60 East 42nd St. Associates L.L.C.

March 31, 2012

FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2011~~2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 0-2670

60 EAST 42ND ST. ASSOCIATES L.L.C.

(Exact name of Registrant as specified in its charter)

A New York Limited Liability Company		13-6077181
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

One Grand Central Place

60 East 42nd Street

New York, New York 10165

(Address of principal executive offices)

(212) 687-8700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to section 12(g) of the Exchange Act:

$7,000,000 of Participations in LLC Member Interests

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x. No ¨.

Indicate by check mark whether Registrant is a shell company (as defined in Rule 12b-2 of the Act) Yes ¨ No x .

Indicate by check mark whether Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.

PART I. FINANCIAL INFORMATION

Item 1.

Financial Statements.

60 East 42nd St. Associates L.L.C.

(A Limited Liability Company)

Condensed Balance Sheets

(Unaudited)

		September 30,			September 30,
	March 31, 2012			December 31, 2011
	September 30, 2011			December 31, 2010
Assets
Real estate:
Building	$	16,960,000		$	16,960,000
Less: accumulated depreciation		(16,960,000	)		(16,960,000	)
		—			—
Building improvements and equipment		6867,~~226~~249,~~526~~293			66,~~034~~940,~~042~~647
Less: accumulated depreciation		13(12,~~336~~617,~~727~~413	)		(12,~~076~~187,~~880~~313	)
		54,889,799			53,957,162
		54,631,880			54,753,334
Tenant improvements		5,~~793~~870,~~417~~165			5,~~598~~793,~~316~~417
Less: accumulated depreciation		(1,~~168~~609,~~842~~769	)		~~515~~(1,~~948~~386,473	)
		4,624,575			5,082,368
		4,260,396			4,406,944
Land		7,240,000			7,240,000
Total real estate, net		66,~~754~~132,~~374~~276			66,~~279~~400,~~530~~278
Cash and cash equivalents		108,~~076~~443,~~605~~362			1110,~~555~~466,~~334~~377
Due from Supervisor		87,202			87,202
Due from Lessee		3,085,983			—
Other receivable		3,357			3,357
Deferred costs		12,~~349~~432,~~185~~116			~~454~~2,~~277~~140,059
Leasing commissions, less accumulated amortization of $2,972,681 in 2011 and $2,742,063 in 2010		1,137,140			1,367,758
Leasing costs, less accumulated amortization of $1,522,605 in 2012 and $1,444,673 in 2011		1,185,885			1,066,705
Mortgage refinancing costs, less accumulated amortization of $1,734,326 in 2011 and $1,461,613 in 2010		1,139,306			1,412,019
Mortgage refinancing costs, less accumulated amortization of $1,916,135 in 2012 and $1,825,231 in 2011		957,497			1,048,401
Total assets	$	8379,~~633~~241,~~152~~695		$	81,~~159~~212,~~477~~379
Liabilities and members’ deficiency
Liabilities:
Mortgages payable	$	9290,~~050~~898,~~349~~304		$	9391,~~719~~478,~~850~~304
Accrued mortgage interest		~~431~~425,~~118~~802			~~438~~428,~~819~~479
Accrued supervisory fees, a related party		~~196,633~~—			7881,~~000~~265
Payable to Lessee, a related party		2952,~~553,221~~710			1720,~~082,082~~066
Due to Supervisor		—166,524			43922,~~555~~728
Accrued expenses		~~810~~5,~~828~~634			~~238~~422,~~200~~996
Total liabilities		9692,~~042~~448,~~149~~974			9594,~~600~~053,~~506~~838
Commitments and contingencies		—			—
Members’ deficiency (at September 30, 2011 and December 31, 2010, there were 700 units (at $10,000 per unit) of participation units outstanding)		(12,408,997	)		(14,441,029	)
Members’ deficiency (at March 31, 2012 and December 31, 2011, there were 700 units (at $10,000 per unit) of participation units outstanding)		(13,207,279	)		(12,841,459	)
Total liabilities and members’ deficiency	$	8379,~~633~~241,~~152~~695		$	81,~~159~~212,~~477~~379

See notes to the condensed financial statements.

60 East 42^nd St. Associates L.L.C.

(A Limited Liability Company)

Condensed Statements of Operations

(Unaudited)

		September 30,			September 30,			September 30,		September 30,
	For the Three Months Ended March 31,
	For the ThreeMonths EndedSeptember 30,						For the NineMonths EndedSeptember 30,
	2012			2011
	2011			2010			2011		2010
Revenue:
Revenue:
Basic rent income, from a related party	$	1,868,595		$	1,868,514
Basic rent income, from a related party	$	1,868,531		$	1,868,517			5,605,564	$	5,606,054
Advances of additional rent income, from a related party		263,450			263,450
Advance of additional rent income, from a related party		263,450			263,450			790,350		790,350
Total rent income		2,132,045			2,131,964
Further additional rent from a related party		3,085,983			55,347			3,085,983		55,347
Dividend income		223			280
Total rent income		5,217,964			2,187,314			9,481,897		6,451,751
Total revenue		2,132,268			2,132,244
Dividend income		254			398			802		1,219
Expenses:
Total revenue		5,218,218			2,187,712			9,482,699		6,452,970
Interest on mortgages		1,370,996			1,402,306
Expenses:
Supervisory services, a related party		48,478			46,845
Interest on mortgages		1,386,869			1,418,318			4,183,817		4,274,907
Depreciation of building and tenant improvements and equipment		653,396			633,448
Supervisory services, to a related party		48,478			46,845			142,168		62,535
Amortization of leasing costs		77,933			79,960
Additional payment for services to supervisor, a related party		—			—			—		—
Professional fees, including amounts to a related party		85,680			50,868
Depreciation of improvements and equipment		631,015			515,613			1,912,741		1,348,222
Total expenses		2,236,483			2,213,427
Amortization of leasing commissions		73,412			90,336			230,618		298,664
Net Loss	$	(104,215	)	$	(81,183	)
Professional fees and miscellaneous		108,841			42,602			196,508		45,602
Income (loss) per $10,000 participation unit, based on 700 participation units outstanding during each period	$	(148.88	)	$	(115.98	)
Total expenses		2,248,615			2,113,714			6,665,852		6,029,930
Distributions per $10,000 participation unit consisted of the following:
Net Income	$	2,969,603		$	73,998		$	2,816,847	$	423,040
Income	$	0		$	0
Income per $10,000 participation unit, based on 700 participation units outstanding during each period	$	4,242.29		$	105.71		$	4,024.07	$	604.34
Return of capital		373.72			373.72
Distributions per $10,000 participation unit consisted of the following:
Total distributions	$	373.72		$	373.72
Income	$	373.72		$	105.71		$	1,121.16	$	604.34
Return of capital		—			268.01			—		516.82
Total distributions	$	373.72		$	373.72		$	1,121.16	$	1,121.16

See notes to the condensed financial statements.

