plan year runs from July 1 to June 30.

The Pension Plan year runs from July 1 to

Employers contribute to the Pension Plan at a fixed rate on behalf of each covered employee.

Separate actuarial information regarding such pension plans is not made available to the contributing employers by the union administrators or trustees, since the plans do not maintain separate records for each reporting unit.

On September 28, 2020 and September 28, 2021, the actuary certified that for the plan years beginning July 1, 2020 and July 1, 2021, respectively, the Pension Plan was in critical status under the Pension Protection Act of 2006.

On September 28, 2021, the actuary certified that for the plan year beginning July 1, 2021, the Pension Plan was in critical status under the Pension Protection Act of 2006.

The Pension Plan trustees adopted a rehabilitation plan consistent with this requirement.

However, on September 28, 2022, the actuary certified that for the plan year beginning July 1, 2022, the Pension Plan was in endangered status under the Pension Protection Act of 2006.

However, on September 28, 2022 and September 28, 2023, the actuary certified that for the plan year beginning July 1, 2022 and July 1, 2023, respectively, the Pension Plan was in endangered status under the Pension Protection Act of 2006.

The Pension Plan trustees adopted a funding improvement plan consistent with this requirement.

For the plan years ended June 30, 2020 and June 30, 2021, the Pension Plan received contributions from employers totaling $ 291.3 million and $ 290.1 million, respectively.

The Form 5500 is not yet available for the plan year June 30, 2022.

For the plan years ended June 30, 2021, 2022 and 2023, the Pension Plan received contributions from employers totaling $ 290.1 million, $ 305.7 million and $ 317.9 million, respectively.

The Health Plan was established under the terms of collective bargaining agreements between the Union, the Realty Advisory Board on Labor Relations, Inc.

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Generally, these agreements provide that the employers contribute to the Health Plan at a fixed rate on behalf of each covered employee.

For the plan years ended June 30, 2020, and June 30, 2021, the Health Plan received contributions from employers totaling $ 1.6 billion and $ 1.5 billion, respectively.

The Form 5500 is not yet available for the plan year June 30, 2022.

For the plan years ended June 30, 2021, 2022 and 2023, the Health Plan received contributions from employers totaling $ 1.5 billion, $ 1.6 billion and $ 1.9 billion, respectively.

Term of Collective Bargaining Agreements

Our collective bargaining agreement for local 32BJ commenced from January 1, 2020 and runs through December 31, 2023.

We are also a signatory to a second collective bargaining agreement for local 32BJ with a term from April 21, 2022 to April 20, 2026 for our residential properties.

Our collective bargaining agreement for Service Employees International Union Local 32BJ relating to commercial properties in New York City was renewed and commenced effective January 1, 2024 through December 31, 2027.

We are in the process of negotiating a successor agreement to the collective bargaining agreement for Service Employees International Union Local 32BJ relating to our operations in the greater New York metropolitan area.

We are also a signatory to another collective bargaining agreement for Service Employees International Union Local 32BJ with a term from April 21, 2022 through April 20, 2026 for our residential properties.

Contributions

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Other includes $ 0.3 million, $ 0.2 million and $ 0.2 million for the years ended 2023, 2022 and 2021, respectively, in connection with other multiemployer plans not discussed above.

The increase in plan contributions in 2022 is mainly due to higher payroll levels as a result of recovery from the COVID-19 pandemic.

The increase in plan contributions in 2023 is mainly due to higher payroll levels with the increased building utilization at our various properties.

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

Shares and Units

As of December 31, 2022, there were approximately 271.0 million operating partnership units outstanding, of which approximately 161.1 million, or 59.5 %, were owned by ESRT and approximately 109.9 million, or 40.5 %, were owned by other partners, including ESRT directors, members of senior management and other employees.

On May 16, 2019, the Empire State Realty Trust, Inc.

Empire State Realty OP, L.P.

2019 Equity Incentive Plan (“2019 Plan”) was approved by our shareholders.

The 2019 Plan provides for grants to directors, employees and consultants of our company and operating partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards.

An aggregate of approximately 11.0 million shares of our common stock are authorized for issuance under awards granted pursuant to the 2019 Plan.

We will not issue any new equity awards under the First Amended and Restated Empire State Realty Trust, Inc.

and Empire State Realty OP, L.P.

2013 Equity Incentive Plan ("2013 Plan", and collectively with the 2019 Plan, "the Plans").

The shares of ESRT Class A common stock underlying any awards under the 2019 Plan and the 2013 Plan that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2019 Plan or the 2013 Plan to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

In addition, shares of ESRT Class A common stock repurchased on the open market will not be added back to the shares of ESRT Class A common stock available for issuance under the 2019 Plan.

Long-term incentive plan ("LTIP") units are a special class of partnership interests.

Each LTIP unit awarded will be deemed equivalent to an award of one share of ESRT stock under the Plans, reducing the availability for other equity awards on a one -for-one basis.

