FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

(Mark One)

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

For the quarterly period ended ~~June~~September 30, 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 0-2666

250 WEST 57th ST. ASSOCIATES L.L.C.

(Exact name of Registrant as specified in its charter)

A New York Limited Liability Company		13-6083380
(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 Act:

$3,600,000 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.

250 West 57th St. Associates L.L.C.

(A Limited Liability Company)

Condensed Balance Sheets

	June 30, 2012			December 31, 2011
	September 30, 2012			December 31, 2011
	(Unaudited)
Assets
Real Estate at 250-264 West 57th Street, New York, New York:
Building	$	4,940,682		$	4,940,682
Less: accumulated depreciation		(4,940,682	)		(4,940,682	)
		—			—
Building improvements		4244,~~997~~082,~~890~~575			41,215,430
Less: accumulated depreciation		(67,~~878~~153,~~385~~282	)		(6,334,722	)
		36,119,505			34,880,708
		36,929,293			34,880,708
Tenant improvements		4,~~447~~817,~~319~~085			2,702,193
Less: accumulated depreciation		(~~843~~1,~~654~~019,804	)		(548,783	)
		3,603,665			2,153,410
		3,797,281			2,153,410
Land		2,117,435			2,117,435
Total real estate, net		4142,~~840~~844,~~605~~009			39,151,553
Cash and cash equivalents		1,~~632~~269,~~866~~384			2,325,024
Due from Supervisor, a related party		60,000			60,000
Deferred costs		1,431,585			1,003,519
Due from Lessee, a related party		3,558,414			—
Other receivable		60,677			—
Deferred costs		1,414,890			790,019
Prepaid insurance		14,826			—
Other receivable		79,774			—
Leasing costs, less accumulated amortization of $851,250 in 2012 and $740,183 in 2011		1,415,013			795,274
Prepaid insurance		10,144			—
Mortgage refinancing costs, less accumulated amortization of $1,421,674 in 2012 and $1,263,152 in 2011		806,146			964,668
Leasing costs, less accumulated amortization of $926,333 in 2012 and $740,183 in 2011		1,383,370			795,274
Total assets	$	47,261,718		$	44,300,038
Mortgage financing costs, less accumulated amortization of $1,500,935 in 2012 and $1,263,152 in 2011		726,885			964,668
Total assets	$	51,346,870		$	44,086,538
Liabilities and members’ deficiency
Liabilities:
Mortgages payable	$	44,~~425~~164,~~212~~732		$	44,935,520
Accrued mortgage interest		~~197~~196,~~806~~607			201,523
Payable to Lessee, a related party		79,~~851~~350,~~505~~095			3,576,129
Accrued supervisory fees, a related party		—			20,000
Accrued expenses		3811,~~080~~540			55,901
Due to Supervisor, a related party		~~139~~322,~~730~~718			153,445
Total liabilities		5254,~~652~~045,~~333~~692			48,942,518
Commitments and contingencies		—			—
Members’ deficiency (at June 30, 2012 and December 31, 2011, there were 720 units (at $5,000 per unit) of participation units outstanding)		(5,390,615	)		(4,642,480	)
Members’ deficiency (at September 30, 2012 and December 31, 2011, there were 720 units (at $5,000 per unit) of participation units outstanding)		(2,698,822	)		(4,855,980	)
Total liability and members’ deficiency	$	47,261,718		$	44,300,038
Total liabilities and members’ deficiency	$	51,346,870		$	44,086,538

See notes to the condensed financial statements.

250 West 57th St. Associates L.L.C.

(A Limited Liability Company)

Condensed Statements of Operations

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	For the Three Months						For the Nine Months
	Ended September 30,						Ended September 30,
	2012			2011			2012			2011
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue:
Basic minimum annual rent, from a related party	$	866,~~237~~936		$	~~817~~818,~~836~~005		$	12,~~732~~599,~~472~~408		$	12,~~635~~453,~~503~~508
Advance of primary overage rent, from a related party		188,000			188,000			~~376~~564,000			~~376~~564,000
Total rent income		1,054,237			1,005,836			2,108,472			2,011,503
Secondary overage rent, from a related a party		3,558,414			4,350,339			3,558,414			4,350,339
Interest and dividend income		164			235			350			486
Total rent income		4,613,350			5,356,344			6,721,822			7,367,847
Total revenue		1,054,401			1,006,071			2,108,822			2,011,989
Interest and dividend income		151			214			501			699
Total revenue		4,613,501			5,356,558			6,722,323			7,368,546
Expenses:
Interest on mortgages		~~680~~677,~~400~~516			~~645~~642,~~848~~626			12,~~364~~041,~~334~~850			1,~~294~~937,~~972~~598
Supervisory services, to a related party		31,~~426~~797			3031,~~500~~425			6294,~~851~~648			6192,~~000~~425
Depreciation of building and tenant improvements		438,025			367,610			838,534			733,114
Additional payment for supervisory services, to a related party		—			284,745			—			284,745
Amortization of leasing commissions		56,786			46,043			111,067			96,737
Depreciation of building and tenant improvements		451,047			379,159			1,289,581			1,112,272
Professional fees, including amounts to a related party		49,229			30,850			103,003			60,833
Amortization of leasing costs		75,083			46,247			186,150			142,985
Miscellaneous		14,168			—			17,168			3,000
Formation transaction expense		56,738			41,589			95,575			81,417
Total expenses		1,270,034			1,120,851			2,496,957			2,249,656
Professional fees, including amounts to a related party		188,824			72,395			291,827			133,227
Net Loss	($	215,633	)	($	114,780	)	($	388,135	)	($	237,667	)
Miscellaneous		8,366			—			25,534			3,000
Loss per $5,000 participation unit, based on 720 participation units outstanding during the period	($	299.49	)	($	159.42	)	($	539.08	)	($	330.09	)
Total expenses		1,489,371			1,498,186			4,025,165			3,787,669
Net Income	$	3,124,130		$	3,858,372		$	2,697,158		$	3,580,877
Income per $5,000 participation unit, based on 720 participation units outstanding during the period	$	4,339.07		$	5,358.85		$	3,746.05		$	4,973.44
Distributions per $5,000 participation unit consisted of the following:
Income	$	0250.00		$	0250.00		$	0750.00		$	0750.00
Return of capital		~~250.00~~0			~~250.00~~0			~~500.00~~0			~~500.00~~0
Total distributions	$	250.00		$	250.00		$	~~500~~750.00		$	~~500~~750.00

See notes to the condensed financial statements.

250 West 57^th St. Associates L.L.C.

(A Limited Liability Company)

Statements of Members’ Deficiency

	For the SixMonths EndedJune 30, 2012			For the YearEndedDecember 31, 2011
	For the NineMonths EndedSeptember 30, 2012			For the YearEndedDecember 31, 2011
	(Unaudited)	~~(Unaudited)~~
Members’ deficiency:
January 1, 2012	$	(4,~~642~~855,~~480~~980	)
January 1, 2011				$	(4,~~821~~860,~~116~~381	)
Add, net income (loss):
Add net income:
January 1, 2012 through June 30, 2012		(388,135	)
January 1, 2012 through September 30, 2012		2,697,158
January 1, 2011 through December 31, 2011					3,~~461~~287,~~340~~105
		(5,030,615	)		(1,359,776	)
		(2,158,822	)		(1,573,276	)
Less, distributions:
Less distributions:
Distributions January 1, 2012 through
Distributions January 1, 2012 through September 30, 2012		540,000
June 30, 2012		360,000
Distributions January 1, 2011 through December 31, 2011					720,000
Distributions January 1, 2011 through
December 31, 2011					720,000
Distribution, December 14, 2011					2,562,704
		360,000			3,282,704
		540,000			3,282,704
Members’ deficiency at the end of the period	$	(52,~~390~~698,~~615~~822	)	$	(4,~~642~~855,~~480~~980	)

See notes to the condensed financial statements.