60 East 42nd St. Associates L.L.C.

(A Limited Liability Company)

Statement of Members’ Deficiency

(Unaudited)

		September 30,			September 30,
	For the ThreeMonths EndedMarch 31, 2012			For the Year EndedDecember 31, 2011
	For the NineMonths EndedSeptember 30, 2011			For the YearEndedDecember 31, 2010
Members’ deficiency:
January 1, 2011	$	(14,441,029	)
January 1, 2012	$	(12,841,459	)
January 1, 2010				$	(13,459,008	)
January 1, 2011				$	(14,441,029	)
Add net income:
Add net income (loss):
January 1, 2011 through September 30, 2011		2,816,847
January 1, 2012 through March 31, 2012		(104,215	)
January 1, 2010 through December 31, 2010					64,399
January 1, 2011 through December 31, 2011					2,645,990
		(11,624,182	)		(13,394,609	)
		(12,945,674	)		(11,795,039	)
Less distributions:
Monthly distributions:
January 1, 2011 through September 30, 2011		784,815
January 1, 2012 through March 31, 2012		261,605
January 1, 2010 through December 31, 2010					1,046,420
January 1, 2011 through December 31, 2011					1,046,420
Total distributions		~~784~~261,~~815~~605			1,046,420
Members’ deficiency at the end of the period:	$	(1213,~~408~~207,~~997~~279	)	$	(1412,~~441~~841,~~029~~459	)

See notes to the condensed financial statements.

60 East 42nd St. Associates L.L.C.

(A Limited Liability Company)

Condensed Statements of Cash Flows

(Unaudited)

		September 30,			September 30,
	For the ThreeMonths EndedMarch 31,2012			For the ThreeMonth EndedMarch 31,2011
	For the NineMonths EndedSeptember 30, 2011			For the NineMonth EndedSeptember 30, 2010
Cash flows from operating activities:
Net income	$	2,816,847		$	423,040
Net loss	$	(104,215	)	$	(81,183	)
Adjustments to reconcile net income to net cash provided by operating activities:
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation of improvements and equipment		1,912,741			1,348,222
Depreciation of building and tenant improvements and equipment		653,396			633,448
Amortization of leasing commissions		230,618			298,664
Amortization of leasing costs		77,933			79,960
Amortization of mortgage refinancing costs		~~272~~90,~~713~~904			~~272~~90,~~713~~903
Changes in operating assets and liabilities:
Due to Supervisor		~~(43~~184,~~555~~350	)		—(43,555	)
Increase (decrease) in Further additional rent due from lessee		(3,085,983	)		(55,347	)
Decrease in accrued expenses		(396,362	)		(149,482	)
Increase (decrease) in accrued supervisory fees, to a related party		~~118~~(81,~~633~~265	)		39,000
Increase (decrease) in accrued mortgage interest and other expenses		564,927			(6,983	)
Decrease in accrued mortgage interest		(2,677	)		—
Net cash provided by operating activities		2,786,941			2,319,309
Net cash (used in) provided by operating activities		422,064			569,091
Cash flows from investing activities:
Purchase of building improvements and equipment		~~(2,192,484~~—	)		(3587,~~239,621~~140	)
Purchase of tenant improvements		~~(195,101~~—	)		(2195,~~600,983~~101	)
Increase in payable to Lessee		1,471,139			2,724,047
(Decrease) increase in payable to Lessee		—			782,329
Net cash used in investing activities		(916,446	)		(3,116,557	)
Net cash (used in) provided by (used in) investing activities		—			88
Cash flows from financing activities:
Other receivable		—			(3,357	)
Repayment of mortgages payable		(580,000	)		(548,835	)
Repayment of mortgages payable		(1,669,501	)		(1,579,828	)
Distributions to Participants		(261,605	)		(261,605	)
Financing costs		—			(2,831	)
Deferred costs		(1,603,474	)		(141,006	)
Distributions to Participants		(784,815	)		(784,815	)
Net cash used in financing activities		(2,445,079	)		(951,446	)
Deferred costs		(894,908	)		—
Net decrease in cash and cash equivalents		(2,023,015	)		(382,267	)
Net cash used in financing activities		(3,349,224	)		(2,370,831	)
Cash and cash equivalents, beginning of period		10,466,377			11,555,334
Net decrease in cash and cash equivalents		(1,478,729	)		(3,168,079	)
Cash and cash equivalents, end of period	$	8,443,362		$	11,173,067
Cash and cash equivalents, beginning of period		11,555,334			16,810,403
Cash and cash equivalents, end of period	$	10,076,605		$	13,642,324
Supplemental disclosure of cash flow information:
Cash paid for interest	$	31,~~918~~282,~~805~~769		$	41,~~008~~313,~~477~~934
Net cash used in investing activities excludes increase of $385,394 in payable to lessee for the period ended March 31, 2012.
Net cash used in financing activities excludes a decrease of $1,311,417 in Due to Supervisor for the period ended March 31, 2012.

See notes to the condensed financial statements.

Notes to Condensed Financial Statements (Unaudited)

Note A Interim Period Reporting

In the opinion of management, the accompanying unaudited condensed financial statements of 60 East 42nd St. Associates L.L.C. (“Registrant”) reflect all adjustments, consisting of normal recurring accruals, necessary to present fairly the financial position of Registrant as of ~~September~~March 3031, ~~2011~~2012 and its results of operations ~~for the three~~ and ~~nine months ended September 30, 2011 and 2010 and~~ cash flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~ 2012 and ~~2010~~2011. Information included in the condensed balance sheet as of December 31, ~~2010~~2011 has been derived from the audited balance sheet included in Registrant’s Form 10-K for the year ended December 31, ~~2010~~2011 (the “10-K”) previously filed with the Securities and Exchange Commission (the “SEC”). Pursuant to rules and regulations of the SEC, certain information and disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles have been condensed or omitted from these financial statements unless significant changes have taken place since the end of the most recent fiscal year. Accordingly, these unaudited condensed financial statements should be read in conjunction with the financial statements and notes thereto and the other information contained in the 10-K. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2011~~2012 are not necessarily indicative of the results to be expected for any interim period or the full year.

Reclassification

Certain prior year balances have been reclassified to conform with the current period presentation.