The vesting period for LTIP units, if any, will be determined at the time of issuance.

Under the terms of the LTIP units, we will revalue for tax purposes its assets upon the occurrence of certain specified events, and any increase in valuation from the time of grant until such event will be allocated first to the holders of LTIP units to equalize the capital accounts of such holders with the capital accounts of unitholders.

Subject to any agreed upon exceptions, once vested and having achieved parity with unitholders, LTIP units are convertible into operating partnership units on a one -for-one basis.

LTIP units subject to time-based vesting, whether vested or not, receive the same per unit distributions as OP Units, which equal per share dividends (both regular and special) on our common stock.

LTIP units subject to market-based vesting 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.

As of December 31, 2023, there were 162,061,947 shares of Class A common stock, 984,317 shares of Class B common stock and 107,900,200 operating partnership units outstanding.

The controlling interest of 60.2 % is owned by ESRT.

The other 39.8 % noncontrolling interest in the OP is diversified among various limited partners, some of whom include Company directors, senior management and employees.

ESRT has two classes of common stock as a means to give its OP Unit holders voting rights in the public company that correspond to their economic interest in the combined entity.

A one-time option was created at our formation transactions for any pre-IPO OP Unit holder to exchange one OP Unit out of every 50 OP Units they owned for one Class B share, and such Class B share carries 50 votes per share.

Stock and Publicly Traded Operating Partnership Unit Repurchase Program

ESRT's Board of Directors authorized the repurchase of up to $ 500 million of ESRT Class A common stock and the Operating Partnership’s Series ES, Series 250 and Series 60 operating partnership units from January 1, 2022 through December 31, 2023.

Upon expiration of this program, ESRT's Board of Directors authorized the repurchase of up to $ 500 million of ESRT's Class A common stock and our Series ES, Series 250 and Series 60 operating partnership units during the period from January 1, 2024 through December 31, 2025.

Under the program, ESRT may purchase ESRT Class A common stock and we may purchase our 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 ESRT and us at our discretion and will be subject to stock price, availability, trading volume and general market conditions.

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

The following table summarizes our purchases of equity securities for the year ended December 31, 2022:

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, 2022 11,571,133 $ 7.79 11,571,133 $ 409,824

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

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

At December 31, 2023, we had used approximately $ 103.3 million of the authorized repurchase amount for the 2022-2023 period.

The following table summarizes our purchases of equity securities for the year ended December 31, 2023 under the previous repurchase program.

Year ended December 31, 2023 2,150,857 $ 6.09 2,150,857 $ 500,000,000 (a)

(a) Represents the new board authorization for the January 1, 2024 - December 31, 2025 period.

As of the date of this filing, we have used $ 0 of such $ 500 million authorization.

Private Perpetual Preferred Units

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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 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.

Both series are not redeemable at the option of the holders and are redeemable at our option only in the case of specific defined events.

Distributions

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June 15, 2022 June 30, 2022 $ 0.035

June 19, 2020 June 30, 2020 $ 0.105

March 15, 2022 March 31, 2022 $ 0.035

December 20, 2021 December 31, 2021 $ 0.035

September 15, 2021 September 30, 2021 $ 0.035

June 15, 2021 June 30, 2021 $ 0.035

Total distributions paid to OP unitholders and Preferred unitholders during 2023, 2022 and 2021 totaled $ 41.3 million, $ 42.8 million and $ 32.8 million, respectively.

Incentive and Share-Based Compensation

The Plans provide for grants to directors, employees and consultants consisting of stock options, restricted stock, dividend equivalents, stock payments, performance shares, LTIP units, stock appreciation rights and other incentive awards.

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, 2022, approximately 6.3 million shares of ESRT common stock remain available for future issuance under the Plans.

In March 2022, we made grants of LTIP units to executive officers under the 2019 Plan, including a total of 412,689 LTIP units that are subject to time-based vesting, 694,383 LTIP units that are subject to market-based vesting and 515,369 units that are subject to performance-based vesting with fair market values of $ 3.2 million, $ 3.9 million and $ 3.1 million, respectively.

In March 2022, we made grants of LTIP units and restricted stock to certain other employees under the 2019 Plan, including a total of 240,156 LTIP units and 210,212 shares of restricted stock that are subject to time-based vesting, 85,772

LTIP units that are subject to market-based vesting and 63,574 LTIP units that are subject to performance-based vesting, with fair market values of $ 2.1 million and $ 2.0 million, respectively, for the time-based vesting awards, $ 0.6 million for the market-based vesting awards and $ 0.5 million for the performance-based vesting awards.

On May 16, 2019, the Empire State Realty Trust, Inc.

Empire State Realty OP, L.P.

