FORMTable 10-Kof Contents

~~SECURITIES~~FORM ~~AND~~10-K ~~EXCHANGE COMMISSION~~

~~Washington,~~SECURITIES ~~D.C.~~AND ~~20549~~EXCHANGE COMMISSION

xWashington, ~~ANNUAL~~D.C. ~~REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~20549

~~For~~x ~~the~~ANNUAL ~~fiscal~~REPORT ~~year~~PURSUANT ~~ended~~TO ~~December 31,~~SECTION ~~2011~~13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

¨For ~~TRANSITION~~the ~~REPORT~~calendar ~~PURSUANT~~year TOended ~~SECTION~~December 31, 132012 ~~OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

~~For~~¨ ~~the~~TRANSITION ~~transition~~REPORT ~~period~~PURSUANT ~~from to~~ TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~Commission~~For ~~file~~the ~~number~~transition ~~0-827~~period from to

~~Empire~~Commission ~~State~~file ~~Building~~number ~~Associates L.L.C.~~ 0-827

~~(Exact~~Empire ~~name~~State Building ofAssociates ~~registrant~~L.L.C. ~~as specified in its charter)~~

A New York Limited Liability Company		13-6084254
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

(Exact name of registrant as specified in its charter)

One Grand Central Place

A New York Limited Liability Company

13-6084254

(State or other jurisdiction of

incorporation or organization)

(I.R.S. Employer

Identification No.)

60One ~~East~~Grand ~~42nd~~Central ~~Street~~Place

~~New~~60 ~~York,~~East ~~New~~42nd ~~York~~Street ~~10165~~

~~(Address~~New ofYork, ~~principal~~New ~~executive~~York ~~offices)~~10165

(~~212)~~Address ~~687-8700~~of principal executive offices)

(~~Registrant’s~~212) ~~telephone~~687-8700 ~~number, including area code)~~

~~Securities registered pursuant to Section 12~~(b)Registrant’s oftelephone ~~the~~number, ~~Act:~~including area code)

~~None~~Securities registered pursuant to Section 12(b) of the Act:

~~Securities~~None ~~registered pursuant to section 12(g) of the Act:~~

~~$33,000,000~~Securities ofregistered ~~Participations~~pursuant into ~~LLC~~section ~~Member~~12(g) ~~Interests~~of the Act:

~~Indicate~~$33,000,000 ~~by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)~~ of ~~the~~Participations ~~Securities~~in ~~Exchange~~LLC ~~Act~~Member ofInterests 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

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

~~The~~Indicate ~~aggregate market of the voting stock held~~ by ~~non-affiliates~~check ofmark whether the Registrant: ~~Not~~is ~~applicable,~~a ~~but~~shell ~~see~~company ~~Items~~(as 5defined ~~and~~in 10Rule 12b-2 of ~~this report~~the Act) Yes ¨ No x.

~~Indicate~~The byaggregate ~~check~~market ~~mark if disclosure~~ of ~~delinquent~~the ~~filers~~voting ~~pursuant~~stock toheld ~~Item 405~~by ~~of Regulation S~~non-Kaffiliates isof ~~not contained herein, and will not be contained, to~~ the ~~best of~~ Registrant’s: ~~knowledge~~Not applicable, ~~in definitive~~but ~~proxy~~see orItems ~~information~~5 ~~statements~~and ~~incorporated~~10 ~~by reference in Part III~~ of this ~~Form 10-K or any amendment to this Form 10-K~~report. ¨

Indicate by check mark ~~whether~~if ~~the~~disclosure ~~Registrant~~of isdelinquent afilers ~~well~~pursuant to Item 405 of Regulation S-~~known~~K ~~seasoned~~is ~~issuer~~not contained herein, asand ~~defined~~will innot ~~Rule~~be ~~405~~contained, ofto the ~~Securities~~best of Registrant’s knowledge, in ~~Act~~definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ~~Yes~~ ¨ ~~No x.~~

Indicate by check mark whether the Registrant is a ~~large~~well-known ~~accelerated~~seasoned ~~filer~~issuer, anas ~~accelerated~~defined ~~filer,~~in aRule ~~non-accelerated~~405 ~~filer,~~of orthe ~~a smaller reporting company~~Securities Act. Yes ¨ No x.

~~Large~~Indicate ~~Accelerated~~by ~~Filer~~check ¨mark ~~Accelerated~~whether ~~Filer~~the ¨Registrant ~~Non~~is a large accelerated filer, an accelerated filer, a non-~~Accelerated~~accelerated ~~Filer~~filer, ¨or ~~Smaller~~a ~~Reporting~~smaller ~~Company~~reporting xcompany.

~~PART~~Large IAccelerated Filer ¨ Accelerated Filer ¨ Non-Accelerated Filer ¨ Smaller Reporting Company x

ItemTable 1.of Business.Contents

~~(a)~~PART ~~General~~ I

~~Registrant~~Item ~~was originally organized on July 11, 1961 as a general partnership. On October~~ 1~~, 2001, Registrant converted from a general partnership to a limited liability company under New York law and is now known as Empire State Building Associates L~~.~~L.C.~~ ~~The conversion did not change any aspect of the assets and operations of Registrant other than to protect its investors from any future liability to a third party~~Business. Through April 16, 2002, Registrant owned the tenant’s interest in a master operating leasehold (the “Master Lease”) of the Empire State Building (the “Building”), located at 350 Fifth Avenue, New York, New York. On April 17, 2002, Registrant acquired, through a wholly-owned limited liability company (Empire State Land Associates L.L.C.), the fee title to the Building, and the land thereunder (the “Land”) (together, the “Real Estate” or “Property”), at a price of $57,500,000, and obtained a $60,500,000 first mortgage with Capital One Bank to finance the acquisition and certain related costs.

~~Registrant does not operate the Building. It subleases the Building to Empire State Building Company L.L.C.~~ (~~the “Sublessee”) pursuant to~~ a ~~net operating sublease (the “Sublease”~~) ~~which included an initial term which expired on January 4, 1992. The Sublease provided four separate options for Sublessee to renew the term, in each case~~General for an additional 21 years, on the terms of the original Sublease. Such renewals have been exercised by Sublessee (a) on January 30, 1989, for the first renewal period from January 5, 1992 through January 4, 2013 and (b) as of February 11, 2010, for the remaining three renewal periods from January 5, 2013 through January 4, 2076 (the last two such renewals being exercised by Sublessee with Registrant’s consent for early exercise).

Registrant’s ~~members~~was ~~(“Members”)~~originally ~~are~~organized ~~Peter~~on LJuly 11, 1961 as a general partnership. ~~Malkin~~On October 1, ~~Anthony~~2001, ERegistrant converted from a general partnership to a limited liability company under New York law and is now known as Empire State Building Associates L.L.C. ~~Malkin~~The conversion did not change any aspect of the assets and ~~Thomas~~operations Nof Registrant other than to protect its investors from any future liability to a third party. ~~Keltner~~Through April 16, ~~Jr.~~2002, Registrant owned the tenant’s interest in a master operating leasehold (~~collectively,~~the “Master Lease”) of the Empire State Building (the “~~Agents~~Building”), ~~each~~located ofat ~~whom~~350 ~~also~~Fifth ~~acts~~Avenue, asNew anYork, ~~agent~~New ~~for~~York. ~~holders~~On ofApril 17, ~~participations~~2002, inRegistrant ~~his~~acquired, ~~respective~~through ~~member~~a ~~interest~~wholly-owned inlimited ~~Registrant~~liability company (Empire State Land Associates L.L.C.), the fee title to the Building, and the land thereunder (the “~~Participants~~Land”). (together, the “Real Estate” or “Property”), at a price of $57,500,000, and obtained a $60,500,000 first mortgage with Capital One Bank to finance the acquisition and certain related costs.

~~Sublessee~~Registrant isdoes anot ~~New~~operate ~~York~~the ~~limited~~Building. ~~liability~~It ~~company~~subleases inthe ~~which~~Building ~~Peter~~to L.Empire ~~Malkin~~State isBuilding aCompany ~~member~~L.L.C. ~~and~~(the “Sublessee”) ~~entities~~pursuant ~~for~~to ~~Peter~~a L.net ~~Malkin’s~~operating ~~family~~sublease ~~members~~(the ~~are~~“Sublease”) ~~beneficial~~which ~~owners.~~included ~~All~~an ofinitial ~~the~~term ~~Members~~which inexpired ~~Registrant~~on ~~hold senior~~January 4, ~~positions~~1992. atThe ~~Malkin~~Sublease ~~Holdings~~provided ~~LLC~~four ~~(“Malkin~~separate ~~Holdings”~~options orfor ~~the~~Sublessee ~~“Supervisor”)~~to ~~(formerly~~renew ~~Wien &~~the ~~Malkin LLC)~~term, ~~One~~in ~~Grand~~each ~~Central~~case for ~~Place,~~an 60additional ~~East~~21 ~~42nd Street~~years, ~~New~~on ~~York,~~the ~~New~~terms ~~York,~~of ~~which~~the ~~provides~~original ~~supervisory~~Sublease. ~~and~~Such ~~other services~~renewals tohave ~~Registrant~~been ~~and~~exercised toby Sublessee. ~~See~~(a) on ~~Items 10~~January 30, 111989, 12for ~~and~~the 13first ~~hereof~~renewal ~~for~~period afrom ~~description~~January 5, of1992 ~~the~~through ~~ongoing~~January 4, ~~services~~2013 ~~rendered~~and by(b) as of February 11, ~~and~~2010, ~~compensation~~for ~~paid~~the ~~to,~~remaining ~~Supervisor~~three ~~and~~renewal ~~for~~periods afrom ~~discussion~~January 5, of2013 ~~certain~~through ~~relationships~~January 4, ~~which~~2076 ~~may~~(the ~~pose~~last ~~potential~~two ~~conflicts of~~such ~~interest~~renewals ~~among~~being ~~Registrant,~~exercised by Sublessee ~~and~~with ~~certain~~Registrant’s ofconsent ~~their~~for ~~respective~~early ~~affiliates~~exercise).

AsRegistrant’s ofmembers ~~December 31,~~(“Members”) ~~2011,~~are ~~the Building~~Peter ~~was~~L. ~~68% occupied by approximately 305 tenants who engage in various businesses~~Malkin, ~~including~~Anthony ~~the~~E. ~~FDIC,~~Malkin LFand ~~USA,~~Thomas ~~Skanska,~~N. ~~Coty~~Keltner, ~~Inc~~Jr., ~~Funaro & Co.~~(collectively, ~~Linked In~~the “Agents”), ~~Noven~~each ~~Pharmaceuticals,~~of ~~People’s~~whom ~~Daily~~also ~~Online~~acts ~~USA,~~as ~~Taylor~~an ~~Global,~~agent ~~Turkish Airlines~~for ~~and~~holders ~~World~~of ~~Monuments~~participations ~~Fund.~~in ~~Registrant~~his ~~does~~respective ~~not~~member ~~maintain~~interest ain ~~full-time~~Registrant ~~staff. See Item 2 hereof for additional information concerning~~ (the ~~Real Estate~~“Participants”).

1Sublessee is a New York limited liability company in which Peter L. Malkin is a member and entities for Peter L. Malkin’s family members are beneficial owners. All of the Members in Registrant hold senior positions at Malkin Holdings LLC (“Malkin Holdings” or the “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 Sublessee. See Items 10, 11, 12 and 13 hereof for a description of the ongoing services rendered by, and compensation paid to, Supervisor and for a discussion of certain relationships which may pose potential conflicts of interest among Registrant, Sublessee and certain of their respective affiliates.

~~(b)~~As of December 31, 2012,the Building was 69.0% occupied by approximately 256 tenants who engage in various businesses, including LF USA; Skanska; Coty, Inc.; the Federal Deposit Insurance Corporation; Funaro & Co.; Kaltex North America, Inc.; LinkedIn; Noven Pharmaceuticals; People’s Daily Online USA; Taylor Global; The ~~Master~~Freeh ~~Lease~~Group; Turkish Airlines; and ~~Sublease~~World Monuments Fund. Registrant does not maintain a full-time staff. See Item 2 hereof for additional information concerning the Real Estate.

(b) The ~~annual rent payable by Registrant to its subsidiary under the~~ Master Lease ~~is $1,970,000 from January 5, 1992 through January 5, 2013~~ and ~~$1,723,750~~Sublease ~~annually during the term of each renewal period thereafter. These amounts are eliminated in consolidation.~~

~~Sublessee~~The isannual ~~required~~rent payable by Registrant to ~~pay~~its ~~annual~~subsidiary ~~Basic~~under ~~Rent~~the ~~(“Basic~~Master ~~Rent”)~~Lease ofis $61,~~018~~970,~~750~~000 from January 15, 1992 through January 45, 2013, and $51,~~895~~723,~~625~~750 ~~from~~annually ~~January 5,~~during ~~2013 through~~ the ~~expiration~~ ofterm ~~all renewal terms. See Item 2. Sublessee is also required to pay Registrant additional rent~~ of ~~50% of Sublessee’s net operating profit, as defined in the Sublease, in excess of $1,000,000 for~~ each ~~lease year ending~~renewal ~~December 31~~period ~~(“Additional Rent”)~~thereafter. InThese ~~addition~~amounts toare ~~the~~eliminated ~~above,~~in ~~Sublessee is required to pay for all operating and maintenance expenses, real estate taxes, and necessary repairs and replacements, and keep the Property adequately insured against fire and accident~~consolidation.

InSublessee ~~accordance~~is ~~with~~required ~~the~~to ~~2nd~~pay ~~lease~~annual ~~modification~~Basic ~~dated~~Rent ~~February~~(“Basic Rent”) of $6,018,750 from January 251, ~~2009~~1992 through January 4, ~~Basic~~2013, ~~Rent described~~and ~~above~~$5,895,625 ~~had~~from ~~been~~January 5, ~~increased~~2013 through the expiration of all renewal terms. See Item 2. Sublessee is also required to ~~cover~~pay ~~debt~~Registrant ~~service~~additional onrent aof 50% of Sublessee’s net operating profit, as defined in the Sublease, in excess of $311,~~500~~000,000 ~~second~~for ~~mortgage~~each ~~that~~lease ~~closed~~year onending ~~February~~December 2531 (“Overage Rent”). In addition to the above, ~~2009~~Sublessee is required to pay for all operating and maintenance expenses, real estate taxes, and necessary repairs and replacements, and keep the Property adequately insured against fire and accident.

In accordance with the ~~3rd~~fifth lease modification ~~dated July 26~~, ~~2011,~~ Basic Rent was increased to cover debt service relating to the Secured Term Loan, as defined in Item 2, refinancing that prepaid the first and second mortgages aggregating $92,000,000 (Item 2), to the extent the Secured Term Loan debt exceeds the previous first mortgage of $60,500,000. Basic Rent increased for the ~~three and~~ twelve months ended December 31, ~~2011~~ 2012 by $~~775~~4,~~926 and $2~~181,~~434~~245,~~117,~~ ~~respectively,~~ representing debt service, consisting ~~which consists~~ only of interest, on the outstanding principal balance of the ~~second~~Secured ~~mortgage~~Term Loan in excess of $60,500,000, and was increased by an additional annual amount of approximately $1,351,000 (based on the ~~balance~~current interest rate of 2.7017%) pursuant to the ~~Secured~~sixth ~~Term~~lease ~~Loan~~modification indated ~~excess~~February 26, 2013 subsequent to the end of the year ended December 31, 2012 covering an increase of the outstanding principal balance of $6050,~~500~~000,000.

BasicTable Rent will be increased to cover debt service on any refinancing of such debt so long as the aggregate amount refinanced does not exceed the then existing amount of debt plus refinancing costs. Contents

~~Due~~Basic Rent will be increased to cover debt service on any refinancing of such debt so long as the ~~Sublessee~~aggregate atamount ~~December 31,~~refinanced ~~2011~~does ~~represents~~not exceed the ~~payable~~ tothen ~~Sublessee~~existing ~~for~~amount ~~purchased~~of ~~building~~debt ~~and~~plus ~~tenanting~~refinancing costs.

~~Additional~~Due ~~Rent and any interest and dividends accumulated thereon are distributed annually after deduction for any additional payment described in Note E below, other expenses and additions~~ to ~~general contingencies management judges to be suitable under~~ the ~~circumstances. Additional Rent income is~~ ~~recognized when earned from the~~ Sublessee, at ~~the close of the year ending~~ December 31., ~~Such~~2012 ~~income~~and is2011 ~~not~~represents ~~determinable until~~ the ~~Sublessee,~~payable ~~pursuant~~ to ~~the Sublease, provides Registrant with a certified operating report from a certified public accountant on the~~ Sublessee’s ~~operation~~for ofpurchased ~~the~~building ~~Real~~and ~~Estate.~~tenanting ~~The Sublease requires that this report be delivered to Registrant annually within 60 days after the end of each such fiscal year~~costs.

2Overage Rent and any interest and dividends accumulated thereon are distributed annually after deduction for any additional payment described in Note 12, other expenses, reserves and additions to general contingencies management judges to be suitable under the circumstances. Overage Rent income is recognized when earned from the Sublessee, at the close of the year ending December 31. Such income is not determinable until the Sublessee, pursuant to the Sublease, provides Registrant with a certified operating report from a certified public accountant on the Sublessee’s operation of the Real Estate. The Sublease requires that this report be delivered to Registrant annually within 60 days after the end of each such fiscal year. Accordingly, all Overage Rent income and the additional payment to Supervisor are reflected in the Registrant’s financial statements in the fourth quarter of each year and are paid after the end of the year. The Sublease does not provide for the Sublessee to render interim reports to Registrant. See Note 5 to the Consolidated Financial Statements filed under Item 8 hereof (the “Notes”) regarding Overage Rent payments by Sublessee for the calendar years ended December 31, 2012 and 2011. There was Overage Rent of $24,199,368 for the year ended December 31, 2012.

~~Accordingly,~~Real ~~all~~estate ~~Additional~~taxes ~~Rent~~incurred ~~income~~directly ~~and~~by the ~~additional payment to Supervisor are reflected in the fourth quarter of each year. The Sublease does not provide for the~~ Sublessee tototaled render interim reports to Registrant. See Note 4 of Notes to the Consolidated Financial Statements filed under Item 8 hereof (the “Notes”) regarding Additional Rent payments by Sublessee for the fiscal years ended December 31$26,340,502 ~~2011~~ and ~~2010.~~ ~~There was Additional Rent of~~ $2830,~~780~~009,~~449~~907 for the ~~year~~years ended December 31, 2012 and 2011, respectively.

~~Real~~(c) ~~estate~~Competition ~~taxes paid directly by the Sublessee totaled $30,009,908 and $27,664,886 for the years ended December 31, 2011 and 2010, respectively.~~

Pursuant to tenant space leases at the Building, the average annual base rental payable to Sublessee is approximately $43 per square foot (cexclusive of electricity charges and escalation). The asking ~~Competition~~rents for new leases at the Building range from $49 to $55 per square foot. Overage Rent may be impacted by Sublessee’s ability to negotiate higher average base rent.

~~Pursuant to tenant space leases at the Building, the average annual base rental payable to Sublessee is approximately $40 per square foot~~ (~~exclusive of electricity charges and escalation~~d). ~~The~~Tenant ~~asking rents for new~~ leases ~~at the Building range from $38 to $53 per square foot. . Additional Rent may be impacted by Sublessee’s ability to negotiate higher average base rent.~~

~~(d)~~Sublessee ~~Tenant~~operates ~~leases~~the Building free from any federal, state or local government restrictions involving rent control or other similar rent regulations which may be imposed upon residential real estate in Manhattan. Any increase or decrease in the amount of rent payable by a tenant is governed by the provisions of the tenant’s lease.

~~Sublessee~~(e) ~~operates~~Proposed ~~the~~Consolidation Building free from any federal, state or local government restrictions involving rent control or other similar rent regulations which may be imposed upon residential real estate in Manhattan. Any increase or decrease in the amount of rent payable by a tenant is governed by the provisions of the tenant’s lease.

~~Item~~The 2Supervisor of the Registrant is in the process of soliciting consents of Participants in the Registrant and other public limited liability companies supervised by the Supervisor to a proposed Consolidation (as defined below) pursuant to a prospectus/consent solicitation statement included in a registration statement on Form S-4 declared effective by the Securities and Exchange Commission. ~~Property~~In the proposed transaction (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 would be contributed to the operating partnership of Empire State Realty Trust, Inc., a newly organized real estate investment trust.

OnConsents ~~April 17, 2002,~~are ~~Registrant~~required ~~acquired,~~from ~~through~~Participants ain ~~wholly~~the ~~owned~~Registrant ~~limited~~and ~~liability~~such ~~company~~other ~~(Empire~~public ~~State~~limited ~~Land~~liability ~~Associates~~companies ~~L.L.C.),~~for ~~the~~them ~~fee title~~ to ~~the~~contribute ~~Building,~~their interests ~~and~~in the ~~Land~~Consolidation. ~~thereunder,~~Consents athave abeen ~~price of $57,500,000, and~~ obtained afrom ~~$60,500,000~~participants ~~first~~in ~~mortgage~~the ~~with Capital~~private ~~One~~entities ~~Bank~~and ~~to finance~~ the ~~acquisition~~Supervisor and certain ~~related~~affiliated ~~costs.~~companies ~~The Building, erected in 1931~~ and ~~containing~~affiliates ~~102~~of ~~stories, a concourse and a lower lobby, occupies~~ the ~~entire~~Supervisor ~~blockfront~~for ~~from~~them ~~33rd Street~~ to ~~34th~~make ~~Street~~such ~~on Fifth Avenue~~contributions. The ~~Building~~ ~~has~~consideration 72to ~~passenger~~be paid ~~elevators~~to ~~and~~the 4contributing ~~freight~~companies ~~elevators~~ and isentities ~~equipped~~in ~~with~~the ~~air~~Consolidation ~~conditioning~~will ~~and~~be ~~individual~~allocated ~~air~~in ~~handling~~accordance ~~units.~~with ~~The~~exchange ~~Building~~values isdetermined ~~subleased~~based ~~to Sublessee under the Sublease which expires~~ on ~~January 4,~~appraisals ~~2076.~~by ~~See~~an ~~Item 1 hereof~~independent ~~for~~third ~~a description of the terms of the Master Lease and Sublease~~party.

~~The~~Item Real Estate is carried in the Consolidated Financial Statements at its historical cost of $60,484,389, consisting of $57,500,000 for the purchase price paid to the seller, $752,022 for acquisition costs, and $2~~,232,367 representing the unamortized balance of the cost of the Master Lease on the date the Real Estate was acquired~~. ~~The cost of the Land was estimated to be 35~~Property.63% of the total cost of the Real Estate, and the Building, 64.37%. Under the terms of the contract of sale, the deed contains language to avoid the merger of the fee estate and the leasehold, although on a Consolidated Financial Statements basis the Registrant incurred no leasehold rent expense after acquiring the Real Estate.

3On April 17, 2002, Registrant acquired, through a wholly owned limited liability company (Empire State Land Associates L.L.C.), the fee title to the Building, and the Land thereunder, at a price of $57,500,000, and obtained a $60,500,000 first mortgage with Capital One Bank to finance the acquisition and certain related costs. The Building, erected in 1931 and containing 102 stories, a concourse and a lower lobby, occupies the entire blockfront from 33rd Street to 34th Street on Fifth Avenue. The Building has 72 passenger elevators and 4 freight elevators and is equipped with air conditioning and individual air handling units. The Building is subleased to Sublessee under the Sublease which expires on January 4, 2076. See Item 1 hereof for a description of the terms of the Master Lease and Sublease.

OnTable July 26, 2011, Registrant entered into a three-year term loan (the “Secured Term Loan”) with institutional lenders, including HSBC Bank USA, National Association as agent and HSBC Bank USA, National Association and DekaBank Deutsche Girozentrale as lead arrangers. The Secured Term Loan is secured by a mortgage on the Property. The Secured Term Loan was amended by the First Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated as of November 2, 2011 to provide for additional commitments from Capital One, National Association and Bank of America, N.A. so that, collectively, the loan was increased to $300,000,000. There were no additional principal advances for the year ending December 31, 2011. Subject to the terms and conditions of the Loan, the outstanding principal amount of the loan shall bear interest at a rate equal to 2.5% per annum above 30-day LIBOR, which aggregate rate was 2.78% at December 31, 2011. The Secured Term Loan was amended on November 23, 2011 clarifying certain terms upon which the Property is permitted to be transferred into a consolidated entity without accelerating the Secured Term Loan. Contents

AtThe ~~the~~Real ~~closing~~Estate ofis ~~the~~carried ~~Secured~~in ~~Term Loan,~~ the ~~lenders~~Consolidated ~~provided~~Financial ~~Registrant~~Statements ~~with~~at anits ~~advance~~historical cost of $~~159~~60,~~000~~484,~~000~~389, (consisting of ~~which~~ $9257,~~000~~500,000 ~~refinanced~~for ~~existing~~the ~~indebtedness).~~purchase ~~Based~~price onpaid ~~the~~to ~~terms of~~ the ~~Secured~~seller, ~~Term Loan~~$752,022 ~~(as~~for ~~amended)~~acquisition costs, and ~~subject~~$2,232,367 torepresenting the ~~conditions~~unamortized ~~set~~balance ~~forth~~of inthe cost of the ~~Secured~~Master ~~Term~~Lease ~~Loan~~on ~~(as~~the ~~amended),~~date the ~~lenders~~Real ~~agreed~~Estate towas ~~provide~~acquired. ~~Registrant~~The cost ~~with~~of ~~additional~~the ~~advances~~Land ofwas upestimated to ~~$141,000,000~~be 35.63% ~~Provided~~of nothe ~~event~~total cost of ~~default~~the ~~has~~Real ~~occurred~~Estate, and ~~subject~~the ~~to other conditions~~Building, ~~upon~~64.37%. ~~Registrant’s~~Under ~~request,~~the ~~HSBC~~terms ~~has~~of ~~also~~the ~~agreed~~contract toof ~~source~~sale, ~~further~~the ~~additional~~deed ~~commitments~~contains ~~aggregating~~language up to ~~$200,000,000~~avoid inthe merger of the ~~sole~~fee ~~discretion~~estate ofand the ~~lenders.~~leasehold, ~~Any~~although ~~further~~on ~~advances~~a Consolidated ~~under~~Financial Statements basis the ~~Secured~~Registrant ~~Term~~incurred ~~Loan~~no ~~are~~leasehold ~~subject~~rent toexpense ~~the consent~~after ofacquiring the ~~Sublessee~~Real Estate.

~~Pursuant~~On July 26, to2011, ~~the~~Registrant ~~terms~~entered ofinto a three-year term loan (the “Secured Term Loan”) ~~agreement~~with institutional lenders, ~~Registrant~~including ~~and~~HSBC ~~Sublessee~~Bank ~~entered~~USA, ~~into~~National ~~an amendment~~Association ~~dated~~as ~~July 26,~~agent ~~2011~~and toHSBC ~~the~~Bank ~~sublease~~USA, ~~(“Third~~National ~~Modification~~Association ofand ~~Sublease”)~~DekaBank ~~pursuant~~Deutsche Girozentrale toas ~~which~~lead ~~(i) Sublessee~~arrangers. ~~consented~~The toSecured ~~the~~Term ~~advance~~Loan ofis upsecured toby ~~$159,000,000~~a ~~under~~mortgage on the Property. The Secured Term Loan ~~and~~was ~~(ii) in~~amended ~~accordance~~by ~~with~~ the ~~terms~~ First Amendment to Loan Agreement, Ratification of ~~the~~Loan ~~existing~~Documents ~~sublease~~and ~~agreement~~Omnibus ~~(which~~Amendment ~~terminates~~dated onas ~~January~~of November 42, ~~2076)~~2011 ~~between~~to ~~Sublessee~~provide ~~and~~for ~~Registrant,~~additional ~~the~~commitments ~~Basic~~from ~~Rent~~Capital ~~payable~~One, byNational ~~Sublessee~~Association ~~was~~and ~~increased~~Bank byof anAmerica, ~~amount~~N.A. ~~equal~~so tothat, collectively, the ~~debt~~maximum ~~service~~amount onof the ~~portion~~loan ofwas ~~the~~increased ~~borrowing~~to ~~from~~$300,000,000. ~~the~~ The Secured Term Loan ~~associated~~was ~~with~~further amended ~~improvements~~on ~~(excluding~~November 23, ~~any~~2011 ~~principal~~clarifying ~~payable~~certain terms upon ~~maturity).~~which ~~The~~the ~~original~~Property ~~Basic~~is ~~Rent~~permitted ~~payable~~to bybe ~~Sublessee~~transferred isinto ~~more~~a ~~than~~consolidated ~~sufficient~~entity towithout ~~pay~~accelerating the ~~debt~~Secured ~~service~~Term onLoan. ~~the~~The ~~portion~~Secured ofterm ~~the~~Loan ~~borrowing~~was ~~associated~~further ~~with~~amended ~~purchasing~~ by the ~~fee~~Third ~~position~~Amendment to inLoan ~~2002.~~Agreement, ~~The~~Ratification ~~Sublessee~~of ~~and~~Loan ~~ESB~~Documents ~~Observatory~~and ~~LLC,~~Omnibus aAmendment ~~subsidiary~~dated as of ~~Sublessee~~October 11, ~~also~~2012 ~~entered~~to ~~into~~provide ~~subordination~~for ~~agreements~~additional ~~with~~commitments from the ~~agent~~lenders onso ~~behalf~~that, collectively, the maximum amount of the ~~lenders~~loan ~~pursuant~~was increased to ~~which~~$500,000,000. A condition to the ~~Sublease~~lenders’ ~~and~~obligation to loan the ~~lease~~additional ofamounts (in addition to the ~~observatory~~other ~~were subordinated~~conditions toin the ~~mortgage~~loan ~~securing~~agreement) is that the ~~Secured~~loan-to-value ~~Term~~ratio ~~Loan.~~(as Asdefied atherein), ~~result~~based on an updated appraisal, does not then exceed 50%. Upon execution of the ~~Sublease~~amendment, ~~and~~Registrant paid the ~~observatory~~lenders ~~lease~~a ~~can~~facility befee ~~terminated~~of in0.75% ~~connection~~of ~~with~~such aincrease ~~foreclosure~~($1,500,000) byand ~~Secured~~an ~~Term~~arrangement ~~Loan~~fee ~~lenders~~of 0.25% of such increase ($500,000).