250 West 57th St. Associates L.L.C.

(A Limited Liability Company)

Condensed Statements of Cash Flows

	For the SixMonths EndedJune 30, 2012			For the SixMonths EndedJune 30, 2011
	For the NineMonths EndedSeptember 30, 2012			For the NineMonths EndedSeptember 30, 2011
	(Unaudited)	~~(Unaudited)~~		(Unaudited)
Cash flows from operating activities:
Net loss	($	388,135	)	($	237,667	)
Net income	$	2,697,158		$	3,580,877
Adjustments to reconcile net loss to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of building and tenant improvements		~~838~~1,~~534~~289,581			~~733~~1,~~114~~112,272
Amortization of leasing costs		~~111~~186,~~067~~150			96142,~~737~~984
Amortization of mortgage refinancing costs		~~158~~237,~~522~~783			~~158~~237,~~522~~783
Changes in operating assets and liabilities:
Other receivable		(60,677	)		(57,758	)
Other receivable and Due from Lessee		(3,637,489	)		(4,424,412	)
Leasing costs paid		—			(~~101~~159,~~646~~949	)
Change in prepaid insurance		(1410,~~826~~144	)		—
Change in due to Supervisor, a related party		~~(25~~88,~~774~~641	)		—
Change in accrued mortgage interest		(34,~~717~~916	)		(23,~~392~~529	)
Change in accrued supervisory fees, a related party		(20,000	)		~~(31~~253,~~000~~745	)
Change in accrued expenses and other liabilities		(17,821	)		172,426
Change in accrued expenses		(44,361	)		(66,481	)
Net cash provided by operating activities		~~577~~782,~~173~~403			~~730~~673,~~336~~290
Cash flows from investing activities:
Purchase of building and tenant improvements		—			(12,~~860~~931,~~055~~285	)
Increase in payable to Lessee, a related party		16,984			13,~~961~~091,~~700~~234
Net cash provided by investing activities		16,984			~~101~~159,~~645~~949
Cash flows from financing activities:
Repayment of mortgages payable		(~~510~~770,~~308~~788	)		(~~482~~729,~~828~~331	)
Change in deferred costs		(416,007	)		(185,412	)
Deferred costs		(544,239	)		(297,604	)
Distributions to Participants		(~~360~~540,000	)		(~~360~~540,000	)
Net cash used in financing activities		(1,~~286~~855,~~315~~027	)		(1,~~028~~566,~~240~~935	)
Net decrease in cash and cash equivalents		(~~692~~1,~~158~~055,640	)		(~~196~~733,~~259~~696	)
Cash and cash equivalents, beginning of period		2,325,024			1,513,152
Cash and cash equivalents, end of period	$	1,~~632~~269,~~866~~384		$	1779,~~316,893~~456
Supplemental disclosure of cash flow information:
Cash paid for interest	$	1,~~209~~808,~~528~~983		$	1,~~138~~703,~~842~~342
Supplemental information of non-cash, investing and financing activities.
Net cash used in investing activities excludes the increase of $4,258,392 in payable to Lessee for the period ended June 30, 2012.
Net cash used in financing activities excludes an increase of $80,632 in Due to Supervisor for deferred costs for the period ended September 30, 2012.
Net cash used in financing activities includes an increase of $12,059 in Due to Supervisor for the period ended June 30, 2012.
Net cash used in investing activities excludes an increase of $4,982,037 in payable to Lessee for Building improvements and Tenant improvements purchased during the nine months ended September 30, 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 250 West 57th 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 ~~June~~September 30, 2012 and its results of operations for the three and ~~six months~~nine months ended ~~June~~September 30, 2012 and cash flows for the ~~six~~nine months ended ~~June~~September 30, 2012 and 2011. Information included in the condensed balance sheet as of December 31, 2011 has been derived from the audited balance sheet included in in Registrant’s Form 10-K for the year ended December 31, 2011 (the “10-K”) previously filed with the Securities and Exchange Commission (the “SEC”) except as disclosed in Note H. 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, notes to financial statements and the other information in the 10-K. The results of operations for the ~~six~~nine months ended ~~June~~September 30, 2012 are not necessarily indicative of the results to be expected for any interim period or the full year. For purposes of comparison, certain items shown in the 2011 condensed financial statements have been reclassified to conform with the presentation used for 2012.

Note B Organization

Registrant is a New York limited liability company which was organized as a joint venture on May 25, 1953. On September 30, 1953, Registrant acquired fee title to the building known as 250 West 57^th Street (the “Building”), formerly known as the Fisk Building, and the land thereunder located at 250-264 West 57th Street, New York, New York (collectively, the “Property”). On November 30, 2001, Registrant converted to a limited liability company under New York law and is now known as 250 West 57^th 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 future liability to a third party. 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 respective member interests in Registrant (the “Participants”). The Members in Registrant hold senior positions at Malkin Holdings LLC (“Malkin Holdings” or the “Supervisor”), One Grand Central Place, 60 East 42nd Street, New York, New York, which provides supervisory and other services to Registrant and Lessee. See Note E below.

Note C Lease

Registrant does not operate the Property. Registrant leases the Property to Fisk Building Associates L.L.C. (the “Lessee”) under a long-term net operating lease dated May 1, 1954 (the “Lease”). In 1985, the Participants in Registrant consented to Registrant’s Agents granting Lessee four options to extend the Lease, in each case for an additional twenty-five year renewal period, the last expiring in 2103, all on the same terms as the original lease. The Agents intend to grant such options on behalf of Registrant, subject to Lessee’s compliance with such consents. Such options have been granted by the Agents and exercised by Lessee as to (a) the first renewal period from October 1, 2003 through September 30, 2028, and (b) the second renewal period from October 1, 2028 through September 30, 2053. The Participants in Registrant have consented to the granting of options to the Lessee to extend the lease for two additional 25-year renewal terms expiring in 2103. Lessee is a New York limited liability company whose members consist of, among others, Anthony E. Malkin and entities for the benefit of members of Peter L. Malkin’s and Anthony E. Malkin’s ~~family~~families, respectively.

Under the Lease, effective May 1, 1975, between Registrant and Lessee, basic annual rent (“Basic Rent”) was equal to mortgage principal and interest payments plus $28,000 for partial payment to Malkin Holdings for supervisory services. The lease modification dated November 17, 2000, and as further modified, between Registrant and Lessee provides that Basic Rent will be equal to the sum of $28,000 plus the installment payments for interest and amortization (not including any balloon payment due at maturity) currently payable on all mortgages. Basic Rent is payable in monthly installments on the first day of each calendar month in an amount equal to $2,333.33 plus the projected debt service due on the mortgages on the first day of the ensuing calendar month (with a reconciliation to be made as soon as practicable thereafter). Basic Rent shall be adjusted on a dollar-for-dollar basis by changes in the annual debt service on the mortgages. See Note D.

Lessee is required to make a monthly payment to Registrant, as an advance against primary overage rent (“Primary Overage Rent”), of an amount equal to its operating profit for its previous lease year in the maximum amount of $752,000 per annum. Lessee currently advances $752,000 each year, which is recorded in revenues in monthly installments of $62,667 and permits Registrant to make regular monthly distributions at 20% per annum on the Participants’ remaining original cash investment (which remaining cash investment at ~~June~~September 30, 2012, was equal to the Participants’ original cash investment of $3,600,000) and to pay $1,667 monthly to Supervisor as an advance of of the additional payment (the “Additional Payment”).

Lessee is also required to make an annual payment to Registrant of secondary overage rent (“Secondary Overage Rent”) subsequent to September 30th of the amount representing 50% of the excess of the net operating profit (as defined) of the Lessee for the lease year ending September 30 over the Primary Overage Rent of $752,000, less the amount representing interest earned and retained by Registrant on funds borrowed for the building improvement program described below. It is not practical to estimate Secondary Overage Rent for the lease year ending on September 30 which would be allocable to the first nine months of the lease year until the Lessee, pursuant to the Lease, renders to Registrant ~~a report on the operation of the Property. Registrant~~ recognizes Secondary Overage Rent when earned from the Lessee, at the close of the lease year ending September 30 and records such amount in revenue in the three months ended September 30.

Rent income, earned from a related party, was $26,~~108~~842,~~471~~028 and $27,~~011~~367,~~503~~847 for the ~~six~~nine months ~~ended~~ ~~June~~ended September 30, 2012 and 2011, respectively.

