Empire State Realty Trust CEO on Lower International Demand and NYC Real Estate

Observatory Performance and Guidance Adjustment

• 📉 Empire State Realty Trust shares fell due to lower-than-expected international demand and a reduction in full-year guidance.
• 🌦️ Unusual amounts of bad weather on weekends impacted observatory business, particularly in the first two months of the second quarter.
• ✈️ Demand from the pass program, which predominantly serves international tourists purchasing multi-attraction packages, has been lower.

Shifting Visitor Demographics and Business Strengths

• 🇺🇸 The visitor demographic for the observatory has shifted, with domestic visitors now comprising over 50%, compared to approximately one-third pre-COVID.
• 📈 Despite the shift, revenue per person has increased by more than 2.3%.
• 🏢 In contrast to the observatory, the company's leasing performance has been strong, signing 222,000 square feet of leases with 12.1% mark-to-market spreads for the 16th consecutive quarter.
• ⚙️ The company operates with multiple business segments, including observatory, office, retail, and residential, providing resilience.

Impact of NYC Mayoral Candidate and Policy

• 🗣️ Concerns exist regarding the potential impact of a candidate advocating for a "socialist city" and high taxes on wealthier individuals, potentially leading to an exodus.
• 🗽 The CEO emphasizes that New York City is resilient and in demand by talent.
• 🏙️ The priority for any New York City mayor should be safe streets, schools, and businesses, along with respect for all citizens.
• 🏛️ The company works with successive city administrations and acknowledges that significant budget decisions are made at the state level in Albany.