~~Subject~~On toJuly 26, 2011, the ~~terms~~lenders ~~and~~provided ~~conditions~~Registrant ofwith ~~the~~an ~~Secured~~advance ~~Term~~of ~~Loan~~$159,000,000 ~~agreement~~(of which $92,000,000 ~~the~~refinanced ~~outstanding~~existing ~~principal~~indebtedness). ~~amount~~An ofadditional ~~the~~$30,000,000 ~~Secured~~was ~~Term~~drawn ~~Loan~~on ~~shall~~April 5, 2012 ~~bear~~(in ~~interest~~accordance atwith athe ~~rate~~Fourth ~~equal~~Modification toof ~~2.5%~~Sublease dated April ~~per~~5, ~~annum~~2012 ~~above~~by and between Registrant and Sublessee) and an additional $30~~-day~~,000,000 ~~LIBOR~~was drawn on July 9, ~~unless~~2012 ~~such~~(in ~~rate~~accordance iswith ~~not~~the ~~available~~Fifth Modification of Sublease dated July 9, in2012 ~~which~~by ~~event~~and between Registrant and Sublessee) bringing the ~~Secured~~total ~~Term~~amount ~~Loan~~advanced ~~would~~through ~~bear~~December 31, ~~interest~~2012 atto 2$219,000,000.~~5% per~~ ~~annum~~An inadditional ~~excess~~$50,000,000 ofwas ~~(i) HSBC’s~~drawn ~~prime~~on ~~rate~~the orSecured ~~(ii)~~Term Loan on February 26, 2013 bringing the total ~~BBA~~amount ~~LIBOR~~advanced ~~Daily~~to ~~Floating Rate~~$269,000,000. InBased ~~connection~~on ~~with~~the ~~this~~terms ~~loan,~~of ~~Registrant~~the ~~issued~~Secured ~~promissory~~Term ~~notes,~~Loan a(as ~~mortgage~~amended) ~~encumbering~~and subject to the ~~Property~~conditions inset ~~favor~~forth ofin the ~~agent~~Secured ~~for~~Term ~~the~~Loan ~~lenders~~(as amended), ~~and~~additional ~~other~~advances ~~customary~~of ~~security~~up ~~and~~to ~~other~~$231,000,000 ~~loan~~were ~~documents.~~available ~~The~~under ~~maturity~~the ~~date~~Secured ofTerm ~~this~~Loan ~~loan~~after isthe ~~July~~$50,000,000 drawn on February 26, ~~2014,~~2013. ~~which~~Any ~~Registrant~~further ~~may~~advances ~~extend~~under tothe ~~July 26,~~Secured ~~2015~~Term ~~and~~Loan ~~thereafter~~are subject to ~~July 26,~~the ~~2016,~~consent inof ~~each~~the ~~case~~Sublessee. ~~upon~~

Pursuant to the terms of the Secured Term Loan agreement, Registrant and Sublessee entered into an amendment dated July 26, 2011 to the Sublease (“Third Modification of Sublease”) pursuant to which (i) Sublessee consented to the advance of up to $159,000,000 under the Secured Term Loan and (ii) in accordance with the terms of the existing Sublease agreement (which terminates on January 4, 2076) between Sublessee and Registrant, the Basic Rent payable by Sublessee was increased by an amount equal to the debt service on the portion of the borrowing from the Secured Term Loan associated with improvements (excluding any principal payable upon maturity). In connection with additional advances aggregating $60,000,000, Registrant and Sublessee entered into a Fourth Modification of Sublease and a Fifth Modification of Sublease dated as of April 5, 2012 and July 9, 2012, respectively, under which the basic rent payable by Sublessee was further increased by an amount equal to the debt service on the aggregate additional advance of $60,000,000. The original Basic Rent payable by Sublessee is more than sufficient to pay the debt service on the portion of the borrowing associated with purchasing the fee position in 2002. The Sublessee and Empire State Realty Observatory TRS, LLC (formerly known as ESB Observatory LLC), a subsidiary of Sublessee, also entered into subordination agreements with the agent on behalf of the lenders pursuant to which the Sublease and the lease of the observatory were subordinated to the mortgage securing the Secured Term Loan. As a result, the Sublease and the observatory lease can be terminated in connection with a foreclosure by Secured Term Loan lenders.

Subject to the terms and conditions of the Secured Term Loan agreement, the outstanding principal amount of the Secured Term Loan shall bear interest at a rate equal to 2.5% per annum above 30-day LIBOR, unless such rate is not available, in which event the Secured Term Loan would bear interest at 2.5% per annum in excess of (i) HSBC’s prime rate or (ii) the BBA LIBOR Daily Floating Rate. The aggregate rate in accordance with the foregoing was 2.7% at December 31, 2012. In connection with this loan, Registrant issued promissory notes, a mortgage encumbering the Property in favor of the agent for the lenders, and other customary security and other loan documents. The maturity date of this loan is July 26, 2014, which Registrant may extend to July 26, 2015 and thereafter to July 26, 2016, in each case upon payment of an extension fee of 0.25% of the total availability under the Secured Term Loan agreement at the time of such extension. Such extensions are subject to customary conditions, ~~including~~ including the satisfaction of certain loan-to-value and debt yield ratios and the absence of an event of default.

The initial ~~advance~~ advance was used to pay and discharge the then existing secured mortgage loans relating to the Property and to fund operations and working capital requirements related to the Property (including for improvements), including reimbursements to Sublessee for expenditures relating to improvements previously incurred by Sublessee, and certain other general entity purposes permitted by the Secured Term Loan including costs of the financing. Subsequent advances were or will be used for the foregoing purposes except for the discharge of existing secured mortgage loans which had been discharged from proceeds of the initial advance.

PaymentTable obligations relating to the Secured Term Loan may be accelerated upon the occurrence of an event of default under the Secured Term Loan agreement. Events of default under the Secured Term Loan agreement include, subject in some cases to specified cure periods: payment defaults; failure by Registrant to pay taxes; failure to keep certain insurance policies in effect; breaches of representations and covenants contained in the mortgage; defaults in the observance or performance of covenants; inaccuracy of representations and warranties in any material respect; bankruptcy and insolvency related defaults; and the entry of one or more final judgments for the payment of more than $1,000,000 that are not satisfied within 30 days. Contents

~~The~~ Payment obligations relating to the Secured Term Loan ~~agreement~~may ~~contains~~be ~~affirmative~~accelerated ~~and~~upon ~~negative~~the ~~covenants~~occurrence of ~~customary~~an ~~for~~event ~~financings~~ of ~~this~~default ~~type~~under the Secured Term Loan agreement. ~~Negative~~Events ~~covenants~~of indefault under the Secured Term Loan agreement ~~limit Registrant’s ability~~include, subject toin ~~certain~~some ~~exceptions,~~cases to ~~transfer~~specified ~~all~~cure ~~or substantially~~periods: ~~all~~payment ofdefaults; ~~its~~failure ~~property;~~by ~~incur~~Registrant ~~indebtedness~~to ~~and~~pay ~~liens~~taxes; ~~dissolve,~~failure ~~liquidate~~to orkeep certain ~~enter~~insurance ~~into~~policies ~~mergers~~in oreffect; ~~similar~~breaches ~~transactions;~~of ~~change~~representations ~~its~~and ~~line~~covenants ofcontained ~~business;~~in ~~cancel~~the ~~debt~~mortgage; ~~enter~~defaults ~~into~~in ~~transactions~~the ~~with~~observance ~~affiliates;~~or ~~rezone~~performance ~~its~~of ~~property~~covenants; ~~sell~~inaccuracy ~~its assets;~~of ~~make~~representations ~~certain~~and ~~distributions~~warranties toin ~~investors~~any material respect; bankruptcy and insolvency ~~change~~related ~~its~~defaults; ~~organizational~~and ~~documents.~~the ~~The~~entry ~~Registrant~~of ~~must~~one ~~also~~or ~~maintain~~more afinal ~~debt~~judgments ~~yield~~for asthe ~~specified~~payment inof ~~the~~more ~~Secured~~than ~~Term~~$1,000,000 ~~Loan~~that ~~agreement~~are not satisfied within 30 days.

~~Registrant~~The asSecured ~~both~~Term ~~the~~Loan ~~fee~~agreement ~~owner~~contains affirmative and ~~the~~negative ~~ground~~covenants ~~lessor~~customary for financings of ~~the~~this ~~Empire~~type. ~~State~~Negative ~~Building~~covenants ~~are~~in ~~mortgagors~~the ~~and~~Secured ~~their~~Term ~~respective~~Loan ~~estates~~agreement ~~are~~limit Registrant’s ability, ~~therefore~~subject ~~mortgaged.~~to ~~Sublessee~~certain exceptions, to transfer all or substantially all of its property; incur indebtedness and ~~the~~liens; ~~observatory~~dissolve, ~~tenant~~liquidate ~~agreed~~or toenter ~~subordinate~~into ~~their~~mergers ~~respective~~or ~~leasehold~~similar ~~interest~~transactions; change its line of business; cancel debt; enter into transactions with affiliates; rezone its property; sell its assets; make certain distributions to ~~the~~investors; ~~mortgage~~and change its organizational documents. ~~Accordingly,~~The inRegistrant ~~the~~must ~~event~~also ofmaintain a ~~foreclosure,~~debt ~~their~~yield ~~leasehold~~as ~~estates~~specified ~~could~~in bethe ~~terminated~~Secured Term Loan agreement.

~~The~~Registrant ~~estimated~~as ~~fair~~both ~~value~~the offee ~~Registrant’s~~owner ~~Secured~~and ~~Term~~the ~~Loan~~ground ~~debt~~lessor ~~based~~of onthe ~~available~~Empire ~~market~~State ~~information~~Building is ~~approximately~~mortgagor ~~$159,097,070 as~~and each of ~~December 31,~~its ~~2011~~estates is therefore mortgaged. ~~The~~Sublessee ~~fair~~and ~~value~~the ofobservatory ~~borrowings~~tenant isagreed ~~estimated~~to bysubordinate ~~discounting~~their respective leasehold interest to the ~~future~~mortgage. ~~cash~~Accordingly, ~~flows~~in ~~using~~the ~~current~~event ~~interest~~of ~~rates~~a atforeclosure, ~~which~~their ~~similar~~leasehold ~~borrowings~~estates could be ~~made by Registrant~~terminated.

~~Restricted~~The ~~cash~~estimated atfair value of Registrant’s Secured Term Loan debt based on available market information is approximately $219,000,000 as of December 31, ~~2011~~2012. ~~represents~~The ~~funds~~fair invalue anof ~~account~~borrowings ~~held~~is atestimated ~~HSBC~~by ~~Bank~~discounting ~~pursuant~~the tofuture ~~the~~cash ~~terms~~flows ofusing ~~the~~current ~~Secured~~interest ~~Term Loan,~~rates toat bewhich ~~used~~similar ~~for~~borrowings ~~Registrant’s~~could ~~monthly~~be ~~loan~~made ~~interest~~by ~~obligation~~Registrant.

~~The~~Restricted ~~Building~~cash ~~and~~at ~~Building~~December 31, ~~improvements~~2012 ~~are~~represents ~~being depreciated~~funds onin ~~the~~an ~~straight-line~~account ~~basis~~held ~~over~~at ~~their~~HSBC ~~estimated~~Bank ~~useful~~pursuant ~~lives~~to ~~of 39 years. Tenant improvements are being depreciated and leasing commissions are being amortized over~~ the ~~remaining~~terms ~~lease~~of ~~term or useful life, whichever is shorter. Mortgage financing costs relating to~~ the Secured Term Loan, ~~totaling $6,654,241, are being amortized ratably over the life of the loan. As the prior first and second mortgages relating~~ to ~~these~~be ~~loans~~used ~~were~~for ~~repaid~~Registrant’s onmonthly ~~July 26, 2011, the remaining unamortized balance of applicable financing costs were written-off. The unamortized~~ loan ~~costs and the prepayment penalty on early repayment of such mortgages were included in~~ interest ~~expense~~obligation.

5The Building and Building improvements are being depreciated on the straight-line basis over their estimated useful lives of 39 years. Tenant improvements are being depreciated and leasing commissions are being amortized over the remaining lease term or useful life, whichever is shorter. Mortgage financing costs relating to the Secured Term Loan, totaling $11,744,378, are being amortized ratably over the life of the loan. As the prior first and second mortgages relating to these loans were repaid on July 26, 2011, the remaining unamortized balance of applicable financing costs were written-off. The unamortized loan costs and the prepayment penalty on early repayment of such mortgages were included in interest expense.

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 athe ~~consolidation~~Consolidation ~~transaction~~(as defined below). In ~~such~~the ~~consolidation~~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 would be contributed to the operating partnership of Empire State Realty Trust, Inc., a newly organized real estate investment trust.

~~Consents~~Item 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-43. ~~Consents~~Legal ~~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 contributions~~Proceedings.

The ~~consideration to be paid to the contributing companies and entities in the consolidation will be allocated in accordance with~~Property ~~exchange values determined based on appraisals by an independent third party. Such method~~ of ~~allocation has been approved by the Sublessee. Based on the preliminary exchange values, if the consolidation proposal is approved by the~~ Registrant~~’s Participants,~~ ~~the~~was ~~consideration with respect to~~ the ~~Empire~~subject ~~State Building will be allocated approximately 50% to the Registrant and 50% to the Sublessee, which the Supervisor believes is in accordance with the historical treatment~~ of the ~~Registrant and~~following ~~the~~material ~~Sublessee.~~litigation:

~~Item~~Malkin 3Holdings LLC and Peter L. ~~Legal~~Malkin, ~~Proceedings~~a member in Registrant, were engaged in a proceeding with Sublessee’s former managing agent, Helmsley-Spear, Inc., commenced in 1997, concerning the management, leasing and supervision of the Property that is subject to the Sublease to Sublessee. 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 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.

~~The~~An August 29, 2006 settlement agreement terminated Helmsley-Spear, Inc. as managing and leasing agent at the Property as of ~~Registrant~~August 30, ~~was~~2006. Sublessee is now self-managing the Property, subject to the supervision of ~~the~~Malkin ~~following~~Holdings ~~material~~L.L.C., ~~litigation:~~as its supervisor, while engaging third party leasing agents, CB Richard Ellis for retail space since August 30, 2006 and Newmark Knight Frank for non-retail space since October 21, 2009.

MalkinTable Holdings LLC and Peter L. Malkin, a member in Registrant, were engaged in a proceeding with Sublessee’s former managing agent, Helmsley-Spear, Inc., commenced in 1997, concerning the management, leasing and supervision of the Property that is subject to the Sublease to Sublessee. 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 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. Contents

6In March 2012, five putative class actions, or the Class Actions, were filed in New York State Supreme Court, New York County by Participants in Empire State Building Associates L.L.C. (“ESBA”) and several other entities supervised by the Supervisor (on March 1, 2012, March 7, 2012, March 12, 2012, March 14, 2012 and March 19, 2012). The plaintiffs assert claims against Malkin Holdings LLC, 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, the Helmsley estate, the operating partnership and the company 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 by which it was structured (including the valuation that was employed) are unfair to the participants, the consolidation provides excessive benefits to the Malkin Holdings group and the then-draft prospectus/consent solicitation filed with the SEC 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 proposed transaction. The actions were consolidated and co-lead plaintiffs’ counsel were appointed by the New York State Supreme Court by order dated June 26, 2012. Furthermore, an underlying premise of the Class Actions, as noted in discussions among plaintiffs’ counsel and defendants’ counsel, was that the consolidation had been structured in such a manner that would cause the subject LLC participants immediately to incur substantial tax liabilities.

AnThe ~~August 29,~~parties ~~2006~~entered ~~settlement~~into ~~agreement~~a ~~terminated~~Stipulation ~~Helmsley-Spear~~of Settlement dated September 28, ~~Inc~~2012, resolving the Class Actions. asThe ~~managing~~Stipulation ~~and~~of ~~leasing~~Settlement ~~agent~~recites atthat the ~~Property~~consolidation aswas approved by overwhelming consent of ~~August 30,~~the ~~2006~~participants in the private entities. ~~Sublessee~~The isStipulation ~~now~~of ~~self-managing~~Settlement states that counsel for the ~~Property,~~plaintiff ~~subject~~class satisfied themselves that they have received adequate access to relevant information, including the ~~supervision~~independent ofvaluer’s ~~Malkin~~valuation ~~Holdings~~process ~~L.L.C.~~and methodology, that the disclosures in the Registration Statement on Form S-4, as ~~its~~amended, ~~supervisor~~are appropriate, ~~while~~that ~~engaging~~the ~~third~~transaction ~~party~~presents ~~leasing~~potential benefits, ~~agents~~including the opportunity for liquidity and capital appreciation, CBthat ~~Richard~~merit ~~Ellis~~the participants’ serious consideration and that each of named class representatives intends to support the transaction as modified. The Stipulation of Settlement further states that counsel for ~~retail~~the plaintiff class are satisfied that the claims regarding tax implications, enhanced disclosures, appraisals and exchange values of the properties that would be consolidated into the company, and the ~~space~~interests ~~since~~of ~~August 30~~the participants in the subject LLCs and the private entities, ~~2006~~have been addressed adequately, and ~~Newmark~~they ~~Knight~~have ~~Frank~~concluded ~~for~~that ~~non-retail~~the ~~space~~settlement ~~since~~pursuant ~~October 21~~to the Stipulation of Settlement and opportunity to consider the proposed transaction on the basis of revised consent solicitations are fair, ~~2009~~reasonable, adequate and in the best interests of the plaintiff class.

~~Five~~The ~~putative class~~defendants ~~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~~Stipulation of ~~which~~Settlement ~~was~~denied ~~filed~~that ~~March 1, 2012~~they ~~(the~~committed ~~“Class~~any ~~Actions”).~~violation ~~As now pending in New York State Supreme Court, New York County, each Class Action challenges the proposed consolidation~~ of ~~those~~law ~~and~~or ~~other~~breached ~~properties~~any ~~supervised by Malkin Holdings into a real estate investment trust (the “REIT”) and the initial public offering~~ of ~~shares~~their induties 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~~did ~~(“Defendants”)~~not ~~for~~admit ~~breach of fiduciary duty and/or aiding and abetting breach of fiduciary duty, alleging, inter alia,~~ that ~~the~~they ~~terms~~had ofany ~~the~~liability ~~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 intend to consent to consolidation, and have no position with respect to appointment of co-lead counsel.~~

The ~~Class~~terms ~~Actions~~of ~~are~~the insettlement ainclude, ~~very~~among other things (i) a ~~preliminary~~payment ~~stage~~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 the Malkin Holdings group (provided that no ~~responses~~member of the Malkin Holdings group that would become a direct or indirect subsidiary of the company in the consolidation will have any liability for such payment) and the Helmsley estate 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 ~~complaints~~case ~~having~~of ~~been~~shares ~~filed~~of common stock and/or operating partnership units, after the termination of specified lock-up periods, to ~~date~~participants in the subject LLCs and the private entities pursuant to a plan of allocation to be prepared by counsel for plaintiffs; (ii) defendants’ agreement that (a) the IPO will be on the basis of a firm commitment underwriting; (b) if, during the solicitation period, any of the three subject LLC’s 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 investors in the subject LLCs; and (c) unless total gross proceeds of $600,000,000 are raised in the IPO, defendants will not proceed with the transaction without further approval of the subject LLCs; and (iii) defendants’ agreement to make additional disclosures in the prospectus/consent solicitation regarding certain matters (which are included therein). Defendants have also ~~stated~~acknowledged ~~they~~the ~~believe~~work of plaintiffs and their counsel was a material factor in defendants’ implementation of the change in the consolidation that, as originally proposed, would have required the exchange of participation interests for Class A ~~Actions~~common stock, which are ~~without~~taxable ~~merit~~on receipt, and ~~intend~~that now permits participants instead to ~~defend~~elect ~~them~~to ~~vigorously~~receive operating partnership units and Class B common stock, which permit tax deferral. Participants in the subject LLCs and private entities will not be required to bear any portion of the settlement payment. The payment in settlement of the Class Actions will be made by the Helmsley estate and the Malkin Holdings group (provided that no member of the Malkin Holdings group that would become a direct or indirect subsidiary of the company in the consolidation will have any liability for such payment) and certain participants in the private entities who agree to contribute. The company and the operating partnership will not bear any of the settlement payment.

~~Item~~The settlement further provides for the certification of a class of participants in the three subject LLCs 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 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. ~~Submission~~Members of ~~Matters~~the putative class have the right to aopt out ~~Vote~~of the monetary portion of ~~Participants~~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.

NoTable mattersof were submitted to the Participants during the period covered by this report. Contents

~~PART~~On IIJanuary 18, 2013, the parties jointly moved for preliminary approval of such settlement, for permission to send notice of the settlement to the class, and for the scheduling of a final settlement hearing (collectively, “preliminary approval”).

~~Item~~On 5January 28, 2013, six participants in ESBA filed an objection to preliminary approval, and cross-moved to intervene in the action and for permission to file a separate complaint on behalf of ESBA participants. ~~Market~~On February 21, 2013 the court denied the cross motion of such objecting participants, and the court denied permission for ~~Registrant~~such objecting participants to file a separate complaint as part of the class action, other than permission to join the case by separate counsel solely for the purpose of supporting the allegation of the objecting participants that the buyout will deprive non-consenting participants in ESBA of “fair value” in violation of the New York Limited Liability Company Law. The court rejected the objecting participants’s ~~Common~~assertion ~~Equity~~that preliminary approval be denied and ~~Related~~granted ~~Security~~preliminary ~~Holder~~approval ~~Matters~~of the settlement.

~~Registrant~~The ~~was~~court ~~originally~~has ~~organized~~scheduled as a ~~general~~hearing ~~partnership~~on ~~pursuant to~~ a ~~partnership~~motion ~~agreement~~for ~~dated~~final asapproval of ~~July 11,~~the ~~1961.~~settlement Onfor ~~October~~May 12, ~~2001, Registrant converted from a general partnership to a limited liability company under New York law~~2013.

~~Registrant~~Item ~~has not issued any common stock~~4. ~~The~~Mine ~~securities~~Safety registered by it under the Securities Exchange Act of 1934, as amended, consist of participations in the Members’ interests in Registrant (the “Participations”) and are not shares of common stock or their equivalentDisclosures. The Participations represent each Participant’s fractional share in a Member’s undivided interest in Registrant and are divided approximately equally among the Members. A full unit of the Participations was offered originally at a purchase price of $10,000; fractional units were also offered at proportionate purchase prices. Registrant has not repurchased Participations in the past and is not likely to change that policy in the future.

7Not applicable.

~~(a)~~PART ~~The~~II Participations are neither traded on an established securities market nor are readily tradable on a secondary market or the substantial equivalent thereof. Based on Registrant’s transfer records, Participations are sold by the holders thereof from time to time in privately negotiated transactions and, in many instances, Registrant is not aware of the prices at which such transactions occur. During 2011 there were 157 transfers. In two instances, the indicated purchase price was equal to 1.5 times the face amount of the Participation transferred, i.e., $15,000 for a $10,000 Participation. In ten instances, the indicated purchase price was equal to 1.55 times the face amount of the Participation transferred. In two instances, the indicated purchase price was equal to 2 times the face amount of the Participation transferred. In fourteen instances, the indicated purchase price was equal to 2.25 times the face amount of the Participation transferred. In two instances, the indicated purchase price was equal to 2.45 times the face amount of the Participation transferred. In two instances, the indicated purchase price was equal to 2.5 times the face amount of the Participation transferred. In four instances, the indicated purchase price was equal to 5 times the face amount of the Participation transferred. In all other cases, no consideration was indicated.

~~(b)~~Item As5. ofMarket ~~December 31,~~for ~~2011~~Registrant’s Common Equity, ~~there~~Related ~~were~~Security ~~2,824~~Holder ~~holders of~~Matters ~~Participations~~and Issuer Purchases of ~~record.~~Equity Securities.

~~(c) During the year ended December 31, 2011,~~ Registrant ~~made regular monthly distributions of $98.21 for each $10,000 Participation. There~~ was ~~Additional~~originally ~~Rent~~organized ofas ~~$28,780,449 for the year ended December 31, 2011. After deducting (i) $10,327,424, mainly for fees relating to~~ a ~~proposed~~general ~~consolidation~~partnership ofpursuant Associates, 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, and for the increase in the supervisory fee to ~~Supervisor, accounting fees, set-aside for~~ a ~~portion~~partnership ofagreement ~~interest~~dated ~~expense~~as ~~and general contingencies, (ii) annual New York State filing fees~~ of ~~$3,025, and (iii)~~July ~~the Additional Payment to supervisor of $1,107,000 (representing the Additional Payment of $1,166,417 less $59,417 previously paid) (Item~~ 11), ~~the balance of $17,343,000 was distributed by Registrant to the Participants on March 8, 2012~~1961. ~~There was Additional Rent of $4,111,371 for the year ended December~~On October 311, ~~2010; $2~~2001,~~020,000~~ ~~was~~Registrant ~~set-aside~~converted ~~for annual~~from ~~debt service on the first mortgage (of which $2,000,000 was deposited in~~ a ~~restricted~~general ~~cash~~partnership ~~account used~~ to ~~satisfy~~ a ~~portion~~limited ofliability ~~the~~company first mortgage interest obligation) and the balance of $2,091,371 was added to general contingency and other reserves so that no additional distribution was made to the Participants for the year ended December 31, 2010. There are no restrictions on Registrant’s present or future ability to make distributions; however, the amount of such distributions, particularly distributions of Additional Rent, depends solely on Sublessee’s ability to make payments of Basic Rent and Additional Rent to Registrant. See Item 1 hereof. Registrant expects to make monthly distributions in the future so long as it receives the payments provided under ~~the~~New ~~Sublease.~~York ~~See Item 7 hereof~~law.

8Registrant has not issued any common stock. The securities registered by it under the Securities Exchange Act of 1934, as amended, consist of participations in the Members’ interests in Registrant (the “Participations”) and are not shares of common stock or their equivalent. The Participations represent each Participant’s fractional share in a Member’s undivided interest in Registrant and are divided approximately equally among the Members. A full unit of the Participations was offered originally at a purchase price of $10,000; fractional units were also offered at proportionate purchase prices.

~~Item 6~~(a) The Participations are neither traded on an established securities market nor are readily tradable on a secondary market or the substantial equivalent thereof. Based on Registrant’s transfer records, Participations are sold by the holders thereof from time to time in privately negotiated transactions and, in many instances, Registrant is not aware of the prices at which such transactions occur. During 2012 there were 236 transfers. In one instance, the indicated purchase price was equal to three fifths of the face amount of the Participation transferred. In all other cases, no consideration was indicated.

~~The~~(b) ~~following~~As ~~table presents selected financial data~~ of ~~the Registrant for each of the five years in the period ended~~ December 31, ~~2011.~~2012, ~~This~~there ~~information~~were is2,889 ~~unaudited~~holders ~~and~~of ~~has~~Participations ~~been~~of derived from the audited Consolidated Financial Statements included in this Annual Report on Form 10-K or from audited Consolidated Financial Statements included in Annual Reports on Form 10-K previously filed by the Registrantrecord. ~~This data should be read together with the Consolidated Financial Statements and the notes thereto included in this Annual Report on Form 10-K.~~

	Year ended December 31,
	2011		2010		2009		2008		2007
Basic Rental income	$	8,452,867	$	8,093,278	$	7,809,181	$	6,018,750	$	6,018,750
Additional rent income		28,780,449		4,111,371		7,570,411		3,509,384		17,025,749
Interest and dividend income		7,768		12,142		49,985		216,802		418,234
Total revenue	$	37,241,084	$	12,216,791	$	15,429,577	$	9,744,936	$	23,462,733
Net income	$	21,249,274	$	3,519,049	$	7,369,823	$	4,196,903	$	17,068,579
Earnings per $10,000 participation unit, based on 3,300 participation units outstanding during the year	$	6,439	$	1,066	$	2,233	$	1,272	$	5,172
Total assets	$	189,319,105	$	99,174,822	$	102,796,559	$	64,995,577	$	79,886,241
Long-term obligations	$	159,000,000	$	92,000,000	$	92,000,000	$	60,500,000	$	60,500,000
Distributions per $10,000 participation unit, based on 3,300 participation units outstanding during the year:
Income	$	1,179	$	1,066	$	1,179	$	1,272	$	5,172
Return of capital		—		1,131		—		3,958		596
Total distributions	$	1,179	$	2,197	$	1,179	$	5,230	$	5,768

(c) During the year ended December 31, 2012, Registrant made regular monthly distributions of $98.21 for each $10,000 Participation. There was Overage Rent of $24,199,368 for the year ended December 31, 2012. After deducting (i ) $10,096,343, mainly for fees relating to a proposed consolidation of Registrant, other public and private entities supervised by the Supervisor and the Supervisor and certain affiliated management companies into Empire State Realty Trust, Inc., a newly formed real estate investment trust (collectively, the “Consolidation”) and the initial public offering of Class A common stock of Empire State Realty Trust, Inc. (the “IPO”), and for the increase in the supervisory fee to Supervisor, accounting fees, set-aside for a portion of interest expense and general contingencies, (ii) annual New York State filing fees of $3,025, and (iii) the Additional Payment to supervisor of $846,000 (representing the Additional Payment of $905,417 less $59,417 previously paid) (Item 11), the balance of $13,254,000 was distributed by Registrant to the Participants on March 8, 2013.

9There was Overage Rent of $28,780,449 for the year ended December 31, 2011. After deducting (i ) $10,327,424, mainly for fees relating to a proposed Consolidation and IPO and for the increase in the supervisory fee to Supervisor, accounting fees, set-aside for a portion of interest expense and general contingencies, (ii) annual New York State filing fees of $3,025, and (iii) the Additional Payment to supervisor of $1,107,000 (representing the Additional Payment of $1,166,417 less $59,417 previously paid) (Item 11), the balance of $17,343,000 was distributed by Registrant to the Participants on March 8, 2012. There are no restrictions on Registrant’s present or future ability to make distributions; however, the amount of such distributions, particularly distributions of Overage Rent, depends solely on Sublessee’s ability to make payments of Basic Rent and Overage Rent to Registrant. See Item 1 hereof. Registrant expects to make monthly distributions in the future so long as it receives the payments provided under the Sublease. See Item 7 hereof.

Item 6a.Table of Contents

~~The~~Item ~~following table presents the Registrant’s unaudited operating results for each of the eight fiscal quarters in the period ended December 31, 2011~~6. ~~The~~Selected ~~information for each of these quarters is unaudited and has been prepared on the same basis as the audited Consolidated~~ Financial ~~Statements included in this Annual Report on Form 10-K~~Data. In the opinion of management, all necessary adjustments, which consist only of normal and recurring accruals, have been included to present fairly the unaudited quarterly results. This data should be read together with the Consolidated Financial Statements and the notes thereto of the Registrant included in this Annual Report on Form 10-K.

	Three Months Ended
	March 31,2011			June 30,2011			September 30,2011			December 31,2011
Consolidated Income Data:
Basic Rental income	$	2,016,295		$	2,021,980		$	2,133,978		$	2,280,613
Additional rent income		—			—			—			28,780,449
Interest and dividend income		1,399			3,261			1,973			1,135
Total revenue	$	2,017,694		$	2,025,241		$	2,135,951		$	31,062,197
Interest on mortgages		1,661,651			1,678,262			4,445,328			1,862,974
Supervisory services		196,104			196,104			202,680			1,309,681
Depreciation of building and improvements		314,707			314,708			977,495			1,183,593
Amortization of leasing commissions		—			—			204,389			269,828
Accounting fees		20,750			20,750			61,250			61,000
Professional fees and miscellaneous		69,638			72,836			81,751			786,329
Total expenses	$	2,262,850		$	2,282,660		$	5,972,893		$	5,473,405
Net income (loss)	$	(245,156	)	$	(257,419	)	$	(3,836,942	)	$	25,588,792
Earnings (loss) per $10,000 participation unit, based on 3,300 participation units outstanding during each period	$	(74	)	$	(78	)	$	(1,163	)	$	7,754

The following table presents selected financial data (inclusive of the correction discussed in Item 7) of the Registrant for each of the five years in the period ended December 31, 2012. This information is unaudited and has been derived from the audited Consolidated Financial Statements included in this Annual Report on Form 10-K or from audited Consolidated Financial Statements included in Annual Reports on Form 10-K previously filed by the Registrant. This data should be read together with the Consolidated Financial Statements and the notes thereto included in this Annual Report on Form 10-K.


	Year ended December 31,
	2012		2011		2010		2009		2008
Basic Rental income	$	10,199,995	$	8,452,867	$	8,093,278	$	7,809,181	$	6,018,750
Overage rent income		24,199,368		28,780,449		4,111,371		7,570,411		3,509,384
Interest and dividend income		2,513		7,768		12,142		49,985		216,802

Total revenue	$	34,401,876	$	37,241,084	$	12,216,791	$	15,429,577	$	9,744,936

Net income	$	10,585,390	$	19,643,940	$	3,307,089	$	7,369,823	$	4,196,903

Earnings per $10,000 participation unit, based on 3,300 participation units outstanding during the year	$	3,208	$	5,953	$	1,002	$	2,233	$	1,272

Total assets	$	234,700,119	$	187,501,811	$	98,962,862	$	102,796,559	$	64,995,577

Long-term obligations	$	219,000,000	$	159,000,000	$	92,000,000	$	92,000,000	$	60,500,000

Distributions per $10,000 participation unit, based on 3,300 participation units outstanding during the year:
Income	$	3,208	$	1,179	$	1,002	$	1,179	$	1,272
Return of capital		3,226		—		1,195		—		3,958

Total distributions	$	6,434	$	1,179	$	2,197	$	1,179	$	5,230

Item 6a.

