Financial Performance - Achieved net income of $7.2 million and Core Funds From Operations of $53.7 million for the three months ended March 31, 2020[140]. - Total revenues for the three months ended March 31, 2020, were $170.224 million, a 1.8% increase from $167.293 million in the same period in 2019[170]. - Rental revenue increased by 3.3% to $148.113 million compared to $143.417 million in the prior year[170]. - Operating expenses decreased by 1.4% to $141.217 million, primarily due to lower property operating expenses[170]. - Net Operating Income (NOI) for the three months ended March 31, 2020, was $88.7 million, compared to $85.9 million for the same period in 2019, representing an increase of approximately 2.1%[235]. - Funds from Operations (FFO) attributable to common stockholders was $51.7 million for the three months ended March 31, 2020, compared to $54.7 million for the same period in 2019, indicating a decrease of approximately 5.6%[242]. - Modified Funds From Operations (Modified FFO) attributable to common stockholders was $53.6 million for the three months ended March 31, 2020, compared to $56.7 million for the same period in 2019, reflecting a decrease of approximately 5.5%[242]. Portfolio and Occupancy - Total portfolio occupancy was 88.7%, with 91.1% leased including signed leases not commenced[140]. - As of March 31, 2020, the portfolio was 91.1% leased, with 6.8% of leases expiring in 2020 and 6.6% in 2021[158]. - The portfolio included 10.1 million rentable square feet of office and retail space as of March 31, 2020[143]. - As of March 31, 2020, approximately 0.9 million rentable square feet were available to lease, representing 8.9% of the net rentable square footage in the portfolio[248]. - Leases representing 6.8% and 6.6% of net rentable square footage will expire in 2020 and 2021, respectively, expected to represent approximately 6.8% and 6.9% of annualized rent for those periods[248]. Debt and Financing - Total debt outstanding was approximately $2.5 billion with a weighted average interest rate of 3.60%[149]. - Raised $300 million in net proceeds from financings and drew $550 million under the unsecured revolving credit facility[152]. - The company has an amended unsecured revolving credit and term loan facility totaling $1.1 billion, with $550 million drawn on the revolving credit facility and $215 million on the term loan facility[192]. - The term loan facility bears interest at a floating rate of 1.20% to 1.75% based on the leverage ratio, with potential reductions if investment-grade ratings are achieved[193]. - The company maintained a maximum total leverage ratio of 35.4%, well below the 60% limit set by financial covenants[211]. - The weighted average interest rate on $2.0 billion of fixed-rate indebtedness was 3.60% per annum as of March 31, 2020[259]. - The fair value of outstanding debt was approximately $2.6 billion, exceeding the historical book value by approximately $104.6 million[260]. Cash and Liquidity - Cash and cash equivalents were approximately $1.0 billion as of March 31, 2020, with $550 million undrawn capacity under the credit facility[152]. - As of March 31, 2020, the company had approximately $1.009 billion in cash and cash equivalents and $550 million available under its unsecured revolving credit facility[189]. - Cash and cash equivalents were $1,045.9 million as of March 31, 2020, compared to $304.7 million as of March 31, 2019, indicating a significant increase[225]. - Net cash provided by operating activities decreased by $13.1 million to $64.8 million for the three months ended March 31, 2020, compared to $77.9 million for the same period in 2019[227]. - Net cash used in investing activities increased by $29.4 million to $40.6 million for the three months ended March 31, 2020, compared to $11.2 million for the same period in 2019[228]. - Net cash provided by financing activities increased by $783.0 million to $750.1 million for the three months ended March 31, 2020, compared to $32.9 million used in financing activities for the same period in 2019[229]. Revenue Sources and Trends - Increased Empire State Building Observatory revenues by 13.2% to $14.4 million in the first two months of 2020[142]. - Observatory revenue for Q1 2020 was $19.5 million, a 5.0% decrease from $20.6 million in Q1 2019, with a visitor decline of 29.8% from 601,000 to 422,000[251]. - The company expects to experience increased occupancy levels and rents over the long term despite short-term lower occupancy due to property redevelopment[249]. - The company’s revenues and results can be impacted by expiring leases that are not renewed or re-leased at current average base rental rates[248]. Tenant and Lease Activity - Signed 35 leases representing 149,143 rentable square feet, achieving a 3.4% increase in mark-to-market cash rent[140]. - The company has received rent deferral requests from 186 tenants, representing approximately 32% of annual rental revenue[160]. - The company signed a total of 4 new leases in retail properties for 31,662 square feet, with leasing commission costs of $1.5 million for the three months ended March 31, 2020[213]. - The company signed 1.3 million rentable square feet of new leases, expansions, and lease renewals for the year ended December 31, 2019, and 0.1 million square feet during the three months ended March 31, 2020[244]. Capital Expenditures and Investments - The company incurred capital expenditures of $13.9 million for the three months ended March 31, 2020, a decrease from $30.1 million in the same period of 2019[214]. - The company expects to incur approximately $146.1 million in additional costs for tenant improvements and leasing commissions, funded through operating cash flow and borrowings[214]. - The company has invested approximately $929.5 million in Manhattan office properties for redevelopment and repositioning since 2002[148]. Distributions and Shareholder Returns - The company expects to make quarterly distributions to securityholders, adhering to the requirement to distribute at least 90% of its REIT taxable income[186]. - Distributions to securityholders amounted to $32.7 million for the three months ended March 31, 2020, compared to $31.9 million for the same period in 2019, reflecting a year-over-year increase of approximately 2.5%[221]. - The company has authorized the repurchase of up to $500 million of its Class A common stock and operating partnership units through December 31, 2020[222].
Empire State Realty OP(FISK) - 2020 Q1 - Quarterly Report