For the lease year ended September 30, ~~2011~~2012, Lessee ~~reported~~had net ~~operating~~ operating profit of $97,~~452~~869,~~901~~123 after deduction of Basic Rent. Lessee paid advances of Primary Overage Rent of $752,000 for that lease year prior to September 30, ~~2011~~2012 and Secondary Overage Rent of $43,~~350~~558,~~339~~414 is payable subsequent to September 30, ~~2011~~ 2012. The Secondary Overage Rent of $43,~~350~~558,~~339~~414 represents 50% of the excess of the Lessee’s net operating profit of $97,~~452~~869,~~901~~123 over $752,000, less $~~111~~148 representing interest earned and retained by Registrant on funds borrowed for the improvement program. As aThe ~~result,~~amount ~~the~~of any Secondary Overage Rent ~~paid~~available for distribution by Registrant to the ~~Lessee~~Participants ~~subsequent~~and any Additional Payment to ~~September 30,~~the ~~2011~~Supervisor ofwill ~~$4,350,339~~be ~~plus~~reported ~~$111~~in ofits ~~interest~~Annual ~~income~~Report ~~was~~on ~~available~~Form 10K for the year ending December 31, 2012. Such distribution byand ~~the~~Additional ~~Registrant~~Payment todepends ~~the~~on ~~Participants.~~reserves ~~After~~required ~~deducting~~for $1general contingencies and professional fees,~~500,000~~ ~~for (i)~~ including fees ~~relating~~in toconnection with a proposed consolidation of Registrant, other public and private entities supervised by ~~Malkin~~the ~~Holdings~~Supervisor and ~~Malkin~~the ~~Holdings~~Supervisor and certain affiliated management companies into Empire State Realty Trust, Inc., a ~~Maryland corporation~~newly ~~which~~formed ~~intends to qualify for U.S. tax purposes as a~~ real estate investment trust, (~~ii) the~~collectively ~~increase in~~ the ~~supervisory fee to the Supervisor, (iii~~“Consolidation”) ~~accounting~~ ~~fees,~~and ~~(iv) general contingencies, (v)~~ the ~~Additional~~initial ~~Payment~~public tooffering ~~Supervisor~~ of ~~$284,745 (Note E), and (vi)~~Class ~~the~~A ~~annual~~common ~~New~~stock ~~York State filing fees~~ of ~~$3,000,~~Empire ~~the~~State ~~balance~~Realty ~~of $2~~Trust,~~562,705~~ ~~was~~Inc. ~~distributed by Registrant to~~ (the ~~Participants on December 14, 2011~~“IPO”).

AsFor athe ~~result~~lease ofyear ~~its~~ended ~~revenue~~September 30, ~~recognition~~2011, ~~policy~~Lessee reported net operating profit of $9,452,901 ~~rental~~after ~~income~~deduction of Basic Rent. Lessee paid Primary Overage Rent of $752,000 for ~~the~~that ~~six~~lease ~~months~~year ~~ended June~~prior to September 30, ~~2012~~2011 and Secondary Overage Rent of $4,350,339 subsequent to September 30, 2011. ~~includes~~The Secondary Overage Rent of $4,350,339 represents 50% of the ~~advances~~excess of ~~Primary~~the Lessee’s net operating profit of $9,452,901 over $752,000, less $111 representing interest earned and retained by Registrant on funds borrowed for the improvement program. As a result, the Secondary Overage Rent ~~received~~paid ~~from~~by ~~January 1~~the Lessee subsequent to ~~June~~September 30, ~~but~~2011 ~~does~~of ~~not~~$4,350,339 ~~include~~plus ~~any~~$110 ~~portion~~of interest was available for distribution by the Registrant to the Participants. After deducting a total of ~~Secondary~~$1,500,000 ~~Overage~~for ~~Rent~~(i) fees relating ~~based~~to onthe proposed Consolidation and IPO, (ii) the ~~Lessee’s~~increase ~~operations~~in ~~during~~the ~~that~~supervisory ~~period~~fee to Supervisor, (iii) accounting fees, (iv) the New York State annual filing fee, and (v) general contingencies, and the Additional Payment to Supervisor of $284,745 (Note E), the balance of $2,562,704 was distributed by Registrant to the Participants on December 14, 2011.

As a result of its revenue recognition policy, rental income for the year ending December 31 includes the advances of Primary Overage Rent received from October 1 to December 31, but does not include any portion of Secondary Overage Rent based on the Lessee’s operations during that period.

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 the Consolidation (as defined below). In the 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 Empire State Realty Trust, Inc., a newly organized 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 the Property 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

On December 29, 2004, a first mortgage (the “First Mortgage”) was placed on the Property in the amount of $30,500,000 with Prudential Insurance Company of America. At closing, $3,000,000 was drawn and the remaining $27,500,000 was drawn during 2005. These draws paid off the pre-existing first mortgage of $15,500,000 with Emigrant Savings Bank on September 1, 2005 and were used to finance capital improvements as needed. The initial draw of $3,000,000 and all subsequent draws required constant equal monthly payments of interest only, at the rate of 5.33% per annum until January 5, 2007. Commencing February 5, 2007 Registrant is required to make monthly payments of $184,213 applied to interest and principal calculated on a 25-year amortization schedule. The balance of the First Mortgage is $26,836,394 at June 30, 2012. The First Mortgage matures on January 5, 2015 when the principal balance will be $24,754,972. The First Mortgage 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 First Mortgage is paid in full during the last 90 days of the term.

OnNote ~~May 25,~~D ~~2006,~~Mortgages a second mortgage (the “Second Mortgage”) was placed on the Property in the amount of $12,410,000 with Prudential Insurance Company of America. At closing, $2,100,000 was drawn and the remaining $10,310,000 had been drawn as of March 5, 2009. The initial draw of $2,100,000 and all subsequent draws required constant equal monthly payments of interest only, at the rate of 6.13% per annum until March 5, 2009. Commencing April 5, 2009, Registrant is required to make monthly payments of $80,947 applied to interest and principal calculated on a 25- year amortization schedule. The balance of the Second Mortgage is $11,654,202 at June 30, 2012. The Second Mortgage matures on January 5, 2015 when the principal balance will be $10,961,870. The Second Mortgage 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 Second Mortgage is paid in full during the last 60 days of the term.

On ~~October~~December 1529, ~~2009~~2004, ~~Registrant closed on~~ a ~~$21,000,000~~first ~~line~~mortgage of(the ~~credit~~“First ~~from~~Mortgage”) ~~Signature~~was ~~Bank~~placed ~~secured by a mortgage~~ on the Property~~, subordinate~~ ~~to the existing senior mortgage debt held by Prudential Insurance Company of America~~ in the ~~original~~ amount of $4230,~~910~~500,000, ~~and~~with toPrudential beInsurance ~~used~~Company ~~for~~of ~~capital improvements~~America. At closing, $~~934~~3,~~616~~000,000 was drawn, and anthe ~~additional~~remaining $527,~~000~~500,000 ~~used for improvements and tenanting costs~~ was drawn onduring ~~December 22, 2011~~2005. ~~The~~These ~~balance~~draws ofpaid off the ~~line~~pre-existing offirst ~~credit~~mortgage ~~was~~of $515,~~934~~500,~~616~~000 atwith ~~June 30,~~Emigrant ~~2012.~~Savings ~~The Signature~~ Bank ~~loan~~on September 1, ~~requires~~2005 ~~payments~~and ofwere ~~interest~~used ~~only~~to ~~and~~finance iscapital ~~co-terminus~~improvements ~~with~~as ~~the~~needed. ~~existing~~The ~~senior mortgage~~initial ~~debt.~~draw ~~The~~of $213,000,000 ~~loan~~and ~~from~~all ~~Signature~~subsequent ~~Bank~~draws ~~was~~required ~~modified~~constant ~~effective~~equal asmonthly payments of ~~January 10~~interest only, ~~2012~~at ~~to provide for a reduction in~~ the ~~fluctuating~~ rate of ~~interest~~5.33% per ~~from~~annum auntil January 5, ~~floor~~2007. ofCommencing ~~6.50%~~February 5, to2007 ~~4.25%~~Registrant ~~and~~is required to amake ~~reduction~~monthly inpayments ~~the~~of ~~fixed~~$184,213 ~~rate~~applied to ~~the greater~~interest ofand ~~(i) 4.75%~~principal orcalculated ~~(ii) 300~~on ~~basis~~a ~~points~~25-year inamortization ~~excess~~schedule. The balance of the ~~weekly~~First ~~average~~Mortgage ~~yield~~is on$26,640,483 ~~U.S.~~at September ~~Treasury~~30, ~~Securities~~2012. ~~adjusted~~The toFirst aMortgage ~~maturity~~matures ~~date~~on ~~closest~~January 5, to2015 when the ~~mortgage~~principal ~~maturity~~balance ~~date~~will be $24,680,713. The ~~loan~~First ~~was~~Mortgage ~~also~~may ~~modified~~be toprepaid ~~allow~~at ~~borrower~~any totime, ~~elect prepayment~~in ~~without~~whole ~~any~~only, ~~prepayment~~upon ~~fees~~payment ifof ~~the~~a ~~fixed~~prepayment ~~interest~~penalty ~~rate~~based ~~were~~on ~~the~~a ~~greater~~yield ~~of (i) 5~~maintenance formula.~~00%~~ orThere ~~(ii) 300~~is ~~basis~~no ~~points~~prepayment inpenalty ~~excess~~if of the ~~weekly~~First ~~average~~Mortgage ~~yield~~is onpaid Uin ~~.S.~~full ~~Treasury~~during ~~Securities~~the ~~adjusted~~last to90 adays ~~maturity~~of ~~date closest to~~ the ~~mortgage maturity date~~term.