2019 Equity Incentive Plan (“2019 Plan”) was approved by our shareholders.

The 2019 Plan provides for grants to directors, employees and consultants of our Company and Operating Partnership, including options, restricted stock, restricted stock units, stock appreciation rights, performance awards, dividend equivalents and other equity-based awards, and replaced the First Amended and Restated Empire State Realty Trust, Inc.

and Empire State Realty OP, L.P.

2013 Equity Incentive Plan ("2013 Plan", and collectively with the 2019 Plan, "the Plans").

The shares of Class A common stock underlying any awards under the 2019 Plan and the 2013 Plan that are forfeited, canceled or otherwise terminated, other than by exercise, will be added back to the shares of Class A common stock available for issuance under the 2019 Plan.

Shares tendered or held back upon exercise of a stock option or settlement of an award under the 2019 Plan or the 2013 Plan to cover the exercise price or tax withholding and shares subject to a stock appreciation right that are not issued in connection with the stock settlement of the stock appreciation right upon exercise thereof, will not be added back to the shares of Class A common stock available for issuance under the 2019 Plan.

In addition, shares of Class A common stock repurchased on the open market will not be added back to the shares of Class A common stock available for issuance under the 2019 Plan.

An aggregate of approximately 11.0 million shares of our common stock was authorized for issuance under awards granted pursuant to the 2019 Plan, and as of December 31, 2023, approximately 4.2 million shares of common stock remain available for future issuance under the Plans.

Long-term incentive plan ("LTIP") units are a special class of partnership interests in the Operating Partnership.

Each LTIP unit awarded will be deemed equivalent to an award of one share of stock under the Plans, reducing the availability for other equity awards on a one -for-one basis.

The vesting period for LTIP units, if any, will be determined at the time of issuance.

Under the terms of the LTIP units, the Operating Partnership will revalue for tax purposes its assets upon the occurrence of certain specified events, and any increase in valuation from the time of one such event to the next such event will be allocated first to the holders of LTIP units to equalize the capital accounts of such holders with the capital accounts of OP unitholders.

Subject to any agreed upon exceptions, once vested and having achieved parity with OP unitholders, LTIP units are convertible into OP Units in the Operating Partnership on a one -for-one basis.

LTIP units subject to time-based vesting, whether vested or not, receive the same per unit distributions as OP Units, which equal per share dividends (both regular and special) on our common stock.

Market and performance-based LTIPs 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.

In March 2023, we made grants of LTIP units to executive officers under the 2019 Plan, including a total of 552,412 LTIP units that are subject to time-based vesting, 834,456 LTIP units that are subject to market-based vesting and 679,969 units

that are subject to performance-based vesting with fair market values of $ 3.2 million, $ 3.9 million and $ 3.9 million, respectively.

In March 2023, we made grants of LTIP units and restricted stock to certain other employees under the 2019 Plan, including a total of 229,308 LTIP units and 370,465 shares of restricted stock that are subject to time-based vesting, 111,942 LTIP units that are subject to market-based vesting and 91,211 LTIP units that are subject to performance-based vesting, with fair market values of $ 1.5 million and $ 2.6 million, respectively, for the time-based vesting awards, $ 0.6 million for the market-based vesting awards and $ 0.6 million for the performance-based vesting awards.

The awards subject to time-based vesting vest ratably over four years , subject generally to the grantee's continued employment, with the first installment vesting on January 1, 2024.

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, 2022.

The vesting of the LTIP units subject to performance-based vesting is based on the achievement of (i) operational metrics over a one-year performance period, subject to a three-year absolute TSR modifier, and (ii) environmental, social and governance ("ESG") metrics over a three-year performance period, in each case, commencing on January 1, 2022.

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, 2023.

The vesting of the LTIP units subject to performance-based vesting is based on the achievement of (i) operational metrics over a one -year performance period, subject to a three -year absolute TSR modifier, and (ii) environmental, social and governance metrics over a three -year performance period, in each case, commencing on January 1, 2023.

Following the completion of the respective performance periods, 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 in connection with the award grant.

These units then vest in two equal installments, on January 1, 2025 and January 1,

2026, subject generally to the grantee's continued employment on those dates.

In March 2022, we also made one-time additional grants of LTIP units and restricted stock to an executive officer and certain other employees under the 2019 Plan.

At such time, we granted the executive officer 112,612 LTIP units that are subject to time-based vesting and we granted to certain other employees a total of 84,475 LTIP units and 18,380 shares of restricted stock that are subject to time-based vesting, with a fair market value of $ 1.7 million and $ 0.2 million, respectively.

These awards are subject to time-based vesting and vest over five years , subject generally to the grantee's continued employment.

The first installment vests 30 % on January 1, 2025, the second installment vests 30 % on January 1, 2026 and the remainder of 40 % will vest on January 1, 2027.

In 2022 and prior years, our named executive officers could elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIPs at the face amount of such bonus or (ii) time-vesting LTIPs which would vest over three years , subject to continued employment, at a premium over such face amount ( 120 % for awards granted in 2021 and 2022;

These LTIP units then vest in two equal installments, on January 1, 2025 and December 31, 2026, subject generally to the grantee's continued employment on those dates.