Note B Organization

Registrant was originally organized as a partnership on September 25, 1958. On October 1, 1958, Registrant acquired fee title to One Grand Central Place (the “Building”), formerly known as the Lincoln Building, at the address 60 East 42nd Street, New York, New York ~~(the “Building”)~~ and the land there under (the “Property”). On November 28, 2001, Registrant converted to a limited liability company under New York law and is now known as 60 East 42nd St. Associates L.L.C. The conversion did not change any aspect of the assets and operations of Registrant other than to protect its participants from liability to third parties. Registrant’s members (“Members”) are Peter L. Malkin and Anthony E. Malkin (collectively, the “Agents”), each of whom also acts as an agent for holders of participations ~~(“Participations”)~~ in ~~their~~his respective member interest in Registrant (the “Participants”). The Members in Registrant hold senior positions at Malkin Holdings LLC (“Malkin Holdings” or “Supervisor”) ~~(formerly Wien & Malkin LLC)~~, One Grand Central Place, 60 East 42nd Street, New York, New York, which provides supervisory and other services to Registrant and to Lessee. See Note E below.

Note C Lease

Registrant does not operate the Property. Registrant leases the Property to Lincoln Building Associates L.L.C. (“Lessee”) pursuant to an operating lease as modified (the “Lease”), which is currently set to expire on September 30, 2033. Lessee is a New York limited liability company whose members consist of, among others, entities for the benefit of members of Peter L. Malkin’s family.

5The Lease provides that Lessee is required to pay to Registrant as follows:

The Lease provides that Lessee is required to pay rent to Registrant as follows:

(i) annual basic rent (“Basic Rent”) equal to the sum of $24,000 plus the constant annual mortgage charges on all mortgages. In accordance with the Ninth Lease Modification Agreement dated November 5, 2009, Basic Rent was increased to cover debt service on a $100,000,000 mortgage. See Note D. Basic Rent will be increased or decreased upon the refinancing of the mortgages provided that the aggregate principal balance of all mortgages now or hereafter placed on the Property does not exceed $100,000,000 plus refinancing costs.

(ii) additional rent (“Additional Rent”) equal to, on an annual basis, the lesser of (x) Lessee’s net operating income (as defined) for the lease year ending September 30 or (y) $1,053,800 ($87,817 per month) and further additional rent (“Further Additional Rent”) equal to 50% of any remaining balance of Lessee’s net operating income for such lease year. Lessee has no obligation to make any payment of Additional Rent or Further Additional Rent until after Lessee has recouped any cumulative operating loss accruing from and after September 30, 1977. There is currently no accumulated operating loss against which to offset payment of Additional Rent or Further Additional Rent.

The Lease also requires an advance against Additional Rent equal to, on an annual basis, the lesser of (x) Lessee’s net operating income for the preceding lease year or (y) $1,053,800 which is recorded in revenue in monthly installments of $87,817, which, in the latter amount, will permit basic distributions to Participants at an annual rate of approximately 14.95% per annum on their original and remaining cash investment of $7,000,000 in Registrant; provided, however, if such advances exceed Lessee’s net operating income for any lease year, advances otherwise required during the subsequent lease year shall be reduced by an amount equal to such excess until Lessee shall have recovered, through retention of net operating income, the full amount of such excess. After the Participants have received distributions equal to a return of 14% per annum, $7,380 is paid to Supervisor from the advances against Additional Rent.

Lessee is required to make an annual payment to Registrant of Further Additional Rent, which, as explained above, is the amount representing 50% of the remaining net operating income reported by Lessee for the lease year ending September 30th after deducting the advance against Additional Rent. The Lease requires that the report be delivered by Lessee to Registrant annually within 60 days after the end of each such lease year. ItSince it is not practical to estimate Further Additional Rent for the lease year ending on September 30th which would be allocable to the first nine months of the lease year until Lessee, pursuant to the Lease, renders to Registrant a report on the operation of the Property. Registrant recognizes Further Additional Rent when earned from the Lessee at the close of the lease year ending September 30th and records such amount in revenue during the three months ended September 30th.

~~For~~Rent ~~the lease year ended September 30~~income, ~~2011,~~earned ~~Lessee~~from ~~reported~~a ~~net~~related ~~operating income of $7~~party,~~225,766.~~ ~~Lessee~~was ~~paid advances against Additional Rent of~~ $12,~~053~~132,~~800~~045 ~~for that lease year prior to September 30, 2011~~ and ~~Further Additional Rent of~~ $32,~~085~~131,~~983~~964 subsequent to September 30, 2011. The Further Additional Rent of $3,085,983 represents 50% of the excess of the Lessee’s net operating income of $7,225,766 over $1,053,800. During November 2011 Registrant did not make any additional distribution of Further Additional Rent received for the ~~lease~~quarter ~~year ending~~ended ~~September~~March 3031, ~~2011~~2012 toand ~~Participants~~2011, ~~but added such amount to the contingency reserves of Registrant~~respectively.

For the lease year ended September 30, 2011, Lessee reported net operating income of $7,225,766. Lessee paid advances against Additional Rent of $1,053,800 for that lease year prior to September 30, 2011 and Further Additional Rent of $3,085,983 subsequent to September 30, 2011. The Further Additional Rent of $3,085,983 represents 50% of the excess of the Lessee’s net operating income of $7,225,766 over $1,053,800. During November 2011 Registrant did not make any additional distribution of Further Additional Rent received for the lease year ending September 30, 2011 to Participants as such amount was required for (i) fees relating to a proposed consolidation of Registrant, other public and private entities supervised by Malkin Holdings and Malkin Holdings and certain affiliated management companies into Empire State Realty Trust, Inc., a Maryland corporation which intends to qualify for U.S. tax purposes as a REIT, (ii) the increase in the supervisory fee to Supervisor, (iii) accounting fees, (iv) the New York State annual filing fee, and (v) general contingencies.

The Supervisor of the Registrant has filed a registration statement on Form S-4 for the solicitation of consents of the Participants in the Registrant and other public limited liability companies supervised by the Supervisor to a consolidation transaction. In such consolidation, (x) the property interests of the Registrant, such other public limited liability companies and certain private entities supervised by the Supervisor, and (y) the Supervisor and certain affiliated management companies will be contributed to the operating partnership of a newly organized publicly traded real estate investment trust.

Consents are required from Participants in the Registrant and such other public limited liability companies for them to contribute their interests in the consolidation, and the solicitation of such consents will not commence until the SEC declares effective the registration statement on Form S-4. Consents have been obtained from participants in the private entities and the Supervisor and certain affiliated companies and affiliates of the Supervisor for them to make such contribution.

The consideration to be paid to the contributing companies and entities in the consolidation will be allocated in accordance with exchange values determined based on appraisals by an independent third party. Such method of allocation has been approved by the Lessee. Based on the preliminary exchange values, if the consolidation proposal is approved by the Registrant’s Participants, the consideration with respect to One Grand Central Place will be allocated approximately 50% to the Registrant and 50% to the Lessee, which the Supervisor believes is in accordance with the historical treatment of the Registrant and the Lessee.