~~The~~On May 25, ~~estimated~~2006, ~~fair~~a ~~value~~second ofmortgage ~~Registrant’s~~(the ~~mortgage~~“Second ~~debt~~Mortgage”) ~~based~~was placed on ~~available~~the ~~market~~Property ~~information~~in ~~is approximately~~the amount of $4612,~~680~~410,~~927~~000 with Prudential Insurance Company of America. At closing, $2,100,000 was drawn and the remaining $10,310,000 had been drawn as of ~~June~~March 305, ~~2012~~2009. The ~~fair~~initial ~~value~~draw of ~~borrowings~~$2,100,000 isand ~~estimated~~all bysubsequent ~~discounting~~draws required constant equal monthly payments of interest only, at the ~~future~~rate ~~cash~~of ~~flows~~6.13% per ~~using~~annum ~~current~~until March 5, 2009. Commencing April 5, 2009, Registrant is required to make monthly payments of $80,947 applied to interest ~~rates~~and principal calculated on a 25- year amortization schedule. The balance of the Second Mortgage is $11,589,633 at ~~which~~September 30, ~~similar~~2012. ~~borrowings~~The ~~could~~Second Mortgage matures on January 5, 2015 when the principal balance will be ~~made~~$10,936,920. byThe usSecond Mortgage 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 Second Mortgage is paid in full during the last 60 days of the term.

InOn ~~1999~~October 15, ~~the~~2009, ~~Participants~~Registrant inclosed ~~Registrant~~on ~~and~~a $21,000,000 ~~the~~line ~~members~~of incredit ~~Lessee~~from ~~consented~~Signature toBank asecured ~~building~~by ~~improvement~~a ~~program~~mortgage (on the ~~“Program”) estimated~~Property, subordinate to ~~cost~~the ~~approximately~~existing ~~$12,200,000.~~senior Inmortgage ~~2004,~~debt ~~the~~held ~~Participants~~by ~~and~~Prudential ~~Lessee~~Insurance ~~approved~~Company anof ~~increase~~America in the ~~Program~~original ~~from~~amount of $1242,~~200~~910,000, and to ~~approximately~~be used for capital improvements. At closing $31934,~~400~~616 was drawn, and an additional $5,000,000 ~~under~~used ~~substantially~~for improvements and tenanting costs was drawn on December 22, 2011. The balance of the ~~same~~line ~~conditions~~of ascredit ~~had~~was ~~previously~~$5,934,616 ~~been~~at ~~approved~~September 30, 2012. ToThe ~~induce~~Signature Bank loan requires payments of interest only and is co-terminus with the ~~Lessee~~existing senior mortgage debt. The $21,000,000 loan from Signature Bank was modified effective as of January 10, 2012 to ~~approve~~provide for a reduction in the ~~Program,~~fluctuating ~~Registrant’s~~rate ~~Participants~~of interest ~~authorized~~from a ~~grant~~floor of 6.50% to 4.25% and to a reduction in the ~~Lessee,~~fixed ~~upon~~rate ~~completion~~to the greater of ~~the~~(i) 4.75% ~~Program,~~or (ii) 300 basis points in excess of the ~~right~~weekly average yield on U.S. Treasury Securities adjusted to ~~further~~a ~~extensions~~maturity ofdate closest to the mortgage ~~Lease~~maturity ~~beyond~~date. ~~2103,~~The ~~based~~loan onwas ~~the~~also ~~net~~modified ~~present~~to ~~benefit~~allow borrower to ~~Registrant~~elect prepayment without any prepayment fees if the fixed interest rate were the greater of (i) 5.00% or (ii) 300 basis points in excess of the weekly average yield on ~~improvements~~U ~~made~~.S. Treasury Securities adjusted to a maturity date closest to the mortgage maturity date.

The ~~Program~~estimated ~~for~~fair ~~improvements~~value ~~was further increased in 2006 from $31,400,000 to up to $82,300,000, again on the basis that such increase would allow a further extension~~ of ~~the~~Registrant’s ~~Lease~~mortgage debt based on ~~the~~available ~~net present benefit to Registrant of the improvements made. The Participants in Registrant and the members in Lessee have approved~~market ~~increasing~~information ~~the~~is ~~financing~~approximately ~~from the total of~~ $4246,~~910~~733,~~000~~412 ~~provided~~as ~~by the First and Second Mortgages to up to $63,900,000. As~~ of ~~June~~September 30, 2012~~, Registrant had incurred or accrued costs related to the improvement program of $48,133,209 and estimates that costs upon completion will be approximately $82,300,000~~. The ~~balance~~fair ofvalue ~~the costs~~ of ~~the~~borrowings ~~Program~~is ~~will~~estimated ~~be financed primarily~~ by ~~the~~discounting ~~additional borrowings available under~~ the ~~$21,000,000~~future ~~previously approved loan that closed on October 15, 2009 and Lessee’s operating~~ cash ~~flow.~~flows ~~Amounts~~using ~~Payable~~current tointerest ~~Lessee~~rates ~~related~~at ~~to the program were $7,851,505 (of~~ which ~~$730,807~~similar ~~relate~~borrowings tocould ~~unpaid~~be ~~leasing~~made ~~costs)~~by ~~and $3,576,129 as of June 30, 2012 and December 31, 2011, respectively~~us.

In 1999, the Participants in Registrant and the members in Lessee consented to a building improvement program (the “Program”) estimated to cost approximately $12,200,000. In 2004, the Participants and Lessee approved an increase in the Program from $12,200,000 to approximately $31,400,000 under substantially the same conditions as had previously been approved. To induce the Lessee to approve the Program, Registrant’s Participants authorized a grant to the Lessee, upon completion of the Program, of the right to further extensions of the Lease beyond 2103, based on the net present benefit to Registrant of the improvements made.

The Program for improvements was further increased in 2006 from $31,400,000 to up to $82,300,000, again on the basis that such increase would allow a further extension of the Lease based on the net present benefit to Registrant of the improvements made. The Participants in Registrant and the members in Lessee have approved increasing the financing from the total of $42,910,000 provided by the First and Second Mortgages to up to $63,900,000. As of September 30, 2012, Registrant had incurred or accrued costs related to the improvement program of $49,587,660 and estimates that costs upon completion will be approximately $82,300,000. The balance of the costs of the Program will be financed primarily by the additional borrowings available under the $21,000,000 previously approved loan that closed on October 15, 2009 and Lessee’s operating cash flow. Amounts Payable to Lessee related to the program were $9,350,095 (for unpaid building improvements and leasing costs) and $3,576,129 as of September 30, 2012 and December 31, 2011, respectively.

Note E Supervisory Services

Supervisory and other services are provided to Registrant by its supervisor, Malkin Holding LLC (“Malkin Holdings” or “Supervisor”), a related party. Beneficial interests in Registrant are held directly or indirectly by one or more persons at Malkin Holdings and/or their family members.

Registrant pays Supervisor for supervisory services and disbursements. The basic fee (the “Basic Payment”) had been payable at the rate of $40,000 per annum, payable $3,333 per month, since the fiscal year ended September 30, 1980. 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 $102,000 per annum effective July 1, 2010 to be adjusted annually for any subsequent increase in the Consumer Price Index. The fee is payable (i) not less than $2,333 per month, (ii) an additional $1,000 per month out of Primary Overage Rent payment and (iii) the balance out of available reserves from Secondary Overage Rent. Any deficiency in the portion of the fee payable from Primary or Secondary Overage Rent shall be payable out of Secondary Overage Rent in the next year in which Secondary Overage Rent is sufficient. 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.

Registrant pays Supervisor an Additional Payment equal to 10% of all distributions to Participants in any year in excess of the amount representing a return to them at the rate 15% per annum on their remaining cash investment in Registrant (which remaining cash investment at June 30, 2012 was equal to the Participants’ original cash investment of $3,600,000). For tax purposes, such Additional Payment is recognized as a profits interest, and the Supervisor is treated as a partner, all without modifying each Participant’s distributive share of reportable income and cash distributions.

