Empire State Realty Trust, Inc.

Greetings and welcome to the Empire State Realty Trust's first quarter 2024 earnings call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Heather Hewson, Senior Vice President, Chief Counsel, Corporate and Secretary. Thank you. You may begin.

Good afternoon. Thank you for joining us today for Empire State Realty Trust's first quarter 2024 earnings conference call. In addition to the press release distributed yesterday, a quarterly supplemental package with further detail on our results and our latest investor presentation were posted in the investor section of the company's website at esrtread.com. On today's call, management's prepared remarks and answers to your questions may contain forward-looking statements as defined in applicable securities laws. including those related to market conditions, property operations, capital expenditures, income expense, financial results, and proposed transactions and events. As a reminder, forward-looking statements represent management's current estimates. They are subject to risks and uncertainties, which may cause actual results to differ from those discussed today. Empire State Realty Trust assumes no obligation to update any forward-looking statement in the future. We encourage listeners to review the more detailed discussions related to these forward-looking statements in the company's filings with the SEC. During today's call, we will discuss certain non-GAAP financial measures, such as FFO, modified and core FFO, NOI, same-store property cash NOI, EBITDA, and adjusted EBITDA, which we believe are meaningful in evaluating the company's performance. The definitions and reconciliations of these measures to the most directly comparable GAAP measures are included in the company's release and supplemental package, each available on the company's website. Now, I will turn the call over to Tony Malkin, our Chairman and Chief Executive Officer.

Thanks, Heather, and good afternoon to everyone. Yesterday, ESRT reported strong first quarter results to start the year, with strong leasing progress, observatory results, and proactive balance sheet actions. Today, We will discuss them in our outlook for the rest of 2024. In the first quarter, FFO came in above expectations. Office leasing, absorption, and spreads each showed consistently strong positive results. We delivered our ninth consecutive quarter of leased percentage growth and our 11th consecutive quarter of positive mark-to-market lease spreads. Our observatory performance continues and we maintain a best in class balance sheet. Year to date, the company completed several capital markets actions to ensure the balance sheet strength and flexibility, which put us on our front foot. And we are eager to create additional value for our shareholders in the current real estate cycle. We leased about 250,000 square feet in our top of tier commercial portfolio to start the year. Our Manhattan office portfolio had 200 basis points of positive leased absorption year over year and is now nearly 93% leased. Tom will discuss our current activity. Our office leasing has outperformed the market because, one, we maintained balance sheet discipline during the financing and acquisition booms. did not lever up and did not pay top of market prices. Two, for a decade, we invested portfolio wide in upgrades to modernize and amenitize our portfolio. This included intentional vacates to consolidate floors, modernization through gut renovation, addition of amenities and leadership in energy efficiency and indoor environmental quality. These efforts have resulted in top of tier future-ready product that attracts high-quality tenants. Three, our goal has always been to get the best deals in good times, get the deals in challenged times, and draw consistent leasing volumes through cycles. Four, our price point and unique value proposition cater to the deepest segment of tenant demand in the New York City office market. Five, ESRT's commitment to service and tenant relationships drives strong tenant retention and expansion within our portfolio over time. Since our IPO, we have seen over 2.7 million square feet of tenant expansions in our portfolio. Six, tenants look to partner with a financially stable landlord who will maintain high-quality standards at their assets. We have the lowest leverage of any New York City REIT and a strong liquidity position with no significant debt maturity until 2026, December. Cristina will later discuss this. Seven and last, this is how we consistently put points on the board. The observatory continues to perform. In the face of an abundance of rainy, low-visibility days, first quarter NOI was up 13% year-over-year, driven by the continued improvement in revenue per caps and a 10% increase in visitation, which was partially helped by the shift of the Easter holiday into March of this year as compared to April in 2023. generally based upon a gradual buildback of international travel. Our NOI per cap towers above the competition. There is further upside to our observatory's performance as tourism continues to return. We have an exceptional global brand awareness. Our observatory is iconic New York City and has been resilient through all economic cycles, new competition, and the pandemic. All this shown on slide 15 of our investor presentation. Sustainability is a cornerstone of ESRT's business philosophy, and we are the leader in environmental stewardship and healthy building performance. Our track record of successful partnerships with tenants and their employees and sustainability attracts tenants. We received the highest scores in this area. This quarter, We are pleased to receive the Energy Star Partner of the Year Sustained Excellence Award for the second consecutive year and the Well Equity Award and Well Health Safety Leadership Award. This makes ESRT the first commercial and multifamily REIT to achieve Well Health Safety certification four times, achieve Well Equity, and have all buildings enrolled in Well at scale. We are committed to deliver long-term value to our shareholders through continued excellence and sustainability. I encourage you all to read our just released 2024 sustainability report that contains full details on our recent accomplishments and initiatives. ESRT's 2024 priorities include growth and a company-wide focus on cash generation from continuing operations. Of course, day in and day out, our focus is to lease space, sell tickets to the observatory, manage the balance sheet, and achieve our sustainability goals. These actions together enhance shareholder value. We have a future-ready portfolio and an opportunity-ready balance sheet, which give us options today. We are in a position to take advantage of opportunities created through market disruptions and capital dislocations. Tom, Steve, and Christina will provide more detail on our progress and how we plan to accomplish these goals in 2024. Over to you, Tom.