Note D Mortgages Payable

On November 29, 2004, a new first mortgage (“Mortgage”) was placed on the Property in the amount of $84,000,000 with Prudential Insurance Company of America to provide financing for the improvement program described below. At closing, $49,000,000 was drawn to pay off the former first mortgage with Morgan Guaranty Trust Company in the amount of $12,020,814 and the second mortgage in the amount of $27,979,186 with Emigrant Savings Bank. The remaining $35,000,000 available under the Mortgage was drawn on various dates through July 5, 2007. The proceeds of $49,000,000 drawn at ~~closing~~ closing and all subsequent draws have been used to pay for refinancing costs and capital improvements as needed. The initial draw of $49,000,000 and all subsequent draws required constant equal monthly payments of interest only, at the rate of 5.34% per annum, until July 5, 2007. Commencing August 5, 2007, Registrant is required to make equal monthly payments of $507,838 applied to interest and then principal calculated on a 25-year amortization schedule. The entire $84,000,000 has been drawn and at ~~September~~March 3031, ~~2011~~2012 the balance is $7675,~~512~~497,~~558~~177. The Senior Mortgage matures on November 5, 2014 at which time the principal balance will be $69,797,589.

On November 5, 2009 Registrant took out an additional $16,000,000 loan with Prudential Insurance Company of America secured by a second mortgage on the Property, subordinate to the first mortgage and to be used for capital improvements. The loan requires payments of interest at 7% per annum and principal in the aggregate amount of $113,085 calculated on a ~~twenty-five~~ 25-year amortization schedule and is co-terminus with the first mortgage. At ~~September~~March 3031, ~~2011~~2012, the balance is $15,~~537~~401,~~791~~127. The mortgage matures on November 5, 2014 ~~with~~at awhich time the principal balance ofwill be $14,613,782.

The mortgage loans may be prepaid at any time, in whole only, upon payment of a prepayment penalty based on a yield maintenance formula. There is no prepayment penalty if the mortgages are paid in full during the last 60 days of the term.

The ~~estimated~~mortgage ~~fair~~loans ~~value~~may ofbe ~~Registrant’s~~prepaid ~~mortgage~~at ~~debt~~any ~~based~~time, ~~on available~~in ~~market~~whole ~~information~~only, isupon ~~approximately~~payment ~~$97,513,962~~of asa ofprepayment penalty ~~September 30,~~based ~~2011.~~on ~~The~~a ~~fair~~yield ~~value~~maintenance offormula. ~~borrowings~~There is ~~estimated~~no byprepayment ~~discounting~~penalty if the ~~future~~mortgages ~~cash~~are ~~flows~~paid ~~using~~in ~~current~~full ~~interest~~during ~~rates~~the atlast ~~which~~60 ~~similar~~days ~~borrowings~~of ~~could~~the ~~be made by us~~term.

~~Mortgage~~The ~~financing~~estimated ~~costs~~fair value of Registrant’s mortgage debt based on available market information is approximately $295,~~873~~638,~~632~~984 ~~were~~as ~~capitalized~~of byMarch 31, ~~Registrant~~2012. ~~and~~The ~~are~~fair ~~being~~value ~~amortized~~of ~~ratably~~borrowings ~~over~~is estimated by discounting the ~~terms~~future ofcash ~~the~~flows ~~mortgages~~using current interest rates at which similar borrowings could be made by us.

InAs ~~1999, the Participants~~ of ~~Registrant and the members in Lessee consented to a~~ ~~building improvements program (the “Program”) estimated to cost approximately $22~~March 31,~~800,000.~~ ~~In 2000~~2012, the Participants of Registrant and members in Lessee approved an increase in the Program from $22,800,000 to approximately $28,000,000 under substantially the same conditions as had previously been approved. To induce the Lessee to approve the Program, Registrant authorized the Agents to grant to the Lessee, upon completion of the Program, the right to further extensions of the Lease to 2083. The Program was further increased in 2004 to up to $100,000,000. Such increase is expected to permit extending the Lease beyond 2083, based on the net present benefit to Registrant of the improvements made. The granting of such Lease extension rights upon completion of the Program is expected to trigger a New York State Transfer Tax under current tax rules, which will be paid from mortgage ~~proceeds~~financing ~~and/or the Lessee’s operating cash flow. As of September 30, 2011, Registrant had incurred~~ costs ~~related to the Program~~ of $742,~~019~~873,~~943~~632 ~~and~~were ~~estimates~~capitalized ~~that the Program upon completion will be approximately $100,000,000 including sprinkler work, required to be completed~~ by ~~2019. The Participants of~~ Registrant and ~~the members~~are inbeing ~~Lessee~~amortized ~~had~~ratably ~~approved~~over ~~increased refinancing of $16,000,000 from~~ the ~~total~~terms of ~~$84,000,000 provided by~~ the ~~Mortgage to up to $100,000,000~~mortgages. ~~As noted above, the additional $16,000,000 financing closed on November 5, 2009. Costs of the Program in excess of financing, if applicable, will be funded out of Lessee’s operating cash flow.~~

In 1999, the Participants of Registrant and the members in Lessee consented to a building improvements program (the “Program”) estimated to cost approximately $22,800,000. In 2000, the Participants of Registrant and members in Lessee approved an increase in the Program from $22,800,000 to approximately $28,000,000 under substantially the same conditions as had previously been approved. To induce the Lessee to approve the Program, Registrant authorized the Agents to grant to the Lessee, upon completion of the Program, the right to further extensions of the Lease to 2083. The Program was further increased in 2004 to up to $100,000,000. Such increase is expected to permit extending the Lease beyond 2083, based on the net present benefit to Registrant of the improvements made. The granting of such Lease extension rights upon completion of the Program is expected to trigger a New York State Transfer Tax under current tax rules, which will be paid from mortgage proceeds and/or the Lessee’s operating cash flow. As of March 31, 2012, Registrant had incurred costs related to the Program of $74,693,593 and estimates that the Program upon completion will be approximately $100,000,000 including sprinkler work, required to be completed by 2019. The Participants of Registrant and the members in Lessee had approved increased refinancing of $16,000,000 from the total of $84,000,000 provided by the Mortgage to up to $100,000,000. As noted above, the additional $16,000,000 financing closed on November 5, 2009. Costs of the Program in excess of financing, if applicable, will be funded out of Lessee’s operating cash flow. Amounts Payable to Lessee related to the program were $952,710 (of which $197,113 relate to unpaid leasing costs) and $720,066 as of March 31, 2012 and December 31, 2011, respectively.