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, 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.

~~Accrued~~Registrant ~~supervisory~~pays ~~fees,~~Supervisor an Additional Payment equal to a10% ~~related~~of ~~party,~~all ~~were~~distributions $0to Participants ~~and~~in ~~$20,000~~any year in excess of the amount representing a return to them at ~~June 30,~~the ~~2012~~rate ~~and December~~15% ~~31,~~per ~~2011,~~annum ~~respectively.~~on ~~Due~~their ~~from~~remaining ~~Supervisor,~~cash ainvestment ~~related~~in ~~party,~~Registrant ~~was~~(which ~~$60,000~~remaining cash investment at ~~June~~September 30, 2012 ~~and~~was ~~December 31,~~equal ~~2011,~~to ~~respectively.~~the Participants’ ~~Due~~original tocash ~~Supervisor~~investment of $3,600,000). aFor ~~related~~tax ~~party~~purposes, ~~was~~such ~~$139~~Additional Payment is recognized as a profits interest,~~730~~ and ~~$153,445~~the atSupervisor ~~June 30~~is treated as a partner, ~~2012~~all ~~and~~without modifying each Participant’s distributive share ~~December 31,~~of ~~2011,~~reportable ~~respectively~~income and cash distributions.

~~Registrant~~The ~~also~~basic ~~pays~~supervisory ~~Supervisor~~services ~~for~~provided ~~other~~to ~~services~~Registrant atby ~~hourly~~Supervisor ~~rates.~~include, ~~Pursuant~~but are not limited to, ~~the~~maintaining ~~fee arrangements~~all ~~described~~of ~~herein,~~its ~~Registrant~~entity ~~incurred~~and ~~supervisory~~Participant ~~service~~records, ~~fees~~performing physical inspections of ~~$62~~the Building,~~851~~ ~~and~~providing ~~$61,000~~or ~~for~~coordinating ~~the~~certain ~~six-month~~counsel ~~periods~~services ~~ended~~to ~~June 30~~Registrant, ~~2012~~reviewing ~~and~~insurance ~~2011~~coverage, ~~respectively.~~conducting Noannual ~~remuneration~~supervisory review ~~was~~meetings, ~~paid~~receipt ~~during~~of ~~the~~monthly ~~six-month~~rent ~~periods~~from ~~ended June 30~~Lessee, ~~2012~~ ~~and~~payment ~~2011~~of bymonthly ~~Registrant~~and additional distributions to ~~either~~the Participants, payment of ~~the~~all ~~Members.~~other ~~Included~~disbursements, inconfirmation ~~professional~~of ~~fees~~the ~~are~~payment ~~amounts~~of ~~due~~real toestate ~~related~~taxes, ~~parties~~active review of ~~$14,578~~financial statements submitted to Registrant by Lessee and ~~$37,602~~financial ~~for~~statements ~~the~~audited ~~three~~by and ~~six~~tax ~~months~~information ~~ended~~prepared ~~June 30,~~by ~~2012,~~Registrant’s ~~respectively,~~independent ~~and~~registered ~~$13~~public accounting firm,~~500~~ and ~~$25,833~~distribution ~~for~~of related materials to the ~~three~~Participants. Supervisor also prepares quarterly, annual and ~~six~~other ~~months~~periodic ~~ended~~filings ~~June 30,~~with ~~2011,~~the ~~respectively~~SEC and applicable state authorities.

~~Reference~~Accrued issupervisory fees, ~~made~~ to ~~Note C above for~~ a ~~description~~related ofparty, ~~the~~were ~~terms~~$0 ~~of the Lease between Registrant~~ and ~~Lessee. The respective interest~~$20,000 ifat ~~any~~September 30, of2012 ~~the Members in Registrant~~ and inDecember 31, ~~Lessee~~2011, ~~arise~~respectively. ~~solely~~Due from ~~ownership~~Supervisor, ofa ~~Participations~~related inparty, ~~Registrant~~was ~~and~~$60,000 ofat ~~Member~~September 30, ~~interests~~2012 orand ~~participations~~December 31, in2011, ~~Lessee~~respectively. ~~The~~Due ~~Members as such~~to ~~receive~~Supervisor, ~~no extra or special benefit not shared on~~ a ~~pro~~related ~~rata~~party, ~~basis~~was ~~with~~$322,718 ~~all~~and ~~other Participants in Registrant or members in Lessee. However~~$153,445 ~~all of the Members hold senior positions~~ at ~~Supervisor~~September 30, ~~(which~~2012 ~~supervises Registrant~~ and ~~Lessee) and~~December 31, ~~by reason of their interest in Supervisor~~2011, ~~may receive income attributable to supervisory or other remuneration paid to Supervisor~~respectively.

Registrant pays Supervisor for other services at hourly rates. Pursuant to the fee arrangements described herein, Registrant incurred supervisory fees of $94,648 and $377,170 for the nine-month periods ended September 30, 2012 and 2011, respectively. The fee of $377,170 for the nine months ended September 30, 2011 included the Additional Payment of $284,745. As indicated above in Note C, an Additional Payment to Supervisor for the current lease year will be reflected in Registrant’s Annual Report on Form 10K for the year ending December 31, 2012. No remuneration was paid during the nine-month periods ended September 30, 2012 and 2011 by Registrant to either of the Members. Included in professional fees are amounts for services from related parties of $43,518 and $81,120 for the three and nine months ended September 30, 2012, respectively, and $15,144 and $40,977 for the three and nine months ended September 30, 2011, respectively.

Distributions are paid from a cash account held by Supervisor. That account is included in the condensed Balance Sheets as “Due from Supervisor.” The funds of $60,000 at September 30, 2012 and December 31, 2011 were paid to Participants on October 1, 2012 and January 1, 2012, respectively.

Reference is made to Note C above for a description of the terms of the Lease between Registrant and Lessee. The respective interest, if any, of the Members in Registrant and in Lessee arise solely from ownership of Participations in Registrant and of Member interests or participations 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~~An ~~events~~additional ~~have~~$9,000,000 ~~been~~was ~~evaluated~~drawn ~~for~~on ~~potential~~November ~~recognition~~7, 2012 on the Signature Bank line of credit to fund building improvements and ~~disclosure~~tenanting costs bringing the total amount advanced to date to $14,934,616.

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, Financial Accounting Standards Board 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, a related party, due from Lessee, a related party, other receivable, accrued mortgage interest, accrued supervisory fees, a related party, payable to Lessee, a related party, due to Supervisor, a related party, and accrued expenses. The carrying amount of cash and cash equivalents, due from Supervisor, a related party, due from Lessee, a related party, other receivable, accrued mortgage interest, accrued supervisory fees, a related party, payable to Lessee, a related party, due to Lessee, a related party, due to Supervisor, a related party, and accrued expenses reported in our Condensed Balance Sheets ~~approximates~~approximate fair value due to the short term maturity of these instruments.

10Mortgages payable: The fair value of borrowings, as disclosed in Note D, is estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made to us.

Mortgages 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~~11 ~~3 – Valuations based significantly on unobservable inputs.~~

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 $46,~~680~~733,~~927~~412, compared to the book value of the related debt of $44,~~425~~164,~~212~~732, at ~~June~~September 30, 2012.

Disclosure about fair value of financial instruments is based on pertinent information available to us as of ~~June~~September 30, 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.

11Note H Offering Costs and Formation Transaction Expenses

~~Note~~In Hconnection ~~Offering~~with ~~Costs~~the Consolidation and IPO we have incurred or will incur incremental accounting fees, legal fees and other professional fees. Such costs will be deferred and recorded as a reduction of proceeds of the Consolidation and IPO, or expensed if the Consolidation and IPO is not consummated. Certain costs associated with the Consolidation and IPO not directly attributable to the solicitation of consents and the IPO, but rather related to structuring the formation transaction, are expensed as incurred.