In March 2023, we also made one-time additional grants of LTIP units to certain non-executive employees under the 2019 Plan.

At such time, we granted to certain other employees a total of 152,542 LTIP units that are subject to time-based vesting, with a fair market value of $ 1.0 million that vest over four and five year periods.

In 2023, our named executive officers could elect to receive their annual incentive bonus in any combination of (i) cash or vested LTIPs at the face amount of such bonus or (ii) time-vesting LTIPs which would vest over three years , subject to continued employment, at a premium over such face amount ( 120 % for awards granted in 2021, 2022, and 2023;

125 % for years prior to 2021).

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We granted to executive officers a total of 521,571 LTIP units that are subject to time-based vesting with a fair market value of $ 3.0 million.

Of these LTIP units, 53,980 LTIP units vested immediately on the grant date and 416,880 LTIP units vest ratably over three years from January 1, 2022, subject generally to the grantee's continued employment.

The first installment vests on January 1, 2023, and the remainder will vest thereafter in two equal annual installments.

Annually, we also make grants of LTIP units to our non-employee directors under the 2019 Plan.

In 2022, each of our directors received 60 % of their $ 200,000 annual base retainer in the form of equity vesting ratably over four years , and could elect to receive the remaining 40 % of such base retainer in (i) cash at the face value of the award, (ii) immediately vesting equity at the face value of the award, or (iii) equity vesting ratably over three years at 120 % of the face amount.

Of these LTIP units, 446,376 LTIP units vest ratably over three years from January 1, 2023, subject generally to the grantee's continued employment.

The first installment vests on January 1, 2024, and the remainder will vest thereafter in two equal annual installments on January 1, 2025 and January 1, 2026.

We also granted to our retired general counsel 75,195 LTIP units that vested immediately on the grant date.

Annually, we make grants of LTIP units to our non-employee directors under the 2019 Plan.

In May 2023, each of our directors received 60 % of their $ 200,000 annual base retainer in the form of equity vesting ratably over four years , and could elect to receive the remaining 40 % of such base retainer in (i) cash at the face value of the award, (ii) immediately vesting equity at the face value of the award, or (iii) equity vesting ratably over three years at 120 % of the face amount.

Each director could elect to receive any equity portion of the base retainer in either (i) LTIP units or (ii) restricted shares of our Class A common stock.

In accordance with each director's election, we granted a total of 142,358 LTIP units that are subject to time-based vesting with fair market values of $ 1.1 million.

The LTIP units vest ratably over three or four years from the date of the grant, based on grantee election, subject generally to the director's continued service on our Board of Directors.

We also granted 51,284 LTIP units that are subject to immediate vesting with fair market values of $ 0.3 million.

In accordance with each director's election, in May 2023, we granted a total of 237,856 LTIP units that are subject to time-based vesting with fair market values of $ 1.2 million.

The LTIP units vest ratably over three or four years from the date of the grant, based on grantee election, subject generally to the director's continued service on ESRT's Board of Directors.

During July 2023, we granted our two new directors, Christina Van Tassell and Hannah Yang, a total of 27,000 LTIP units which are subject to time-based vesting with a combined fair market value of $ 0.2 million.

One-fourth of the units will vest on May 12, 2024, and the remainder shall vest in substantially equal installments on each subsequent anniversary for a period of three years thereafter.

An employee is retirement eligible when the employee attains the (i) age of 65 for awards granted in 2020 and after, and age of 60 for awards granted before 2020 and (ii) the date on which the employee has first completed ten years of continuous service with us or our affiliates.

Additionally, for the performance-based equity awards, we assess, at each reporting period,

whether it is probable that the performance conditions will be satisfied.

An employee is retirement eligible when the employee attains the (i) age of 65 for awards granted in 2020 and after, and age of 60 for awards granted before 2020 and (ii) the date on which the employee has first completed the requisite years of continuous service with us or our affiliates.

Additionally, for the performance-based equity awards, we assess, at each reporting period, whether it is probable that the performance conditions will be satisfied.

We recognize expense respective to the number of awards we expect to vest at the conclusion of the measurement period.

Changes in estimate are accounted for in the period of change through a cumulative catch-up adjustment.

Any forfeitures of share-based compensation awards are recognized as they occur.

For the market-based LTIP units, the fair value of the awards was estimated using a Monte Carlo Simulation model and 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 weighted-average per unit or share fair value was $ 5.67 , $ 7.21 and $ 8.52 for grants issued in 2023, 2022 and 2021, respectively.