Note E Supervisory Services

Registrant pays Supervisor for supervisory services and disbursements. The basic fee (the Basic Payment”) has been payable at the rate of $24,000 per annum, payable $2,000 per month, since October 1, 1958. The Basic Payment was increased, with the approval of the Agents, by an amount equal to the increase in the consumer price index since such date, resulting in an increase in the Basic Payment to $180,000 per annum effective July 1, 2010. ~~The~~to ~~Basic Payment will~~ be ~~subject~~adjusted toannually ~~further~~for ~~increase in accordance with~~ any ~~future~~subsequent increase in the ~~consumer~~Consumer ~~price~~Price ~~index~~Index. The fee is payable (i) not less than $2,000 per month and (ii) the balance out of available reserves from Further Additional Rent. If Further Additional Rent is insufficient to pay such balance, any deficiency shall be payable in the next year in which Further Additional Rent is sufficient. InThe ~~addition, the~~ Agents also approved payment by Registrant, effective July 1, 2010, of the expenses in connection with regular accounting services related to maintenance of Registrant’s books and records. Such expenses were previously paid by Supervisor.

The basic supervisory services provided to Registrant by Supervisor include, but are not limited to, maintaining all of its entity and Participant records, performing physical inspections of the Building, providing or coordinating certain counsel services to Registrant, reviewing insurance coverage and conducting annual supervisory review meetings, receipt of monthly rent from Lessee, payment of monthly and additional distributions to the Participants, payment of all other disbursements, confirmation of the payment of real estate taxes, active review of financial statements submitted to Registrant by Lessee and financial statements audited by and tax information prepared by Registrant’s independent registered public accounting firm, and distribution of related materials to the Participants. Supervisor also prepares quarterly, annual and other periodic filings with the SEC and applicable state authorities.

~~Registrant~~Accrued ~~pays Supervisor for other services at hourly rates. Pursuant to the fee arrangements described herein, Registrant incurred~~ supervisory ~~service~~ fees ~~of $142~~,~~168~~ ~~for~~to ~~the~~a ~~nine-month~~related ~~period ended September 30~~party, ~~2011.~~are ~~Supervisory~~$0 ~~fees~~and ~~were~~ $6281,~~535~~265 ~~for~~at ~~the nine-month period ended September~~March 3031,2012 ~~2010. No~~and ~~remuneration was paid during the nine-month periods ended September~~December 3031, 2011, ~~and 2010 by Registrant to any of the Members~~respectively.

Registrant pays Supervisor ~~also~~for ~~receives~~other aservices ~~payment~~at ~~(“Additional~~hourly ~~Payment”)~~rates. ~~equal~~Pursuant to ~~10%~~the offee arrangements ~~all~~described ~~distributions~~herein, ~~to Participants in~~ Registrant inincurred ~~any~~supervisory ~~year~~service infees ~~excess~~ of ~~the~~$48,478 ~~amount~~for ~~representing~~the athree-month ~~return~~period toended ~~them at the rate of 14%~~March ~~per~~31, ~~annum~~2012. onSupervisory ~~their~~fees ~~remaining~~were ~~cash~~$46,845 ~~investment~~for inthe ~~Registrant~~three-month ~~(which~~period ~~remaining~~ended ~~cash investment at September~~March 3031, 2011 ~~was equal to the Participants’ original cash investment of $7,000,000)~~. ~~For~~No ~~tax~~remuneration ~~purposes,~~was ~~such Additional~~paid ~~Payment~~during ~~is recognized as a profits interest, and~~ the ~~Supervisor~~three-month isperiods ~~treated~~ended ~~as a partner~~March 31, ~~all~~2012 ~~without~~and ~~modifying~~2011 ~~each~~by ~~Participant’s~~Registrant ~~distributive~~to ~~share~~any of ~~reportable income and cash distribution. Supervisor receives $7,380 a year as an advance against~~ the ~~Additional Payment, which Registrant expenses monthly~~Members.

~~Reference~~Supervisor isalso receives ~~made~~a topayment ~~Note~~(“Additional CPayment”) ~~above~~equal ~~for~~to ~~a description~~10% of ~~the~~all ~~terms~~distributions ofto ~~the~~Participants ~~Lease~~in ~~between~~ Registrant ~~and~~in ~~Lessee.~~excess As of ~~September~~14% ~~30,~~per ~~2011,~~annum ~~entities~~on ~~for~~their ~~the~~remaining ~~benefit~~cash ofinvestment ~~Peter~~in L.Registrant ~~Malkin’s~~(which ~~family~~remaining ~~own~~cash ~~member~~investment ~~interests~~at inMarch 31, 2012 ~~Lessee.~~was ~~The~~equal ~~respective~~to ~~interests~~the ofParticipants’ ~~the~~original ~~Members~~cash ininvestment ~~Registrant~~of ~~and Lessee~~$7,000,000). ~~arise~~For ~~solely~~tax ~~from~~purposes, ~~ownership~~such ofAdditional ~~their~~Payment ~~respective~~is ~~Participations~~recognized inas ~~Registrant~~a ~~and~~profits interest, inand the ~~case~~Supervisor ofis ~~Peter~~treated L.as ~~Malkin~~a partner, ~~entity~~all ~~ownership~~without ofmodifying ~~member~~each Participant’s ~~interests~~distributive ~~for~~share ~~the benefit~~ of ~~family~~reportable ~~members~~income inand ~~Lessee~~cash distribution. ~~The~~Supervisor ~~Members~~receives as$7,380 ~~such~~a ~~receive~~year noas ~~extra~~an ~~or special~~advance ~~benefit~~against ~~not~~the ~~shared~~Additional onPayment, awhich ~~pro~~Registrant ~~rata~~expenses ~~basis~~monthly. ~~with~~Distributions ~~all~~are ~~other~~paid ~~Participants~~from ina ~~Registrant~~cash oraccount ~~members~~held ~~in Lessee~~by Supervisor. ~~However,~~That ~~all~~account ofis ~~the~~included ~~Members~~in ~~hold~~the ~~senior~~condensed ~~positions~~Balance atSheets ~~Supervisor~~as ~~(which~~“Due ~~supervises~~from ~~Registrant~~Supervisor.” ~~and~~The ~~Lessee)~~funds ~~and~~of $87,202 byat ~~reason~~March of31, ~~their~~2012 ~~positions at~~and ~~Supervisor~~December 31, ~~may~~2011 ~~receive~~were ~~income~~paid ~~attributable~~ to ~~supervisory~~participants oron ~~other~~April ~~remuneration~~1, ~~paid~~2012 toand ~~Supervisor~~January by1, ~~Registrant~~2012, ~~and Lessee~~respectively.