	Three Months Ended
	March 31,2010			June 30,2010			September 30,2010			December 31,2010
Consolidated Income Data:
Basic Rental income	$	2,016,295		$	2,021,980		$	2,027,938		$	2,027,065
Additional rent income		—			—			—			4,111,371
Interest and dividend income		2,420			3,959			3,072			2,691
Total revenue	$	2,018,715		$	2,025,939		$	2,031,010		$	6,141,127
Interest on mortgages		1,661,651			1,678,261			1,694,874			1,694,872
Supervisory services		39,854			39,854			196,104			196,105
Depreciation of building and improvements		314,707			314,708			314,708			314,708
Accounting fees		—			—			—			83,000
Professional fees and miscellaneous		19,778			15,199			97,130			22,229
Total expenses	$	2,035,990		$	2,048,022		$	2,302,816		$	2,310,914
Net income (loss)	$	(17,275	)	$	(22,083	)	$	(271,806	)	$	3,830,213
Earnings (loss) per $10,000 participation unit, based on 3,300 participation units outstanding during each period	$	(5	)	$	(6	)	$	(82	)	$	1,161

The following table presents the Registrant’s unaudited operating results (inclusive of the correction discussed in Item 7) for each of the eight fiscal quarters in the period ended December 31, 2012. The information for each of these quarters is unaudited and has been prepared on the same basis as the audited Consolidated Financial Statements included in this Annual Report on Form 10-K. In the opinion of management, all necessary adjustments, which consist only of normal and recurring accruals, have been included to present fairly the unaudited quarterly results. This data should be read together with the Consolidated Financial Statements and the notes thereto of the Registrant included in this Annual Report on Form 10-K.

11During fiscal year 2012, we determined that certain costs related to the structuring of the formation transaction that were previously included deferred offering costs should have been expensed in the prior periods. As discussed further in item 7, the correction resulted immaterial changes to formation transaction expenses in the unaudited quarterly results.

ItemTable 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.Contents

Forward Looking Statements


	Three Months Ended											Year Ended
	March 31, 2012			June 30, 2012			September 30, 2012			December 31, 2012		December 31, 2012
Consolidated Income Data:
Basic Rental income	$	2,291,479		$	2,522,042		$	2,609,019		$	2,777,455	$	10,199,995
Overage rent income		—			—			—			24,199,368		24,199,368
Interest and dividend income		526			474			817			696		2,513

Total revenue		2,292,005			2,522,516			2,609,836			26,977,519		34,401,876

Interest on mortgages		1,827,679			2,122,282			2,449,396			2,849,911		9,249,268
Supervisory services		202,681			202,681			205,326			1,051,326		1,662,014
Depreciation of building and improvements		1,549,170			1,874,586			2,137,275			1,950,781		7,511,812
Amortization of leasing commissions		268,442			379,325			416,663			389,466		1,453,896
Formation transaction expenses		122,133			208,471			411,834			272,469		1,014,907
Professional fees		221,526			205,949			1,185,809			1,153,259		2,766,543
Miscellaneous		17,347			3,026			14,246			123,427		158,046

Total expenses		4,208,978			4,996,320			6,820,549			7,790,639		23,816,486

Net income (loss)	$	(1,916,973	)	$	(2,473,804	)	$	(4,210,713	)	$	19,186,880	$	10,585,390

Earnings (loss) per $10,000 participation unit, based on 3,300 participation units outstanding during each period	$	(581	)	$	(749	)	$	(1,276	)	$	5,814	$	3,208

~~Readers~~Item of this discussion are advised that the discussion should be read in conjunction with the Consolidated Financial Statements of Registrant (including related notes thereto) appearing elsewhere in this Annual Report on Form 10-K6a. 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.


	Three Months Ended											Year Ended
	March 31, 2011			June 30, 2011			September 30, 2011			December 31, 2011		December 31, 2011
Consolidated Income Data:
Basic Rental income	$	2,016,295		$	2,021,980		$	2,133,978		$	2,280,614	$	8,452,867
Overage rent income		—			—			—			28,780,449		28,780,449
Interest and dividend income		1,399			3,261			1,973			1,135		7,768

Total revenue		2,017,694			2,025,241			2,135,951			31,062,198		37,241,084

Interest on mortgages		1,661,651			1,678,262			4,445,328			1,862,971		9,648,212
Supervisory services		196,104			196,104			202,680			1,309,682		1,904,570
Depreciation of building and improvements		314,707			314,708			977,495			1,183,596		2,790,506
Amortization of leasing commissions		—			—			204,389			269,828		474,217
Formation transaction expenses		68,972			145,163			223,603			1,167,596		1,605,334
Professional fees		87,363			93,586			143,001			841,045		1,164,995
Miscellaneous		3,025			—			—			6,285		9,310

Total expenses		2,331,822		$	2,427,823		$	6,196,496		$	6,641,003	$	17,597,144

Net income (loss)	$	(314,128	)	$	(402,582	)	$	(4,060,545	)	$	24,421,195	$	19,643,940

Earnings (loss) per $10,000 participation unit, based on 3,300 participation units outstanding during each period	$	(95	)	$	(122	)	$	(1,230	)	$	7,400	$	5,953

SIGNIFICANTTable ACCOUNTINGof POLICIES AND ESTIMATES Contents

~~The~~Item ~~Securities and Exchange Commission (“SEC”) issued disclosure guidance for “Critical Accounting Policies~~7.” ~~The SEC defines Critical Accounting guidance for Critical Accounting Policies as those that require the application of management~~Management’s ~~most difficult,~~Discussion ~~subjective,~~and orAnalysis ~~complex judgments, often because~~ of ~~the~~Financial ~~need~~Condition toand ~~make~~Results ~~estimates about the effect~~ of ~~matters that are inherently uncertain and may change in subsequent periods~~Operations.

~~Registrant’s~~Forward ~~discussion~~Looking ~~and analysis of its financial condition and results of operations are based upon Registrant’s Consolidated Financial~~ Statements, the preparation of which takes into account estimates based on judgments and assumptions that affect certain amounts and disclosures. Accordingly, actual results could differ from these estimates. The accounting policies and estimates used and outlined in Note 2 to Registrant’s Consolidated Financial Statements, which are presented elsewhere in this annual report, have been applied consistently at December 31, 2011 and 2010, and for the years ended December 31, 2011 and 2010. Registrant believes that the following accounting policies or estimates require the application of management’s most difficult, subjective, or complex judgments:

~~Valuation~~Readers of ~~Long-Lived~~this ~~Assets:~~discussion ~~Registrant~~are ~~assesses~~advised that the ~~carrying~~discussion ~~amount~~should be read in conjunction with the Consolidated Financial Statements of ~~long-lived~~Registrant ~~assets~~(including ~~whenever~~related ~~events~~notes orthereto) ~~changes~~appearing inelsewhere ~~circumstances~~in ~~indicate~~this ~~that~~Annual ~~their~~Report ~~carrying~~on ~~amount~~Form 10-K. Certain statements in this discussion may ~~not~~constitute be“forward-looking ~~recoverable.~~statements” ~~When~~within ~~Registrant~~the ~~determines~~meaning ~~that~~of the ~~carrying~~Private ~~amount~~Securities Litigation Reform Act of ~~long~~1995. Forward-~~lived~~looking ~~assets~~statements isreflect Registrant’s ~~impaired~~current expectations regarding future results of operations, ~~the~~economic ~~measurement~~performance, financial condition and achievements of ~~any~~Registrant, ~~impairment~~and isdo ~~based~~not onrelate astrictly ~~discounted~~to ~~cash~~historical ~~flow~~or ~~method~~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.

12Although 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.

~~Revenue~~SIGNIFICANT ~~Recognition:~~ACCOUNTING ~~Basic~~POLICIES ~~Rent~~AND isESTIMATES equal to $6,018,750 plus mortgage charges in excess of $60,500,000. Registrant records basic rental income as earned ratably on a monthly basis. Additional Rent, which is based on the Sublessee’s annual net income in each calendar year, as defined in the Sublease, is recognized by Registrant when such amount is realizable and earned.

~~Financial~~The ~~Condition~~Securities and ~~Results~~Exchange Commission (“SEC”) issued disclosure guidance for “Critical Accounting Policies.” The SEC defines Critical Accounting guidance for Critical Accounting Policies as those that require the application of ~~Operations~~management’s most difficult, subjective, or complex judgments, often because of the need to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods.

AtRegistrant’s ~~the~~discussion ~~time~~and analysis of its ~~organization,~~financial ~~Registrant~~condition ~~acquired~~and ~~the~~results ~~Master~~of ~~Lease~~operations ofare ~~the~~based ~~Property~~upon ~~subject~~Registrant’s Consolidated toFinancial Statements, the ~~Sublease.~~preparation ~~Basic~~of ~~Rent~~which ~~received~~takes ~~by Registrant~~into ~~was~~account ~~used~~estimates tobased ~~pay~~on ~~annual~~judgments ~~rent~~and ~~due~~assumptions ~~under~~that ~~the~~affect ~~Master~~certain ~~Lease~~amounts and ~~the~~disclosures. ~~basic~~Accordingly, ~~payment~~actual ~~(“Basic~~results ~~Payment”)~~could ~~for~~differ ~~supervisory~~from ~~services~~these toestimates. ~~Supervisor;~~The ~~the~~accounting policies ~~balance~~and ofestimates ~~such~~used ~~Basic~~and ~~Rent~~outlined ~~was~~in ~~distributed~~Note 2 to ~~the Participants. Basic Rent received by~~ Registrant’s isConsolidated ~~used~~Financial toStatements, ~~pay~~which ~~the~~are ~~Basic~~presented ~~Payment~~elsewhere ~~and~~in athis ~~portion~~annual ofreport ~~debt service~~ on ~~the~~Form ~~Secured~~10-K, ~~Term~~have ~~Loan;~~been ~~the~~applied ~~balance~~consistently ofat ~~such~~December 31, ~~Basic~~2012 ~~Rent~~and is2011, ~~distributed~~and to for the ~~Participants.~~years ~~Commencing~~ended ~~July~~December 2631, ~~2011,~~2012 ~~Basic~~and ~~Rent~~2011. ~~was~~Registrant ~~increased~~believes tothat ~~cover debt service on~~ the ~~refinanced~~following ~~loan~~accounting ~~balance~~policies toor ~~the~~estimates ~~extent~~require the ~~Secured~~application ~~Term~~of ~~Loan~~management’s ~~debt~~most ~~exceeds~~difficult, ~~$60~~subjective,~~500,000~~ ~~which~~or ~~was~~complex ~~the~~judgments: ~~balance of the prior first mortgage fully paid on July 26, 2011.~~

~~Additional~~Valuation ~~Rent~~of ~~and~~Long-Lived ~~any~~Assets: ~~interest~~Registrant ~~and~~assesses ~~dividends~~the ~~accumulated~~carrying ~~thereon~~amount ~~less~~of ~~any~~long-lived ~~expenses~~assets ~~and~~whenever ~~additions~~events toor ~~general~~changes ~~contingencies~~in ~~and~~circumstances indicate ~~other~~that ~~reserves~~their ~~are~~carrying ~~distributed~~amount tomay ~~the~~not ~~Participants~~be ~~after~~recoverable. ~~the~~When ~~Additional Payment~~Registrant todetermines ~~Supervisor.~~that ~~Pursuant to~~ the ~~Sublease,~~carrying ~~Sublessee~~amount ~~has~~of ~~assumed~~long-lived ~~responsibility~~assets ~~for~~is ~~the condition~~impaired, ~~operation,~~the ~~repair,~~measurement ~~maintenance and management~~ of ~~the~~any ~~Property.~~impairment ~~Registrant~~ is ~~not~~based ~~required~~on toa ~~maintain~~discounted ~~liquid~~cash ~~assets~~flow ~~to defray any operating expenses of the Property~~method.

~~The~~Revenue ~~basic~~Recognition: ~~supervisory~~Basic ~~services~~Rent ~~provided~~is equal to ~~Registrant by Supervisor include~~$6, ~~but are not limited to~~018,750 ~~maintaining all of its entity and Participant records~~($5,895,625 ~~performing~~commencing ~~physical inspections of the Building~~January 5, ~~providing~~2013) orplus ~~coordinating~~mortgage ~~certain~~charges ~~counsel~~in ~~services~~excess ~~to Registrant~~of $60, ~~reviewing insurance coverage~~500,000. ~~conducting~~Registrant ~~annual~~records ~~supervisory~~basic ~~review meetings,~~rental ~~receipt~~income ofas ~~monthly~~earned ~~rent~~ratably ~~from~~on ~~Sublessee,~~a ~~payment of~~ monthly ~~and~~basis. ~~additional~~Overage ~~distributions to the Participants~~Rent, ~~payment~~which ofis ~~all~~based ~~other~~on ~~disbursements, confirmation of~~ the ~~payment of real estate taxes, active review of financial statements submitted to Registrant by~~ Sublessee ~~and financial statements audited by and tax information prepared by Registrant~~’s ~~independent~~annual ~~registered~~net ~~public~~income ~~accounting~~in ~~firm,~~each ~~and~~calendar ~~distribution~~year, ofas ~~related~~defined ~~materials~~in to the ~~Participants.~~Sublease, ~~Supervisor~~is ~~also prepares~~recognized ~~quarterly,~~by ~~annual~~Registrant ~~and~~when ~~other~~such amount ~~periodic~~is ~~filings~~earned ~~with~~at the ~~SEC~~close ~~and~~of ~~applicable~~the ~~state~~year ~~authorities~~ending December 31.

~~Registrant~~Financial ~~pays Supervisor~~Condition ~~for~~and ~~other~~Results ~~services~~of atOperations ~~hourly rates.~~

~~Registrant’s~~At ~~results~~the time of ~~operations~~its ~~are~~organization, ~~affected~~Registrant ~~primarily~~acquired bythe Master Lease of the ~~amount~~Property subject to the Sublease. Basic Rent received by ofRegistrant ~~rent~~was ~~payable~~used to itpay annual rent due under the ~~Sublease.~~Master ~~The~~Lease ~~amount~~and the basic payment (“Basic Payment”) for supervisory services to Supervisor; the balance of ~~Additional~~such Basic Rent ~~payable~~was distributed to the Participants. Basic Rent received by Registrant is ~~affected~~used byto pay the ~~New~~Basic ~~York~~Payment ~~City~~and ~~economy~~a ~~and~~portion ~~real~~of ~~estate~~debt ~~rental~~service ~~and~~on ~~tourist~~the ~~attraction~~Secured ~~markets~~Term Loan; the balance of such Basic Rent is distributed to the Participants. Commencing July 26, ~~which~~2011, ~~are~~Basic ~~difficult~~Rent ~~for~~was ~~management~~increased to ~~forecast~~cover debt service on the refinanced loan balance to the extent the Secured Term Loan debt exceeds $60,500,000 ~~and~~which bywas the ~~amount~~ balance of ~~unfinanced~~the ~~improvements~~prior ~~undertaken~~first atmortgage ~~the~~fully ~~Property~~paid on July 26, 2011.

AsOverage ~~compared~~Rent ~~with~~and ~~the~~any ~~prior~~interest ~~year,~~and adividends ~~decrease~~accumulated inthereon ~~Additional~~less ~~Rent earned~~any inexpenses ~~any~~and ~~year~~additions ~~reduces~~to ~~the~~general ~~available~~contingencies ~~amount~~and ofother ~~distributions~~reserves are distributed to the Participants inafter the ~~following~~Additional ~~year~~Payment to ~~and~~Supervisor. Pursuant to the ~~Additional~~Sublease, ~~Payment~~Sublessee tohas ~~Supervisor.~~assumed ~~See~~responsibility ~~Item 2~~for ~~hereof~~the ~~and~~condition, ~~Note~~operation, 4repair, maintenance and management of the ~~Notes~~Property. Registrant is not required to ~~the~~maintain ~~Consolidated~~liquid ~~Financial~~assets ~~Statements~~to defray any operating expenses of the Property.

13The 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 Sublessee, 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 Sublessee 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.

~~The following summarizes the material factors affecting~~ Registrant’s ~~results~~pays ~~of operations~~Supervisor for other ~~the~~services ~~two~~at ~~preceding~~hourly ~~years:~~rates.

(a)Table Total revenues increased for the year ended December 31, 2011 as compared with the year ended December 31, 2010. Such increase was a result of an increase of $359,589 in Basic Rent income to cover an increase in debt service, an increase of $24,669,078 in Additional Rent received by Registrant in 2011 due to the refinancing in 2011 that resulted in improvements and tenanting costs paid out of mortgage proceeds rather than Sublessee’s operating cash flow and a decrease in dividend and interest income earned as compared with the year ended December 31, 2010. See Note 4 of the Notes to the Consolidated Financial Statements.Contents

~~(b)~~Registrant’s ~~Total~~results ~~expenses increased for the year ended December 31, 2011 as compared with the year ended December 31, 2010. Such increase is the net result~~ of anoperations ~~increase~~are ofaffected ~~$1,696,747~~primarily inby the ~~interest~~amount ~~on the mortgages attributable to the inclusion~~ of ~~the~~rent ~~prepayment penalty pertaining~~ payable to ~~the~~it ~~repayment~~under of the ~~prior~~Sublease. ~~first~~The ~~and~~amount ~~second mortgages and the write-off~~ of ~~$568,307~~Overage ofRent ~~unamortized~~payable ~~loan costs in interest expense, an increase in basic supervisory fees~~ to ~~Malkin~~Registrant ~~Holdings~~is ~~effective~~affected ~~July~~by ~~1, 2010 of $325,653 and~~ the ~~Additional~~New ~~Payment~~York toCity ~~Supervisor~~economy ofand ~~$1,107,000~~real asestate arental ~~result of the additional distribution to Participants, an increase of $1,531,674 in depreciation on building improvements~~ and ~~amortization~~tourist ofattraction ~~leasing commissions~~markets, anwhich ~~increase~~are ofdifficult ~~$773,564~~for inmanagement ~~professional fees and miscellaneous expenses and an increase in fees~~ to ~~Malkin Holdings for services rendered in connection with a proposed consolidation of Registrant~~forecast, ~~other public~~ and ~~private entities supervised~~ by ~~Malkin~~the ~~Holdings~~amount ~~and~~of unfinanced ~~Malkin~~improvements ~~Holdings~~undertaken ~~and~~at ~~certain~~the ~~affiliated management companies into Empire State Realty Trust, Inc~~Property., ~~a newly formed REIT.~~

~~Subsequent~~As ~~Events~~compared with the prior year, a decrease in Overage Rent earned in any year reduces the available amount of distributions to the Participants in the following year and the Additional Payment to Supervisor. See Item 2 hereof and Note 4 of the Notes to the Consolidated Financial Statements.

~~Additional~~The ~~rent~~following ofsummarizes ~~$28,780,449~~the ~~was~~material ~~paid~~factors toaffecting Registrant’s onresults ~~March 5, 2012. On March 8, 2012, out~~ of ~~additional~~operations ~~rent,~~for ~~$17,343,000 was distributed to~~ the ~~Participants~~two inpreceding ~~Registrant~~years: ~~and $1,107,000 was paid to Malkin Holdings, representing the balance of its Additional Payment for 2011.~~

~~Sublessee~~(a) ~~concluded~~Total anrevenues ~~agreement~~decreased ~~with New~~by ~~York~~$2,839,208 ~~City~~ for athe ~~reduction~~year inended ~~real~~December ~~estate~~31, ~~taxes~~2012 ~~for~~as compared with the ~~tax~~year ~~years~~ended ~~2002/2003-2011/2012~~December ~~resulting~~31, in2011. ~~gross~~Such ~~tax~~decrease ~~savings~~is ofthe ~~approximately~~net ~~$16,900,000,~~result of ~~which~~1) ~~approximately~~an increase of $121,~~400~~747,~~000~~128 ~~will be~~ in ~~the~~Basic ~~form~~Rent ofincome ato ~~refund~~cover ~~and~~an ~~the~~increase ~~balance~~in ~~through~~debt ~~future tax~~service ~~reductions~~attributable to bean ~~phased~~increase in ~~through~~the ~~2012/2016.~~loan ~~Professional~~balance, ~~fees~~2) ~~total~~a decrease of $14,~~735~~581,~~010,~~081 ~~including~~in ~~$867,505~~Overage Rent received by Registrant for the year 2012 due to ~~Malkin~~the ~~Holdings.~~payment of improvements and tenanting costs out of Sublessee’s isoperating ~~reviewing~~cash ~~the~~flow ~~adjustment~~after touse ~~real~~of ~~estate~~all ~~tax~~currently ~~escalation~~available ~~rent~~mortgage ~~billings~~proceeds, and to ~~existing~~3) ~~tenants~~a ~~resulting~~decrease ~~from~~in dividend and interest income earned of $5,255 as compared with the ~~tax reduction~~year ended December 31, 2011. See Note 4 of the Notes to the Consolidated Financial Statements.

An(b) ~~additional~~Total expenses increased by $306,~~000~~219,~~000~~342 ~~was~~for ~~drawn~~the year ended December 31, 2012 as compared with the year ended December 31, 2011. Such increase is the net result of 1) a net decrease of $398,944 in the interest on the ~~Secured~~mortgages ~~Term~~attributable ~~Loan~~to the inclusion in 2011 of the prepayment penalty pertaining to the repayment of the prior first and second mortgages of $2,343,373 and the write-off of $568,307 of unamortized loan costs in interest expense, offset by an increase in interest expense of $2,512,736 attributable to an increase in the loan balance, 2) a net decrease in supervisory fees to Malkin Holdings of $242,556, consisting of a cost-of-living increase of $18,444 in the basic supervisory fee, offset by a decrease in the Additional Payment of $261,000 attributable to a decrease in the additional distribution to Participants resulting from a reduction in Overage Rent, 3) an increase of $4,721,306 in depreciation on ~~April 6~~building and tenant improvements attributable to improvements placed in service in 2012 and a full year of depreciation on improvements placed in service in 2011, 4) an increase in amortization of leasing costs of $979,679 due to leasing costs incurred in 2012 ~~bringing~~and a full year amortization for costs incurred in 2011, 5) an increase in professional fees of $1,601,548 including (i) an increase in fees to Malkin Holdings and legal and accounting fees for services rendered in connection with the ~~total~~Consolidation ~~amount advanced~~and IPO, and to (ii) an increase in consulting fees for the design and implementation of a new accounting system, 6) a decrease in formation transaction expenses of $~~189~~590,~~000~~427 attributable to a reduction in ancillary legal fees and valuation fees,~~000~~ and 7) an increase in miscellaneous expenses of $148,736, mainly attributable to an increase in filing fees and to officers and directors insurance which commenced in 2012. 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 prior periods. The correction resulted immaterial changes to deferred costs and the formation transaction expenses in the periods incurred.

~~Liquidity~~Subsequent ~~and~~Events ~~Capital Resources~~

~~Registrant’s~~Overage ~~liquidity~~Rent ~~has~~of ~~increased~~$24,199,368 ~~for~~was ~~the~~paid ~~year~~to ~~ended~~Registrant, ~~December 31~~$2,000,000 ~~2011~~on ~~as compared with the year ended December~~January 3111, ~~2010~~ ~~due~~2013 ~~to the Secured Term Loan financing proceeds~~ and an$22,199,368 ~~increased~~on ~~amount of Additional Rent payable by Sublessee for the year ended December~~March 314, ~~2011~~2013. ~~Pursuant~~On toMarch 8, ~~the~~2013, ~~loan~~out ~~described~~of ~~below.~~such ~~Adverse~~Overage ~~developments~~Rent, ~~in economic~~$13,254,000 ~~credit~~was ~~and~~distributed ~~investment~~to ~~markets over~~ the ~~last~~Participants ~~several years impaired general liquidity (although some improvement~~ in ~~such~~Registrant ~~markets has arisen recently)~~ and ~~the~~$846,000 ~~developments~~was ~~may~~paid ~~negatively~~to ~~impact~~Malkin ~~Registrant~~Holdings, ~~and/or~~representing ~~space tenants at~~ the ~~Building.~~balance ~~Any~~of ~~such~~its ~~impact should~~Additional bePayment ~~ameliorated~~for 2012.

14An additional $50,000,000 was drawn on the Secured Term Loan on February 26, 2013 bringing the total amount advanced to $269,000,000.

byLiquidity ~~the fact that (a) each of Registrant~~ and ~~its~~Capital ~~Sublessee~~Resources has very low debt in relation to asset value, (b) the Building’s rental revenue is derived from a substantial number of tenants in diverse businesses with lease termination dates spread over numerous years.

~~On July 26, 2011,~~ Registrant ~~entered~~’s ~~into~~liquidity ahas ~~three-year~~decreased ~~term~~as ~~loan~~of ~~(the~~December 31, ~~“Secured~~2012 ~~Term~~as ~~Loan”)~~compared with ~~institutional lenders~~December 31, ~~including~~2011 ~~HSBC~~primarily ~~Bank~~attributable ~~USA,~~to ~~National~~1) ~~Association~~costs asincurred ~~agent~~in ~~and~~connection ~~HSBC~~with ~~Bank~~the ~~USA,~~Consolidation ~~National Association~~ and ~~DekaBank~~IPO, ~~Deutsche Girozentrale as lead arrangers.~~and ~~The~~2) ~~Secured~~commitments ~~Term~~to ~~Loan~~the isSublessee ~~secured~~for bybuilding aimprovements ~~mortgage~~and ontenanting ~~the Property~~costs. ~~The~~Adverse ~~Secured~~developments ~~Term~~in ~~Loan~~economic, ~~was~~credit ~~amended~~and byinvestment ~~the~~markets ~~First~~over ~~Amendment~~the tolast ~~Loan~~several ~~Agreement,~~years ~~Ratification~~impaired ofgeneral ~~Loan~~liquidity ~~Documents~~(although ~~and~~some ~~Omnibus~~improvement ~~Amendment~~in ~~dated~~such asmarkets ofhas arisen ~~November 2,~~recently) ~~2011~~and tothe ~~provide~~developments ~~for additional~~may ~~commitments~~negatively ~~from~~impact ~~Capital~~Registrant ~~One, National Association~~ and/or ~~Bank~~tenants ofat ~~America,~~the NBuilding.A. soAny ~~that,~~such ~~collectively,~~impact ~~the~~should ~~loan~~be ~~was~~ameliorated ~~increased~~by tothe ~~$300,000,000.~~fact Nothat ~~additional~~(a) each ~~funds~~of ~~were~~Registrant ~~drawn~~and atits ~~the~~Sublessee ~~time~~has ofvery ~~the~~low ~~modification.~~debt ~~The~~in ~~Secured~~relation ~~Term~~to ~~Loan~~asset ~~was amended~~value, onand ~~November~~(b) ~~23,~~the ~~2011~~Building’s ~~clarifying~~rental ~~certain~~revenue ~~terms~~is ~~upon~~derived ~~which~~from ~~the~~a ~~Property~~substantial isnumber ~~permitted~~of totenants bein ~~transferred~~diverse ~~into~~businesses awith ~~consolidated~~lease ~~entity~~termination ~~without~~dates ~~accelerating~~spread ~~the~~over ~~Secured~~numerous ~~Term Loan~~years.

AtTable the closing of the Secured Term Loan, the lenders provided Registrant with an advance of $159,000,000 (of which $92,000,000 refinanced existing indebtedness). Based on the terms of the Secured Term Loan (as amended) and subject to the conditions set forth in the Secured Term Loan (as amended), the lenders agreed to provide Registrant with additional advances of up to $141,000,000. Provided no event of default has occurred, and subject to other conditions, upon Registrant’s request, HSBC has also agreed to source further additional commitments aggregating up to $200,000,000 in the sole discretion of the lenders. Any further advances under the Secured Term Loan are subject to the consent of the Sublessee. Contents

~~Pursuant~~On toJuly 26, ~~the~~2011, ~~terms~~Registrant ofentered into a three-year term loan (the ~~Secured~~ “Secured Term Loan”) ~~agreement~~with institutional lenders, ~~Registrant~~including ~~and~~HSBC ~~Sublessee~~Bank ~~entered~~USA, ~~into~~National anAssociation ~~amendment~~as ~~dated~~agent ~~July 26~~and HSBC Bank USA, ~~2011~~National toAssociation ~~the~~and ~~sublease~~DekaBank ~~(“Third~~Deutsche ~~Modification~~Girozentrale ofas ~~Sublease”)~~lead ~~pursuant~~arrangers. toThe ~~which~~Secured ~~(i) Sublessee~~Term ~~consented~~Loan tois ~~the~~secured ~~advance~~by ofa upmortgage toon ~~$159,000,000~~the ~~under~~Property. ~~the~~The Secured Term Loan ~~and~~was ~~(ii) in~~amended ~~accordance~~by ~~with~~ the ~~terms~~First ofAmendment ~~the~~to ~~existing~~Loan ~~sublease~~Agreement, ~~agreement~~Ratification ~~(which~~of ~~terminates~~Loan onDocuments ~~January 4,~~and ~~2076)~~Omnibus ~~between~~Amendment ~~Sublessee~~dated ~~and~~as ~~Registrant~~of November 2, ~~the~~2011 ~~Basic~~to ~~Rent~~provide ~~payable~~for byadditional ~~Sublessee~~commitments ~~was~~from ~~increased~~Capital byOne, anNational ~~amount~~Association ~~equal~~and toBank ~~the~~of ~~debt~~America, ~~service~~N.A. onso that, collectively, the ~~portion~~maximum amount of the ~~borrowing~~loan ~~from~~was ~~the~~increased to $300,000,000. The Secured Term Loan ~~associated~~was ~~with~~amended ~~improvements~~on ~~(excluding~~November 23, ~~any~~2011 ~~principal~~clarifying ~~payable~~certain terms upon ~~maturity).~~which ~~The~~the ~~original~~Property ~~Basic~~is ~~Rent~~permitted ~~payable~~to bybe transferred ~~Sublessee~~into isa ~~more~~consolidated ~~than~~entity ~~sufficient~~without toaccelerating ~~pay~~ the ~~debt service~~Secured onTerm ~~the~~Loan. ~~portion~~The ofSecured ~~the~~Term ~~borrowing~~Loan ~~associated~~was ~~with~~further ~~purchasing~~amended by the ~~fee~~Third ~~position~~Amendment into ~~2002.~~Loan ~~The~~Agreement, ~~Sublessee~~Ratification ~~and~~of ~~ESB~~Loan ~~Observatory~~Documents ~~LLC,~~and aOmnibus ~~subsidiary~~Amendment dated as of ~~Sublessee~~October 11, 2012 ~~also~~to ~~entered~~provide ~~into~~for ~~subordination~~additional ~~agreements~~commitments ~~with~~from the ~~agent~~lenders onso ~~behalf~~that, collectively, the maximum amount of the ~~lenders pursuant~~loan was increased to ~~which~~$500,000,000. ~~the~~A ~~Sublease~~condition ~~and~~to the ~~lease~~lenders’ ofobligation to loan the ~~observatory~~additional ~~were~~amounts ~~subordinated~~(in addition to the ~~mortgage~~other conditions ~~securing~~in the ~~Secured~~loan ~~Term~~agreement) ~~Loan.~~is Asthat athe ~~result~~loan-to-value ratio (as defied therein), ~~the~~based ~~Sublease~~on ~~and~~an ~~the~~updated ~~observatory~~appraisal, ~~lease~~does ~~can~~not bethen ~~terminated~~exceed in50%. ~~connection~~Upon ~~with~~execution of the amendment, Registrant paid the lenders a ~~foreclosure~~facility byfee ~~Secured~~of ~~Term~~0.75% of such increase ~~Loan~~($1,500,000) ~~lenders~~and an arrangement fee of 0.25% of such increase ($500,000).