The per unit or share granted in 2022 was estimated on the respective dates of grant using the following assumptions:

an expected life from 2.0 to 5.3 years, a dividend rate of 2.0 %, a risk-free interest rate from 1.4 % to 2.0 %, and an expected price volatility from 37.0 % to 53.0 %.The per unit or share granted in 2021 was estimated on the respective dates of grant using the following assumptions:

The fair value per unit or share granted in 2023 was estimated on the respective dates of grant using the following assumptions:

an expected life from 2.0 to 5.3 years, a dividend rate of 1.7 %, a risk-free interest rate from 4.4 % to 5.0 %, and an expected price volatility from 35.0 % to 46.0 %.

The per unit or share granted in 2020 was estimated on the respective dates of grant using the following assumptions:

The fair value per unit or share granted in 2022 was estimated on the respective dates of grant using the following assumptions:

an expected life from 2.0 to 5.3 years, a dividend rate of 2.0 %, a risk-free interest rate from 1.4 % to 2.0 %, and an expected price volatility from 37.0 % to 53.0 %.

The fair value per unit or share granted in 2021 was estimated on the respective dates of grant using the following assumptions:

an expected life from 2.0 to 5.3 years, a dividend rate of 2.60 %, a risk-free interest rate from 0.12 % to 0.32 %, and an expected price volatility from 36.0 % to 53.0 %.

No other stock options, dividend equivalents, or stock appreciation rights were issued or outstanding in 2023, 2022 and 2021.

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The total fair value of LTIP units and restricted stock that vested during 2023, 2022 and 2021 was $ 13.3 million, $ 14.1 million and $ 12.3 million, respectively.

The time-based LTIPs and restricted stock awards are treated for accounting purposes as immediately vested upon the later of (i) the date the grantee attains the 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.

The time-based LTIPs and restricted stock awards are treated for accounting purposes as immediately vested upon the later of (i) the date the grantee attains the age of 60 or 65 , as applicable, and (ii) the date on which grantee has first completed the requisite 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 and performance-based awards, and accordingly, we recognized $ 2.8 million, $ 2.3 million and $ 1.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

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Earnings Per Unit

Earnings per unit is calculated by dividing the net income attributable to common unitholders by the weighted average number of units outstanding during the respective period.

Unvested share-based payment awards that contain non-forfeitable

rights to dividends, whether paid or unpaid, are accounted for as participating securities.

Share-based payment awards are included in the calculation of diluted income using the treasury stock method if dilutive.

Earnings per unit for the years ended December 31, 2023, 2022 and 2021 is computed as follows (amounts in thousands, except per share amounts):

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Private perpetual preferred unit distributions ( 4,201 ) ( 4,201 ) ( 4,201 )

Net income attributable to non-controlling interests in other partnerships 243 — —

Net (income) loss attributable to non-controlling interests in other partnerships ( 68 ) 243 —

Earnings allocated to unvested shares — — ( 340 )

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Earnings per unit - basic and diluted $ 0.30 $ 0.22 $ ( 0.06 )

There were 0 , 1,052,390 and 307,536 antidilutive shares and LTIP units for the years ended December 31, 2022, 2021 and 2020, respectively.

There were zero antidilutive shares for the years ended December 31, 2023 and 2022, respectively.

There were 1,052,390 antidilutive shares for the year ended December 31, 2021.

Related Party Transactions

Sale of Westport Retail Properties

On February 1 2023, we closed on the disposition of our retail assets located at 69-97 and 103-107 Main Street in Westport, Connecticut, for total consideration of $ 40.0 million, to an entity affiliated with our Chairman, President and Chief Executive Officer, Anthony E.

On February 1, 2023, we closed on the disposition of our retail assets located at 69-97 and 103-107 Main Street in Westport, Connecticut, for total consideration of $ 40.0 million, to an entity affiliated with our Chairman and Chief Executive Officer, Anthony E.

Malkin (the “Westport Transaction”).

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The $ 40.0 million valuation for the Westport Transaction is in the range of the bids the Company received during the marketed sale process.

In connection with the Westport Transaction, we advanced a loan to the buyer to facilitate closing with a maximum principal amount of up to $ 1.0 million, which bears interest at SOFR plus 3.5 % and requires repayment of principal to the extent of available cash flow of the property.

We anticipate that the loan will be fully repaid within one year.

Post-sale, we will provide certain supervisory and property management services to the buyer on similar terms as those we provide to our other excluded properties.

See “– Excluded Properties and Businesses” below.

In connection with the Westport Transaction, we advanced a loan to the buyer to facilitate closing with a maximum principal amount of up to $ 1.0 million, which bore interest at SOFR plus 3.5 % and required repayment of principal to the extent of available cash flow of the property.

As of December 31, 2023, the loan has been fully paid.

The Company has a written Related Party Transactions Policy (the “Policy”) which requires the Nominating and Corporate Governance Committee to review the material facts of all related party transactions and consider all relevant factors in approving any related party transaction.

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The independent members of the Nominating and Corporate Governance Committee conducted an independent review under the guidance of outside counsel and then approved the transaction.