Through ~~June~~September 30, 2012 we have incurred external offering costs of $1,~~431~~414,~~585~~890, including an adjustment of $38,837 for the six months ended June 30, 2012 as a result of the reclassification discussed below, of which we have incurred $~~428~~624,~~066~~ 871 and $~~185~~297,~~411~~604 for the ~~six~~nine month periods ended ~~June~~September 30, 2012 and 2011, respectively, and are reflected as deferred costs on Registrant’s Condensed Balance Sheets. ~~Such~~A ~~costs~~total ~~are comprised~~ of ~~accounting fees~~$208, ~~legal fees, and other~~303 ~~professional fees. Such costs have been deferred~~ and ~~shall be recorded as a reduction of proceeds of the Consolidation and IPO (as defined below), or expensed as incurred if the Consolidation and IPO is not consummated.~~ $~~139~~127,~~730~~671 ~~and $109,560~~ of these costs are in Due to Supervisor at ~~June~~September 30, 2012 and December 31, 2011, respectively. Additional offering costs for work done by employees of the Supervisor of $3781,~~602~~120 and $2540,~~833~~977 for the ~~six~~nine months ended September ~~June~~ 30, 2012 and 2011, respectively, were incurred and advanced by the Supervisor and have or will be reimbursed to the Supervisor by the ~~entities to be included in the Consolidation and IPO~~Registrant.

~~Item~~12 ~~2. Management’s Discussion and Analysis of~~

~~Financial~~Correction ~~Condition~~of ~~and~~an ~~Results~~Immaterial ofError ~~Operations.~~in the Financial Statements

Our prior period financial results have been adjusted to reflect an immaterial correction which has no impact to the net change in cash reported on the statement of cash flows. During fiscal year 2012, we determined that certain costs related to the structuring of the formation transaction that were previously included in deferred offering costs should have been expensed in the periods incurred. The correction impacted the 2011 and 2010 periods and had accumulated to an amount of $252,337 as of June 30, 2012. Adhering to applicable guidance for accounting changes and error corrections, we concluded that the error was not material to any of our prior period financial statements. The correction resulted in immaterial changes to deferred costs and formation transaction expenses for the years ended December 31, 2011 and 2010. We applied the guidance for accounting changes and error corrections and revised our prior period financial statements presented.

The following tables present the effect this correction had on our prior period reported financial statements. Additionally, financial information included in the notes to the financial statements that is impacted by the adjustment have been revised, as applicable.


	As of December 31, 2011
	As reported			Adjustment			As adjusted
Deferred costs, net	$	1,003,519		$	(213,500	)	$	790,019
Members’ deficiency		(4,642,480	)		(213,500	)		(4,855,980	)

	For the six months ended June 30, 2012
	As reported			Adjustment			As adjusted
Formation transaction expenses	$	—		$	38,837		$	38,837
Net loss		(388,135	)		(38,837	)		(426,972	)
Net cash provided by operating activities		577,173			(38,837	)		538,336
Net cash used in financing activities		(1,286,315	)		38,837			(1,247,478	)
Net change in cash and cash equivalents		(692,158	)		—			(692,158	)

	For the nine months ended September 30, 2011
	As reported			Adjustment			As adjusted
Formation transaction expenses	$	—		$	81,417		$	81,417
Net income		3,662,294			(81,417	)		3,580,877
Net cash provided by operating activities		754,707			(81,417	)		673,290
Net cash used in financing activities		(1,648,352	)		81,417			(1,566,935	)
Net change in cash and cash equivalents		(733,696	)		—			(733,696	)

	For the three months ended September 30, 2011
	As reported			Adjustment			As adjusted
Formation transaction expenses	$	—		$	41,589		$	41,589
Net income		3,899,961			(41,589	)		3,858,372

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 solely for the purpose of owning the Property subject to a net operating lease of the Property held by Lessee. Registrant is required to pay, from Basic Rent under the Lease, the charges on the First and Second mortgages and the line of credit and amounts for supervisory services. Registrant is required to pay from Primary Overage Rent and Secondary Overage Rent the Additional Payment to Supervisor, other expenses and then to distribute the balance of such Overage Rent less any additions to reserves to the Participants. See Note E to the condensed financial statements. Pursuant to the Lease, Lessee has assumed responsibility for the condition, operation, repair, maintenance and management of the Property. Accordingly, Registrant need not 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 amounts of Primary Overage Rent and Secondary Overage Rent are affected by the New York City economy and real estate rental market, which is difficult for management to forecast.

~~During~~14 the six-month period ended June 30, 2012, Registrant made regular monthly distributions of $83.33 for each $5,000 Participation ($1,000 per annum for each $5,000 participation). There are no restrictions on Registrant’s present or future ability to make distributions; however, the amount of such distributions depends on the ability of Lessee to make monthly payments of Basic Rent, Primary Overage Rent, and Secondary Overage Rent to Registrant in accordance with the terms of the Lease. Registrant expects to make distributions so long as it receives the payments provided for under the Lease.

During the nine-month period ended September 30, 2012, Registrant made regular monthly distributions of $83.33 for each $5,000 Participation ($1,000 per annum for each $5,000 participation). There are no restrictions on Registrant’s present or future ability to make distributions; however, the amount of such distributions depends on the ability of Lessee to make monthly payments of Basic Rent, Primary Overage Rent, and Secondary Overage Rent to Registrant in accordance with the terms of the Lease. 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 corresponding period of the previous year, the material factors affecting Registrant’s results of operations for such periods:

Total rental income decreased ~~increased~~ by $96646,~~969~~025 for the ~~six~~ nine month period ended ~~June~~September 30, 2012 as compared with the corresponding period of the prior year ~~attributable~~as tothe net result of an increase in Basic Rent of $145,900 to cover an increase in debt service - —as a result of a $5,000,000 draw on December 22, 2011 on the Signature Bank line of credit that increased the loan balance—and -a decrease in Secondary Overage rent of $791,925 mainly attributable to an increase in Lessee’s operating expenses including improvements and tenanting costs for the ~~six~~nine month period ended ~~June~~ September 30, 2012 as compared with the corresponding period of the prior year.

Total rental income ~~increased~~decreased by $48742,~~401~~994 for the three month period ended ~~June~~September 30, 2012 as compared with the corresponding period of the prior year, ~~primarily~~as ~~attributable~~the tonet result of an increase in Basic Rent of $48,931 to cover an increase in debt service - —as a result of a $5,000,000 draw on December 22, 2011 on the Signature Bank line of credit that increased the loan balance—and -a decrease in Secondary Overage rent of $791,925 mainly attributable to an increase in Lessee’s operating expenses including improvements and tenanting costs for the three month period ended ~~June~~September 30, 2012 as compared with the corresponding period of the prior year.

Total expenses increased by $~~247~~237,~~301~~496 for the ~~six~~nine month period ended ~~June~~September 30, 2012 as compared with the corresponding period of the prior year, ~~primarily~~ attributable to: (a) a net increase in interest on ~~the~~ mortgages payable of $69104,~~362~~252, consisting of an increase of $96145,~~968~~900 due to the $5,000,000 increase of the Signature line of credit loan in December 2011 and an aggregate decrease of $2741,~~606~~648 on the Prudential First Mortgage and Second Mortgage;, (b) a net decrease of supervisory fees of $282,522, consisting of an increase of $2,223 in supervisory fees and a decrease in the Additional Payment to Supervisor of $284,745, the amount recorded in the third quarter of 2011, as the Additional Payment has not been determined for the current lease year and shall be reported in Registrant’s Annual report on Form 10K for the year ending December 31, 2012, (c) an increase in depreciation of assets and amortization on leasing costs of $~~119~~220,~~750~~474 attributable to improvements placed in service in the ~~second~~last ~~half~~three months of 2011 and first ~~half~~nine months of 2012;, ~~and c~~(d) an ~~and~~increase in miscellaneous expenses of $22,534 attributable to filing fees, (e) an increase in professional fees of $42158,~~170~~600 including (i) $1140,~~769~~143 to Supervisor for services rendered in connection with athe proposed ~~consolidation~~Consolidation ofand ~~Registrant~~IPO, ~~other~~and ~~public~~(ii) ~~and~~$102,374 for ~~private~~accounting ~~entities~~fees ~~supervised~~in byconnection with the ~~Supervisor~~Consolidation, and consulting fees for the ~~Supervisor~~design and ~~certain~~implementation ~~affiliated~~of ~~management~~new ~~companies~~accounting ~~into~~systems, ~~Empire~~and ~~State~~an ~~Realty~~(f) increase ~~Trust,~~in ~~Inc.~~formation transaction expenses of $14,158. aThe ~~newly~~increase ~~formed~~in ~~real~~formation ~~estate~~transaction expenses ~~investment~~is ~~trust~~mainly ~~(collectively,~~attributable to matters pertaining to the ~~“Consolidation”~~class action litigation including extensive negotiations relating to the settlement (as described in Legal Proceedings). ~~and~~For ~~initial~~formation transaction expenses, our prior period financial ~~public~~results ~~offering~~have ofbeen ~~Class A~~adjusted ~~common~~to ~~stock~~reflect ofan ~~Empire~~immaterial ~~State~~correction. ~~Realty~~During ~~Trust~~fiscal year 2012, ~~Inc.~~we (determined that certain costs related to the ~~“IPO”)~~structuring of the formation transaction that were previously included in deferred offering costs should have been expensed in the periods incurred. The correction resulted in immaterial changes to deferred costs and formation transaction expenses for the six ~~month~~months ~~period~~ ended June 30, 2012 asand ~~compared~~for ~~with~~ the ~~corresponding~~years ~~period~~ended ofDecember 31, ~~the~~2011 ~~prior~~and ~~year~~2010.