~~Subject~~At to the ~~terms~~closing ~~and conditions~~ of the Secured Term Loan ~~agreement~~, the lenders ~~outstanding~~provided ~~principal~~Registrant ~~amount~~with ofan ~~the Secured~~advance ~~Term~~of ~~Loan~~$159,000,000 ~~shall~~(of ~~bear~~which ~~interest~~$92,000,000 atrefinanced aexisting ~~rate equal to 2~~indebtedness).~~5% per~~ ~~annum~~An ~~above~~additional $30~~-day LIBOR~~,000,000 ~~unless~~was ~~such~~drawn ~~rate~~on ~~is not available~~April 5, 2012 (in ~~which~~accordance ~~event~~with the ~~Secured~~Fourth ~~Term~~Modification ~~Loan~~of ~~would~~Sublease ~~bear interest at 2.5%~~dated April ~~per~~5, ~~annum~~2012 inby ~~excess~~and ofbetween ~~(i) HSBC’s prime~~Registrant ~~rate~~and ~~or (ii~~Sublessee) ~~the~~ ~~BBA~~and ~~LIBOR~~an ~~Daily~~additional ~~Floating Rate. In connection with this loan~~$30,000,000 ~~Registrant~~was ~~issued~~drawn ~~promissory~~on ~~notes~~July 9, a2012 ~~mortgage~~(in ~~encumbering~~accordance with the ~~Property~~Fifth inModification ~~favor~~ of ~~the~~Sublease ~~agent~~dated ~~for~~July 9, ~~the~~2012 ~~lenders,~~by and ~~other~~between ~~customary~~Registrant ~~security~~ and ~~other~~Sublessee) ~~loan~~bringing ~~documents.~~the ~~The~~total ~~maturity~~amount ~~date~~advanced ofthrough ~~this~~December 31, ~~loan~~2012 isto ~~July 26~~$219,000,000. ~~2014~~An additional $50,000,000 ~~which~~was ~~Registrant~~drawn ~~may~~on ~~extend~~the toSecured ~~July~~Term Loan on February 26, ~~2015~~2013 ~~and~~bringing ~~thereafter~~the total amount advanced to ~~July 26~~$269, ~~2016~~000,000. inBased ~~each~~on ~~case~~the ~~upon~~terms ~~payment~~ of anthe ~~extension~~Secured Term ~~fee~~Loan of(as ~~0.25%~~amended) ofand subject to the ~~total~~conditions ~~availability~~set ~~under~~forth in the Secured Term Loan ~~agreement~~(as atamended), ~~the~~additional ~~time~~advances of ~~such~~up ~~extension.~~to ~~Such~~$231,000,000 ~~extensions~~were ~~are~~available ~~subject~~under tothe ~~customary~~Secured ~~conditions,~~Term ~~including~~Loan after the ~~satisfaction~~$50,000,000 ofdrawn ~~certain~~on ~~loan-to-value~~February 26, ~~and~~2013. ~~debt~~Any further ~~yield~~advances ~~ratios~~under ~~and~~ the ~~absence~~Secured ofTerm anLoan ~~event~~are subject to the consent of ~~default~~the Sublessee.

15Based on the terms of the Secured Term Loan (as amended) and subject to the conditions set forth in the Secured Term Loan (as amended), the lenders agreed to provide Registrant with additional advances of up to $281,000,000. Any further advances under the Secured Term Loan are subject to the consent of the Sublessee.

~~The~~Pursuant ~~initial~~to ~~advance~~the ~~was~~terms ~~used~~of tothe ~~pay~~Secured Term Loan agreement, Registrant and ~~discharge~~Sublessee entered ~~then~~into ~~existing~~an ~~secured~~amendment ~~mortgage~~dated ~~loans relating~~July 26, 2011 to the ~~Property~~Sublease ~~and~~(“Third Modification of Sublease”) pursuant to ~~fund~~which ~~operations~~(i) Sublessee ~~and~~consented ~~working~~to ~~capital~~the ~~requirements~~advance ~~related~~of up to $159,000,000 under the ~~Property~~Secured Term Loan and (~~including~~ii) in accordance ~~for~~with ~~improvements~~the terms of the existing Sublease agreement (which terminates on January 4, 2076) between Sublessee and Registrant, ~~including~~the ~~reimbursements~~Basic toRent payable by Sublessee ~~for~~was ~~expenditures~~increased ~~relating~~by an amount equal to the debt service on the portion of the borrowing from the Secured Term Loan associated with improvements ~~previously~~(excluding ~~incurred~~any principal payable upon maturity). In connection with additional advances aggregating $60,000,000, Registrant and Sublessee entered into a Fourth Modification of Sublease and a Fifth Modification of Sublease dated as of April 5, 2012 and July 9, 2012, respectively, under which the basic rent payable by Sublessee was further increased by an amount equal to the debt service on the aggregate additional advance of $60,000,000. The original Basic Rent payable by Sublessee is more than sufficient to pay the debt service on the portion of the borrowing associated with purchasing the fee position in 2002. The Sublessee and Empire State Realty Observatory TRS, LLC (formerly known as ESB Observatory LLC), a subsidiary of Sublessee, also entered into subordination agreements with the agent on behalf of the lenders pursuant to which the Sublease and ~~certain~~the ~~other~~lease ~~general~~of ~~entity~~the ~~purposes~~observatory ~~permitted~~were subordinated into the mortgage securing the Secured Term Loan. ~~including~~As ~~costs~~a ofresult, the ~~financing~~Sublease and the observatory lease can be terminated in connection with a foreclosure by Secured Term Loan lenders.

~~Payment obligations~~Subject ~~relating~~ to the terms and conditions of the Secured Term Loan ~~may~~agreement, bethe ~~accelerated~~outstanding ~~upon~~principal amount of the ~~occurrence~~Secured ofTerm anLoan ~~event~~shall bear ofinterest ~~default~~at ~~under~~a rate equal to 2.5% per annum above 30-day LIBOR, unless such rate is not available, in which event the Secured Term Loan ~~agreement~~would bear interest at 2.5% per ~~Events~~annum in excess of ~~default~~(i) HSBC’s ~~under~~prime rate or (ii) the BBA ~~Secured~~LIBOR ~~Term~~Daily ~~Loan~~Floating ~~agreement~~Rate. ~~include,~~The ~~subject~~aggregate rate in ~~some~~accordance ~~cases~~with tothe ~~specified cure~~foregoing ~~periods:~~was ~~payment~~2.7% ~~defaults;~~at ~~failure~~December 31, by2012. ~~Registrant~~In toconnection ~~pay~~with ~~taxes;~~this ~~failure~~loan, toRegistrant ~~keep~~issued ~~certain~~promissory ~~insurance~~notes, ~~policies~~a inmortgage ~~effect;~~encumbering ~~breaches~~the Property in favor of ~~representations~~the agent for the lenders, and ~~covenants~~other ~~contained~~customary insecurity ~~the~~and ~~mortgage;~~other ~~defaults~~loan documents. The maturity date of this loan is July 26, 2014, which Registrant may extend to July 26, 2015 and thereafter to July 26, 2016, in ~~the~~each ~~observance~~case orupon ~~performance~~payment of ~~covenants;~~an ~~inaccuracy~~extension fee of ~~representations~~0.25% ~~and~~of ~~warranties~~the intotal ~~any~~availability ~~material~~under ~~respect;~~the ~~bankruptcy~~Secured ~~and~~Term ~~insolvency~~Loan ~~related~~agreement ~~defaults;~~at ~~and~~ the ~~entry~~time of ~~one~~such orextension. ~~more~~Such ~~final~~extensions ~~judgments~~are ~~for~~subject to customary conditions, including the ~~payment~~satisfaction of ~~more~~certain ~~than~~loan-to-value ~~$1,000,000~~and ~~that~~debt ~~are~~yield ~~not~~ratios ~~satisfied~~and the ~~within~~absence 30of ~~days~~an event of default.

The ~~Secured~~initial ~~Term~~advance ~~Loan~~was ~~agreement~~used ~~contains~~to ~~affirmative~~pay and ~~negative~~discharge ~~covenants~~the ~~customary~~then ~~for~~existing ~~financings~~secured ofmortgage loans ~~this~~relating ~~type.~~to ~~Negative~~the ~~covenants~~Property ~~in the~~and ~~Secured~~to ~~Term~~fund ~~Loan~~operations ~~agreement~~and ~~limit~~working ~~Registrant’s~~capital ~~ability,~~requirements ~~subject~~related to ~~certain~~the ~~exceptions,~~Property to(including ~~transfer~~for ~~all~~improvements), orincluding ~~substantially~~reimbursements ~~all~~to ofSublessee ~~its~~for ~~Property;~~expenditures ~~incur~~relating ~~indebtedness~~to ~~and~~improvements ~~liens;~~previously ~~dissolve~~incurred by Sublessee, ~~liquidate~~and orcertain ~~enter~~other ~~into~~general ~~mergers~~entity orpurposes ~~similar~~permitted ~~transactions; change~~by ~~its~~the ~~line~~Secured ofTerm ~~business;~~Loan ~~cancel~~including ~~debt;~~costs ~~enter~~of ~~into~~the ~~transactions~~financing. ~~with~~Subsequent ~~affiliates;~~advances ~~rezone~~were ~~its~~or ~~property;~~will ~~sell~~be ~~its~~used ~~assets;~~for ~~make~~the ~~certain~~foregoing ~~distributions~~purposes toexcept ~~investors;~~for ~~and~~the ~~change~~discharge ~~its~~of ~~organizational~~existing ~~documents.~~secured ~~The~~mortgage ~~Registrant~~loans which ~~must~~had ~~also~~been ~~maintain~~discharged afrom ~~debt~~proceeds ~~yield as~~of ~~specified in~~ the ~~Secured~~initial ~~Term Loan agreement~~advance.

~~Registrant~~Payment asobligations ~~both~~relating to the ~~fee~~Secured ~~owner~~Term ~~and~~Loan may be accelerated upon the ~~ground~~occurrence ~~lessor~~of an event of default under the ~~Empire~~Secured ~~State Building~~Term ~~are~~Loan ~~mortgagors~~agreement. ~~and~~Events ~~their~~of ~~respective~~default ~~estates~~under ~~are~~the ~~therefore~~Secured ~~mortgaged.~~Term ~~Sublessee~~Loan ~~and~~agreement ~~the~~include, ~~observatory~~subject ~~tenant~~in ~~agreed~~some cases to ~~subordinate~~specified ~~their~~cure ~~respective~~periods: ~~leasehold~~payment ~~interest~~defaults; failure by Registrant to pay taxes; failure to keep certain insurance policies in effect; breaches of representations and covenants contained in the mortgage.; ~~Accordingly,~~defaults in the ~~event~~observance or performance of acovenants; ~~foreclosure,~~inaccuracy ~~their~~of ~~leasehold~~representations and warranties in any ~~estates~~material ~~could~~respect; bebankruptcy ~~terminated~~and insolvency related defaults; and the entry of one or more final judgments for the payment of more than $1,000,000 that are not satisfied within 30 days.

RegistrantTable anticipates that funds for short-term working capital requirements for the Real Estate will be provided by cash on hand, rental payments received from the Sublessee (which entity is required under the Sublease to make payments of Basic Rent and, subject to cash flow, Additional Rent) and from additional advances of up to $141,000,000 available with respect to the July 26, 2011 refinancing and subsequent amendment on November 2, 2011. Long-term sources of working capital will be provided by rental payments from the Sublessee and, to the extent necessary, from additional capital investment by the members in Sublessee and/or additional external financing. Contents

The ~~Supervisor~~Secured ofTerm ~~the Registrant~~Loan ~~has~~agreement ~~filed~~contains aaffirmative ~~registration~~and ~~statement~~negative oncovenants ~~Form~~customary ~~S-4~~ for financings ~~the solicitation~~ of ~~consents~~this oftype. ~~the~~Negative ~~Participants~~covenants in the ~~Registrant~~Secured ~~and~~Term ~~other~~Loan ~~public~~agreement ~~limited~~limit ~~liability~~Registrant’s ~~companies~~ability, ~~supervised~~subject byto ~~the~~certain ~~Supervisor~~exceptions, to atransfer ~~consolidation~~all ~~transaction.~~or Insubstantially ~~such consolidation,~~all ~~(x) the~~of its property; ~~interests~~incur ofindebtedness ~~the~~and ~~Registrant~~liens; dissolve, ~~such~~liquidate ~~other~~or enter ~~public~~into ~~limited~~mergers ~~liability~~or ~~companies~~similar ~~and~~transactions; ~~certain~~change ~~private~~its ~~entities~~line ~~supervised~~of bybusiness; ~~the~~cancel ~~Supervisor,~~debt; ~~and~~enter ~~(y) the~~into ~~Supervisor~~transactions ~~and~~with ~~certain~~affiliates; ~~affiliated~~rezone ~~management~~its ~~companies~~property; ~~would be~~sell ~~contributed~~its toassets; ~~the~~make ~~operating~~certain ~~partnership~~distributions ofto ~~Empire~~investors; ~~State~~and ~~Realty~~change ~~Trust,~~its ~~Inc~~organizational documents., The Registrant must also maintain a ~~newly~~debt ~~organized~~yield ~~real~~as ~~estate~~specified ~~investment~~in ~~trust~~the Secured Term Loan agreement.

~~Consents~~Registrant ~~are~~as ~~required~~both ~~from Participants in~~ the ~~Registrant~~fee owner and ~~such~~the ~~other~~ground ~~public~~lessor ~~limited~~of ~~liability~~the ~~companies~~Empire ~~for~~State ~~them~~Building tois ~~contribute~~mortgagor ~~their interests in the consolidation,~~ and ~~the~~each ~~solicitation~~ of ~~such~~its ~~consents~~estates ~~will~~is ~~not~~therefore ~~commence~~mortgaged. ~~until~~Sublessee ~~the~~and ~~SEC declares effective~~ the ~~registration~~observatory ~~statement~~tenant onagreed ~~Form~~to ~~S-4.~~subordinate ~~Consents~~their ~~have~~respective ~~been~~leasehold ~~obtained~~interest ~~from~~to ~~participants in~~ the ~~private~~mortgage. ~~entities~~Accordingly, ~~and~~in the ~~Supervisor~~ ~~and~~event ~~certain affiliated companies and affiliates~~ of ~~the~~a ~~Supervisor~~foreclosure, ~~for~~their ~~them~~leasehold toestates ~~make~~could ~~such~~be ~~contributions~~terminated.

16Registrant anticipates that funds for short-term working capital requirements for the Real Estate will be provided by cash on hand, rental payments received from the Sublessee (which entity is required under the Sublease to make payments of Basic Rent and, subject to cash flow, Overage Rent) and from additional advances of up to $231,000,000 available under the Secured Term Loan after the $50,000,000 drawn on February 26, 2013. Long-term sources of working capital will be provided by a combination of rental payments from the Sublessee and borrowings.

The ~~consideration~~Supervisor toof bethe ~~paid~~Registrant tois in the ~~contributing~~process ~~companies~~of ~~and~~soliciting ~~entities~~consents of Participants in the ~~consolidation~~Registrant and ~~will~~other bepublic ~~allocated~~limited inliability ~~accordance~~companies ~~with~~supervised ~~exchange~~by ~~values~~the ~~determined~~Supervisor ~~based~~to ona ~~appraisals~~proposed byConsolidation an(as ~~independent~~defined ~~third~~below) ~~party.~~pursuant ~~Such~~to ~~method~~a ofprospectus/consent ~~allocation~~solicitation ~~has~~statement ~~been~~included ~~approved~~in bya ~~the~~registration ~~Sublessee.~~statement ~~Based~~ on ~~the~~Form ~~preliminary~~S-4 ~~exchange~~declared ~~values,~~effective ifby the Securities ~~consolidation~~and ~~proposal is~~Exchange ~~approved~~Commission. byIn the ~~Registrant’s~~proposed ~~Participants,~~transaction (the ~~consideration~~“Consolidation”), ~~with~~(x) the ~~respect~~property tointerests of the ~~Empire~~Registrant, ~~State~~such ~~Building~~other ~~will~~public belimited ~~allocated~~liability ~~approximately~~companies ~~50%~~and tocertain ~~the~~private ~~Registrant~~entities ~~and~~supervised ~~50%~~by to the ~~Sublessee~~ Supervisor, ~~which~~and (y) the Supervisor ~~believes~~and iscertain inaffiliated ~~accordance~~management ~~with~~companies would be contributed to the ~~historical~~ ~~treatment~~operating partnership of ~~the~~Empire ~~Registrant~~State ~~and~~Realty ~~the~~Trust, ~~Sublessee~~Inc., a newly organized real estate investment trust.

~~Inflation~~Consents are required from Participants in the Registrant and such other public limited liability companies for them to contribute their interests in the Consolidation. 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 contributions. 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.

~~Inflationary~~Fair ~~trends~~Value inMeasurements the economy do not directly impact Registrant’s operations. As noted above, Registrant does not actively engage in the operation of the Real Estate. Inflation may impact the operations of the Sublessee. The Sublessee is required to pay the Basic Rent regardless of the results of its operations. Inflation and other operating factors affect the amount of Additional Rent payable by the Sublessee, which is based on the Sublessee’s net operating profit.

~~Other~~Fair ~~Information~~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).

The ~~Sublessee~~Registrant isuses ~~to maintain~~ the ~~Building~~following asmethods aand ~~high-class~~assumptions ~~office~~in ~~building~~estimating asfair ~~required~~value disclosures byfor ~~the~~financial ~~terms of the Sublease~~instruments.

InCash ~~connection~~and ~~with~~cash ~~the~~equivalents, ~~July~~due ~~2011~~from ~~refinancing~~Sublessee, ofa ~~the~~related ~~mortgage~~party, ondue ~~the~~from Supervisor, ~~fee~~a ~~position~~related ofparty, ~~the~~additional ~~Empire~~rent ~~State~~due ~~Building~~from insublessee, ~~the~~a ~~new amount~~related ~~of $159~~party,~~000,000,~~ itother isreceivables, ~~now~~due ~~intended~~from ~~that~~sublessee, ~~the~~a ~~Registrant~~related ~~generally~~party, ~~will~~accrued ~~incur~~mortgage ~~all~~interest, ~~capital~~accrued ~~improvement~~supervisory ~~and~~fees, ~~tenanting~~a ~~costs~~related ~~commencing~~party, ~~with~~due ~~expenditures~~to ~~incurred January 1~~Sublessee, ~~2011 and thereafter. As~~ a ~~result~~related ~~of the refinancing~~party, ~~approximately~~due to ~~$58~~Supervisor,~~000,000~~ ~~was~~a ~~available~~related toparty, ~~Registrant~~and toaccrued ~~fund~~expenses: ~~such~~The ~~costs.~~carrying ~~Registrant~~amount ~~reimbursed~~of ~~approximately~~cash ~~$34,700,000~~and ofcash ~~costs~~equivalents, ~~which~~due from Sublessee, ~~had~~a ~~incurred~~related ~~and~~party, ~~recorded~~due infrom ~~its~~Supervisor, ~~financial~~a ~~statements~~related ~~during~~party, ~~the~~additional ~~first~~rent ~~six~~due ~~months~~from ~~of 2011~~sublessee, ~~consisting~~a ofrelated ~~fixed~~party, ~~asset~~other ~~additions of $24~~receivables,~~900,000~~ ~~and~~due ~~deferred~~from ~~leasing~~sublessee, ~~costs~~a ofrelated $9party,~~800,000.~~ ~~The~~accrued ~~foregoing~~mortgage ~~was~~interest, ~~effected~~accrued insupervisory ~~the~~fees, ~~third~~a ~~quarter~~related ofparty, ~~2011~~due ~~and~~to ~~resulted in~~ Sublessee’s, ~~removal~~a ofrelated ~~such~~party, ~~asset~~due ~~additions~~to ~~and Registrant’s recording of same in its financial statements. During the year ended December 31~~Supervisor, ~~2011,~~a ~~Sublessee~~related ~~advanced on behalf of Registrant approximately $63~~party,~~000,000~~ ~~for improvements~~ and ~~tenanting~~accrued ~~costs~~expenses ~~that~~reported ~~have been capitalized~~ in the Registrant’s Balance ~~financial~~Sheets ~~statements,~~approximate offair ~~which $6,067,803~~value isdue ~~payable~~ to ~~Sublessee~~the atshort ~~December 31,~~term ~~2011.~~maturity ~~Registrant~~of ~~will reimburse the Sublessee for~~ these ~~costs from available loan proceeds~~instruments.

Mortgages payable: The fair value of borrowings, as disclosed in Item 2, 8.is ~~Financial~~estimated ~~Statements~~by ~~and~~discounting ~~Supplementary~~the ~~Data~~future cash flows using current interest rates at which similar borrowings could be made to us.

The ~~Consolidated~~methodologies ~~Financial~~used ~~Statements of the Registrant as of December 31, 2011 and 2010 and~~ for ~~each~~valuing offinancial ~~the~~instruments ~~two~~have ~~years~~been incategorized ~~the~~into ~~period~~three ~~ended~~broad ~~December 31,~~levels ~~2011 and the financial statements of the Sublessee~~ as offollows: ~~and for the year ended December 31, 2011 and 2010 are included in this annual report immediately following Exhibit 101.PRE.~~

~~Item~~Level 9.1—Quoted ~~Changes~~prices in ~~and~~active ~~Disagreements~~markets ~~with~~for ~~Accountants~~identical ~~on Accounting and Financial Disclosure~~instruments.

None.Table of Contents

17Level 2—Valuations based principally on other observable market parameters, including:

~~Item~~• ~~9a.~~Quoted ~~Controls~~prices ~~and~~in ~~Procedures.~~active markets for similar instruments;

~~(a) Evaluation~~• ofQuoted ~~disclosure~~prices ~~controls and procedures. The Supervisor after evaluating the effectiveness of Registrant’s “disclosure controls and procedures” (as defined~~ in ~~the~~less ~~Securities~~active ~~Exchange~~or ~~Act~~inactive ofmarkets ~~1934~~for ~~Rules~~identical ~~13a-15(e)~~or ~~and~~similar 15d-15(e)) as of December 31, 2011, the end of the period covered by this report, has concluded that as of that date that Registrant’s disclosure controls and procedures were effective and designed to ensure that material information relating to Registrant would be made known to him by others within those entities on a timely basis. instruments;

~~(b)~~• ~~Changes~~Other inobservable ~~internal~~inputs ~~controls over~~(such ~~financial~~as ~~reporting.~~risk ~~There~~free ~~were~~interest norates, ~~changes~~yield incurves, ~~Registrant’s~~volatilities, ~~internal~~prepayment ~~controls over financial reporting that occurred during the most recent fiscal quarter that have materially affected~~speeds, orloss ~~are reasonably likely to affect~~severities, ~~the Registrant’s~~credit ~~internal~~risks ~~controls~~and ~~over~~default ~~financial~~rates); ~~reporting.~~ and

~~Management’s~~• ~~Annual~~Market ~~Report~~corroborated oninputs ~~Internal~~(derived ~~Control~~principally ~~Over~~from ~~Financial~~or ~~Reporting~~ corroborated by observable market data).

~~Registrant’s~~Level ~~Supervisor~~3—Valuations isbased ~~responsible~~significantly ~~for~~on ~~establishing~~unobservable ~~and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934)~~inputs.

~~Registrant’s~~• ~~internal~~Valuations ~~control~~based ~~over financial~~on ~~reporting~~third-party isindications a(broker ~~process~~quotes ~~designed~~or tocounterparty provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purpose in accordance with U.S. generally accepted accounting principles. Registrant’s internal control over financial reporting includes those policies and procedures that (1quotes) ~~pertain~~ towhich ~~maintenance of records that~~were, in ~~reasonable detail~~turn, ~~accurately~~based ~~and~~significantly ~~fairly~~on ~~reflect~~unobservable ~~the~~inputs ~~transactions~~or ~~and dispositions~~were ofotherwise ~~Registrant’s~~not ~~assets;~~supportable ~~(2) provide reasonable assurance that transactions are recorded~~ as ~~necessary~~Level to2 ~~permit preparation of financial statements in accordance with U~~valuations.S. generally accepted accounting principles, and that Registrant’s receipts and expenditures are being made only in accordance with authorizations of management and members and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Registrant’s assets that could have a material effect on the financial statements.

~~Because~~• ofValuations its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision of and with the participation of the Supervisor, an assessment was conducted of the effectiveness of Registrant’s internal control over financial reporting based on the framework and criteria established in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment Registrant’s Supervisor has concluded that, as of December 31, 2011, Registrant’s internal ~~control~~models ~~over~~with ~~financial~~significant ~~reporting~~unobservable ~~was effective~~inputs.

18These levels form a hierarchy. The Registrant follows 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.

~~PART~~Fair ~~III~~Value of Financial Instruments

~~Item~~The 10following disclosures of estimated fair value were determined by management, using available market information and appropriate valuation methodologies as discussed in Fair Value Measurements. ~~Members~~Considerable judgment is necessary to interpret market data and ~~Executive~~develop ~~Officers~~estimated fair value. Accordingly, the estimates presented herein are not necessarily indicative of ~~Registrant~~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.

~~Registrant~~The ~~has~~mortgages nopayable ~~members~~had oran ~~officers~~estimated orfair ~~any~~value ~~other~~based ~~centralization~~on ofdiscounted ~~management.~~cash ~~There~~flow models, isbased noon ~~specific~~Level ~~term~~3 inputs, of ~~office~~approximately ~~for~~$219,000,000 ~~any~~compared ~~Agent. The table below sets forth as~~ to ~~each~~the ~~Member~~book asvalue of ~~December 31, 2011~~ the ~~following:~~related ~~name,~~debt ~~age, nature~~ of ~~any family relationship with any other Agent~~$219,000,000 ~~business~~at ~~experience during the past five years and principal occupation and employment during such period~~December 31, ~~including~~2012. ~~the name and principal business of any corporation or any organization in which such occupation and employment was carried on and the date such individual became an Agent:~~

Name

Age

Nature of Family Relationship

Business Experience

Principal Occupation and Employment

Date Individualbecame an Agent

Peter L. Malkin

Father of Anthony E. Malkin

Real Estate Supervision

Chairman, Malkin Holdings LLC

1961

Anthony E. Malkin

Son of Peter L. Malkin

Real Estate Supervision and Management

President, Malkin Holdings LLC and Malkin Properties, L.L.C.

2001

Thomas N. Keltner, Jr.

None

Real Estate Supervision

General Counsel, Malkin Holdings LLC

1998

Disclosure about fair value of financial instruments is based on pertinent information available to us as of December 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.

AsOffering ~~stated~~Costs ~~above, all three Members who are acting as Agents for Participants hold senior positions at Supervisor. See Items 1, 11, 12~~ and 13Formation ~~hereof~~Transaction ~~for~~Expenses a description of the services rendered by, and the compensation paid to, Supervisor and for a discussion of certain relationships which may pose actual or potential conflicts of interest among Registrant, Sublessee and certain of their respective affiliates.

~~The~~In ~~names~~connection ofwith ~~entities~~the ~~which~~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 ~~class~~reduction of ~~securities~~ ~~registered~~proceeds ~~pursuant~~of tothe ~~Section 12~~Consolidation ofand IPO, or expensed if the ~~Securities~~Consolidation ~~Exchange~~and ~~Act~~IPO ofis ~~1934~~not orconsummated. ~~are~~Certain ~~subject~~costs toassociated with the ~~requirements~~Consolidation ofand ~~Section 15(d)~~IPO ofnot ~~that~~directly ~~Act~~attributable ~~and~~to inthe ~~which~~solicitation ~~any~~of ~~Member~~consents isand athe ~~director~~IPO, ~~member~~but orrather ~~general~~related ~~partner~~to structuring the formation transaction, are expensed as ~~follows:~~incurred.

~~Peter~~Through LDecember 31, 2012, the registrant has incurred external offering costs of $12,403,174, of which it has incurred $5,678,501 and $5,898,030 for the years ended December 31, 2012 and 2011, respectively, and are reflected as deferred costs on Registrant’s Consolidated Balance Sheets. ~~Malkin~~A total isof a$1,399,448 ~~member~~and $1,086,740 of these costs are in ~~250~~Due ~~West~~to ~~57th~~Supervisor ~~St.~~at ~~Associates~~December 31, L2012 and December 31, 2011, respectively.~~L.C.~~ Additional offering costs for work done by employees of the Supervisor of $1,082,364 and 60$1,001,245 ~~East~~for the ~~42nd~~years ~~St.~~ended ~~Associates~~December 31, L2012 and 2011, respectively, were incurred and advanced by the Supervisor and have been reimbursed to the Supervisor by the Registrant.~~L.C.~~

~~Anthony~~Correction E.of ~~Malkin~~an isImmaterial aError ~~member~~ in ~~250~~the ~~West~~Financial ~~57th~~Statements ~~St. Associates L.L.C. and 60 East 42nd St. Associates L.L.C.~~

~~Item~~The registrant’s 11prior 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. ~~Executive~~During ~~Compensation~~fiscal year 2012, the Registrant 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 $1,817,294 as of December 31, 2011. Adhering to applicable guidance for accounting changes and error corrections, the Registrant concluded that the error was not material to any of its 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. The Registrant applied the guidance for accounting changes and error corrections and revised our prior period financial statements presented.

As statedTable in Item 10 hereof, Registrant has no members or officers or any other centralization of management. Contents

~~Registrant’s~~The ~~organizational~~following ~~documents~~tables dopresent ~~not~~the ~~provide~~effect ~~for a board of members or officers. As described in~~ this ~~report,~~correction ~~Registrant~~had ~~is a~~on ~~limited~~our ~~liability~~prior ~~company~~period which is supervised by Malkin Holdings. No remuneration was paid during the current fiscal year ended December 31, 2011 by Registrant to any of the Agents as such. Registrant pays Supervisor for supervisory servicesreported ~~and~~financial ~~disbursements~~statements. ~~The basic fee (the “Basic Payment”) had been payable at the rate of $100~~Additionally,~~000~~ ~~per~~financial ~~annum,~~information ~~payable~~included ~~$8,333 per month, since inception~~ in ~~1961. The Basic Payment was increased, with~~ the ~~approval~~notes ~~of the Agents, by an amount equal~~ to the ~~increase~~financial instatements ~~the~~or ~~Consumer~~elsewhere ~~Price Index since such date, resulting~~ in anthis ~~increase~~Form in10-K ~~the~~that ~~Basic Payment to $725,000 per annum effective July 1, 2010 to be adjusted annually for any subsequent increase in the Consumer Price Index. The Basic Payment~~ is ~~payable~~impacted ~~(i) not~~by ~~less than $8,333 per month and (ii)~~ the ~~balance~~adjustment ~~out~~have ofbeen ~~available reserves from Additional Rent. If Additional Rent is insufficient to pay such balance~~revised, ~~any~~as ~~deficiency shall be payable in the next year in which Additional Rent is sufficient~~applicable. 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.


	As of December 31, 2011
	As reported			Adjustment			As adjusted
Deferred costs, net	$	8,541,967		$	(1,817,294	)	$	6,724,673
Members’ equity		21,265,168			(1,817,294	)		19,447,874

	For the year ended December 31, 2011
	As reported			Adjustment			As adjusted
Formation transaction expenses		—		$	1,605,334		$	1,605,334
Net income		21,249,274			(1,605,334	)		19,643,940
Net cash used in operating activities		(14,182,209	)		(1,605,334	)		(15,787,543	)
Net cash provided by financing activities		48,301,848			1,605,334			49,907,182
Net change in cash and cash equivalents		(2,082,112	)		—			(2,082,112	)

InInflation 2011, Supervisor earned $1,001,245 from Registrant and $983,027 from Sublessee for special supervisory services at hourly rates 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, all representing Registrant’s and Sublessee’s allocable portion of such fees to be paid directly and not borne indirectly through Additional Rent deductions. Supervisor also receives an additional payment equal to 6% of distributions to the Participants in Registrant in excess of 9% per annum on their remaining cash investment in Registrant (which remaining cash investment at December 31, 2011 was equal to the Participants original cash investment of $33,000,000). Distributions in respect of Malkin Holdings’ profit interest for 2011 were $1,166,417. For tax purposes, any 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. See Item 7 hereof. As noted in Items 1 and 10 of this report, all of the Agents hold senior positions at Supervisor.