The Company reviewed with outside counsel best practices for the specific Westport Transaction and took additional precautions to ensure an arms-length process.

The Company reviewed with outside counsel best

practices for the specific Westport Transaction and took additional precautions to ensure an arms-length process.

There were separate counsels and appraisals for both buyer and seller.

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Malkin that is intended to protect to a limited extent the Malkin Group and an additional third-party investor in Metro Center (who was one of the original landowners and was involved in the development of the property) against certain tax consequences arising from a transaction involving one of four properties, which we refer to in this section as the protected assets.

First, this agreement provides that our operating partnership will not sell, exchange, transfer or otherwise dispose of such protected assets, or any interest in a protected asset, until (i) October 7, 2025, with respect to one protected asset, First Stamford Place, and (ii) the later of (x) October 7, 2021 and (y) the death of both Peter L.

First, this agreement provides that we will not sell, exchange, transfer or otherwise dispose of such protected assets, or any interest in a protected asset, until (i) October 7, 2025, with respect to one protected asset, First Stamford Place, and (ii) the later of (x) October 7, 2021 and (y) the death of both Peter L.

Malkin and Isabel W.

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Malkin and Peter L.

Malkin, and one additional third party investor in Metro Center (who was one of the original landowners and was involved in the development of the property), to protect against gain recognition resulting from a reduction in such continuing investor’s share of the operating partnership liabilities, the agreement provides that during the period from October 7, 2013 until such continuing investor owns less than the aggregate number of operating partnership units and shares of ESRT common stock equal to 50 % of the aggregate number of such units and shares such investor received in the formation transactions, which we refer to in this section as the tax protection period, we will (i) refrain from prepaying any amounts outstanding under any indebtedness secured by the protected assets and (ii) use our commercially reasonable efforts to refinance such indebtedness at or prior to maturity at its current principal amount, or, if we are unable to refinance such indebtedness at its current principal amount, at the highest principal amount possible.

Malkin, and one additional third-party investor in Metro Center (who was one of the original landowners and was involved in the development of the property), to protect against gain recognition resulting from a reduction in such continuing investor’s share of our liabilities, the agreement provides that during the period from October 7, 2013 until such continuing investor owns less than the aggregate number of operating partnership units and shares of ESRT common stock equal to 50 % of the aggregate number of such units and shares such investor received in the formation transactions, which we refer to in this section as the tax protection period, we will (i) refrain from prepaying any amounts outstanding under any indebtedness secured by the protected assets and (ii) use our commercially reasonable efforts to refinance such indebtedness at or prior to maturity at its current principal amount, or, if we are unable to refinance such indebtedness at its current principal amount, at the highest principal amount possible.

The agreement also provides that, during the tax protection period, we will make available to such continuing investors the opportunity (i) to enter into a “bottom dollar” guarantee of their allocable share of $ 160.0 million of our aggregate indebtedness meeting certain requirements or (ii) in the event we have recourse debt outstanding and such a continuing investor agrees, in lieu of guaranteeing debt pursuant to clause (i) above, to enter into a deficit restoration obligation, in each case, in a manner intended to provide an allocation of our liabilities to the continuing investor.

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Because we expect that we will at all times have sufficient liabilities to allow us to meet our obligations to allocate liabilities to our partners that are protected parties under the tax protection agreement, our indemnification obligation with respect to “certain tax liabilities” would generally arise only in the event that we dispose in a taxable transaction of a protected asset within the period specified above in a taxable transaction.

In the event of such a disposition, the amount of our indemnification obligation would depend on several factors, including the amount of “built-in gain,” if any, recognized and allocated to the indemnified partners with respect to such disposition and the effective tax rate to be applied to such gain at the

time of such disposition.

Our disposition of the 10 Bank Street asset on December 7, 2022 did not trigger any obligation of payment pursuant to the tax protection agreement.

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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 and five net leased retail properties, (including one single tenant retail property in Greenwich, Connecticut).

Additionally, in February 2023, ESRT sold its two retail properties in Westport, Connecticut to an entity controlled by the Malkin Group (see Sale of Westport Retail Properties above).

Malkin control the general partners or managers of, the entities that own interests in seven 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, and two retail properties in Westport, Connecticut acquired from ESRT in February 2023 (see Sale of Westport Retail Properties above).

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

In addition, the Malkin Group owns interests in one mezzanine (which was repaid in full on December 6, 2022) and senior equity fund and four property managers, and which we refer to collectively as the excluded businesses.

We do not believe that the excluded properties or the excluded businesses are consistent with our commercial portfolio geographic or property type composition, management or strategic direction.

Pursuant to management and/or service agreements with the owners of interests in those excluded properties and services agreements with five residential property managers and the managers of certain other excluded businesses which historically were managed by affiliates of our predecessor, we are designated as the asset manager (supervisor) and/or property manager of the excluded properties and will 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.