~~Subsequent~~Reference ~~Events~~is made to Note C above for a description of the terms of the Lease between Registrant and Lessee. As of March 31, 2012, entities for the benefit of Peter L. Malkin’s family own member interests in Lessee. The respective interests of the Members in Registrant and Lessee arise solely from ownership of their respective Participations in Registrant and, in the case of Peter L. Malkin, his individual ownership of a member interest in Lessee. The Members as such receive no extra or special benefit not shared on a pro rata basis with all other Participants in Registrant or members in Lessee. However, all of the Members hold senior positions at Supervisor (which supervises Registrant and Lessee) and, by reason of their positions at Supervisor, may receive income attributable to supervisory or other remuneration paid to Supervisor by Registrant and Lessee.

Note F Subsequent Events

Subsequent events have been evaluated for potential recognition and disclosure.

Note G Fair Value Measurements

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. As a basis for considering market participant assumptions in fair value measurements, 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 three of the hierarchy).

We use the following methods and assumptions in estimating fair value disclosures for financial instruments.

Cash and cash equivalents, due from supervisor, other receivable, accrued mortgage interest, accrued supervisory fees, a related party, payable to lessee, a related party, due to supervisor, and accrued expenses: The carrying amount of cash and cash equivalents, due from supervisor, other receivable, accrued mortgage interest, accrued supervisory fees, a related party, payable to lessee, a related party, due to supervisor, and accrued expenses reported in our Condensed Balance Sheets approximates fair value due to the short maturity of these instruments.

Mortgage payable: The fair value of borrowings is estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made to us.

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

Level 1 — Quoted prices in active markets for identical instruments.

Level 2 — Valuations based principally on other observable market parameters, including:

Quoted prices in active markets for similar instruments;

Quoted prices in less active or inactive markets for identical or similar instruments;

Other observable inputs (such as risk free interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates); and

Market corroborated inputs (derived principally from or corroborated by observable market data).

Level 3 — Valuations based significantly on unobservable inputs.

Valuations based on third-party indications (broker quotes or counterparty quotes) which were, in turn, based significantly on unobservable inputs or were otherwise not supportable as Level 2 valuations.

Valuations based on internal models with significant unobservable inputs.

These levels form a hierarchy. We follow this hierarchy for our financial instruments measured at fair value on a recurring and nonrecurring basis and other required fair value disclosures. The classifications are based on the lowest level of input that is significant to the fair value measurement.

Fair Value of Financial Instruments

The following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies as discussed in Fair Value Measurements. Considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts we could realize on disposition of the financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.

The mortgages payable had an estimated fair value based on discounted cash flow models, based on Level 3 inputs, of approximately $95,638,984, compared to the book value of the related debt of $90,898,304, at March 31, 2012.

Disclosure about fair value of financial instruments is based on pertinent information available to us as of March 31, 2012. 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.

Note H Offering Costs

Through March 31, 2012, we have incurred external offering costs of $2,432,116, of which we have incurred $292,057 and $141,006 for the three month periods ended March 31, 2012 and 2011, respectively, and are reflected as deferred costs on Registrant’s Condensed Balance Sheets. Such costs are comprised of accounting fees, legal fees, and other professional fees. Such costs have been deferred and shall be recorded as a reduction of proceeds of the IPO, or expensed as incurred if the IPO is not consummated. $145,524 of these costs are in Due to Supervisor at March 31, 2012. Additional offering costs for work done by employees of the Supervisor of $49,099 and $29,118 for the quarter ended March 31, 2012 and 2011, respectively, were incurred and advanced by the Supervisor and have been reimbursed to the Supervisor by the entities to be included in the consolidation.

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward Looking Statements

Readers of this discussion are advised that the discussion should be read in conjunction with the financial statements of Registrant (including related notes thereto) appearing elsewhere in this Form 10-Q. Certain statements in this discussion may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements reflect Registrant’s current expectations regarding future results of operations, economic performance, financial condition and achievements of Registrant, and do not relate strictly to historical or current facts. Registrant has tried, wherever possible, to identify these forward-looking statements by using words such as “believe,” “expect,” “anticipate,” “intend,” “plan,” “estimate” or words of similar meaning.

Although Registrant believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, such statements are subject to risks and uncertainties, which may cause the actual results to differ materially from those anticipated in the forward looking statements. Such factors include, but are not limited to, the following: general economic and business conditions, which will, among other things, affect demand for rental space, the availability of prospective tenants, lease rents and the availability of financing; adverse changes in Registrant’s real estate market, including, among other things, competition with other real estate owners, risks of real estate development and acquisitions; governmental actions and initiatives; and environmental/safety requirements.

Financial Condition and Results of Operations

Registrant was organized for the purpose of acquiring the Property subject to an operating lease held by Lessee. Registrant is required to pay, from Basic Rent under the Lease, mortgage charges and ~~amounts~~a portion of the fee for supervisory services. Registrant is required to pay from Additional Rent and Further Additional Rent an Additional Payment to Supervisor and other expenses and then to distribute the balance of such Additional Rent and Further Additional Rent less any additions to reserves to the Participants. See Note C to the condensed financial statements herein. Pursuant to the Lease, Lessee has assumed ~~sole~~ sole responsibility for the condition, operation, repair, maintenance and management of the Property. Registrant is not required to maintain substantial reserves or otherwise maintain liquid assets to defray any operating expenses of the Property.

Registrant’s results of operations are affected primarily by the amount of rent payable to it under the Lease. The amount of Additional Rent and Further Additional Rent payable to Registrant is affected by the New York City economy and real estate rental market, which is difficult for management to forecast.

During the ~~nine~~three-month period ended ~~September~~March 3031, ~~2011~~2012, Registrant made regular monthly distributions of $124.57 for each $10,000 Participation ($1,494.89 per annum for each $10,000 Participation). There are no restrictions on Registrant’s present or future ability to make distributions; however, the amount of such distributions, particularly distributions of ~~Additional~~ Additional Rent and Further Additional Rent, depends on the ability of Lessee to make payments of Basic Rent, Additional Rent and Further Additional Rent to Registrant. Registrant expects to make distributions so long as it receives the payments provided for under the Lease.

The following summarizes, with respect to the current period and the corresponding period of the previous year, the material factors regarding Registrant’s results of operations for such periods:

Total revenues ~~increased for the nine-month period ended September 30, 2011 as compared with the corresponding period of the prior year. Such increase is the net result of an increase in Further~~were ~~Additional~~approximately ~~Rent payable by~~ the ~~Lessee~~same ~~due to a decrease in its expenditures~~ for ~~improvements and tenanting costs and a decrease in dividend income and basic rent for~~ the ~~nine~~three-month period ended ~~September~~March 3031, ~~2011~~2012 as compared with the corresponding period of the prior year.