~~Malkin~~Inflationary ~~Holdings~~trends ~~also~~in ~~serves~~the aseconomy ~~supervisor~~do ~~for~~not ~~Sublessee,~~directly ~~for~~impact ~~which~~Registrant’s itoperations. ~~receives~~As anoted ~~basic annual fee of $574~~above,~~000 effective~~ ~~January 1,~~Registrant ~~2010,~~does ~~adjusted~~not ~~annually~~actively byengage in the ~~Consumer~~operation ~~Price~~of ~~Index. The basic supervisory fee for~~ the ~~year~~Real ~~ended December 31, 2011 was $583,368~~Estate. ~~Malkin~~Inflation ~~Holdings~~may ~~received~~impact ~~$1,667,955 from Sublessee in other service fees. For 2010~~the ~~Malkin~~operations ~~Holdings~~of ~~received~~the ~~$271,332 in other service fees from~~ Sublessee. ~~Under~~The ~~separate agreements to which~~ Sublessee is ~~not~~required ato ~~party, certain of Sublessee’s participants~~ pay ~~Malkin~~the ~~Holdings~~Basic ~~and~~Rent ~~members~~regardless of ~~Peter~~the L.results ~~Malkin’s immediate family a percentage~~ of ~~distributions~~its ~~above an annual threshold~~operations. ~~These~~Inflation ~~third party payments (which totaled $1,796,393~~ and ~~$68,880~~other inoperating ~~2011~~factors ~~and~~affect ~~2010,~~the ~~respectively,~~amount toof ~~Malkin~~Overage ~~Holdings~~Rent ~~and~~payable ~~such~~by ~~Malkin~~the ~~family~~Sublessee, ~~members)~~which dois ~~not~~based ~~impose~~on ~~any obligation upon Sublessee~~the orSublessee’s ~~affect~~net ~~its~~operating ~~assets and liabilities~~profit.

~~Item~~Other ~~12.~~Information ~~Security Ownership of Certain Beneficial Owners and Management.~~

~~(a)~~Sublessee ~~Registrant~~is ~~has~~to nomaintain ~~voting~~the ~~securities~~Building ~~(Item~~as ~~5).~~a Athigh-class ~~December 31,~~office ~~2011,~~building noas ~~person~~required ~~owned of record or was known~~ by ~~Registrant~~the toterms ~~own beneficially more than 5%~~ of the ~~outstanding Participations~~Sublease.

~~(b)~~In Atconnection ~~December~~with the July 2011 refinancing of the mortgage on the fee position of the Empire State Building with the Secured Term Loan, it is now intended that the Registrant generally to the extent of available financing will incur all capital improvement and tenanting costs commencing with expenditures incurred January 311, 2011 and thereafter. Registrant has incurred fixed asset additions of $39,396,741 ~~the~~and ~~Members~~leasing ~~(Item~~costs ~~10)~~of ~~beneficially~~$5,554,926 ~~owned~~during 2012 and reimbursed Sublessee $59,999,597, ~~directly~~resulting orin ~~indirectly~~a payable to Sublessee of $3,146,689 ~~the~~(including ~~following Participations:~~unpaid building improvements and leasing costs) at December 31, 2012.

Title of Class	Name & Address of Beneficial Owners	Amount of BeneficialOwnership		Percent of Class
Participations in Member Interest	Anthony E. Malkin One Grand Central Place 60 East 42nd Street New York, N.Y. 10165	$	23,333		.07071	%
	Thomas N. Keltner, Jr. One Grand Central Place 60 East 42nd Street New York, N.Y. 10165	$	17,709		.05366	%

Since the Supervisor gained day-to-day management of the Empire State Building in August 2006, a total of approximately $168,200,000 has been invested through December 31, 2012 in connection with the restoration and renovation program at the Property. The Registrant currently estimates that between $155,000,000 and $195,000,000 of additional capital is needed to complete this renovation program, which the Registrant expects to complete substantially in 2016. These estimates are based on the Supervisor’s current budgets (which do not include tenant improvement and leasing commission costs) and are subject to change. The Registrant’s renovation program at the Property has taken substantial time to design and implement due to many factors, including the overall scale of the program, the market timing of re-leasing upgraded spaces to existing and prospective tenants, the Registrant’s desire to minimize existing tenant disruptions, and the need to obtain consents of investors to complete financings.

20Item 8. Financial Statements and Supplementary Data.

AtThe ~~such~~Consolidated ~~date~~Financial Statements of the Registrant as of December 31, ~~certain~~2012 and 2011 and for each of the ~~Members~~two ~~(or~~years ~~their~~in ~~respective~~the ~~spouses)~~period ~~held~~ended ~~additional~~December 31, 2012 and the financial statements of the ~~Participations~~Sublessee as ~~follows:~~of and for the year ended December 31, 2012 and 2011 are included in this annual report immediately following Exhibit 101.PRE.

PeterTable L. Malkin owned of record as trustee or co-trustee but not beneficially, $211,667 of Participations. Mr. Malkin disclaims any beneficial ownership of such Participations. Contents

~~Entities~~Item ~~for~~9 ~~the~~Changes ~~benefit~~in ~~of members of Peter L. Malkin’s family owned of record~~ and ~~beneficially~~Disagreements ~~$1,064,583~~with ofAccountants ~~Participations.~~on ~~Peter~~Accounting ~~L. Malkin disclaims any beneficial ownership of such Participations, except that related family trusts~~ and ~~entities~~Financial ~~are required to complete scheduled payments to Peter L~~Disclosure. ~~Malkin.~~

~~Anthony E~~None. ~~Malkin owned of record as trustee or co-trustee but not beneficially, $370,417 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.~~

~~Trusts~~Item ~~for the benefit of members of Anthony E~~9a. ~~Malkin’s~~Controls ~~family owned of record~~ and ~~beneficially $50,000 of Participations~~Procedures. ~~Anthony E. Malkin disclaims any beneficial ownership of such Participations.~~

~~Members~~(a) Evaluation of ~~Thomas~~disclosure N.controls ~~Keltner,~~and Jrprocedures. The Supervisor after evaluating the effectiveness of Registrant’s ~~family~~“disclosure ~~owned~~controls and procedures” (as defined in the Securities Exchange Act of ~~record~~1934 Rules 13a-15(e) and ~~beneficially~~15d-15(e)) as $6of December 31,~~667~~ 2012, the end of ~~Participations~~the period covered by this report, has concluded that as of that date that Registrant’s disclosure controls and procedures were effective and designed to ensure that material information relating to Registrant would be made known to him by others within those entities on a timely basis.

(cb) ~~Not~~Changes ~~applicable~~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 affect, the Registrant’s internal controls over financial reporting.

~~Item~~Management’s ~~13.~~Annual ~~Certain~~Report ~~Relationships~~on ~~and~~Internal ~~Related~~Control ~~Transactions.~~Over Financial Reporting

~~(a) As stated in Item 1 hereof, Peter L. Malkin, Anthony E. Malkin and Thomas N. Keltner, Jr. are the three Members in~~ Registrant’s ~~and~~Supervisor ~~also~~is ~~act~~responsible ~~as agents~~ for ~~the~~establishing ~~Participants in their respective member interests. Peter L. Malkin is also a member in Sublessee. As a consequence of one of the three Members being a member in Sublessee,~~ and ~~all~~maintaining ofadequate ~~the~~internal ~~Members~~control ~~holding~~over ~~senior positions at Supervisor (which supervises Registrant and Sublessee),~~financial ~~certain~~reporting actual and potential conflicts of interest may arise with respect to the management and administration of the business of Registrant. However, under the respective participating agreements pursuant to which the Members act (as ~~agents~~defined ~~for the Participants, certain transactions require the prior consent from Participants owning a specified interest under the agreement~~ in ~~order~~Rule ~~for~~13a-15(f) ~~the Agents to act on their behalf. Such transactions, among others, include modifications and extensions~~ of ~~the~~ ~~Sublease or mortgages, or a sale or other disposition of~~ the ~~Property~~Securities orExchange ~~substantially~~Act ~~all~~ of ~~Registrant’s assets~~1934).

~~Reference~~Registrant’s isinternal ~~made~~control toover financial ~~Items~~reporting 1is ~~and~~a 2process ~~hereof~~designed ~~for~~to aprovide ~~description~~reasonable ofassurance regarding the ~~terms~~reliability of ~~the~~financial ~~Sublease~~reporting ~~between Registrant~~ and ~~Sublessee.~~the ~~The~~preparation ~~respective interests~~ of ~~the~~financial ~~Members~~statements infor ~~Registrant~~external ~~and~~purpose in ~~Sublessee~~accordance ~~arise~~with ~~solely~~U.S. ~~from~~generally ~~ownership~~accepted ofaccounting principles. ~~their~~Registrant’s ~~respective~~internal ~~Participations~~control inover ~~Registrant~~financial ~~and,~~reporting inincludes ~~the~~those ~~case~~policies ofand ~~Peter~~procedures L.that ~~Malkin,~~(1) pertain ~~his~~to ~~family~~maintenance ~~entities’ ownership~~ of ~~member~~records ~~interests~~that, in ~~Sublessee.~~reasonable ~~The Members~~detail, asaccurately ~~such~~and ~~receive~~fairly noreflect ~~extra~~the ortransactions ~~special~~and dispositions ~~benefit~~of ~~not~~Registrant’s ~~shared~~assets; on(2) provide areasonable ~~pro~~assurance ~~rata~~that ~~basis~~transactions ~~with~~are ~~all~~recorded ~~other~~as ~~Participants~~necessary into ~~Registrant~~permit orpreparation ~~members in Sublessee. However, all~~ of ~~the~~financial ~~Members~~statements ~~hold~~in ~~senior~~accordance ~~positions~~with atU.S. ~~Supervisor~~generally ~~(which~~accepted ~~supervises~~accounting ~~Registrant~~principles, and that ~~Sublessee)~~Registrant’s receipts and, byexpenditures ~~reason~~are ofbeing ~~their~~made ~~position~~only atin ~~Supervisor,~~accordance ~~may~~with ~~receive~~authorizations ~~income~~of ~~attributable~~management toand ~~supervisory~~members orand ~~other~~(3) provide ~~remuneration~~reasonable ~~paid~~assurance byregarding ~~Registrant~~prevention toor ~~Supervisor~~timely ~~and~~detection ~~Sublessee.~~of ~~See~~unauthorized ~~Item 11~~acquisition, ~~hereof~~use, ~~for~~or disposition ~~a description~~ of ~~the~~Registrant’s ~~remuneration arrangements~~assets ~~between~~that ~~Registrant~~could ~~and~~have ~~Supervisor~~a ~~relating~~material toeffect ~~supervisory~~on ~~services~~the ~~provided~~financial ~~by Supervisor~~statements.

21Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the supervision of and with the participation of the Supervisor, an assessment was conducted of the effectiveness of Registrant’s internal control over financial reporting based on the framework and criteria established in Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment Registrant’s Supervisor has concluded that, as of December 31, 2012, Registrant’s internal control over financial reporting was effective.

ReferenceTable is also made to Items 1 and 10 hereof for a description of the relationship between Registrant and Supervisor, of which all of the Agents are among the Members. The respective interest of the Members in any remuneration paid by Registrant to Supervisor arise solely from such member’s interest in Supervisor. Contents

~~(b)~~PART ~~Reference~~III ~~is made to Paragraph (a) above.~~

~~(c)~~Item ~~Not applicable~~10. Members and Executive Officers of Registrant

~~(d)~~Registrant ~~Not~~has ~~applicable~~no members or officers or any other centralization of management. There is no specific term of office for any Agent. The table below sets forth as to each Member as of December 31, 2012 the following: name, age, nature of any family relationship with any other Agent, business experience during the past five years and principal occupation and employment during such period, including the name and principal business of any corporation or any organization in which such occupation and employment was carried on and the date such individual became an Agent:

Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Name

Age

Nature of

Family Relationship

Business

Experience

Principal Occupation and

Employment

Date Individual

became an Agent

Peter L. Malkin

Father of Anthony E. Malkin

Real Estate Supervision

Chairman, Malkin Holdings LLC

1961

Anthony E. Malkin

Son of Peter L. Malkin

Real Estate Supervision

and Management

President, Malkin Holdings LLC

and Malkin Properties, L.L.C.

2001

Thomas N. Keltner, Jr.

None

Real Estate Supervision

General Counsel, Malkin

Holdings LLC

1998

~~The~~As ~~fees~~stated ~~paid~~above, orall ~~accrued~~three toMembers ~~Ernst &~~who ~~Young~~are ~~LLP~~acting ~~and~~as ~~Margolin~~Agents for Participants hold senior positions at Supervisor. See Items 1, ~~Winer &~~11, ~~Evens~~12 ~~LLP~~and 13 hereof for ~~professional~~a description of the services ~~for~~rendered by, and the ~~years~~compensation ~~ended~~paid ~~December 31~~to, ~~2011~~Supervisor and ~~2010,~~for ~~respectively,~~a ~~were~~discussion asof certain relationships which may pose actual or potential conflicts of interest among ~~follows:~~Registrant, Sublessee and certain of their respective affiliates.

Fee Category	2011		2010
Audit Fees	$	156,250	$	83,000
Tax Fees		7,500		7,500
Total Fees	$	163,750	$	90,500

The names of entities which have a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934 or are subject to the requirements of Section 15(d) of that Act and in which any Member is a director, member or general partner are as follows:

~~Audit~~Peter ~~Fees~~L. ~~Consist~~Malkin ofis ~~fees~~a ~~billed~~member ~~for professional services rendered for the audit of Registrant’s Consolidated Financial Statements and review of the interim financial statements included~~ in ~~quarterly~~250 ~~10-Q~~West ~~reports~~57th St. ~~The~~Associates ~~Agents approved payment by Registrant, effective July 1, 2010, of accounting and tax fees~~L.L.C. ~~Such expenses were previously paid by Supervisor~~ and, ~~therefore,~~60 ~~were~~East ~~not~~42nd ~~reflected~~St. asAssociates ~~an expense in Registrant’s financial statements~~L.L.C.

~~Tax~~Anthony ~~Fees~~E. ~~Consists~~ ofMalkin ~~fees~~is ~~billed~~a ~~for~~member ~~professional~~in ~~services~~250 ~~for~~West ~~tax~~57th ~~compliance,~~St. ~~tax~~Associates ~~advice~~L.L.C. and ~~preparation~~60 ofEast ~~tax~~42nd ~~returns~~St. Associates L.L.C.

~~POLICY~~Item ~~ON AUDIT~~11. ~~COMMITTEE~~Executive ~~PRE-APPROVAL OF AUDIT SERVICES~~ Compensation.

~~AND~~As stated ~~PERMISSIBLE~~in ~~NON-AUDIT~~Item 10 ~~SERVICES~~hereof, OFRegistrant ~~INDEPENDENT~~has ~~AUDITORS~~no members or officers or any other centralization of management.

Registrant ~~has no audit committee as such. Registrant~~’s ~~policy~~organizational isdocuments todo ~~pre-approve~~not ~~all~~provide ~~audit~~for ~~and~~a ~~permissible~~board ~~non-audit~~of ~~services performed~~members byor ~~the independent public accountants~~officers. ~~These~~No ~~services~~remuneration ~~may~~was ~~include~~paid ~~audit~~during ~~services, audit related services, tax services and other services. For audit and tax services,~~ the ~~independent auditor provides an engagement letter in advance of the~~year ~~services~~ended ~~outlining~~December 31, ~~the~~2012 ~~scope of the audit and related audit fees. If agreed~~ by Registrant, ~~this~~to ~~engagement~~any ~~letter~~of isthe ~~formally~~Members ~~accepted~~as ~~by the Supervisor~~such.

~~For~~As ~~all~~described ~~services,~~in this annual report on Form 10-K, Registrant’s ~~supervisory~~is ~~management~~a ~~staff~~limited ~~submits~~liability ~~from~~company ~~time~~which tois ~~time~~supervised by Malkin Holdings. No remuneration was paid during the current fiscal year ended December 31, 2012 by Registrant to any of the Agents ofas such. Registrant ~~for~~pays ~~approval~~Supervisor for supervisory services ~~that~~and itdisbursements. ~~recommends~~The basic fee (the ~~Registrant~~“Basic ~~engage~~Payment”) had been payable at the ~~independent auditor~~rate toof ~~provide~~$100,000 per annum, payable $8,333 per month, since inception in 1961. InThe ~~addition~~Basic Payment was increased, with the ~~Agents~~approval of ~~Registrant~~the Agents, ~~pre-approve~~by ~~specific~~an ~~non-audit~~amount ~~services~~equal ~~that~~to the ~~independent~~increase ~~auditor~~in isthe ~~authorized~~Consumer toPrice ~~provide.~~Index ~~All~~since ~~fee~~such ~~proposals~~date, ~~for~~resulting ~~those~~in ~~non-audit~~an ~~services~~increase ~~must~~in the Basic Payment to $725,000 per annum effective July 1, 2010 to be ~~pre-approved~~adjusted inannually ~~writing~~for byany asubsequent ~~senior~~increase in the ~~executive~~Consumer Price Index. The Basic Payment was adjusted to $761,888 effective July 1, 2012. The Basic Payment is payable (i) not less than $8,333 per month and (ii) the balance out of available reserves from Additional Rent. If Additional Rent is insufficient to pay such balance, any deficiency shall be payable in the ~~Supervisor~~next year in which Additional Rent is sufficient. The Agents ofalso approved payment by Registrant, ~~are~~effective ~~informed~~July 1, ~~routinely~~2010, byof the ~~independent~~expenses ~~auditor~~in ~~pursuant~~connection with regular accounting services related to ~~this~~maintenance ~~pre-approved~~of ~~process~~Registrant’s books and records. Such expenses were previously paid by Supervisor.

22Accrued supervisory fees to the Supervisor were $846,000 and $1,107,000 at December 31, 2012 and 2011, respectively. Due to Supervisor, a related party, was $2,193,548 and $1,306,131 at December 31, 2012 and 2011, respectively.

In 2012, Supervisor earned $1,082,364 from Registrant and $1,064,025 from Sublessee, which are included in professional fees, for special supervisory services at hourly rates in connection with the Consolidation and IPO, all representing Registrant’s and Sublessee’s allocable portion of such fees to be paid directly and not borne indirectly through Overage Rent deductions. Supervisor also receives an additional payment equal to 6% of distributions to the Participants in Registrant in excess of 9% per annum on their remaining cash investment in Registrant (which remaining cash investment at December 31, 2012 was equal to the Participants’ original cash investment of $33,000,000). Distributions in respect of Malkin Holdings’ profit interest for 2012 were $905,417. For tax purposes, any 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. See Item 7 15hereof. ~~Exhibits~~As noted in Items 1 and ~~Financial~~10 ~~Statement~~of ~~Schedules~~this report, all of the Agents hold senior positions at Supervisor.

(a)(1)Table Financialof StatementsContents

Malkin Holdings also serves as supervisor for Sublessee, for which it receives a basic annual fee of $574,000 effective January 1, 2010, adjusted annually by the Consumer Price Index. The basic supervisory fee for the years ended December 31, 2012 and 2011 was $591,567 and $583,368, respectively. For the years ended December 31, 2012 and 2011, Malkin Holdings received $1,452,257 and $1,667,955, respectively, in other service fees from Sublessee. Under separate agreements to which Sublessee is not a party, certain of Sublessee’s participants pay Malkin Holdings and members of Peter L. Malkin’s immediate family a percentage of distributions above an annual threshold. These third party payments (2which totaled $821,222 and $1,796,393 in 2012 and 2011, respectively, to Malkin Holdings and such Malkin family members) ~~Financial~~do ~~Statement~~not ~~Schedules~~impose any obligation upon Sublessee or affect its assets and liabilities.

~~The~~Included ~~Consolidated~~in professional ~~Financial~~fees ~~Statements~~are ~~and~~amounts ~~the~~for ~~financial~~services ~~statement~~provided ~~schedule~~by ofSupervisor, ~~the~~a ~~Registrant~~related ~~and~~party, ~~the financial statements~~ of ~~the~~$1,082,364 ~~Sublessee required~~and in$1,001,245 ~~this~~for ~~annual report are listed in~~ the ~~respective~~years ~~indexes~~ended toDecember 31, ~~those~~2012 ~~financial statements~~ and ~~included~~2011, ~~immediately following Exhibit 101~~respectively.~~PRE.~~

~~(3)~~Distributions ~~Exhibits:~~are ~~See~~paid ~~Exhibit~~from ~~Index~~a cash account held by Supervisor. That account is included in the Condensed Consolidated Balance Sheets as “Due from Supervisor.” The funds of $324,111 at December 31, 2012 and 2011 were paid to Participants on January 1, 2013 and January 1, 2012, respectively.

23The 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.

~~EXHIBIT~~Item ~~INDEX~~12. Security Ownership of Certain Beneficial Owners and Management.

Number		Document
3.1		Registrant’s Partnership Agreement dated July 11, 1961, filed as Exhibit No. 1 to Registrant’s Registration Statement on Form S-1 as amended (the “Registration Statement”) by letter dated August 8, 1962 and assigned File No. 2-18741, is incorporated by reference as an exhibit hereto.
3.2		Amended Business Certificate of Registrant filed with the Clerk of New York County on August 7, 1998 reflecting a change in the Partners of Registrant which was filed as Exhibit 3(b) to Registrant’s 10-Q-A for the quarter ended September 30, 1998 and is incorporated by reference as an exhibit hereto (file number 000-00827).
3.3		Registrant’s Consent and Operating Agreement dated as of September 30, 2001 incorporated by reference to Exhibit 3(c) to Registrant’s Form 10-K for the year ended December 31, 2002 (file number 000-00827).
3.4		Certificate of Conversion of Registrant to a limited liability company dated October 1, 2001 filed with the New York Secretary of State on October 3, 2001 incorporated by reference to Exhibit 3 (d) to Registrant’s Form 10-K for the year ended December 31, 2002 (file number 000-00827).
3.5		Agreement among Members of Empire State Building Associates, L.L.C., dated July 1, 2010, filed as Exhibit 10 (f) to the Registrant’s Form 10-K for the fiscal year ended December 31, 2009 is incorporated by reference as an exhibit hereto.
3.6		Amendment Number One to the Limited Liability Company Agreement of Empire State Building Associates L.L.C., dated as of November 30, 2011, by and among Peter L. Malkin, Anthony E. Malkin and Thomas N. Keltner, Jr. incorporated by reference to Exhibit 3.1 to the Form 8-K filed on December 5, 2011.
4		Registrant’s form of Participating Agreement, filed as Exhibit No. 6 to the Registration Statement by letter dated August 8, 1962 and assigned File No. 2-18741, is incorporated by reference as an exhibit hereto.
10.1		Sublease dated December 27, 1961, between Empire State Building Company and Registrant.
10.2		First Modification of Sublease Agreement dated February 15, 1965, between Empire State Building Company L.L.C. and Registrant.
10.3		Second Modification of Sublease Agreement dated February 25, 2009, between Empire State Building Company L.L.C. and Registrant.
10.4		Third Modification of Sublease Agreement dated July 26, 2011, between Empire State Building Company L.L.C. and Registrant, filed as Exhibit 10.1 to Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 and is incorporated by reference as an exhibit hereto.

(a) Registrant has no voting securities (Item 5). At December 31, 2012, no person owned of record or was known by Registrant to own beneficially more than 5% of the outstanding Participations.

24(b) At December 31, 2012, the Members (Item 10) beneficially owned, directly or indirectly, the following Participations:

EXHIBIT INDEX


Title of Class	Name & Address of Beneficial Owners	Amount of Beneficial Ownership		Percent of Class
Participations in Member Interest	Anthony E. Malkin One Grand Central Place 60 East 42^nd Street New York, N.Y. 10165	$	23,333		0.07071	%
	Thomas N. Keltner, Jr. One Grand Central Place 60 East 42^nd Street New York, N.Y. 10165	$	17,709		0.05366	%

At such date, certain of the Members (~~continued~~or their respective spouses) held additional Participations as follows:

Number		Document
10.5		Loan Agreement and Exhibits thereto, dated July 26, 2011, between the Registrant, Empire Land Associates L.L.C. and HSBC Bank, USA, National Association, as Agent and the lender named therein and HSBC USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.2 to Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 and is incorporated by reference as an exhibit hereto.
10.6		First Amendment of the Loan Agreement, dated November 2, 2011, between the Registrant, Empire Land Associates L.L.C. and HSBC Bank, USA, National Association, as Agent and the lender named therein and HSBC USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.3 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.
10.7		Second Amendment of the Loan Agreement, dated November 23, 2011, between the Registrant, Empire Land Associates L.L.C. and HSBC Bank, USA, National Association, as Agent and the lender named therein and HSBC USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.4 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.
10.8		Form of Replacement Promissory Note dated July 26, 2011 between Registrant and Empire State Land Associates L.L.C. and lenders under the Loan Agreement, filed as Exhibit 10.5 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.
10.9		Consolidated, Amended and Restated Fee and Leasehold Mortgage, Assignment of Leases and Rents and Security Agreement, dated July 26, 2011, between the Registrant, Empire Land Associates L.L.C. and HSBC Bank, USA, National Association, for the ratable benefit of the lenders, filed as Exhibit 10.6 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.
24.1		Power of Attorney dated March 13, 2012 between the Members and Mark Labell
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

Peter L. Malkin owned of record as trustee or co-trustee but not beneficially, $211,667 of Participations. Mr. Malkin disclaims any beneficial ownership of such Participations.

25Entities for the benefit of members of Peter L. Malkin’s family owned of record and beneficially $1,064,583 of Participations. Peter L. Malkin disclaims any beneficial ownership of such Participations, except that related family trusts and entities are required to complete scheduled payments to Peter L. Malkin.

~~EXHIBIT~~Anthony ~~INDEX~~E. Malkin owned of record as trustee or co-trustee but not beneficially, $370,417 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.

~~(continued)~~Trusts for the benefit of members of Anthony E. Malkin’s family owned of record and beneficially $50,000 of Participations. Anthony E. Malkin disclaims any beneficial ownership of such Participations.

Number		Document
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

Members of Thomas N. Keltner, Jr.’s family owned of record and beneficially $6,667 of Participations.

26(c) Not applicable.

SIGNATURETable of Contents

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

~~The~~(a) ~~individual~~As ~~signing~~stated ~~this~~in ~~report~~Item 1 onhereof, ~~behalf~~Peter ofL. Malkin, Anthony E. Malkin and Thomas N. Keltner, Jr. are the three Members in Registrant and also act as agents for the Participants in their respective member interests. Peter L. Malkin is ~~Attorney-~~also a member in~~-Fact~~ ~~for~~Sublessee. ~~Registrant~~As ~~and~~a ~~each~~consequence of one of the three Members being a member in Sublessee, and all of the Members holding senior positions at Supervisor (which supervises Registrant and Sublessee), certain ~~pursuant~~actual and potential conflicts of interest may arise with respect to ~~Powers~~the management and administration of ~~Attorney~~the business of Registrant. However, ~~dated~~under ~~March 13~~the respective participating agreements pursuant to which the Members act as agents for the Participants, ~~2012~~certain (transactions require the ~~“Power”)~~prior consent from Participants owning a specified interest under the agreement in order for the Agents to act on their behalf. Such transactions, among others, include modifications and asextensions ~~supervisor~~of the Sublease or mortgages, or a sale or other disposition of the ~~accounting~~Property ~~functions~~or substantially all of Registrant’s assets.

~~Empire~~Reference ~~State~~is ~~Building~~made ~~Associates~~to LItems 1 and 2 hereof for a description of the terms of the Sublease between Registrant and Sublessee. The respective interests of the Members in Registrant and in Sublessee arise solely from ownership of their respective Participations in Registrant and, in the case of Peter L.C Malkin, his family entities’ ownership of member interests in Sublessee. 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 Sublessee. However, all of the Members hold senior positions at Supervisor (which supervises Registrant and Sublessee) and, by reason of their position at Supervisor, may receive income attributable to supervisory or other remuneration paid by Registrant to Supervisor and Sublessee. See Item 11 hereof for a description of the remuneration arrangements between Registrant and Supervisor relating to supervisory services provided by Supervisor.

(Reference is also made to Items 1 and 10 hereof for a description of the relationship between Registrant) and Supervisor, of which all of the Agents are among the Members. The respective interest of the Members in any remuneration paid by Registrant to Supervisor arise solely from such member’s interest in Supervisor.

By(b) ~~/s/~~Reference ~~Mark~~is ~~Labell~~made ~~Mark~~to ~~Labell~~Paragraph as(a) above. ~~Senior Vice President, Finance of Malkin Holdings LLC, Supervisor of Empire State Building Associates* and as Attorney-in-Fact on behalf of:~~

~~Peter~~(c) LNot applicable. ~~Malkin, Member~~

~~Anthony~~(d) ENot applicable. ~~Malkin, Member~~

~~Thomas~~Item N14. ~~Keltner,~~Principal ~~Jr.,~~Accountant ~~Member~~Fees And Services.

~~Date:~~The ~~April~~fees paid or accrued to Ernst 11& Young LLP for professional services for the years ended December 31, 2012 and 2011, respectively, were as follows:

* 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-K is being signed by a senior executive and a senior member of the financial/accounting staff of Registrant’s Supervisor in such capacities.


Fee Category	2012		2011
Audit Fees	$	129,600	$	156,250
Tax Fees		—		—

Total Fees	$	129,600	$	156,250

27Audit Fees. Consist of fees billed for professional services rendered for the audit of Registrant’s Consolidated Financial Statements and review of the interim financial statements included in quarterly 10-Q reports.

~~INDEX~~POLICY TOON AUDIT ~~FINANCIAL~~COMMITTEE ~~STATEMENTS~~PRE-APPROVAL ~~AND~~OF ~~SCHEDULES~~AUDIT SERVICES

~~EMPIRE~~AND ~~STATE~~PERMISSIBLE ~~BUILDING~~NON-AUDIT ~~ASSOCIATES~~SERVICES ~~L.L.C.~~OF INDEPENDENT AUDITORS

(ARegistrant ~~Limited~~has ~~Liability~~no ~~Company)~~audit committee as such. Registrant’s policy is to pre-approve all audit and permissible non-audit services performed by the independent public accountants. These services may include audit services, audit related services, tax services and other services. For audit and tax services, the independent auditor provides an engagement letter in advance of the services outlining the scope of the audit and related audit fees. If agreed by Registrant, this engagement letter is formally accepted by the Supervisor.

Report of Ernst & Young LLP — Independent Registered Public Accounting Firm			2
Consolidated Balance Sheets as of December 31, 2011 and 2010			3
Consolidated Statements of Income for the Years Ended December 31, 2011 and 2010			4
Consolidated Statements of Members’ Equity for the Years Ended December 31, 2011 and 2010			5
Consolidated Statements of Cash Flows for the Years Ended December 31, 2011 and 2010			6
Notes to Consolidated Financial Statements			7
SCHEDULE III – Real Estate and Accumulated Depreciation as of December 31, 2011 and 2010			19
All other schedules are omitted as the information is not required, is not material, or is otherwise provided.

For all services, Registrant’s supervisory management staff submits from time to time to the Agents of Registrant for approval services that it recommends the Registrant engage the independent auditor to provide. In addition, the Agents of Registrant pre-approve specific non-audit services that the independent auditor is authorized to provide. All fee proposals for those non-audit services must be pre-approved in writing by a senior executive of the Supervisor. The Agents of Registrant are informed routinely by the independent auditor pursuant to this pre-approved process.

REPORTTable OFof INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Contents

~~Empire~~Item ~~State~~15. ~~Building~~Exhibits ~~Associates~~and ~~L.L.C.~~Financial Statement Schedules.

(Aa)(1) ~~Limited~~Financial ~~Liability~~Statements ~~Company)~~

We(2) ~~have~~Financial ~~audited~~Statement the accompanying consolidated balance sheets of Empire State Building Associates L.L.C. as of December 31, 2011 and 2010, and the related consolidated statements of income, members’ equity and cash flows for each of the two years in the period ended December 31, 2011. Our audits also included the financial statement schedule, Schedule III- Real Estate and Accumulated Depreciation for the years ended December 31, 2011 and 2010, also included in this Form 10-K. These consolidated financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and schedule based on our audits. Schedules

WeThe ~~conducted~~Consolidated ~~our~~Financial ~~audits~~Statements inand ~~accordance~~the ~~with~~financial ~~the~~statement ~~standards~~schedule of the ~~Public~~Registrant ~~Company Accounting Oversight Board (United States). Those standards require that we plan~~ and ~~perform~~ the ~~audit to obtain reasonable assurance about whether the~~ financial statements ~~are free~~ of ~~material misstatement. We were not engaged to perform an audit of Company’s internal control over financial reporting. Our audits included consideration of internal control over~~the ~~financial~~Sublessee ~~reporting~~required asin athis ~~basis~~annual ~~for~~report ~~designing audit procedures that~~ are ~~appropriate~~listed in the ~~circumstances,~~respective ~~but~~indexes ~~not~~to ~~for~~those ~~the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over~~ financial ~~reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial~~ statements, ~~assessing the accounting principles used~~ and ~~significant~~included ~~estimates~~immediately ~~made~~following ~~by management,~~Exhibit ~~and evaluating the overall financial statement presentation~~101. ~~We believe that our audits provide a reasonable basis for our opinion~~PRE.