As the manager or service provider, we are paid a management or other fee with respect to those excluded properties and excluded businesses where our predecessor had previously received a management fee on the same terms as the fee paid to our predecessor, and reimbursed for our costs in providing the management and other services to those excluded properties and businesses where our predecessor had not previously received a management fee.

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;

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

We do not believe that the excluded properties or the excluded businesses are consistent with our current commercial portfolio or strategic direction.

Pursuant to management and/or service agreements with the owners of interests in those excluded properties and businesses, we are designated as the asset manager (supervisor) and/or property manager of the excluded properties, provide services to certain of the excluded properties and the other excluded businesses.

As the manager or service provider, we are paid a management or other fee with respect to those excluded properties and businesses where our predecessor had previously received a management fee, and reimbursed for our costs in providing the management and other services to those excluded properties and businesses where our predecessor had not previously received a management fee.

Our management of the excluded properties and provision of services to the three 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 continue to provide such services;

Malkin and Anthony E.

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If we were to attempt any such acquisition, we anticipate that Anthony E.

Malkin, ESRT's Chairman, President and Chief Executive Officer, will not participate in the negotiation process on our behalf with respect to our potential acquisition of any of these excluded properties or businesses, and the approval of a majority of ESRT's independent directors will be required to approve any such acquisition.

Malkin, our Chairman and Chief Executive Officer, will not participate in the negotiation process on our behalf with respect to our potential acquisition of any of these excluded properties or businesses, and the approval of a majority of our independent directors will be required to approve any such acquisition.

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

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Malkin, our chairman emeritus and employee, utilizing approximately 15 % of the space, for which we pay to such tenant an allocable pro rata share of the cost.

We also have agreements with these entities and excluded

properties and businesses to provide them with general computer-related support services.

Total revenue aggregated $ 0.3 million, $ 0.3 million and $ 0.3 million for the years ended December 31, 2022, 2021 and 2020, respectively.

We also have agreements with these entities and excluded properties and businesses to provide them with general computer-related support services.

Total aggregate revenue was $ 0.2 million, $ 0.3 million and $ 0.3 million for the years ended December 31, 2023, 2022 and 2021, respectively.

Holdings TRS and Observatory TRS are taxable entities and their consolidated provision for income taxes consisted of the following for the years ended December 31, 2023, 2022 and 2021 (amounts in thousands):

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Income tax (expense) benefit $ ( 2,715 ) $ ( 1,546 ) $ 1,734

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.

For the year ended December 31, 2020, 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, 2022, our parent and general partner, Empire State Realty Trust, Inc., had $ 99.8 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.

As of December 31, 2023, Empire State Realty Trust, Inc.

had $ 103.0 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 may not be able to reduce the amount required to be distributed by ESRT to meet REIT requirements to zero.

The federal NOL may be carried forward indefinitely.

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This receivable reflects an anticipated refund resulting from the carryback of 2020 NOL to previous tax years.

The Observatory TRS has $ 10.2 million of NOL carryforwards that may be used to offset future taxable income, if any.

The federal NOL may be carried forward indefinitely and the state and local NOL can be carried forward for up to 20 years.

The Observatory TRS has $ 1.5 million of federal NOL carryforward that may be used to offset future taxable income, if any.

The federal NOL may be carried forward indefinitely.

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.

The effective income tax rate is 44.5 %, 33.6 % and 26.0 % for the years ended December 31, 2023, 2022 and 2021, respectively.

The actual tax provision differed from that computed at the federal statutory corporate rate as follows (amounts in

The actual tax provision differed from that computed at the federal statutory corporate rate as follows (amounts in thousands):

For the Year Ended December 31,

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State income tax benefit (expense), net of federal benefit ( 1,221 ) ( 963 ) 794

Corporate income tax rate adjustment — — 2,048

Income tax (expense) benefit $ ( 2,715 ) $ ( 1,546 ) $ 1,734

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Deferred tax assets at December 31, 2023, 2022 and 2021 are included in prepaid expenses and other assets on the consolidated balance sheets.

The deferred tax assets at December 31, 2022 are mainly attributable to the inclusion of the Federal net operating loss to be carried forward and utilized during income years indefinitely and the New York State and New York City net operating loss to be carried forward and utilized during income years for a period of 20 years.

The deferred tax assets at December 31, 2023 are mainly attributable to a timing difference in recognizing income on unredeemed Observatory admission tickets and the inclusion of the Federal net operating loss to be carried forward and utilized during income years indefinitely.

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

This determination is based on the Observatory TRS’s anticipated future taxable income and the reversal of the deferred tax asset.

At December 31, 2022, 2021 and 2020, the TRS entities have no amount of unrecognized tax benefits.

The federal and state tax returns of 2022, 2021 and 2019 remain open for examination.

As of December 31, 2023, 2022 and 2021, the TRS entities have no amount of unrecognized tax benefits.