10Total expenses increased by $23,056 for the three-month period ended March 31, 2012 as compared with the corresponding period of the prior year, primarily attributable to: a decrease in interest on the mortgages payable of $31,310 as a result of scheduled amortization of principal that reduced the loan balance, offset in part by an increase in depreciation of building improvements and equipment of $19,948 attributable to an increase in depreciable assets placed in service and an increase in professional fees primarily attributable to fees to the supervisor of $19,981 for services rendered in connection with a proposed consolidation of Registrant, other public and private entities supervised by Malkin Holdings and Malkin Holdings and certain affiliated management companies into Empire State Realty Trust, Inc., a newly formed REIT, for the three-month period ended March 31, 2012 as compared with the corresponding period of the prior year.

Total revenues increased for the three-month period ended September 30, 2011 as compared with the corresponding period of the prior year. Such increase is the net result of an increase in Further Additional Rent payable by the Lessee due to a decrease in its expenditures for improvements and tenanting costs and a decrease in dividend income for the three-month period ended September 30, 2011 as compared with the corresponding period of the prior year.

Total expenses increased for the nine-month period ended September 30, 2011 as compared with the corresponding period of the prior year. Such increase is the net result of a decrease in interest on the mortgages payable as a result of principal payments that reduced the loan balance, an increase in basic supervisory fees to Malkin Holdings effective July 1, 2010, an increase in depreciation of improvements and equipment attributable to an increase in depreciable assets placed in service, a decrease in amortization of leasing commissions as a result of certain leasing commissions having been fully amortized, an increase in professional fees due to the fact that accounting fees now paid by Registrant were previously paid by Supervisor and an increase in fees to Malkin Holdings for services rendered in connection with certain matters regarding ownership and operation of One Grand Central Place for the nine-month period ended September 30, 2011 as compared with the corresponding period of the prior year.

Total expenses increased for the three-month period ended September 30, 2011 as compared with the corresponding period of the prior year. Such increase is the net result of a decrease in interest on the mortgages payable as a result of principal payments that reduced the loan balance, an increase in basic supervisory fees to Malkin Holdings effective July 1, 2010, an increase in depreciation of improvements and equipment attributable to an increase in depreciable assets placed in service and a decrease in amortization of leasing commissions as a result of certain leasing commissions having been fully amortized, an increase in professional fees due to the fact that accounting fees now paid by Registrant were previously paid by Supervisor and an increase in fees paid to Malkin Holdings for services rendered in connection with certain matters regarding ownership and operation of One Grand Central Place for the three-month period ended September 30, 2011 as compared with the corresponding period of the prior year.

Liquidity and Capital Resources

Registrant’s liquidity has ~~increased~~decreased at ~~September~~March 3031, ~~2011~~2012 as compared with December 31, ~~2010~~2011 as a result of scheduled amortization of principal based on a 25-year amortization period and payment of ~~Further~~accrued ~~Additional~~costs ~~Rent~~in ~~due~~connection ~~from~~with the ~~Lessee~~proposed atformation ~~September 30,~~of ~~2011~~the REIT. Registrant may from time to time set cash aside for contingencies. Adverse developments in economic, credit and investment markets over the last ~~two~~several years have impaired general liquidity (although some improvement in such markets has arisen recently) and the developments may negatively impact Registrant and/or space tenants at the Building. Any such impact should be ameliorated by the fact that (a) each of Registrant and its Lessee has very low debt in relation to asset value, (b) the maturity of Registrant’s existing and planned debt will not occur within the next 3624 months, and (c) the Building’s rental revenue is derived from a substantial number of tenants in diverse businesses with lease termination dates spread over numerous years.

1112

Amortization payments due under the First Mortgage commenced August 5, 2007, calculated on a 25-year amortization schedule. Amortization payments due under the additional $16,000,000 loan commenced December 5, 2009 calculated on a 25-year amortization schedule. The mortgages mature on November 5, 2014 at which time the aggregate principal balance due will be $84,~~411~~186,~~371~~295. Registrant does not maintain any reserve to cover the payments of such mortgage indebtedness at maturity. Therefore, repayment of the mortgages will depend on Registrant’s ability to arrange a refinancing. Assuming that the Property continues to generate an annual net profit in future years comparable to that in past years, and assuming further that real estate capital and operating markets return to more stable patterns, consistent with long-term historical real estate trends in the geographic area in which the Property is located, Registrant anticipates that the value of the Property will be in excess of the amount of the mortgage balances at maturity.

Registrant anticipates that funds for short-term working capital requirements for the Property will be provided by cash on hand and rental payments received from Lessee. Long-term sources of working capital will be provided by rental payments received from Lessee and ~~to the extent necessary, from additional capital investment by the members in Lessee and~~/or external financing. However, as noted above, Registrant has no requirement to maintain substantial reserves to defray any operating expenses of the Property.

The Supervisor of the Registrant has filed a registration statement on Form S-4 for the solicitation of consents of the Participants in the Registrant and other public limited liability companies supervised by the Supervisor to a consolidation transaction. In such consolidation, (x) the property interests of the Registrant, such other public limited liability companies and certain private entities supervised by the Supervisor, and (y) the Supervisor and certain affiliated management companies ~~will~~would be contributed to the operating partnership of Empire State Building Realty Trust, Inc., a newly organized ~~publicly traded~~ real estate investment trust.

Inflation

Registrant believes that there has been no material change in the impact of inflation on its operations since the filing of its report on Form 10-K for the year ended December 31, ~~2010~~2011.

Security Ownership

As of ~~September~~March 3031, ~~2011~~2012, the Members in Registrant owned of record and beneficially an aggregate $25,833 of participations in Registrant, representing 0.4% of the currently outstanding ~~Participations~~ Participations therein.

12As of March 31, 2012, certain of the Members in Registrant held additional Participations in Registrant as follows:

AsPeter L. Malkin owned of ~~September 30,~~record ~~2011,~~as ~~certain~~trustee or co-trustee an aggregate of ~~the~~$59,049 ~~Members~~of inParticipations. ~~Registrant~~Peter ~~held~~L. Malkin ~~additional~~disclaims ~~Participations~~any inbeneficial ~~Registrant~~ownership asof ~~follows:~~such Participations.

Peter L. Malkin owned of record as trustee or co-trustee an aggregate of $169,049 of Participations. Peter L. Malkin disclaims any beneficial ownership of such Participations.