1315

Total expenses ~~increased~~decreased by $~~149~~8,~~183~~815 for the three month period ended ~~June~~September 30, 2012 as as compared with the corresponding period of the prior year, primarily attributable to: (a) an increase in interest on the mortgages payable of $34,~~552~~890 as a result of a $5,000,000 draw on December 22, 2011 on the Signature Bank line of credit that increased the loan balance; (b) a net decrease of supervisory fees of $284,373, consisting of an increase of $372 in ~~depreciation~~supervisory fees and a decrease in the Additional Payment to Supervisor of $284,745, the amount recorded in the third quarter of 2011, as the Additional Payment has not been determined for the current lease year and shall be reported in Registrant’s Annual report on Form 10K for the year ending December 31, 2012; (c) an increase in depreciation of assets and amortization on leasing costs of $81100,~~158~~724 attributable to improvements placed in service in the ~~second~~last ~~half~~three months of 2011 and first ~~quarter~~nine months of 2012;, ~~and~~(d) an cincrease in miscellaneous expenses of $8,366 attributable to filing fees, (e) a annet increase in professional fees of $18116,~~379~~429, including (i) $1428,~~578~~374 to Supervisor for services rendered in connection with the proposed Consolidation and IPO, and $102,374 for (ii) accounting fees in connection with the Consolidation, ~~three~~and ~~month~~consulting ~~period~~fees ~~ended~~for ~~June~~the design and implementation of new accounting systems, and (f) 30an increase in formation transaction expenses of $15,149. ~~2012~~The asincrease ~~compared~~is ~~with~~mainly attributable to matters pertaining to the ~~corresponding~~class ~~period~~action litigation ofincluding extensive negotiations relating to the settlement (as described in Legal Proceedings). For formation transaction expenses, our prior period financial results have been adjusted to reflect an immaterial correction. During fiscal year 2012, we determined that certain costs related to the structuring of the formation transaction that were previously included in deferred offering costs should have been expensed in the periods incurred. The correction resulted in immaterial changes to deferred costs and formation transaction expenses for the six months ended June 30, 2012 and for the years ended December 31, 2011 and 2010.

Liquidity and Capital Resources

Registrant’s liquidity has decreased at ~~June~~September 30, 2012 as compared with December 31, 2011 as a result of 1) costs incurred in connection with the Consolidation and IPO, and 2) commitments for reimbursement to Lessee under the improvement program. Registrant may from time to time set aside cash for general contingencies. Adverse developments in economic, credit and investment markets over the last several years 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 24 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.

Amortization payments due under the First Mortgage commenced February 5, 2007, calculated on a 25-year amortization schedule. Amortization payments under the Second Mortgage commenced April 5, 2009, calculated on a 25-year amortization schedule. The First and the Second Mortgages mature on January 5, 2015. The line of credit requires payment of interest only and also matures on January 5, 2015. Registrant does not maintain any reserve to cover the payment of such mortgage indebtedness at maturity. Therefore, repayment of mortgage debt 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 senior mortgage debt and the line of credit balances at maturity.

Registrant anticipates that funds for short-term working capital requirements for the Property will be provided by cash on hand, approximately $15,000,000 available to be drawn on the line of credit from Signature Bank, and rental payments received from the Lessee. Long-term sources of working capital will be provided by rental payments received from the 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 the Consolidation. In the 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 Empire State Realty Trust, Inc., a newly organized real estate investment trust.

~~The~~17 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 the Property 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.

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 exchange values, if the Consolidation proposal is approved by the Registrant’s Participants, the consideration with respect to the Property 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.

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, 2011. Inflationary trends in the economy do not directly affect Registrant’s operations since Registrant does not actively engage in the operation of the Property. Inflation may impact the operations of Lessee. Lessee is required to pay Basic Rent, regardless of the results of its operations. Inflation and other operating factors affect the amount of Primary and Secondary Overage Rent payable by Lessee, which is based on Lessee’s net operating profit.

Security Ownership

The Members in Registrant do not hold any Participations in their individual capacities.

As of ~~June~~September 30, 2012, certain of the Members in Registrant held Participations as follows:

Entities for the benefit of members of Peter L. Malkin’s family owned of record and beneficially $167,500 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 Peter L. Malkin.

Peter L. Malkin owned of record as trustee, but not beneficially, $7,500 of Participations. Peter L. Malkin disclaims any beneficial ownership of such Participations.

Anthony E. Malkin owned of record as trustee and co-trustee, but not beneficially, $10,000 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.

Item 4.

Controls and Procedures.

• 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 ~~June~~ September 30, 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.

• 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:

(a) Malkin Holdings 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 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 and Mr. Malkin. Malkin Holdings and Mr. Malkin have represented that such costs will be recovered only to the extent that (a) a ~~competent~~ competent tribunal authorizes payment or (b) an investor voluntarily agrees that his or her proportionate share be paid. On behalf of himself and Malkin Holdings, Mr. Malkin has requested, or intends to request, such voluntary agreement from all investors, which may include renewing such request in the future for any investor who previously received such request and failed to confirm agreement at that time. Because any related payment has been, or will be, made only by consenting investors, Registrant has not provided for the expense and related liability with respect to such costs in these financial statements.

16(b) In March 2012, five putative class actions (the “Class Actions”) were filed in New York State Supreme Court, New York County by participants in Empire State Building Associates L.L.C. and several other entities supervised by Malkin Holdings that own fee or leasehold interests in various properties located in New York City (on March 1, 2012, March 7, 2012, March 12, 2012, March 14, 2012 and March 19, 2012). 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 Empire State Realty Trust, Inc. (“Defendants”) for breach of fiduciary duty, unjust enrichment, and/or aiding and abetting breach of fiduciary duty. They allege, among other things, that the terms of the transaction and the process in which it was structured (including the valuation that was employed) are unfair to the investors in the existing entities, the consolidation provides excessive benefits to Malkin Holdings and its affiliates and the then-draft prospectus/consent solicitation statement which is part of the registration statement on Form S-4 filed with the SEC relating to the consolidation failed to make adequate disclosure to permit a fully-informed decision about the proposed transaction. The complaints seek money damages and injunctive relief preventing the consolidation. The actions were consolidated and co-lead plaintiffs’ counsel were appointed by the New York State Supreme Court by order dated June 26, 2012.