In(3) ~~our~~Exhibits: ~~opinion,~~See ~~the~~Exhibit ~~consolidated financial statements referred to above present fairly, in all material respects, the financial position of Empire State Building Associates L~~Index.L.C. at December 31, 2011 and 2010, and the results of its operations and its cash flows for each of the two years in the in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/Table Ernst &of Young LLP Contents

~~New~~EXHIBIT ~~York,~~INDEX ~~New York~~

April 11, 2012


Number		Document

3.1		Registrant’s Partnership Agreement dated July 11, 1961, filed as Exhibit No. 1 to the Registrant’s Registration Statement on Form S-1 as amended (the “Registration Statement”) by letter dated August 8, 1962 and assigned File No. 2-18741, is incorporated by reference as an exhibit hereto.

3.2		Amended Business Certificate of Registrant filed with the Clerk of New York County on August 7, 1998 reflecting a change in the Partners of Registrant which was filed as Exhibit 3(b) to the Registrant’s 10-Q-A for the quarter ended September 30, 1998, is incorporated by reference as an exhibit hereto (file number 000-00827).

3.3		Registrant’s Consent and Operating Agreement dated as of September 30, 2001, incorporated by reference to Exhibit 3(c) to the Registrant’s Form 10-K for the year ended December 31, 2002 (file number 000-00827).

3.4		Certificate of Conversion of general partnership to a limited liability company of Registrant dated September 30, 2001 filed with the New York Secretary of State on October 3, 2001, incorporated by reference to Exhibit 3 (d) to the Registrant’s Form 10-K for the year ended December 31, 2002 (file number 000-00827).

3.5		Agreement among Members of Empire State Building Associates, L.L.C., dated July 1, 2010, filed as Exhibit 10 (f) to the Registrant’s Form 10-K for the fiscal year ended December 31, 2009, is incorporated by reference as an exhibit hereto.

3.6		Amendment Number One to the Limited Liability Company Agreement of Empire State Building Associates L.L.C., dated as of November 30, 2011, by and among Peter L. Malkin, Anthony E. Malkin and Thomas N. Keltner, Jr., incorporated by reference to Exhibit 3.1 to the Form 8-K filed on December 5, 2011.

4		Registrant’s form of Participating Agreement dated January 1, 1962, filed as Exhibit No. 6 to the Registration Statement by letter dated August 8, 1962 and assigned File No. 2-18741, is incorporated by reference as an exhibit hereto.

10.1		Sublease dated December 27, 1961, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.1 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2011, is incorporated by reference as an exhibit hereto.

10.2		First Modification of Sublease dated February 15, 1965, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.2 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2011, is incorporated by reference as an exhibit hereto.

10.3		Second Modification of Sublease dated February 25, 2009, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.3 to the Registrant’s Form 10-K for the fiscal year ended December 31, 2011, is incorporated by reference as an exhibit hereto.

10.4		Third Modification of Sublease dated July 26, 2011, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.1 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011, is incorporated by reference as an exhibit hereto.

2Table of Contents

~~EMPIRE~~EXHIBIT ~~STATE~~INDEX ~~BUILDING ASSOCIATES L.L.C.~~

(~~A Limited Liability Company~~continued)

CONSOLIDATED BALANCE SHEETS



10.5		Fourth Modification of Sublease dated April 5, 2012, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.1 to the Registrant’s Form 10-Q for the quarterly period ended March 31, 2012, is incorporated by reference as an exhibit hereto.

10.6		Fifth Modification of Sublease dated July 9, 2012, between Empire State Building Company L.L.C. and the Registrant, filed as Exhibit 10.1 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2012, is incorporated by reference as an exhibit hereto.

10.7		Loan Agreement and Exhibits thereto, dated July 26, 2011, between the Registrant, Empire State Land Associates L.L.C. and HSBC Bank USA, National Association, as Agent and the lenders named therein and HSBC Bank USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.2 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011, is incorporated by reference as an exhibit hereto.

10.8		First Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated November 2, 2011, between the Registrant, Empire State Land Associates L.L.C. and HSBC Bank USA, National Association, as Agent and the lenders named therein and HSBC Bank USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.3 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.

10.9		Second Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated November 23, 2011, between the Registrant, Empire State Land Associates L.L.C. and HSBC Bank USA, National Association, as Agent and the lenders named therein and HSBC Bank USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.4 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.

10.10		Third Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated October 11, 2012, between the Registrant, Empire State Land Associates L.L.C. and HSBC Bank USA, National Association, as Agent and the lenders named therein and HSBC Bank USA, National Association and Dekabank Deutsche Girozentrale, as Lead Arrangers, filed as Exhibit 10.2 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2012, is incorporated by reference as an exhibit hereto.

10.11		Form of Note Replacement Promissory Note A-1 dated July 26, 2011 between the Registrant and Empire State Land Associates L.L.C. and lenders under the Loan Agreement, filed as Exhibit 10.5 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.

10.12		Consolidated, Amended and Restated Fee and Leasehold Mortgage, Assignment of Leases and Rents and Security Agreement, dated July 26, 2011, between the Registrant, Empire State Land Associates L.L.C. and HSBC Bank USA, National Association, for the ratable benefit of the lenders, filed as Exhibit 10.6 to the Registrant’s Form 10-Q for the quarterly period ended September 30, 2011 is incorporated by reference as an exhibit hereto.

10.13		Master Lease dated December 21, 1951, between The Prudential Insurance Company of America, as lessor, and Alglan Realty Corporation, Rostev Realty Corporation, and Bentob Realty Corporation, as lessee, filed as Exhibit 99.49 to Pre-Effective Amendment No. 3 to the Registration Statement on Form S-4 of Empire State Realty Trust, Inc. and Empire State Realty OP, L.P., filed August 13, 2012, is incorporated by reference as an exhibit hereto.

10.14		First Modification of Indenture of Master Lease, dated December 27, 1961, between The Prudential Insurance Company of America, as lessor, and the Registrant, as lessee, filed as Exhibit 99.50 to Pre-Effective Amendment No. 3 to the Registration Statement on Form S-4 of Empire State Realty Trust, Inc. and Empire State Realty OP, L.P., filed August 13, 2012, is incorporated by reference as an exhibit hereto.

	December 31,
	2011			2010
Assets
Real estate:
Building:
Empire State Building, located at 350 Fifth Avenue, New York, N.Y.	$	38,933,801		$	38,933,801
Less: Accumulated depreciation		(9,692,570	)		(8,694,307	)
		29,241,231			30,239,494
Building improvements		27,676,681			10,162,577
Less: Accumulated depreciation		(792,081	)		(411,235	)
		26,884,600			9,751,342
Building improvements in progress		7,058,098			—
Tenant Improvements		22,272,545			—
Less: Accumulated depreciation		(1,411,398	)		—
		20,861,147			—
Land		21,550,588			21,550,588
Total real estate, net		105,595,664			61,541,424
Cash and cash equivalents		23,236,067			25,318,179
Restricted cash		406,312			896,965
Due from Supervisor		324,111			324,111
Additional rent due from Sublessee		28,780,449			—
Other receivables		115,369			92,118
Deferred costs		8,541,967			1,038,603
Due from Sublessee		—			8,961,815
Other assets		—			100,000
Leasing commissions, less accumulated amortization of $474,217 in 2011		15,900,512			—
Mortgage financing costs, less accumulated amortization of $986,801 in 2011 and $2,457,051 in 2010		6,418,654			901,607
Total assets	$	189,319,105		$	99,174,822
Liabilities and members’ equity
Liabilities:
Mortgage payable	$	159,000,000		$	92,000,000
Accrued mortgage interest		463,678			514,944
Due to Sublessee		6,067,803			1,888,629
Accrued supervisory fees, to a related party		1,107,000			312,500
Accrued expenses		109,325			553,522
Due to Supervisor		1,306,131			—
Total liabilities		168,053,937			95,269,595
Commitments and contingencies		—			—
Members’ equity		21,265,168			3,905,227
Total liabilities and members’ equity	$	189,319,105		$	99,174,822

~~See~~EXHIBIT ~~accompanying~~INDEX ~~notes to consolidated financial statements.~~

3(continued)

EMPIRE STATE BUILDING ASSOCIATES L.L.C.



10.15		Second Modification of Indenture of Master Lease, dated February 15, 1965, between The Prudential Insurance Company of America, as lessor, and the Registrant, as lessee, filed as Exhibit 99.51 to Pre-Effective Amendment No. 3 to the Registration Statement on Form S-4 of Empire State Realty Trust, Inc. and Empire State Realty OP, L.P., filed August 13, 2012, is incorporated by reference as an exhibit hereto.

24.1		Power of Attorney dated March 6, 2013 between the Members and Mark Labell

31.1		Certification of Andrew Prentice, 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 Andrew Prentice, 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.DEF		XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

(ATable Limitedof Liability Company) Contents

~~CONSOLIDATED~~SIGNATURE ~~STATEMENTS OF INCOME~~

	Years ended December 31,
	2011		2010
Revenue:
Rent income, from a related party	$	37,233,316	$	12,204,649
Interest and dividend income		7,768		12,142
Total revenue		37,241,084		12,216,791
Expenses:
Interest on mortgage		9,648,212		6,729,658
Supervisory services, to a related party		1,904,570		471,917
Depreciation of building and tenant improvements		2,790,506		1,258,831
Amortization of leasing commissions		474,217		—
Professional fees, including amounts paid to a related party		1,010,555		153,990
Accounting fees		163,750		83,000
Miscellaneous		—		346
Total expenses		15,991,810		8,697,742
Net income	$	21,249,274	$	3,519,049
Earnings per $10,000 participation unit, based on 3,300 participation units outstanding during each year	$	6,439	$	1,066

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.

~~See~~The ~~accompanying~~individual ~~notes~~signing this report on behalf of Registrant is Attorney-in-Fact for Registrant and each of the Members in Registrant, pursuant to ~~consolidated~~a ~~financial~~Power ~~statements~~of Attorney, dated March 6, 2013 (the “Power”) and as supervisor of the accounting functions.

4Empire State Building Associates L.L.C.

~~EMPIRE~~(Registrant) ~~STATE BUILDING ASSOCIATES L.L.C.~~

(ABy ~~Limited~~/s/ ~~Liability~~Mark ~~Company)~~Labell Mark Labell as Senior Vice President, Finance of Malkin Holdings LLC, Supervisor of Empire State Building Associates* and as Attorney-in-Fact on behalf of:

~~CONSOLIDATED~~Peter ~~STATEMENTS~~L. OFMalkin, ~~MEMBERS’~~Member ~~EQUITY~~

	Members’		Share of					Members’
	Equity		Net Income					Equity
	January 1,		For Year		Distributions			December 31,
Year Ended December 31, 2011:
Anthony E. Malkin Group	$	1,301,742	$	7,083,091	$	(1,296,445	)	$	7,088,388
Thomas N. Keltner, Jr. Group		1,301,743		7,083,091		(1,296,444	)		7,088,390
Peter L. Malkin Group		1,301,742		7,083,092		(1,296,444	)		7,088,390
TOTALS	$	3,905,227	$	21,249,274	$	(3,889,333	)	$	21,265,168
Year Ended December 31, 2010:
Anthony E. Malkin Group	$	2,545,811	$	1,173,016	$	(2,417,085	)	$	1,301,742
Thomas N. Keltner, Jr. Group		2,545,813		1,173,016		(2,417,086	)		1,301,743
Peter L. Malkin Group		2,545,811		1,173,017		(2,417,086	)		1,301,742
TOTALS	$	7,637,435	$	3,519,049	$	(7,251,257	)	$	3,905,227

Anthony E. Malkin, Member

~~See~~Thomas ~~accompanying~~N. ~~notes~~Keltner, ~~to consolidated financial statements~~Jr., Member

5Date: March 28, 2013

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

(ATable Limitedof Liability Company) Contents

~~CONSOLIDATED~~REPORT ~~STATEMENTS~~ OF ~~CASH~~INDEPENDENT ~~FLOWS~~REGISTERED PUBLIC ACCOUNTING FIRM

	Years Ended December 31,
	2011			2010
Cash flows from operating activities:
Net income (loss)	$	21,249,274		$	3,519,049
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of building and tenant improvements		2,790,506			1,258,831
Amortization of mortgage financing costs		1,888,410			666,603
Amortization of leasing commissions		474,217
Changes in operating assets and liabilities:
Change in restricted cash		490,653			(182,126	)
Change in other receivables		(23,251	)		27,778
Additional rent due to/from Sublessee		(30,669,079	)		(540,960	)
Leasing commissions paid		(11,988,107	)
Accrued mortgage interest		(51,266	)		–
Change in due to Supervisor		1,306,131			—
Accrued expenses		(444,197	)		553,522
Accrued supervisory fees, to a related party		794,500			97,909
Net cash provided by (used in) operating activities		(14,182,209	)		5,400,606
Cash flows from investing activities:
Purchase of building and tenant improvements and improvements in progress		(36,201,751	)		—
Net cash used in investing activities		(36,201,751	)		—
Cash flows from financing activities:
Financing costs		(7,405,455	)		—
Proceeds of mortgage		159,000,000			—
Repayment of mortgages payable		(92,000,000	)		—
Distributions to Participants		(3,889,333	)		(7,251,257	)
Change in deferred costs		(7,403,364	)		(1,038,603	)
Net cash provided by (used in) financing activities		48,301,848			(8,289,860	)
Net decrease in cash and cash equivalents		(2,082,112	)		(2,889,254	)
Cash and cash equivalents, beginning of year		25,318,179			28,207,433
Cash and cash equivalents, end of year	$	23,236,067		$	25,318,179
Supplemental disclosure of cash flow information:
Cash paid for interest	$	6,229,019		$	6,063,055
Net cash used in investing activities excludes increases of $6,067,803 and $0 in payable to Sublessee for the years ended December 31, 2011 and 2010, respectively.

Empire State Building Associates L.L.C.

~~See~~(A Limited ~~accompanying~~Liability ~~notes~~Company) ~~to consolidated financial statements.~~

6We have audited the accompanying consolidated balance sheets of Empire State Building Associates L.L.C. (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of income, members’ equity and cash flows for each of the two years in the period ended December 31, 2012. Our audits also included the financial statement schedule, Schedule III- Real Estate and Accumulated Depreciation for the years ended December 31, 2012 and 2011, also included in this Form 10-K. These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

~~EMPIRE~~We conducted ~~STATE~~our ~~BUILDING~~audits ~~ASSOCIATES~~in Laccordance with the standards of the Public Company Accounting Oversight Board (United States).L Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.C We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

(AIn ~~Limited~~our ~~Liability~~opinion, ~~Company)~~the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Empire State Building Associates L.L.C. at December 31, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the two years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

~~NOTES~~/s/ TOErnst & ~~CONSOLIDATED~~Young ~~FINANCIAL~~LLP ~~STATEMENTS~~

1.New ~~Business~~York, ~~Activity~~New ~~and~~York ~~Purchase of Real Estate~~

~~Through April~~March 1628, ~~2002, Empire State Building Associates L.L.C. (“Associates”) owned the tenant’s~~2013 interest in a master operating leasehold (the “Master Lease”) on the Empire State Building (the “Building”), located at 350 Fifth Avenue, New York, New York. On April 17, 2002 Associates acquired, through a wholly-owned limited liability company, the fee title to the Building and to the land thereunder (the “Land”), (together, the “Real Estate”). Associates subleases the property to Empire State Building Company L.L.C. (“Sublessee”). The consolidated financial statements include the accounts of Associates and, effective April 17, 2002, its wholly-owned limited liability company, Empire State Land Associates L.L.C. All intercompany accounts and transactions have been eliminated in consolidation.

Associates’Table members are Peter L. Malkin, Anthony E. Malkin and Thomas N. Keltner, Jr., each of whom also acts as an agent for holders of participations in his respective member interest in Associates. In the consolidated Statements of Members’ Equity, each such agent representation is referred to as a Group (i.e., Peter L. Malkin Group, Thomas N. Keltner, Jr. Group and Anthony E. Malkin Group). Contents

2.EMPIRE ~~Summary~~STATE ofBUILDING ~~Significant~~ASSOCIATES ~~Accounting~~L.L.C. ~~Policies~~

a.(A ~~Cash~~Limited ~~and~~Liability ~~Cash~~Company) ~~Equivalents~~

~~Cash and~~CONSOLIDATED ~~cash~~BALANCE ~~equivalents~~SHEETS ~~include investments in money market funds and all highly liquid debt instruments with an original maturity of three months or less when acquired.~~

b. Restricted Cash


	December 31,
	2012			2011
Assets
Real estate:
Building:
Empire State Building, located at 350 Fifth Avenue, New York, N.Y.	$	38,933,801		$	38,933,801
Less: Accumulated depreciation		(10,690,833	)		(9,692,570	)

		28,242,968			29,241,231

Building improvements		45,641,988			27,676,681
Less: Accumulated depreciation		(1,731,973	)		(792,081	)

		43,910,015			26,884,600

Building improvements in progress		19,184,883			7,058,098

Tenant Improvements		43,703,979			22,272,545
Less: Accumulated depreciation		(6,985,055	)		(1,411,398	)

		36,718,924			20,861,147

Land		21,550,588			21,550,588

Total real estate, net		149,607,378			105,595,664
Cash and cash equivalents		4,359,664			23,236,067
Restricted cash		708,794			406,312
Due from Supervisor, a related party		324,111			324,111
Additional rent due from Sublessee, a related party		24,199,368			28,780,449
Other receivables		491,572			115,369
Deferred costs		12,403,174			6,724,673
Due from Sublessee, a related party		15,174,264			—
Other assets		61,042			—
Leasing commissions, less accumulated amortization of $1,928,113 in 2012 and $474,217 in 2011		20,001,542			15,900,512
Mortgage financing costs, less accumulated amortization of $4,375,168 in 2012 and $986,801 in 2011		7,369,210			6,418,654

Total assets	$	234,700,119		$	187,501,811

Liabilities and members’ equity
Liabilities:
Mortgage payable	$	219,000,000		$	159,000,000
Accrued mortgage interest		686,092			463,678
Due to Sublessee, a related party		3,146,689			6,067,803
Accrued supervisory fees, to a related party		846,000			1,107,000
Accrued expenses		26,859			109,325
Due to Supervisor, a related party		2,193,548			1,306,131

Total liabilities		225,899,188			168,053,937
Commitments and contingencies		—			—
Members’ equity		8,800,931			19,447,874

Total liabilities and members’ equity	$	234,700,119		$	187,501,811

~~Restricted~~See ~~cash at~~accompanying ~~December 31,~~notes ~~2011 and 2010 includes a checking account at HSBC Bank and a money market account held at Capital One Bank pursuant~~ to ~~the~~consolidated ~~terms~~financial ~~of the loans, to be used monthly to satisfy a portion of the loan interest obligation~~statements.

c.Table Use of EstimatesContents

InEMPIRE ~~preparing financial~~STATE ~~statements~~BUILDING inASSOCIATES ~~conformity with U~~L.SL. generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting periodC. ~~Actual results could differ from those estimates.~~

7(A Limited Liability Company)

~~EMPIRE~~CONSOLIDATED ~~STATE~~STATEMENTS ~~BUILDING~~OF ~~ASSOCIATES~~INCOME ~~L.L.C.~~

(A Limited Liability Company)


	Years ended December 31,
	2012		2011
Revenue:
Rent income, from a related party	$	34,399,363	$	37,233,316
Interest and dividend income		2,513		7,768

Total revenue		34,401,876		37,241,084

Expenses:
Interest on mortgage		9,249,268		9,648,212
Supervisory services, to a related party		1,662,014		1,904,570
Depreciation of building and tenant improvements		7,511,812		2,790,506
Amortization of leasing commissions		1,453,896		474,217
Professional fees, including amounts paid to a related party		2,766,543		1,164,995
Formation transaction expenses		1,014,907		1,605,334
Miscellaneous		158,046		9,310

Total expenses		23,816,486		17,597,144

Net income	$	10,585,390	$	19,643,940

Earnings per $10,000 participation unit, based on 3,300 participation units outstanding during each year	$	3,208	$	5,953

~~NOTES~~See TOaccompanying ~~CONSOLIDATED~~notes ~~FINANCIAL~~to ~~STATEMENTS~~consolidated financial statements.

(Continued)Table of Contents

2.EMPIRE ~~Summary~~STATE ofBUILDING ~~Significant~~ASSOCIATES ~~Accounting~~L.L.C. ~~Policies (continued)~~

~~The~~(A ~~real~~Limited ~~estate~~Liability ~~industry~~Company) has historically been cyclical and sensitive to changes in economic conditions such as interest rates, credit availability, and unemployment levels. Changes in these economic conditions could affect the assumptions used by management in preparing the accompanying financial statements.

d.CONSOLIDATED ~~Real~~STATEMENTS ~~Estate~~OF ~~and~~MEMBERS’ ~~Depreciation~~EQUITY

The Real Estate is carried in the financial statements at its historical cost of $60,484,389. The Building and Building improvements are being depreciated on the straight-line basis over their estimated useful lives of 39 years. The tenant improvements are being depreciated over the terms of the individual tenant leases or the estimated useful life if shorter. Under the terms of the April 17, 2002 contract of sale, the deed contains language to avoid the merger of the fee estate and the leasehold, although on a consolidated financial statement basis Associates incurs no leasehold rent expense after acquiring the Real Estate.


	Members’ Equity January 1,		Share of Net Income For Year		Distributions			Members’ Equity December 31,
Year Ended December 31, 2012:
Anthony E. Malkin Group	$	6,482,624	$	3,528,463	$	(7,077,444	)	$	2,933,643
Thomas N. Keltner, Jr. Group		6,482,626		3,528,464		(7,077,445	)		2,933,645
Peter L. Malkin Group		6,482,624		3,528,463		(7,077,444	)		2,933,643

Total	$	19,447,874	$	10,585,390	$	(21,232,333	)	$	8,800,931

Year Ended December 31, 2011:
Anthony E. Malkin Group	$	1,231,089	$	6,547,980	$	(1,296,445	)	$	6,482,624
Thomas N. Keltner, Jr. Group		1,231,090		6,547,980		(1,296,444	)		6,482,626
Peter L. Malkin Group		1,231,088		6,547,980		(1,296,444	)		6,482,624

Total	$	3,693,267	$	19,643,940	$	(3,889,333	)	$	19,447,874

e.See ~~Mortgage~~accompanying ~~Financing~~notes ~~Costs,~~to ~~Leasing~~consolidated ~~Commissions~~financial ~~and~~statements. ~~Amortization~~

MortgageTable financing costs relating to the Secured Term Loan totaling $7,405,455 are being amortized ratably over the life of the loan. As the prior first and second mortgages were repaid on July 26, 2011, the remaining unamortized balance of applicable financing costs were written-off. The unamortized loan costs and the prepayment penalty of $2,343,372 on early repayment of such mortgages are included in interest expense of Associates for the year ended December 31, 2011. Contents

~~Leasing~~EMPIRE ~~commissions~~STATE ~~(incurred~~BUILDING inASSOCIATES connection with the building improvements program) represent reimbursements to the Sublessee for commissions incurred for new tenants and are being amortized over the terms of the individual tenant leasesL.L.C.

f.(A ~~Revenue~~Limited ~~Recognition~~Liability Company)

~~Basic rental~~CONSOLIDATED ~~income,~~STATEMENTS asOF ~~defined~~CASH inFLOWS a long-term lease, is a fixed amount that Associates records ratably over the year. Additional rent is based on 50% of the net operating profit of the Sublessee, as defined, in excess of $1,000,000 for each lease year ending December 31st and is recorded by Associates when such amount becomes realizable and earned, at the end of each calendar year.


	Years Ended December 31,
	2012			2011
Cash flows from operating activities:
Net income	$	10,585,390		$	19,643,940
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation of building and tenant improvements		7,511,812			2,790,506
Amortization of mortgage financing costs		3,388,367			1,888,410
Amortization of leasing commissions		1,453,896			474,217
Leasing commissions paid		(5,554,926	)		(11,988,107	)
Changes in operating assets and liabilities:
Change in restricted cash		(302,482	)		490,653
Change in other receivables		(489,905	)		(23,251	)
Additional rent due to/from Sublessee		4,581,081			(30,669,079	)
Accrued mortgage interest		222,414			(51,266	)
Change in due to Supervisor		574,709			1,306,131
Prepaid insurance		(61,042	)		—
Accrued expenses		(82,466	)		(444,197	)
Accrued supervisory fees, to a related party		(261,000	)		794,500

Net cash provided by (used in) operating activities		21,565,848			(15,787,543	)

Cash flows from investing activities:
Purchase of building and tenant improvements and improvements in progress		(54,444,640	)		(36,201,751	)
Advance to Sublessee, a related party		(15,060,562	)		—

Net cash used in investing activities		(69,505,202	)		(36,201,751	)

Cash flows from financing activities:
Proceeds from mortgage payable		60,000,000			159,000,000
Repayment of mortgages payable		—			(92,000,000	)
Financing costs		(4,338,923	)		(7,405,455	)
Deferred costs		(5,365,793	)		(5,798,030	)
Distributions to Participants		(21,232,333	)		(3,889,333	)

Net cash provided by financing activities		29,062,951			49,907,182

Net decrease in cash and cash equivalents		(18,876,403	)		(2,082,112	)
Cash and cash equivalents, beginning of year		23,236,067			25,318,179

Cash and cash equivalents, end of year	$	4,359,664		$	23,236,067

Supplemental disclosure of cash flow information-
Cash paid for interest	$	5,638,487		$	6,229,019

Non-cash investing and financing activities:
Purchases of buildings and tenant improvements and improvements in progress included in Due to Sublessee, a related party	$	3,146,689		$	6,067,803
Deferred costs included in Due to Supervisor, a related party		1,399,448			1,086,740

~~EMPIRE~~See ~~STATE~~accompanying ~~BUILDING~~notes ~~ASSOCIATES~~to Lconsolidated financial statements.~~L.C.~~

(ATable Limitedof Liability Company) Contents

~~NOTES~~EMPIRE TOSTATE ~~CONSOLIDATED~~BUILDING ~~FINANCIAL~~ASSOCIATES ~~STATEMENTS~~L.L.C.

(~~Continued~~A Limited Liability Company)

g.NOTES ~~Valuation~~TO ofCONSOLIDATED ~~Long-Lived~~FINANCIAL ~~Assets~~STATEMENTS

~~Associates assesses the carrying amount of long-lived assets whenever events or changes in circumstances indicate that their carrying amount may not be recoverable~~1. ~~When~~Business ~~Associates~~Activity ~~determines~~and ~~that~~Purchase ~~the carrying amount~~ of ~~long-lived~~Real ~~assets is impaired, the measurement of any impairment is based on a discounted cash flow method. No impairment loss has been recorded for the years ended December 31, 2011 and 2010.~~ Estate

hThrough April 16, 2002, Empire State Building Associates L.L.C. ~~Income~~(“Associates”) ~~Taxes~~owned the tenant’s interest in a master operating leasehold (the “Master Lease”) on the Empire State Building (the “Building”), located at 350 Fifth Avenue, New York, New York. On April 17, 2002 Associates acquired, through a wholly-owned limited liability company, the fee title to the Building and to the land thereunder (the “Land”), (together, the “Real Estate”). Associates subleases the property to Empire State Building Company L.L.C. (“Sublessee”). The consolidated financial statements include the accounts of Associates and, effective April 17, 2002, its wholly-owned limited liability company, Empire State Land Associates L.L.C. All intercompany accounts and transactions have been eliminated in consolidation.

Associates’ ~~is organized~~members asare aPeter ~~limited~~L. ~~liability~~Malkin, ~~company~~Anthony E. Malkin and isThomas ~~taxed~~N. Keltner, Jr., each of whom also acts as aan ~~partnership~~agent for ~~income~~holders ~~tax~~of ~~purposes. Accordingly,~~participations in his respective member interest in Associates is(“Partcipants”). ~~not~~In ~~subject~~the toconsolidated ~~federal~~Statements ~~and~~of ~~state~~Members’ ~~income~~Equity, ~~taxes~~each ~~and~~such ~~makes~~agent norepresentation ~~provision~~is ~~for~~referred ~~income~~to ~~taxes~~as ina ~~its~~Group (i.e., ~~financial~~Peter ~~statements~~L. ~~Associates’~~ ~~taxable~~Malkin ~~income~~Group, orThomas ~~loss~~N. isKeltner, ~~reportable~~Jr. byGroup ~~its~~and ~~members~~Anthony E. Malkin Group).

The Supervisor of Associates ~~has~~is ~~determined~~in the ~~that~~process ~~there~~of ~~are~~soliciting noconsents ~~material uncertain~~of ~~tax~~Participants ~~positions~~in ~~that~~the ~~require~~Registrant ~~recognition~~and orother ~~disclosure~~public limited liability companies supervised by the Supervisor to a proposed Consolidation (as defined below) pursuant to a prospectus/consent solicitation statement included in ~~its~~a ~~financial~~registration ~~statements~~statement on Form S-4 declared effective by the Securities and Exchange Commission. ~~Taxable~~In ~~years~~the ~~ended~~proposed ~~December 31~~transaction (the “Consolidation”), ~~2008~~(x) the property interests of the Registrant, ~~2009~~such other public limited liability companies and certain private entities supervised by the Supervisor, ~~2010~~and (y) the Supervisor and ~~2011~~certain ~~are~~affiliated ~~subject~~management companies would be contributed to ~~IRS~~the ~~and~~operating ~~other~~partnership ~~jurisdictions~~of ~~tax~~Empire ~~examinations~~State Realty Trust, Inc., a newly organized real estate investment trust.

AtConsents ~~December 31,~~are ~~2011,~~required ~~the~~from ~~reported~~Participants ~~amounts~~in of Associates’ ~~aggregate~~and ~~tax~~such ~~bases~~other ~~exceeded~~public limited liability companies for them to contribute their ~~net~~interests ~~assets~~in bythe ~~approximately $685,600~~Consolidation. AtConsents ~~December 31,~~have ~~2010,~~been ~~there~~obtained ~~was~~from noparticipants ~~difference~~in ~~between~~ the ~~tax~~private ~~bases~~entities and the ~~reported~~Supervisor ~~amount~~and certain affiliated companies and affiliates of ~~Associates’~~the ~~aggregate~~Supervisor ~~net~~for ~~assets~~them to make such contributions. 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.

i2. ~~Offering~~Summary ~~Costs~~of Significant Accounting Policies

External offering costs of $7,503,364 and $1,038,603 were incurred for the years ended December 31, 2011 and 2010, respectively, and are reflected as deferred costs on Associates’ Consolidated 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~~. ~~Additional~~Cash ~~offering costs for work done by employees of the Supervisor of $1,001,245~~ and ~~$142,691~~Cash for the years ended December 31, 2011 and 2010, respectively, were incurred and advanced by the Supervisor and have been reimbursed to the Supervisor by the entities to be included in the consolidation. Equivalents

9Cash and cash equivalents include investments in money market funds and all highly liquid debt instruments with an original maturity of three months or less when acquired.

~~EMPIRE STATE BUILDING ASSOCIATES L~~b.~~L.C.~~ Restricted Cash

(ARestricted ~~Limited~~cash at ~~Liability~~December 31, ~~Company)~~2012 and 2011 includes a checking account at HSBC Bank pursuant to the terms of the Secured Term Loan, to be used monthly to satisfy a portion of the loan interest obligation.