Entities for the benefit of members of Peter L. Malkin’s family owned of record and beneficially $160,000 of Participations. Peter L. Malkin disclaims any beneficial ownership of such Participations, except that related family trusts or entities are required to complete scheduled payments to him.

Anthony E. Malkin owned of record as co-trustee an aggregate of $2545,000 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.

Trusts for the benefit of members of Anthony E. Malkin’s family owned of record and beneficially $40,000 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.

Item 4.

Controls and Procedures.

(a) Evaluation of disclosure controls and procedures. The Supervisor after evaluating the effectiveness of Registrant’s “disclosure controls and procedures” (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) and 15d-15(e)) as of ~~September~~March 3031, ~~2011~~2012, the end of the period covered by this report, has concluded that as of that date Registrant’s disclosure controls and procedures were effective and designed to ensure that material information relating to Registrant would be made known to it by others within those entities on a timely basis.

(b)

Changes in internal controls over financial reporting. There were no changes in Registrant’s internal controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, Registrant’s internal controls over financial reporting.

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings.

The property of Registrant was the subject of the following material litigation:

Malkin Holdings ~~LLC~~ and Peter L. Malkin, a member in Registrant, were engaged in a proceeding with Lessee’s former managing agent, Helmsley-Spear, Inc. commenced in 1997, concerning the management, leasing, and supervision of the ~~property~~Property that is subject to the Lease to Lessee. In this connection, certain costs for legal and professional fees and other expenses were paid by Malkin Holdings ~~LLC~~ and Mr. Malkin. Malkin Holdings ~~LLC~~ and Mr. Malkin have represented that such costs will be recovered only to the extent that (a) a competent tribunal authorizes payment or (b) an investor voluntarily agrees that his or her proportionate share be paid. ~~Accordingly,~~On ~~Registrant’s~~behalf ~~allocable share~~ of ~~such~~himself ~~costs~~and isMalkin asHoldings, ~~yet~~Mr. Malkin ~~undetermined~~has requested, ~~and~~or ~~Registrant~~intends ~~has~~to ~~not provided~~request, ~~for~~such ~~the~~voluntary ~~expense~~agreement from ~~and~~all ~~related~~investors, ~~liability~~which ~~with~~may ~~respect~~include torenewing such ~~costs~~request in ~~its~~the ~~financial~~future ~~statements~~for ~~included~~any ininvestor ~~this~~who ~~Form~~previously ~~10-Q.~~received Assuch arequest ~~result~~and offailed anto ~~August 29,~~confirm ~~2006~~agreement ~~settlement~~at ~~agreement,~~that ~~which~~time. ~~included~~Because ~~termination~~any ofrelated ~~this~~payment ~~proceeding~~has been, ~~Registrant~~ or will ~~not~~be, ~~recognize~~made ~~any~~only ~~gains~~by orconsenting investors, ~~losses~~Registrant ~~from~~has ~~this~~not ~~proceeding~~provided ~~other~~for ~~than~~ the ~~possible~~expense ~~charges~~and ~~for~~related ~~the~~liability ~~aforementioned~~with ~~fees~~respect ~~and~~to ~~expenses~~such costs in these financial statements.

Five putative class actions have been brought by Participants in Registrant and several other entities supervised by Malkin Holdings that own fee or leasehold interests in various properties located in New York City, the first of which was filed March 1, 2012 (the “Class Actions”). As now pending in New York State Supreme Court, New York County, each Class Action challenges the proposed consolidation of those and other properties supervised by Malkin Holdings into a real estate investment trust (the “REIT”) and the initial public offering of shares in Empire State Realty Trust, Inc., a Maryland corporation which intends to qualify for U.S. tax purposes as a REIT. The plaintiffs assert claims against Malkin Holdings, Malkin Properties, L.L.C., Malkin Properties of New York, L.L.C., Malkin Properties of Connecticut, Inc., Malkin Construction Corp., Anthony E. Malkin, Peter L. Malkin, Estate of Leona M. Helmsley, Empire State Realty OP, L.P., and the REIT (“Defendants”) for breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty, alleging, inter alia, that the terms of the transaction are unfair to the Participants and overly favorable to Malkin Holdings and related parties. The complaints seek money damages and injunctive relief preventing the proposed transaction. On April 3, 2012, plaintiffs moved for consolidation of the actions and for appointment of co-lead counsel. Defendants filed a response consenting to consolidation, and taking no position with respect to appointment of co-lead counsel. The motion is scheduled to be heard by the court on June 21, 2012.

The Class Actions are in a very preliminary stage, with no responses to the complaints having been filed to date. Defendants have stated they believe the Class Actions are without merit and intend to defend them vigorously.

Item 6.

Exhibits

EXHIBIT INDEX

Number		Document
3.1		Amendment Number One to the Limited Liability Company Agreement of 60 East 42nd St. Associates L.L.C., dated as of November 30, 2011, by and among Peter L. Malkin and Anthony E. Malkin incorporated by reference to Exhibit 3.1 to the Form 8-K filed on December 5, 2011
24.1		Power of Attorney dated May 10, 2012, between Members of Registrant and Mark Labell which is being filed as Exhibit 24.1 to Registrant’s 10-Q for the period ended March 31, 2012.
24.1		Power of Attorney dated November 8, 2011, between Members of Registrant and Mark Labell which is being filed as Exhibit 24.1 to Registrant’s 10-Q for the quarter ended September 30, 2011.
31.1		Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.1		Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Mark Labell, Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2		Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Mark Labell, Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

1516

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

The individual signing this report on behalf of Registrant is Attorney-in-Fact for Registrant and each of the Members in Registrant, pursuant to Power of Attorney, dated ~~September~~May 810, ~~2011~~2012 (the “Power”) and is supervisor of the accounting functions.

60 EAST 42ND ST. ASSOCIATES L.L.C. ~~(Registrant) By: /s/ Mark Labell Mark Labell*, Attorney-in-Fact on behalf of:~~

(Registrant)

By:

/s/ Mark Labell

Mark Labell Senior Vice President, Finance of Malkin Holdings LLC,

Supervisor of 60 East 42^nd St. Associates L.L.C.

* and as Attorney-in-Fact on behalf of:

Peter L. Malkin, Member

Anthony E. Malkin, Member

Dated: ~~February~~May 1318, 2012

16* Registrant’s organizational documents do not provide for a Chief Executive Officer, Chief Financial Officer or Chief Accounting Officer or other officer with equivalent rights and duties. As described in the Report, Registrant is a limited liability company which is supervised by Malkin Holdings LLC. Accordingly, this Form 10-Q is being signed by a senior executive and senior member of the financial/accounting staff of Registrant’s Supervisor in such capacities.

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Filing Compare · 60 EAST 42ND STREET ASSOCIATES L.L.C.