AsThe ofparties ~~the~~entered ~~date~~into ofa ~~this~~Stipulation ~~10-Q~~of ~~report,~~Settlement ~~five~~dated ~~putative~~September ~~class~~28, ~~actions~~2012, ~~have~~resolving ~~been~~the ~~brought~~Class ~~by Participants~~Actions. inThe ~~Empire~~Stipulation ~~State~~of ~~Building~~Settlement recites ~~Associates~~that ~~L.L.C.~~the ~~and~~consolidation ~~several~~was ~~other~~approved ~~entities supervised~~ by ~~Malkin~~overwhelming ~~Holdings~~consent ~~that~~of ~~own~~the ~~fee~~private orentity ~~leasehold~~participants. ~~interests~~The inStipulation ~~various~~of ~~properties~~Settlement ~~located~~states inthat ~~New~~counsel ~~York~~for ~~City,~~ the ~~first~~plaintiff ofclass ~~which~~satisfied ~~was~~themselves ~~filed~~that ~~March 1,~~they ~~2012~~have ~~(the “Class~~received ~~Actions”).~~adequate Asaccess ~~currently~~to relevant ~~pending~~information, inincluding ~~New~~the ~~York~~independent ~~State~~valuer’s ~~Supreme~~valuation ~~Court,~~process ~~New~~and ~~York County~~methodology, ~~each~~that ~~Class~~the ~~Action~~disclosures ~~challenges~~in the ~~proposed~~registration ~~consolidation~~statement ofon ~~those~~Form ~~and~~S-4, ~~other~~as ~~properties~~amended, ~~supervised~~are byappropriate, ~~Malkin~~that ~~Holdings~~the ~~into~~transaction apresents ~~real~~potential ~~estate~~benefits, ~~investment~~including ~~trust (~~the ~~“REIT”)~~opportunity ~~and~~for ~~the~~liquidity ~~initial~~and ~~public~~capital ~~offering~~appreciation, ofthat ~~shares~~merit ofthe ~~Class A~~participants’ ~~common~~serious ~~stock~~consideration inand ~~Empire~~that ~~State~~each ~~Realty~~of ~~Trust,~~the ~~Inc.,~~named aclass ~~Maryland~~representatives ~~corporation which~~ intends to ~~qualify~~support ~~for~~the ~~U.S.~~transaction ~~tax purposes~~ as ~~a REIT~~modified. The ~~plaintiffs~~Stipulation ~~assert claims against Malkin Holdings, Malkin Properties, L.L.C., Malkin Properties~~ of ~~New~~Settlement ~~York,~~further states ~~L.L.C.,~~that ~~Malkin~~counsel ~~Properties~~for ofthe ~~Connecticut,~~plaintiff ~~Inc.,~~class ~~Malkin~~are ~~Construction~~satisfied ~~Corp.,~~that ~~Anthony~~the E.claims ~~Malkin,~~regarding ~~Peter~~tax ~~L. Malkin~~implications, ~~Estate~~enhanced ~~of Leona M. Helmsley~~disclosures, ~~Empire~~appraisals ~~State Realty OP, L.P.,~~ and ~~Empire~~exchange ~~State~~values ~~Realty~~of ~~Trust,~~the ~~Inc.~~properties ~~(“Defendants”)~~that ~~for~~would ~~breach~~be ofconsolidated ~~fiduciary~~into ~~duty,~~the ~~unjust enrichment~~company, and~~/or~~ ~~aiding and abetting breach of fiduciary duty, alleging, inter alia, that~~ the ~~terms~~interests of the participants ~~transaction~~in ~~and~~ the ~~process in~~public ~~which~~entities itand ~~was structured (including~~ the ~~valuation~~private ~~which~~entities ~~was~~have ~~employed)~~been ~~are~~addressed ~~unfair~~adequately, toand ~~the~~they ~~investors~~have inconcluded ~~the~~that ~~existing entities,~~ the ~~consolidation~~settlement ~~provides~~pursuant ~~excessive benefits~~ to the ~~Malkin~~Stipulation ~~Holdings~~of ~~group~~Settlement and ~~the~~opportunity ~~prospectus/consent solicitation fails~~ to ~~make~~ ~~adequate~~consider ~~disclosure. The complaints seek money damages and injunctive relief preventing~~ the proposed transaction. Onon ~~April 3, 2012, plaintiffs moved for consolidation of~~ the ~~actions~~basis ~~and for appointment~~ of revised ~~co-lead~~consent ~~counsel.~~solicitations ~~The~~are ~~motion was granted on June 26~~fair, ~~2012~~reasonable, adequate and in the ~~plaintiffs~~best ~~have~~interests ~~120~~of ~~days~~the ~~from~~plaintiff ~~that date to file a consolidated amended complaint~~class.

~~The Class~~19 ~~Actions are in a very preliminary stage, with no responses to the complaints having been filed to date.~~

~~The outcome of this litigation is uncertain, however, and as a result, the~~ Defendants ~~may~~in ~~incur costs associated with defending or settling such litigation or paying any judgment if they lose. In addition,~~ the ~~Defendants~~Stipulation ~~may be required to pay damage awards or settlements. At this time, the Defendants cannot reasonably assess the timing, outcome~~ of ~~this~~Settlement ~~litigation,~~denied ~~and~~that anthey ~~estimate~~committed ofany ~~the~~violation ~~amount~~ of ~~loss,~~ law or ~~its~~breached ~~effect, if~~ any, onof ~~the~~their ~~Defendants’~~duties ~~financial~~and ~~statements~~did ifnot ~~applicable.~~admit ~~Defendants~~that ~~have stated~~ they ~~believe~~had ~~the~~any ~~Class~~liability ~~Actions are baseless and intend~~ to ~~defend~~the ~~them vigorously~~plaintiffs.

The terms of the settlement include, among other things (i) a payment of $55 million, with a minimum of 80% in cash and maximum of 20% in freely-tradable shares of common stock and/or freely-tradable operating partnership units (all of which will be paid by affiliates of Malkin Holdings (provided that no affiliate of Malkin Holdings that would become a direct or indirect subsidiary of Empire State Realty Trust, Inc. in the consolidation will have any liability for such payment) and the Estate of Leona M. Helmsley and certain participants in the private entities who agree to contribute) to be distributed, after reimbursement of plaintiffs’ counsel’s court-approved expenses and payment of plaintiffs’ counsel’s court-approved attorneys’ fees, and, in the case of the shares of common stock and/or operating partnership units, after the termination of specified lock-ups periods, to participants in the public entities and the private entities pursuant to a plan of allocation to be prepared by counsel for plaintiffs; (ii) Defendants’ agreement that (a) the initial public offering will be on the basis of a firm commitment underwriting; (b) if, during the solicitation period of the public entities, any of the three public entities’ percentage of total exchange value is lower than what is stated in the final prospectus/consent solicitation by 10% or more, such decrease will be promptly disclosed by Defendants to participants in the public entities; and (c) unless total gross proceeds of $600,000,000 are raised in the initial public offering, Defendants will not proceed with the transaction without further approval of the public entities, and (iii) Defendants’ agreement to make additional disclosures in the prospectus/consent solicitation which is part of the registration statement on From S-4 regarding certain matters (which are included therein). Participants in the public entities and private entities will not be required to bear any portion of the settlement payment. The payment in settlement of the claim will be made by the Estate of Leona M. Helmsley and affiliates of Malkin Holdings (provided that no affiliate of Malkin Holdings that would become a direct or indirect subsidiary of Empire State Realty Trust, Inc. in the consolidation will have any liability for such payment) and certain participants in the private entities who agree to participate. Empire State Realty Trust, Inc. and Empire State Realty OP, L.P. will not bear any of the settlement payment.

The settlement further provides for the certification of a class of participants in the three public entities and all of the private entities, other than Defendants and other related persons and entities, and a release of any claims of the members of the class against Defendants and related persons and entities, as well as underwriters in the initial public offering and other advisors. The release in the settlement excludes certain claims, including but not limited to, claims arising from or related to any supplement to the registration statement on Form S-4 that is declared effective to which the plaintiffs’ counsel objects in writing, which objection will not be unreasonably made or delayed, so long as plaintiffs’ counsel has had adequate opportunity to review such supplement. Members of the putative class have the right to opt out of the monetary portion of the settlement, but not the portion providing for equitable relief. The settlement is subject to court approval. It is not effective until such court approval is final, including the resolution of any appeal. Defendants continue to deny any wrongdoing or liability in connection with the allegations in the Class Actions.

There is a risk that other third parties will assert claims against the Defendants, including, without limitation, that the Defendants breached their fiduciary duties to participants or that the consolidation violates the relevant operating agreements, and third parties may commence litigation against the Defendants.

1720

Item 6.

Exhibits

Number		EXHIBIT INDEX Document
24.1		Power of Attorney dated ~~July~~October 2311, 2012 between Members in Registrant and Mark Labell which is being filed as Exhibit 24.1 to Registrant’s 10-Q for the period ended ~~June~~September 30, 2012.
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.
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.
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

1821

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 ~~August July~~October 2311, 2012 (the “Power”) and is supervisor of the accounting functions.

250 WEST 57th ST. ASSOCIATES L.L.C. (Registrant) By /s/ Mark Labell Mark Labell as Senior Vice President, Finance of Malkin Holdings LLC, Supervisor of 250 West 57th St. Associates L.L.C.* and as Attorney-in-Fact on behalf of: Peter L. Malkin, Member Anthony E. Malkin, Member Date: November 13, 2012

(Registrant)

By /s/ Mark Labell

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

Supervisor of 250 West 57th St. Associates L.L.C.* and as Attorney-in-Fact on behalf of:

Peter L. Malkin, Member

Anthony E. Malkin, Member

Date: August 9, 2012

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 that is supervised by Malkin Holdings LLC. Accordingly, this Form 10-Q is being signed by a senior executive and a senior member of the financial/accounting staff of Registrant’s Supervisor in such capacities.

1922

Large Accelerated Filer

Accelerated Filer

Non-Accelerated Filer

Smaller Reporting Company

Filing Compare · 250 WEST 57TH ST ASSOCIATES L.L.C.