~~NOTES~~c. TOUse ~~CONSOLIDATED~~of ~~FINANCIAL STATEMENTS~~ Estimates

~~(Continued)~~In preparing financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

2The real estate industry has historically been cyclical and sensitive to changes in economic conditions such as interest rates, credit availability, and unemployment levels. ~~Summary~~Changes ofin ~~Significant~~these ~~Accounting~~economic conditions ~~Policies~~could ~~(continued)~~affect the assumptions used by management in preparing the accompanying financial statements.

jd. ~~New~~Real ~~Accounting~~Estate ~~Pronouncements:~~and Depreciation

InThe ~~May~~Real ~~2011~~Estate ~~the~~is ~~FASB~~included ~~issued~~in ~~ASU~~the ~~2011-04,~~financial ~~Fair~~statements ~~Value~~at ~~Measurements~~its ~~(Topic~~historical ~~820):~~cost ~~Amendments~~of to$60,484,389. ~~Achieve~~The ~~Common~~Building ~~Fair~~and ~~Value~~Building ~~Measurement~~improvements ~~and~~are ~~Disclosure~~being ~~Requirements~~depreciated inon ~~U.S.~~the ~~GAAP.~~straight-line ~~This~~basis ~~ASU~~over ~~provides~~their ~~guidance~~estimated ~~setting~~useful ~~forth~~lives ~~additional~~of ~~requirements~~39 ~~relating to disclosures about fair value~~years. The ~~guidance~~tenant ~~will~~improvements beare ~~effective~~being ~~for~~depreciated usover ~~beginning with~~ the ~~first~~terms ~~interim~~of ~~period~~the inindividual ~~2012.~~tenant Inleases ~~accordance with~~or the ~~guidance,~~estimated weuseful ~~will~~life beif ~~required~~shorter. toUnder ~~disclose~~ the ~~level~~terms inof the April 17, ~~fair~~2002 ~~value~~contract ~~hierarchy~~of insale, ~~which~~the ~~each~~deed ~~fair~~contains ~~value~~language ~~lies that is disclosed but not used~~ to ~~measure~~avoid anthe ~~asset~~merger orof ~~liability on~~ the ~~balance~~fee ~~sheet.~~estate ~~The~~and ~~guidance also clarifies that~~ the ~~fair value~~leasehold, ofalthough ~~a non-financial asset is based~~ on ~~its highest and best use and requires disclosure if~~ a ~~non-~~consolidated financial ~~asset~~statement isbasis ~~being used in a manner that is not its highest and best use.~~ Associates ~~does~~incurs ~~not~~no ~~have~~leasehold ~~any~~rent ~~financial~~expense ~~instruments~~after ~~that~~acquiring ~~would~~the beReal ~~materially impacted by this standard as of December 31, 2011~~Estate.

3.Table Mortgagesof PayableContents

~~To finance the acquisition of the fee title to the Real Estate (Note 1) and certain related costs, on April 17, 2002 Associates obtained a $60,500,000 first mortgage with Capital One Bank~~e. ~~The~~Mortgage ~~mortgage~~Financing ~~was scheduled to mature on May 1~~Costs, ~~2012.~~Leasing ToCommissions ~~finance improvements at the property~~ and costs of the financing, on February 25, 2009 Associates borrowed $31,500,000 from Signature Bank secured by a second mortgage on the Real Estate. The second mortgage was also scheduled to mature on May 1, 2012. The first and second mortgage loans aggregating $92,000,000 plus accrued interest and prepayment penalties of $2,343,373 were prepaid on July 26, 2011 out of proceeds from the new $159,000,000 financing described below. Amortization

OnMortgage ~~July 26,~~financing ~~2011,~~costs ~~Associates~~relating ~~entered~~to ~~into a three-year term loan (~~the “Secured Term Loan”) ~~with~~totaling ~~institutional lenders~~$11, ~~including~~744,378 ~~HSBC~~are ~~Bank~~being ~~USA,~~amortized ~~National~~ratably ~~Association~~over asthe ~~agent~~life ~~and~~of ~~HSBC~~the ~~Bank~~loan. ~~USA,~~As ~~National~~the ~~Association~~prior first and ~~DekaBank~~second ~~Deutsche~~mortgages ~~Girozentrale~~were asrepaid ~~lead~~on ~~arrangers.~~July 26, 2011, At the ~~closing~~remaining ofunamortized ~~the~~balance ~~Secured~~of ~~Term~~applicable ~~Loan,~~financing ~~the~~costs ~~lenders~~were ~~provided~~written-off. ~~Associates~~The ~~with~~unamortized anloan ~~advance~~costs of $~~159~~568,~~000,000~~307 ~~(of~~and ~~which~~the prepayment penalty of $922,~~000~~343,~~000~~373 ~~repaid~~on ~~existing~~early ~~indebtedness).~~repayment ~~The~~of ~~Secured~~such ~~Term~~mortgages ~~Loan~~are isincluded ~~secured~~in byinterest aexpense ~~mortgage~~of Associates onfor the ~~Real~~year ~~Estate~~ended December 31, 2011.

~~The~~Leasing ~~Secured~~commissions ~~Term~~(incurred ~~Loan~~in ~~was~~connection ~~amended~~with by the ~~First Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated as of November 2, 2011 to provide for additional commitments~~building ~~from~~improvements ~~Capital~~program) ~~One,~~represent ~~National~~reimbursements ~~Association and Bank of America, N.A. of up~~ to ~~$141,000,000 so that, collectively,~~ the ~~loan~~Sublessee ~~was~~for ~~increased~~commissions toincurred ~~$300,000,000.~~for Nonew ~~additional~~tenants ~~funds were drawn at the time of the modification. Provided no event of default has occurred,~~ and subject to other conditions, upon Associates’ request, HSBC has also agreed to source further additional commitments aggregating up to $200,000,000 in the sole discretion of the lenders. Any further advances under the Secured Term Loan are ~~subject~~being toamortized ~~the~~over ~~consent of~~ the ~~Sublessee. The Secured Term Loan was amended on November 23, 2011 clarifying certain~~ terms ~~upon~~of ~~which~~ the ~~Real~~individual ~~Estate~~tenant ~~is permitted to be transferred into a consolidated entity without accelerating the Secured Term Loan~~leases.

10f. Revenue Recognition

~~EMPIRE~~Basic rental ~~STATE~~income, ~~BUILDING~~as ~~ASSOCIATES~~defined Lin a long-term lease, is a fixed amount that Associates records ratably over the year.L Commencing January 1, 2013, basic rent paid by Sublessee is $5,895,625 per annum plus debt service.C. Additional rent is based on 50% of the net operating profit of the Sublessee, as defined, in excess of $1,000,000 for each lease year ending December 31st and is recorded by Associates when such amount becomes realizable and earned, at the end of each calendar year.

(Ag. ~~Limited~~Valuation ~~Liability~~of ~~Company)~~Long-Lived Assets

~~NOTES~~Associates TOassesses ~~CONSOLIDATED~~the ~~FINANCIAL~~carrying ~~STATEMENTS~~amount of long-lived assets whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When Associates determines that the carrying amount of long-lived assets is impaired, the measurement of any impairment is based on a discounted cash flow method. No impairment loss has been recorded for the years ended December 31, 2012 and 2011.

~~(Continued)~~h. Income Taxes

3Associates is organized as a limited liability company and is taxed as a partnership for income tax purposes. Accordingly, ~~Mortgages~~Associates ~~Payable~~is ~~(concluded)~~not subject to federal and state income taxes and makes no provision for income taxes in its financial statements. Associates’ taxable income or loss is reportable by its members.

~~Pursuant~~Associates tohas ~~the~~determined ~~terms~~that ofthere ~~the~~are ~~Secured~~no ~~Term Loan agreement, Associates and Sublessee~~material ~~entered~~uncertain ~~into~~tax anpositions ~~amendment~~that ~~dated~~require ~~July 26,~~recognition ~~2011~~or todisclosure ~~the~~in ~~sublease~~its ~~(“Third~~financial ~~Modification~~statements. ofTaxable ~~Sublease”)~~years ~~pursuant~~ended ~~to which (i)~~December ~~Sublessee~~31, ~~consented~~2009 tothrough ~~the~~2012 ~~advance~~are ofsubject up to ~~$159,000,000~~IRS ~~under the Secured Term Loan~~ and ~~(ii) in accordance~~other ~~with~~jurisdictions ~~the~~tax ~~terms~~examinations. ~~of the existing sublease~~

~~agreement~~At ~~(which terminates on January~~December 431, ~~2076) between Sublessee and Associates~~2012, the ~~basic~~reported ~~rent~~amounts ~~payable~~of byAssociates’ ~~Sublessee~~aggregate ~~was~~tax ~~increased~~bases byexceeded antheir ~~amount~~net ~~equal~~assets toby ~~the~~approximately $14,539,638. ~~debt~~At ~~service~~December 31, on2011, the ~~portion~~reported amounts of ~~the~~Associates’ ~~borrowing~~aggregate ~~from~~tax ~~the~~bases ~~Secured~~exceeded ~~Term~~their ~~Loan~~net ~~associated~~assets ~~with~~by ~~improvements~~approximately ~~(excluding any principal payable upon maturity) (Note 12)~~$14,026,816. ~~The~~ ~~original basic rent payable~~

~~by Sublessee is more than sufficient to pay the debt service on the portion of the borrowing associated with purchasing the fee position in 2002~~i. Offering Costs

~~Subject~~In toconnection with the ~~terms~~proposed ~~and~~consolidation ~~conditions~~ of ~~the~~certain ~~Secured~~properties ~~Term Loan agreement,~~ (the ~~outstanding~~“Consolidation”) ~~principal~~and ~~amount~~an ofinitial ~~the~~public ~~Secured~~offering ~~Term~~of ~~Loan shall bear interest at a rate equal to 2.5% per annum above 30-day LIBOR, unless such rate is not available, in which event~~ the ~~Secured~~consolidated ~~Term~~group ~~Loan would bear interest at 2.5% per annum in excess of~~ (~~i) HSBC’s prime rate or (ii)~~ the ~~BBA LIBOR Daily Floating Rate. In connection with this loan~~“IPO”), Associates ~~issued~~has ~~promissory~~incurred ~~notes,~~or awill ~~mortgage~~incur ~~encumbering~~incremental ~~the~~accounting ~~Property in favor of the agent for the lenders~~fees, ~~and~~legal ~~other customary~~fees ~~security~~ and other ~~loan~~professional ~~documents~~fees. ~~The~~Certain ~~maturity~~costs ~~date~~associated ofwith ~~this~~the ~~loan~~Consolidation isand ~~July 26,~~IPO ~~2014,~~not ~~which~~directly ~~Associates~~attributable ~~may extend~~ to ~~July 26,~~the ~~2015~~solicitation ~~and thereafter to July 26, 2016, in each case upon payment~~ of anconsents ~~extension~~and ~~fee of 0.25% of~~ the ~~total~~ ~~availability under the Secured Term Loan agreement at the time of such extension. Such extensions are subject to customary conditions~~IPO, ~~including~~but ~~the~~rather ~~satisfaction~~related ~~of certain loan-~~to~~-value~~ ~~and~~structuring ~~debt yield ratios and~~ the ~~absence~~formation oftransaction, anare ~~event~~expensed ~~of default.~~as incurred.

11Through December 31, 2012, Associates has incurred external offering costs of $12,403,174, of which were incurred $5,678,501 and $5,898,030 for the years ended December 31, 2012 and 2011, respectively, and were reflected as deferred costs on Associates Condensed Consolidated Balance Sheets. A total of $1,399,448 and $1,086,740 of these costs were in Due to Supervisor at December 31, 2012 and December 31, 2011, respectively. Additional offering costs for work done by employees of the Supervisor of $1,082,364 and $1,001,245 for the years ended December 31, 2012 and 2011, respectively, were incurred and advanced by the Supervisor and have been reimbursed to the Supervisor by Associates.

~~EMPIRE~~Correction ~~STATE~~of ~~BUILDING~~an Immaterial ~~ASSOCIATES~~Error ~~L.L.C.~~in the Financial Statements

(AAssociates ~~Limited~~prior ~~Liability~~period ~~Company)~~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, Associates determined that certain costs related to the structuring of the Consolidation 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 $1,817,294 as of December 31, 2011. Adhering to applicable guidance for accounting changes and error corrections, Associates concluded that the error was not material to any of its 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. Associates applied the guidance for accounting changes and error corrections and revised our prior period financial statements presented in this Form 10-K.

NOTESTable TOof CONSOLIDATED FINANCIAL STATEMENTS Contents

~~(Continued)~~The following tables present the effect this correction had on the combined financial statements as of and for the year ended December 31, 2011. Additionally, financial information included in the notes to the financial statements that is impacted by the adjustment have been revised, as applicable.

4. Related Party Transactions – Rent Income


	As of December 31, 2011
	As reported		Adjustment			As adjusted
Deferred costs, net	$	8,541,967	$	(1,817,294	)	$	6,724,673
Owners’ equity		21,265,168		(1,817,294	)		19,447,874

Associates does not operate the Building. It subleases the Building to Sublessee pursuant to a net operating sublease (the “Sublease”), which included an initial term which expired on January 4, 1992. The Sublease provides four separate options for Sublessee to renew the term, in each case for an additional 21 years, on the terms of the original Sublease. Such renewals have been exercised by Sublessee (a) on January 30, 1989, for the first renewal period from January 5, 1992 through January 4, 2013 and (b) as of February 11, 2010, for the remaining three renewal periods from January 5, 2013 through January 4, 2076 (the last two such renewals being exercised by Sublessee with Associates’ consent for early exercise). Sublessee is required to pay annual basic rent of $6,018,750 from January 1, 1992 through January 4, 2013, and $5,895,625 from January 5, 2013 through the expiration of all renewal terms. Sublessee is also required to pay Associates additional rent of 50% of Sublessee’s net operating profit, as defined in the Sublease, in excess of $1,000,000 for each lease year ending December 31. In addition to the above, Sublessee is required to pay for all operating and maintenance expenses, real estate taxes, and necessary repairs and replacements, and keep the Building adequately insured against fire and accident. In accordance with the 3rd lease modification dated July 26, 2011, basic rent was increased to cover debt service relating to the Secured Term Loan refinancing that prepaid the first and second mortgages aggregating $92,000,000 (Note 3), to the extent the Secured Term Loan debt exceeds the previous first mortgage of $60,500,000. Basic rent will be increased to cover debt service on any additional borrowings for improvements and tenanting costs and on any refinancing of such debt so long as the aggregate amount refinanced does not exceed the then existing amount of debt plus refinancing costs.


	For the year ended December 31, 2011
	As reported			Adjustment			As adjusted
Formation transaction expenses		—			1,605,334			1,605,334
Net income		21,249,274			(1,605,334	)		19,643,940
Net cash provided by operating activities		(14,182,209	)		(1,605,334	)		(15,787,543	)
Net cash used in financing activities		48,301,848			1,605,334			49,907,182
Net change in cash and cash equivalents		(2,082,112	)		—			(2,082,112	)

~~Additional rent through all renewal terms under the Sublease is payable in an amount equal to 50% of the Sublessee’s annual net operating profit, as defined, in excess of $1,000,000~~j. ~~For~~New ~~2011~~Accounting ~~and 2010, Sublessee reported net operating profit of $58,560,898 and $9,222,742, respectively. Therefore, rent income was comprised as follows~~Pronouncements:

	For the years endedDecember 31,
	2011		2010
Minimum basic rent	$	6,018,750	$	6,018,750
Additional basic rent		2,434,117		2,074,528
Additional rent earned		28,780,449		4,111,371
	$	37,233,316	$	12,204,649

During May 2011, the FASB issued ASU 2011-04, Fair Value Measurements (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP. This ASU provides guidance setting forth additional requirements relating to disclosures about fair value. The guidance was effective for Associates beginning with the first interim period in 2012. In accordance with the guidance, Associates was required to disclose the level in the fair value hierarchy in which each fair value lies that is disclosed but not used to measure an asset or liability on the balance sheet. The guidance also clarifies that the fair value of a non-financial asset is based on its highest and best use and requires disclosure if a non-financial asset is being used in a manner that is not its highest and best use. The adoption of ASU 2011-04 on January 1, 2012 did not have a material impact on Associates financial condition or results of operations.

~~Due to Sublessee at December 31, 2011 represents the payable to Sublessee for purchased building and tenanting costs~~k. Reclassifications

~~Real~~For ~~estate~~purposes of ~~taxes~~comparison, ~~paid~~certain ~~directly~~items byshown in the ~~Sublessee~~2011 ~~for~~consolidated ~~the~~financial ~~years~~statements ~~ended~~have ~~December 31,~~been ~~2011~~reclassified ~~and~~to ~~2010~~conform ~~totaled $30,009,907~~with ~~and~~the ~~$27,664,886,~~presentation ~~respectively~~used for 2012.

123. Mortgages Payable

~~EMPIRE~~To ~~STATE~~finance ~~BUILDING~~the ~~ASSOCIATES~~acquisition Lof the fee title to the Real Estate (Note 1) and certain related costs, on April 17, 2002 Associates obtained a $60,500,000 first mortgage with Capital One Bank.L The mortgage was scheduled to mature on May 1, 2012.C To finance improvements at the property and costs of the financing, on February 25, 2009 Associates borrowed $31,500,000 from Signature Bank secured by a second mortgage on the Real Estate. The second mortgage was also scheduled to mature on May 1, 2012. The first and second mortgage loans aggregating $92,000,000 plus accrued interest and prepayment penalties of $2,343,373 were prepaid on July 26, 2011 out of proceeds from the new $159,000,000 financing described below.

On July 26, 2011, Associates entered into a three-year term loan (Athe ~~Limited~~“Secured ~~Liability~~Term ~~Company~~Loan”) with institutional lenders, including HSBC Bank USA, National Association as agent and HSBC Bank USA, National Association and DekaBank Deutsche Girozentrale as lead arrangers. At the closing of the Secured Term Loan, the lenders provided Associates with an advance of $159,000,000 (of which $92,000,000 repaid existing indebtedness). An additional $30,000,000 was drawn on April 5, 2012 (in accordance with the Fourth Modification of Sublease dated April 5, 2012 by and between Registrant and Sublessee) and an additional $30,000,000 was drawn on July 9, 2012 (in accordance with the Fifth Modification of Sublease dated July 9, 2012 by and between Registrant and Sublessee) bringing the total amount advanced through December 31, 2012 to $219,000,000. An additional $50,000,000 was drawn on the Secured Term Loan on February 26, 2013 bringing the total amount advanced to $269,000,000. Based on the terms of the Secured Term Loan (as amended) and subject to the conditions set forth in the Secured Term Loan (as amended), additional advances of up to $231,000,000 were available under the Secured Term Loan after the $50,000,000 drawn on February 26, 2013. Any further advances under the Secured Term Loan are subject to the consent of the Sublessee.

NOTESTable TOof CONSOLIDATED FINANCIAL STATEMENTS Contents

~~(Continued)~~The Secured Term Loan is secured by a mortgage on the Real Estate.

4The Secured Term Loan was amended by the First Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated as of November 2, 2011 to provide for additional commitments from Capital One, National Association and Bank of America, N.A. ~~Related~~of ~~Party~~up ~~Transactions~~to –$141,000,000 ~~Rent~~so ~~Income~~that, collectively, the maximum amount of the loan was increased to $300,000,000. No additional funds were drawn at the time of the modification. Provided no event of default has occurred, and subject to other conditions, upon Associates’ request, HSBC has also agreed to source further additional commitments aggregating up to $200,000,000 in the sole discretion of the lenders. Any further advances under the Secured Term Loan are subject to the consent of the Sublessee. The Secured Term Loan was amended on November 23, 2011 clarifying certain terms upon which the Real Estate is permitted to be transferred into a consolidated entity without accelerating the Secured Term Loan. The Secured Term Loan was further amended by the Third Amendment to Loan Agreement, Ratification of Loan Documents and Omnibus Amendment dated as of October 11, 2012 to provide for additional commitments from the lenders so that, collectively, the maximum amount of the loan was increased to $500,000,000. A condition to the lenders’ obligation to loan the additional amounts (~~concluded~~in addition to the other conditions in the loan agreement) is that the loan-to-value ratio (as defined therein), based on an updated appraisal, does not then exceed 50%.

~~The~~Pursuant ~~following~~to isthe aterms ~~schedule~~of the Secured Term Loan agreement, Associates and Sublessee entered into an amendment dated July 26, 2011 to the Sublease (“Third Modification of ~~future~~Sublease”) ~~minimum~~pursuant to ~~rental~~which ~~income~~(i) Sublessee consented to the advance of up to $159,000,000 under the Secured Term Loan and (~~assuming~~ii) in ~~that~~accordance with the terms of the existing sublease agreement (which terminates on January 4, 2076) between Sublessee and ~~does~~Associates, ~~not~~the ~~surrender~~basic rent payable by Sublessee was increased by an amount equal to the debt service on the portion of the borrowing from the Secured Term Loan associated with improvements (excluding any principal payable upon maturity). In connection with additional advances aggregating $60,000,000, Registrant and Sublessee entered into a Fourth Modification of Sublease and a Fifth Modification of Sublease dated as of April 5, 2012 and July 9, 2012, respectively, under which the basic rent payable by Sublessee was further increased by an amount equal to the debt service on the aggregate additional advance of $60,000,000. The original basic rent payable by Sublessee is more than sufficient to pay the debt service on the portion of the borrowing associated with purchasing the fee position in 2002. The Sublessee and Empire State Realty Observatory TRS, LLC (formerly known as ESB Observatory LLC):, a subsidiary of Sublessee, also entered into subordination agreements with the agent on behalf of the lenders pursuant to which the Sublease and the lease of the observatory were subordinated to the mortgage securing the Secured Term Loan. As a result, the Sublease and the observatory lease can be terminated in connection with a foreclosure by Secured Term Loan lenders.

Year ending December 31,
2012	$	6,018,750
2013		5,895,625
2014		5,895,625
2015		5,895,625
Thereafter		353,737,500
	$	377,443,125

Subject to the terms and conditions of the Secured Term Loan agreement, the outstanding principal amount of the Secured Term Loan shall bear interest at a rate equal to 2.5% per annum above 30-day LIBOR, unless such rate is not available, in which event the Secured Term Loan would bear interest at 2.5% per annum in excess of (i) HSBC’s prime rate or (ii) the BBA LIBOR Daily Floating Rate. In connection with this loan, Associates issued promissory notes, a mortgage encumbering the Property in favor of the agent for the lenders, and other customary security and other loan documents. The maturity date of this loan is July 26, 2014, which Associates may extend to July 26, 2015 and thereafter to July 26, 2016, in each case upon payment of an extension fee of 0.25% of the total availability under the Secured Term Loan agreement at the time of such extension. Such extensions are subject to customary conditions, including the satisfaction of certain loan-to-value and debt yield ratios and the absence of an event of default.

~~On July 26, 2011, Associates refinanced the existing mortgages which were scheduled to mature on May 1, 2012~~4. ~~The~~Fair ~~above~~Value ~~table~~Measurements does not reflect additional basic rent to cover debt service on the Secured Term Loan. As indicated in the above table, additional basic rent for the years ended December 31, 2011 and 2010 to cover debt service on the mortgages totaled $2,434,117 and $2,074,528, respectively. The above table reflects all lease renewals described above.

5Fair 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. ~~Related~~As ~~Party~~a ~~Transactions~~basis –for ~~Supervisory~~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 ~~Other~~two ~~Services~~of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within level three of the hierarchy).

~~Supervisory and other services are provided to~~ Associates byuses ~~its supervisor, Malkin Holdings LLC (“Malkin Holdings” or~~ the ~~“Supervisor”),~~following amethods ~~related~~and ~~party.~~assumptions ~~Associates’~~in ~~members~~estimating ~~consist~~fair ofvalue ~~certain~~disclosures ~~individuals who hold senior positions at Supervisor, each of whom also acts as an agent (collectively, the “Agents”)~~ for ~~holders (the~~financial ~~“Participants”) of participations (“Participations”) in his respective member interest in Associates~~instruments. ~~Beneficial interests in Associates are held directly or indirectly by one or more persons at Malkin Holdings and/or their family members.~~

~~Associates~~Cash ~~pays~~and ~~Supervisor~~cash ~~for~~equivalents, ~~supervisory~~due ~~services~~from ~~and~~Sublessee, ~~disbursements.~~a ~~The~~related ~~basic~~party, ~~fee~~due ~~(the~~from ~~“Basic Payment”)~~Supervisor, ~~had~~a ~~been~~related ~~payable~~party, atadditional ~~the~~rent ~~rate~~due ~~of $100~~from sublessee,~~000~~ ~~per~~a ~~annum,~~related ~~payable $8~~party,~~333~~ ~~per~~other ~~month~~receivables, ~~since~~due ~~inception~~from insublessee, ~~1961.~~a ~~The~~related ~~Agents~~party, ~~approved~~accrued anmortgage ~~increase~~interest, inaccrued ~~such~~supervisory ~~fee~~fees, ina anrelated ~~amount~~party, ~~equal~~due to ~~the~~Sublessee, ~~increase~~a inrelated ~~the Consumer Price Index since such date~~party, ~~resulting~~ indue ~~an increase in the Basic Payment~~ to ~~$725~~Supervisor,~~000~~ ~~per~~a ~~annum~~related ~~effective July 1~~party, ~~2010,~~and toaccrued beexpenses: The ~~adjusted~~carrying ~~annually~~amount ~~for~~of ~~any~~cash ~~subsequent~~and ~~increase~~cash inequivalents, ~~the~~due ~~Consumer~~from ~~Price~~Sublessee, ~~Index.~~a ~~The~~related ~~Basic~~party, ~~Payment~~due isfrom ~~payable~~Supervisor, ~~(i) not~~a ~~less~~related ~~than $8~~party,~~333~~ ~~per~~additional ~~month and~~rent ~~(ii) the~~due ~~balance out of available reserves~~ from ~~Additional~~sublessee, ~~Rent.~~a Ifrelated ~~Additional~~party, ~~Rent~~other isreceivable, ~~insufficient~~due tofrom ~~pay such balance~~sublessee, ~~any~~a ~~deficiency~~related ~~shall~~party, beaccrued mortgage ~~payable~~interest, inaccrued ~~the~~supervisory ~~next~~fees, ~~year~~a inrelated ~~which~~party, ~~Additional~~payable ~~Rent~~to isSublessee, ~~sufficient.~~a ~~The~~related ~~Agents~~party, ~~also~~due ~~approved payment~~to ~~by Associates~~Supervisor, ~~effective~~a ~~July 1,~~related ~~2010~~party, ofand ~~the~~accrued expenses reported in ~~connection~~the ~~with~~Registrant’s ~~regular~~Balance ~~accounting~~Sheets ~~services~~approximate ~~related~~fair tovalue ~~maintenance~~due ofto ~~Associates’~~the ~~books~~short term ~~and~~maturity ~~records.~~of ~~Such~~these ~~expenses were previously paid by Supervisor~~instruments.

13Table of Contents

~~EMPIRE~~Mortgages ~~STATE~~payable: ~~BUILDING~~The ~~ASSOCIATES~~fair Lvalue of borrowings, as disclosed in Note 4, is estimated by discounting the future cash flows using current interest rates at which similar borrowings could be made to us.~~L.C.~~

(AThe methodologies ~~Limited~~used ~~Liability~~for ~~Company)~~valuing financial instruments have been categorized into three broad levels as follows:

~~NOTES~~Level TO1—Quoted ~~CONSOLIDATED~~prices ~~FINANCIAL~~in active ~~STATEMENTS~~markets for identical instruments.

~~(Continued)~~Level 2—Valuations based principally on other observable market parameters, including:

5.• ~~Related~~Quoted ~~Party~~prices ~~Transactions~~in –active ~~Supervisory~~markets ~~and~~for ~~Other~~similar ~~Services (concluded)~~instruments;

In• ~~2011,~~Quoted ~~Malkin~~prices ~~Holdings earned $1,001,245 from Associates and $983,027 from Sublessee for special supervisory services at hourly rates~~ in ~~connection~~less ~~with~~active aor ~~proposed~~inactive ~~consolidation~~markets of Associates, 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, all representing Associates’ allocable portion of such fees to be paid directly and not borne indirectly through Additional Rent deductions. Malkin Holdings also receives an additional payment equal to 6% of distributions to the Participants in Associates in excess of 9% per annum on their remaining cash investment in Associates (which at December 31, 2011 was $33,000,000). For tax purposes, any 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. Distributions in respect of Malkin Holdings’ profits interest totaled $1,166,417 for ~~2011~~identical ~~and~~or ~~$59,417~~similar ~~for 2010, respectively.~~ instruments;

~~Malkin~~• ~~Holdings~~Other ~~also~~observable ~~serves~~inputs (such as ~~supervisor~~risk ~~for~~free ~~Sublessee~~interest ~~for which it receives a basic annual fee of $574~~rates,~~000~~ ~~effective~~yield ~~January 1~~curves, ~~2010~~volatilities, ~~adjusted~~prepayment ~~annually by the Consumer Price Index. The basic supervisory fees for the years ended December 31~~speeds, ~~2011~~loss ~~and 2010 were $583~~severities,~~368~~ ~~and~~credit ~~$574,000,~~risks ~~respectively. For the years ended December 31, 2011~~ and ~~2010,~~default Malkin Holdings received $1,667,955 and $271,332, respectively, from the Sublessee in other service fees. Under separate agreements to which Sublessee is not a party, certain of Sublessee’s participants pay Malkin Holdings and members of Peter L. Malkin’s immediate family a percentage of distributions above an annual threshold. These third party payments (which totaled $1,796,393 and $68,880 in 2011 and 2010, respectively, to Malkin Holdings and such Malkin family membersrates); ~~do not impose any obligation upon Sublessee or affect its assets~~ and ~~liabilities.~~

6.• ~~Number~~Market ofcorroborated ~~Participants~~inputs (derived principally from or corroborated by observable market data).

~~There~~Level ~~were~~3—Valuations ~~2,824~~based ~~and~~significantly ~~2,813~~on ~~Participants~~unobservable ~~in the participating groups at December 31, 2011 and 2010, respectively~~inputs.

14• 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.

~~EMPIRE~~• ~~STATE~~Valuations ~~BUILDING~~based ~~ASSOCIATES~~on ~~L.L.C.~~internal models with significant unobservable inputs.

(AThese ~~Limited~~levels ~~Liability~~form ~~Company)~~a hierarchy. The Registrant follows 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.

~~NOTES~~Fair TOValue ~~CONSOLIDATED~~of ~~FINANCIAL~~Financial ~~STATEMENTS~~Instruments

~~(Continued)~~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.

7.The ~~Determination~~mortgages payable had an estimated fair value based on discounted cash flow models, based on Level 3 inputs, of ~~Distributions~~approximately $219,000,000 compared to ~~Participants~~the book value of the related debt of $219,000,000 at December 31, 2012.

~~Distributions~~Disclosure toabout ~~Participants~~fair ~~during~~value ~~each~~of ~~year~~financial ~~generally~~instruments ~~reflect~~is ~~the~~based ~~excess~~on ofpertinent ~~the~~information ~~current~~available ~~year’s~~to ~~annual~~us ~~rent income~~as of December 31, ~~plus~~2012. ~~additional~~Although ~~rent~~we ~~income~~are ~~and~~not ~~dividend~~aware ~~income~~of ~~earned~~any infactors that would significantly affect the ~~prior~~reasonable ~~year~~fair value amounts, ~~over~~such ~~the~~amounts ~~cash~~have ~~expenses~~not ~~and~~been ~~mortgage~~comprehensively ~~requirements~~revalued for purposes of ~~the~~these ~~current~~financial ~~year,~~statements ~~adjusted~~since ~~for~~that ~~those~~date ~~cash~~and ~~reserves~~current ~~management~~estimates ~~judges~~of tofair bevalue ~~suitable~~may ~~under~~differ significantly from the ~~circumstances~~amounts presented herein.