As of December 31, 2023, the tax years ended December 31, 2020 through December 31, 2023 remain open for an audit by the Internal Revenue Service, state or local authorities.

Segment Reporting

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Our Observatory segment operates the 86th and 102nd floor observatories at the Empire State Building.

These two lines of businesses are managed separately because each business requires different support infrastructures, provides different services and has dissimilar economic characteristics such as investments needed, stream of revenues and different marketing strategies.

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

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Intercompany rent expense — 80,514 ( 80,514 ) —

Ground rent expense 9,326 — — 9,326

Ground rent expenses 9,326 — — 9,326

General and administrative expenses 63,939 — — 63,939

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Intercompany rent expense — 65,005 ( 65,005 ) —

Ground rent expense 9,326 — — 9,326

Ground rent expenses 9,326 — — 9,326

General and administrative expenses 61,765 — — 61,765

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Interest expense ( 101,206 ) — — ( 101,206 )

Loss on early extinguishment of debt ( 214 ) — — ( 214 )

Loss before income taxes ( 9,535 ) ( 5,236 ) — ( 14,771 )

Gain on sale/disposition of properties 33,988 — — 33,988

Income before income taxes 54,961 9,797 — 64,758

Income tax (expense) benefit ( 584 ) ( 962 ) — ( 1,546 )

Net loss $ ( 10,148 ) $ ( 2,889 ) $ — $ ( 13,037 )

Net income $ 54,377 $ 8,835 $ — $ 63,212

Segment assets $ 3,909,299 $ 254,295 $ — $ 4,163,594

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Intercompany rent expense — 23,413 ( 23,413 ) —

Ground rent expense 9,326 — — 9,326

Ground rent expenses 9,326 — — 9,326

General and administrative expenses 55,947 — — 55,947

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Loss on early extinguishment of debt ( 214 ) — — ( 214 )

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

Loss before income taxes ( 9,535 ) ( 5,236 ) — ( 14,771 )

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During the fourth quarter 2021, we incurred a $ 7.7 million impairment charge relating to our property in Norwalk, Connecticut.

Refer to Note 2 Summary of Significant Accounting Policies.

Our methodology to calculate the fair value of the property involved a combination of the discounted cash flow method, utilizing Level 3 unobservable inputs such as market capitalization rates obtained from external sources, and the market based approach utilizing recent sales comparables.

During the second quarter 2020, we wrote off $ 4.1 million of prior expenditures on a Combined Heat Power/Redundancy onsite power generation project in our real estate segment that is rendered economically unviable due to New York City's Local Law 97 and from its measurement of carbon from natural gas combustion generates fines.

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.

The $ 7.7 million and $ 6.2 million write-offs

are shown as impairment charges in the consolidated statement of operations for the years ended December 31, 2021 and 2020, respectively.

Subsequent Events

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Subsequent to

Acquisition Gross Amount at

which Carried

Acquisition Gross Amount at which Carried at 12/31/23

Type Encumbrances Land and Development Costs Building &

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1010 Third Avenue, New York, NY and 77 West 55th Street, New York, NY retail 34,697 4,462 15,819 4,211 n/a 4,462 20,030 24,492 ( 10,937 ) 1962 1998 various

69-97 Main Street, Westport, CT (1) retail — 2,782 15,766 6,862 n/a 2,782 22,628 25,410 9,441 1922 2003 various

103-107 Main Street, Westport, CT (1) retail — 1,243 7,043 371 n/a 1,260 7,397 8,657 3,184 1900 2006 various

345 E 94th Street NY multi-family 51,465 44,228 55,766 1,044 n/a 44,228 56,811 101,039 1,698 2000 2021 various

Victory 561 10th Ave NY multi-family 131,915 91,437 124,997 804 n/a 91,437 125,801 217,238 3,713 2004 2021 various

345 E 94th Street, New York, NY multi-family 48,646 44,228 55,766 4,237 n/a 44,228 60,003 104,231 ( 3,485 ) 2000 2021 various

Victory 561 10th Ave, New York, NY multi-family 124,194 91,437 124,997 3,461 n/a 91,437 128,458 219,895 ( 7,491 ) 2004 2021 various

298 Mulberry, New York, NY multi-family — 40,935 69,509 1,475 n/a 41,125 70,794 111,919 ( 1,923 ) 1986 2022 various

Williamsburg Retail, Brooklyn, NY retail — 4,851 20,936 101 n/a 4,860 21,028 25,888 ( 196 ) 1910, 1945 2023 various

Property for development at the Transportation Hub in Stamford, CT land — 4,541 — 8,179 n/a 12,720 — 12,720 — n/a n/a n/a

Totals $ 879,195 $ 364,266 $ 1,095,880 $ 2,195,046 $ — $ 374,535 $ 3,280,657 $ 3,655,192 $ ( 1,250,062 )

1 Property sold on February 1, 2023

Empire State Realty OP, L.P.

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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