85. ~~Distributions~~Related ~~and~~Party ~~Amount~~Transactions—Rent of Income ~~per $10,000 Participation Unit~~

~~Distributions~~Associates ~~per~~does ~~$10~~not operate the Building. It subleases the Building to Sublessee pursuant to a net operating sublease (the “Sublease”),~~000~~ ~~participation~~which ~~unit~~included ~~during~~an initial term which expired on January 4, 1992. The Sublease provides four separate options for Sublessee to renew the term, in each case for an additional 21 years, ~~ended~~on ~~December~~the terms of the original Sublease. Such renewals have been exercised by Sublessee (a) 31on January 30, ~~2011~~1989, for the first renewal period from January 5, 1992 through January 4, 2013 and (b) as of February 11, 2010, ~~based~~for onthe ~~3,300~~remaining three ~~participation~~renewal ~~units~~periods ~~outstanding~~from ~~during~~January 5, ~~each~~2013 ~~year~~through January 4, ~~consisted~~2076 of(the ~~him~~last ~~following:~~two such renewals being exercised by Sublessee with Associates’ consent for early exercise).

	Year ended December 31,
	2011		2010
Income	$	1,179	$	1,066
Return of capital		—		1,131
Total distributions	$	1,179	$	2,197

Sublessee is required to pay annual basic rent of $6,018,750 from January 1, 1992 through January 4, 2013, and $5,895,625 from January 5, 2013 through the expiration of all renewal terms. Sublessee is also required to pay Associates additional rent of 50% of Sublessee’s net operating profit, as defined in the Sublease, in excess of $1,000,000 for each lease year ending December 31. In addition to the above, Sublessee is required to pay for all operating and maintenance expenses, real estate taxes, and necessary repairs and replacements, and keep the Building adequately insured against fire and accident.

9.Table Contingenciesof Contents

~~Malkin~~In ~~Holdings~~accordance ~~LLC~~with ~~and~~the ~~Peter~~third L.lease ~~Malkin,~~modification adated ~~member~~July 26, ~~in Associates~~2011, ~~were~~basic ~~engaged~~rent inwas increased ato ~~proceeding~~cover ~~with~~debt ~~Sublessee’s former~~service ~~managing~~relating ~~agent,~~to ~~Helmsley-Spear,~~the ~~Inc.~~Secured ~~that~~Term ~~commenced~~Loan inrefinancing ~~1997,~~that ~~concerning~~prepaid the ~~management,~~first ~~leasing,~~ and ~~supervision~~second ofmortgages ~~the~~aggregating ~~property~~$92,000,000 ~~that~~(Note is3), ~~subject~~ to the ~~Sublease~~extent tothe ~~Sublessee.~~Secured InTerm ~~this~~Loan ~~connection,~~debt ~~certain~~exceeds ~~costs~~the ~~for~~previous ~~legal~~first ~~and~~mortgage ~~professional~~of ~~fees~~$60,500,000. ~~and~~In ~~other~~accordance ~~expenses~~with ~~were~~the ~~paid~~fourth ~~by Malkin Holdings~~ and ~~Mr. Malkin.~~fifth ~~Malkin~~modifications ~~Holdings~~of ~~and~~the ~~Mr. Malkin~~Sublease, ~~have~~basic ~~represented~~rent ~~that~~was ~~such~~further ~~costs~~increased ~~will be recovered only~~ to ~~the~~cover ~~extent~~debt ~~that~~service ~~(a) a~~on ~~competent~~additional ~~tribunal~~advances ~~authorizes~~aggregating ~~payment~~$60,000,000 or (~~b) an investor~~$30,000,000 ~~voluntarily~~on ~~agrees~~each ~~that his or her proportionate share be paid. On behalf~~ of ~~himself~~April 5, 2012 and ~~Malkin Holdings~~July 9, Mr2012). ~~Malkin~~ ~~has~~Basic rent ~~requested,~~will orbe ~~intends~~increased to ~~request,~~cover ~~such~~debt ~~voluntary~~service ~~agreement~~on ~~from~~any ~~all~~additional ~~investors,~~borrowings ~~which may include renewing such request in the future~~ for ~~any~~improvements ~~investor~~and ~~who~~tenanting ~~previously~~costs ~~received such request~~ and ~~failed~~on ~~to confirm agreement at that time. Because~~ any ~~related~~refinancing ~~payment~~of ~~has~~such ~~been,~~debt orso ~~will~~long ~~be,~~as ~~made~~the ~~only~~aggregate byamount ~~consenting~~refinanced ~~investors,~~does ~~Associates has~~ not ~~provided~~exceed ~~for~~ the ~~expense~~ ~~and~~then ~~related~~existing ~~liability~~amount ~~with~~of ~~respect~~debt toplus refinancing ~~such~~ costs ~~in these financial statements~~.

AnAdditional ~~August 29,~~rent ~~2006~~through ~~settlement agreement~~all ~~terminated~~renewal ~~Helmsley-Spear,~~terms ~~Inc.~~under asthe ~~managing~~Sublease ~~and~~is ~~leasing~~payable ~~agent~~in atan ~~the~~amount ~~property~~equal asto 50% of ~~August 30, 2006.~~ the Sublessee’s isannual ~~now~~net ~~self-managing~~operating ~~the property~~profit, ~~subject~~as todefined, ~~the~~in ~~supervision~~excess of ~~Malkin Holding L.L.C.~~$1, ~~as its supervisor~~000,000. ~~while~~For ~~engaging third~~2012 ~~party~~and ~~leasing agents~~2011, CBSublessee ~~Richard~~reported ~~Ellis~~net ~~for~~operating ~~retail~~profit ~~space~~of ~~since August 30~~$49,398,735 ~~2006~~ and ~~Newmark~~$58,560,898, ~~Knight~~respectively. ~~Frank~~Therefore, ~~for~~rent ~~non-retail~~income ~~space~~was ~~since~~comprised ~~October 21,~~as ~~2009.~~follows:


	For the years ended December 31,
	2012		2011
Minimum basic rent	$	6,018,750	$	6,018,750
Additional basic rent		4,181,245		2,434,117
Additional rent earned		24,199,368		28,780,449

	$	34,399,363	$	37,233,316

~~EMPIRE~~Due ~~STATE~~to ~~BUILDING~~Sublessee ~~ASSOCIATES~~at LDecember 31, 2012 represents the payable to Sublessee for purchased building and tenanting costs.~~L.C.~~

(AReal ~~Limited~~estate ~~Liability~~taxes ~~Company)~~incurred directly by the Sublessee for the years ended December 31, 2012 and 2011 totaled $26,340,502 and $30,009,908, respectively.

~~NOTES~~The TOfollowing ~~CONSOLIDATED~~is ~~FINANCIAL~~a ~~STATEMENTS~~schedule of future minimum rental income (assuming that the Sublessee does not surrender the Sublease):

(Continued)


Year ending December 31,
2013	$	9,858,125
2014		8,207,083
2015		5,895,625
2016		5,895,625
2017		5,895,625
Thereafter		341,946,250

	$	377,698,333

9On July 26, 2011, Associates refinanced the existing mortgages which were scheduled to mature on May 1, 2012. ~~Contingencies~~As ~~(concluded)~~indicated in the above table, additional basic rent for the years ended December 31, 2012 and 2011 to cover debt service on the mortgage totaled $4,181,245 and $2,434,117, respectively. The above table reflects all lease renewals described above.

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”)6. AsRelated ~~now~~Party ~~pending~~Transactions—Supervisory ~~in New York State Supreme Court, New York County, each Class Action challenges the proposed consolidation of those~~ and ~~other~~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 intend to consent to consolidation, and have no position with respect to appointment of co-lead counsel. Services

~~The~~Supervisory ~~Class~~and ~~Actions~~other services are inprovided ato ~~very~~Associates ~~preliminary~~by ~~stage~~its supervisor, ~~with~~Malkin noHoldings ~~responses~~LLC to(“Malkin Holdings” or the ~~complaints~~“Supervisor”), ~~having~~a ~~been~~related ~~filed~~party. toAssociates’ ~~date. Defendants~~members ~~have~~consist ~~stated~~of ~~they~~certain ~~believe~~individuals who hold senior positions at Supervisor, each of whom also acts as an agent (collectively, the ~~Class~~“Agents”) ~~Actions~~for holders (the “Participants”) of participations (“Participations”) in his respective member interest in Associates. Beneficial interests in Associates are ~~without~~held ~~merit~~directly ~~and~~or ~~intend~~indirectly toby ~~defend~~one ~~them~~or ~~vigorously~~more persons at Malkin Holdings and/or their family members.

10Associates pays Supervisor for supervisory services and disbursements. ~~Concentration~~The basic fee (the “Basic Payment”) had been payable at the rate of ~~Credit~~$100,000 ~~Risk~~per annum, payable $8,333 per month, since inception in 1961. The Agents approved an increase in such fee in an amount equal to the increase in the Consumer Price Index since such date, resulting in an increase in the Basic Payment to $725,000 per annum effective July 1, 2010, to be adjusted annually for any subsequent increase in the Consumer Price Index. The Basic Payment was adjusted to $761,888 effective July 1, 2012. The Basic Payment is payable (i) not less than $8,333 per month and (ii) the balance out of available reserves from Additional Rent. If Additional Rent is insufficient to pay such balance, any deficiency shall be payable in the next year in which Additional Rent is sufficient. The Agents also approved payment by Associates, effective July 1, 2010, of the expenses in connection with regular accounting services related to maintenance of Associates’ books and records. Such expenses were previously paid by Supervisor.

	December 31,
	2011		2010
Cash and cash equivalents consist of the following:
JPMorgan Chase Bank	$	96,212	$	6,045,419
Signature Bank		—		141,357
Fidelity U.S. Treasury Income Portfolio		23,139,855		19,131,403
Total cash and cash equivalents	$	23,236,067	$	25,318,179

16In 2012, Malkin Holdings earned $1,082,364 from Associates and $1,064,025 from Sublessee, which is included in professional fees, for special supervisory services at hourly rates in connection with a proposed consolidation of Associates, 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, all representing Associates’ allocable portion of such fees to be paid directly and not borne indirectly through Additional Rent deductions. Malkin Holdings also receives an additional payment equal to 6% of distributions to the Participants in Associates in excess of 9% per annum on their remaining cash investment in Associates (which at December 31, 2012 was $33,000,000). For tax purposes, any 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. Distributions in respect of Malkin Holdings’ profits interest totaled $905,417 for 2012 and $1,166,417 for 2011, respectively.

~~EMPIRE~~Malkin ~~STATE~~Holdings also ~~BUILDING~~serves ~~ASSOCIATES~~as Lsupervisor for Sublessee for which it receives a basic annual fee of $574,000 effective January 1, 2010, adjusted annually by the Consumer Price Index. The basic supervisory fees for the years ended December 31, 2012 and 2011 were $591,567 and $583,368, respectively. For the years ended December 31, 2012 and 2011, Malkin Holdings received $1,452,257 and $1,667,955, respectively, from the Sublessee in other service fees. Under separate agreements to which Sublessee is not a party, certain of Sublessee’s participants pay Malkin Holdings and members of Peter L.C Malkin’s immediate family a percentage of distributions above an annual threshold. These third party payments (which totaled $821,222 and $1,796,393 in 2012 and 2011, respectively, to Malkin Holdings and such Malkin family members) do not impose any obligation upon Sublessee or affect its assets and liabilities.

The Supervisor of Associates is in the process of soliciting consents of Participants in the Registrant and other public limited liability companies supervised by the Supervisor to a proposed Consolidation (Aas ~~Limited~~defined ~~Liability~~below) ~~Company~~pursuant to a prospectus/consent solicitation statement included in a registration statement on Form S-4 declared effective by the Securities and Exchange Commission. In the proposed transaction (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 would be contributed to the operating partnership of Empire State Realty Trust, Inc., a newly organized real estate investment trust.

~~NOTES~~Consents TOare ~~CONSOLIDATED~~required ~~FINANCIAL~~from ~~STATEMENTS~~Participants in Associates and such other public limited liability companies for them to contribute their interests in the Consolidation. 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 contributions. 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.

~~(Continued)~~7. Number of Participants

~~10.~~There ~~Concentration~~were of2,889 ~~Credit~~and ~~Risk~~2,824 ~~(concluded)~~Participants in the participating groups at December 31, 2012 and 2011, respectively.

~~Associates maintains cash and cash equivalents (including restricted cash) in two banks and in a money market fund (Fidelity U~~8.S. ~~Treasury~~Determination ~~Income~~of Portfolio). The Federal Deposit Insurance Corporation (“FDIC”) insures each interest bearing account up to $250,000 and fully insures non-interest bearing accounts through December 31, 2012. At December 31, 2011, the bank accounts are fully insured. Funds in the money market fund were not insured at December 31, 2011 and 2010. Distributions are paid from a cash account held by Malkin Holdings. That account is included on the accompanying balance sheet as “Due from Supervisor.” The funds (approximately $324,000 at December 31, 2011 and 2010) were paid to ~~the~~ Participants ~~on January 1, 2012 and 2011, respectively.~~

~~11.~~Distributions ~~Building~~to ~~Improvements~~Participants ~~Program~~during each year generally reflect the excess of the current year’s annual rent income, plus additional rent income and dividend income earned in the prior year, over the cash expenses and mortgage requirements of the current year, adjusted for those cash reserves management judges to be suitable under the circumstances.

In 2008, the Participants of Associates and the members in Sublessee consented to a building improvements program (the “Program”) with an initial borrowing of $31,500,000 and authorization for possible future refinancings of mortgage debt9. ToDistributions ~~finance improvements to the Real Estate~~ and ~~costs~~Amount of ~~financing,~~Income onper ~~February 25, 2009 Associates borrowed~~ $3110,~~500,~~000 ~~from~~Participation Signature Bank (Note 3) which was prepaid on July 26, 2011 out of proceeds from the new $159,000,000 Secured Term Loan. Commencing July 26, 2011, Basic Rent was increased to cover debt service on the refinanced loan balance to the extent the Secured Term Loan debt exceeds $60,500,000 which was the balance of the prior first mortgage. As of December 31, 2011, Associates had incurred costs related to the Program of $57,007,324 and estimates that the Program, expected to be completed substantially in 2016, will be approximately $626,000,000 including sprinkler work of approximately $23,000,000. Due to Sublessee at December 31, 2011 represents the payable to Sublessee for purchased building tenanting costs. The costs of the Program will be financed by the Secured Term Loan, additional financing (Note 3) and Sublessee’s operating cash flow. Unit

~~The~~Distributions ~~Sublessee~~per is$10,000 ~~advancing~~participation ~~costs~~unit ofduring the ~~Program~~years ~~and~~ended ~~is reimbursed by Associates from available financing. The Program (1)~~December ~~grants~~31, ~~the~~2012 ~~ownership~~and of2011, ~~the~~based ~~improvements~~on ~~to Associates to the extent of its~~3,300 ~~reimbursements~~participation tounits ~~Sublessee~~outstanding ~~and~~during ~~(2) allows~~each for the increased mortgage charges to be paid by Associates from an equivalent increase in the basic rent paid by the Sublessee to Associates. Since any additional rent will be decreased by one-half of that amountyear, ~~the~~consisted ~~net effect~~ of ~~the~~him ~~lease~~following: ~~modification is to have Associates and the Sublessee share the costs of the Program equally, assuming additional rent continues to be earned.~~


	Year ended December 31,
	2012		2011
Income	$	3,208	$	1,179
Return of capital		3,226		0

Total distributions	$	6,434	$	1,179

~~EMPIRE STATE BUILDING ASSOCIATES L~~10.~~L.C.~~ Contingencies

Malkin Holdings LLC and Peter L. Malkin, a member in Associates, were engaged in a proceeding with Sublessee’s former managing agent, Helmsley-Spear, Inc. that commenced in 1997, concerning the management, leasing, and supervision of the property that is subject to the Sublease to Sublessee. 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 (Aa) a ~~Limited~~competent ~~Liability~~tribunal ~~Company~~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, Associates has not provided for the expense and related liability with respect to such costs in these financial statements.

NOTESTable TOof CONSOLIDATED FINANCIAL STATEMENTS Contents

~~(Continued)~~An August 29, 2006 settlement agreement terminated Helmsley-Spear, Inc. as managing and leasing agent at the property as of August 30, 2006. Sublessee is now self-managing the property, subject to the supervision of Malkin Holding L.L.C., as its supervisor, while engaging third party leasing agents, CB Richard Ellis for retail space since August 30, 2006 and Newmark Knight Frank for non-retail space since October 21, 2009.

In March 2012, five putative class actions, or the Class Actions, were filed in New York State Supreme Court, New York County by Participants in Empire State Building Associates L.L.C. (“ESBA”) and several other entities supervised by the Supervisor (on March 1, 2012, March 7, 2012, March 12, 2012, March 14, 2012 and March 19, 2012). ~~Subsequent~~The ~~Events~~plaintiffs assert claims against Malkin Holdings LLC, 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, the Helmsley estate, the operating partnership and the company 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 by which it was structured (including the valuation that was employed) are unfair to the participants, the consolidation provides excessive benefits to the Malkin Holdings group and the then-draft prospectus/consent solicitation filed with the SEC 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 proposed transaction. The actions were consolidated and co-lead plaintiffs’ counsel were appointed by the New York State Supreme Court by order dated June 26, 2012. Furthermore, an underlying premise of the Class Actions, as noted in discussions among plaintiffs’ counsel and defendants’ counsel, was that the consolidation had been structured in such a manner that would cause the subject LLC participants immediately to incur substantial tax liabilities.

~~Additional~~The ~~Rent~~parties entered into a Stipulation of $Settlement dated September 28,~~780~~ 2012,~~449~~ resolving the Class Actions. The Stipulation of Settlement recites that the consolidation was ~~paid~~approved by overwhelming consent of the participants in the private entities. The Stipulation of Settlement states that counsel for the plaintiff class satisfied themselves that they have received adequate access to ~~Associates~~relevant information, including the independent valuer’s valuation process and methodology, that the disclosures in the Registration Statement on ~~March 5~~Form S-4, ~~2012.~~as Onamended, ~~March 8~~are appropriate, ~~2012~~that the transaction presents potential benefits, ~~out~~including the opportunity for liquidity and capital appreciation, that merit the participants’ serious consideration and that each of named class representatives intends to support the transaction as modified. The ~~Additional~~Stipulation ~~Rent~~of Settlement further states that counsel for the plaintiff class are satisfied that the claims regarding tax implications, ~~$17~~enhanced disclosures,~~343~~ appraisals and exchange values of the properties that would be consolidated into the company,~~000~~ ~~was~~and ~~distributed~~the tointerests of the ~~Participants~~participants in ~~Associates~~the subject LLCs and $1the private entities,~~107~~ have been addressed adequately,~~000~~ ~~was~~and ~~paid~~they have concluded that the settlement pursuant to ~~Malkin~~the ~~Holdings,~~Stipulation ~~representing~~of Settlement and opportunity to consider the proposed ~~balance~~transaction on the basis of ~~its~~revised ~~additional~~consent ~~payment~~solicitations ~~for~~are ~~2011~~fair, reasonable, adequate and in the best interests of the plaintiff class.

~~Sublessee~~The ~~concluded~~defendants ~~an agreement with New York City for a reduction~~ in ~~real estate taxes for~~ the ~~tax~~Stipulation ~~years~~of ~~2002/2003-2011/2012~~Settlement ~~resulting in~~denied ~~gross~~that ~~tax~~they ~~savings~~committed ofany ~~approximately~~violation ~~$16,900,000,~~ of ~~which~~law ~~approximately~~or ~~$12,400,000~~breached ~~will~~any ~~be in the form~~ of atheir ~~refund~~duties and ~~the~~did ~~balance~~not ~~through~~admit ~~future~~that ~~tax~~they ~~reductions~~had toany beliability ~~phased in through 2012/2016. Professional fees total $1,735,010, including $867,505~~ to ~~Malkin Holdings. Sublessee is reviewing~~ the ~~adjustment to real estate tax escalation rent billings to existing tenants resulting from the tax reduction~~plaintiffs.

AnThe ~~additional~~terms of the settlement include, among other things (i) a payment of $3055 million,~~000~~ 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 the Malkin Holdings group (provided that no member of the Malkin Holdings group that would become a direct or indirect subsidiary of the company in the consolidation will have any liability for such payment) and the Helmsley estate and certain participants in the private entities who agree to contribute) to be distributed,~~000~~ ~~was~~after ~~drawn~~reimbursement onof plaintiffs’ counsel’s court-approved expenses and payment of plaintiffs’ counsel’s court-approved attorneys’ fees and, in the ~~Secured~~case ~~Term~~of ~~Loan~~shares of common stock and/or operating partnership units, after the termination of specified lock-up periods, to participants in the subject LLCs and the private entities pursuant to a plan of allocation to be prepared by counsel for plaintiffs; (ii) defendants’ agreement that (a) the IPO will be on ~~April~~the basis of a firm commitment underwriting; (b) 6if, ~~2012~~during ~~bringing~~the solicitation period, any of the three subject LLC’s percentage of total ~~amount~~exchange ~~advanced~~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 investors in the subject LLCs; and (c) unless total gross proceeds of $~~189~~600,000,000 are raised in the IPO, defendants will not proceed with the transaction without further approval of the subject LLCs; and (iii) defendants’ agreement to make additional disclosures in the prospectus/consent solicitation regarding certain matters (which are included therein). Defendants have also acknowledged the work of plaintiffs and their counsel was a material factor in defendants’ implementation of the change in the consolidation that, as originally proposed, would have required the exchange of participation interests for Class A common stock, which are taxable on receipt, and that now permits participants instead to elect to receive operating partnership units and Class B common stock, which permit tax deferral. Participants in the subject LLCs and private entities will not be required to bear any portion of the settlement payment. The payment in settlement of the Class Actions will be made by the Helmsley estate and the Malkin Holdings group (provided that no member of the Malkin Holdings group that would become a direct or indirect subsidiary of the company in the consolidation will have any liability for such payment) and certain participants in the private entities who agree to contribute. The company and the operating partnership will not bear any of the settlement payment.

18Table of Contents

~~EMPIRE~~The ~~STATE~~settlement ~~BUILDING~~further ~~ASSOCIATES~~provides Lfor the certification of a class of participants in the three subject LLCs 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 and other advisors.L 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.C 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.

(AOn January 18, ~~Limited~~2013, ~~Liability~~the ~~Company~~parties jointly moved for preliminary approval of such settlement, for permission to send notice of the settlement to the class, and for the scheduling of a final settlement hearing (collectively, “preliminary approval”).

~~NOTES~~On TOJanuary 28, ~~CONSOLIDATED~~2013, ~~FINANCIAL~~six ~~STATEMENTS~~participants in ESBA filed an objection to preliminary approval, and cross-moved to intervene in the action and for permission to file a separate complaint on behalf of ESBA participants. On February 21, 2013 the court denied the cross motion of such objecting participants, and the court denied permission for such objecting participants to file a separate complaint as part of the class action, other than permission to join the case by separate counsel solely for the purpose of supporting the allegation of the objecting participants that the buyout will deprive non-consenting participants in ESBA of “fair value” in violation of the New York Limited Liability Company Law. The court rejected the objecting participants’ assertion that preliminary approval be denied and granted preliminary approval of the settlement.

~~(Continued)~~The court has scheduled a hearing on a motion for final approval of the settlement for May 2, 2013.

~~SCHEDULE~~11. ~~III~~Concentration of Credit Risk

Real Estate and Accumulated Depreciation


	December 31,
	2012		2011
Cash and cash equivalents consist of the following:
JPMorgan Chase Bank	$	91,811	$	96,212
Fidelity U.S. Treasury Income Portfolio		4,267,853		23,139,855

Total cash and cash equivalents	$	4,359,664	$	23,236,067

		December 31,			December 31,
Column		2011			2010
A	Description
	Land and building situated at 350 Fifth Avenue, New York, New York
B	Encumbrances
	HSBC Bank	$	159,000,000			—
	Capital One Bank and Signature Bank		—		$	92,000,000
C	Initial cost to company
	Land and building	$	60,484,389		$	60,484,389
D	Cost capitalized subsequent to acquisition
	Building, tenant improvements and improvements in progress	$	57,007,324		$	10,162,577
E	Gross amount at which carried at close of period
	Land	$	21,550,588		$	21,550,588
	Building, tenant improvements and improvements in progress		95,941,125			49,096,378
	Total	$	117,491,713	(a)	$	70,646,966	(a)
F	Accumulated depreciation	$	11,896,048	(b)	$	9,105,542	(b)
G	Date of construction		1931			1931
H	Date acquired		April 17, 2002			April 17, 2002
I	Life on which depreciation of building and improvements in latest income statements is computed		39 years			39 years
(a)	Gross amount of real estate balance at January 1	$	70,646,966		$	70,646,966
	Purchase of real estate: improvements		46,844,747			—
	Balance at December 31	$	117,491,713		$	70,646,966
	The costs for federal income tax purposes are the same as for financial statement purposes.
(b)	Accumulated depreciation
	Balance at January 1	$	9,105,542		$	7,846,711
	Depreciation: F/Y/E		2,790,506			1,258,831
	Balance at December 31	$	11,896,048		$	9,105,542

Associates maintains cash and cash equivalents (including restricted cash) in two banks and in a money market fund (Fidelity U.S. Treasury Income Portfolio). Beginning January 1, 2013, non-interest bearing transaction accounts are no longer insured separately from depositors’ other accounts at the same FDIC Insured Depository Institution (“IDI”). Instead, non-interest bearing transaction accounts are added to any of a depositor’s other accounts in the applicable ownership category, and the aggregate balance will be insured up to at least the standard maximum deposit insurance amount of $250,000, per depositor, at each separately chartered IDI. As of December 31, 2012, the Company’s uninsured cash balances totaled approximately $448,794. Funds in the money market fund were not insured at December 31, 2012. Distributions are paid from a cash account held by Malkin Holdings. That account is included on the accompanying balance sheet as “Due from Supervisor.” The funds ($324,111 at December 31, 2012 and 2011, respectively) were paid to the Participants on January 1, 2013 and 2012, respectively.

19Table of Contents

~~EMPIRE~~12. ~~STATE~~Building ~~BUILDING~~Improvements Program

~~COMPANY~~In L2008, the Participants of Associates consented to a building improvements program (the “Program”) with an initial borrowing of $31,500,000 and authorization for possible future refinancings of mortgage debt.L To finance improvements to the Real Estate and costs of financing, on February 25, 2009 Associates borrowed $31,500,000 from Signature Bank (Note 3) which was prepaid on July 26, 2011 out of proceeds from the new $159,000,000 Secured Term Loan.C. ~~AND~~Commencing July 26, 2011, Basic Rent was increased to cover debt service on the refinanced loan balance to the extent the Secured Term Loan debt exceeds $60,500,000 which was the balance of the prior first mortgage.

~~AFFILIATES~~Since the Supervisor gained day-to-day management of the Empire State Building in August 2006, a total of approximately $168,200,000 has been invested through December 31, 2012 in connection with the restoration and renovation program at the Property. Associates currently estimates that between $155,000,000 and $195,000,000 of additional capital is needed to complete this renovation program, which Associates expects to complete substantially in 2016. Due to Sublessee at December 31, 2012 represents the payable to Sublessee for purchased building tenanting costs. The costs of the Program will be financed by the Secured Term Loan, additional financing (Note 3) and Sublessee’s operating cash flow.

~~CONSOLIDATED~~The ~~FINANCIAL~~Sublessee ~~STATEMENTS~~is advancing costs of the Program and is reimbursed by Associates from available financing. The Program (1) grants the ownership of the improvements to Associates to the extent of its reimbursements to Sublessee and (2) allows for the increased mortgage charges to be paid by Associates from an equivalent increase in the basic rent paid by the Sublessee to Associates. Since any additional rent will be decreased by one-half of that amount, the net effect of the lease modification is to have Associates and the Sublessee share the costs of the Program equally, assuming additional rent continues to be earned. Additional rent of $24,199,368 was paid to Registrant, $2,000,000 on January 11, 2013 and $22,199,368 on March 4, 2013. On March 8, 2013, out of the additional rent, $13,254,000 was distributed to the Participants in Associates and $846,000 was paid to Malkin Holdings, representing the balance of its additional payment for 2012.

~~Years~~Sublessee concluded ~~Ended~~an ~~December 31,~~agreement with New York City for a reduction in real estate taxes for the tax years 2002/2003-2011/2012 resulting in gross tax savings of approximately $16,900,000, of which approximately $12,400,000 was in the form of a refund and ~~2010~~the balance through future tax reductions to be phased in through 2012—2016. Professional fees total $1,735,010, including $867,505 to Malkin Holdings. Sublessee adjusted real estate tax escalation rent billings to existing tenants resulting from the tax reduction.

~~EMPIRE STATE BUILDING COMPANY L~~13.~~L.C.~~ ~~AND~~Subsequent ~~AFFILIATES~~ Events

~~CONTENTS~~Overage Rent of $24,199,368 was paid to Associates, $2,000,000 on January 11, 2013 and $22,199,368 on March 4, 2013. On March 8, 2013, out of such Overage Rent, $13,254,000 was distributed to the Participants in Associates and $846,000 was paid to Malkin Holdings, representing the balance of its Additional Payment for 2012.

Report of Independent Registered Public Accounting Firm		1
Financial Statements:
Consolidated Balance Sheets		2 and 3
Consolidated Statements of Income		4
Consolidated Statements of Changes in Equity		5
Consolidated Statements of Cash Flows		6 and 7
Notes to Consolidated Financial Statements		8 - 27

An additional $50,000,000 was drawn on the Secured Term Loan on February 26, 2013 bringing the total amount advanced to $269,000,000.

REPORTTable OFof INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Contents

~~Empire~~SCHEDULE ~~State~~III ~~Building Company L.L.C.~~

(aReal ~~Limited~~Estate ~~Liability~~and ~~Company)~~Accumulated Depreciation

We have audited the accompanying consolidated balance sheets of Empire State Building Company L.L.C. and Affiliates as of December 31, 2011 and 2010, and the related consolidated statements of income, changes in equity and cash flows for each of the two years in the period ended December 31, 2011. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.


		December 31, 2012			December 31, 2011
Column
A	Description
	Land and building situated at 350 Fifth Avenue, New York, New York
B	Encumbrances
	HSBC Bank	$	219,000,000		$	159,000,000

C	Initial cost to company
	Land and building	$	60,484,389		$	60,484,389

D	Cost capitalized subsequent to acquisition
	Building, tenant improvements and improvements in progress	$	108,530,850		$	57,007,324

E	Gross amount at which carried at close of period
	Land	$	21,550,588		$	21,550,588
	Building, tenant improvements and improvements in progress		147,464,651			95,941,125

	Total	$	169,015,239	(a)	$	117,491,713	(a)

F	Accumulated depreciation	$	19,407,861	(b)	$	11,896,048	(b)

G	Date of construction		1931			1931
H	Date acquired		April 17, 2002			April 17, 2002
I	Life on which depreciation of building and improvements in latest income statements is computed		39 years			39 years
(a)	Gross amount of real estate balance at January 1	$	117,491,713		$	70,646,966
	Purchase of real estate: improvements		51,523,526			46,844,747

	Balance at December 31	$	169,015,239		$	117,491,713

	The costs for federal income tax purposes are the same as for financial statement purposes.
(b)	Accumulated depreciation
	Balance at January 1	$	11,896,049		$	9,105,543
	Depreciation		7,511,812			2,790,506

	Balance at December 31	$	19,407,861		$	11,896,049

WeTable conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Company’s internal controls over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. Contents

InEMPIRE ~~our~~STATE ~~opinion,~~BUILDING ~~the~~COMPANY ~~consolidated financial statements referred to above present fairly, in all material respects, the financial position of Empire State Building Company~~ L.L.C. ~~and~~AND ~~Affiliates~~AFFILIATES at December 31, 2011 and 2010, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles.

~~/s/~~CONSOLIDATED ~~Ernst &~~FINANCIAL ~~Young~~STATEMENTS ~~LLP~~

~~New~~Years ~~York~~Ended December 31, ~~New York~~2012 and 2011

April 11,Table 2012of Contents

1EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

~~EMPIRE~~CONTENTS ~~STATE BUILDING COMPANY L.L.C. AND AFFILIATES~~

CONSOLIDATED BALANCE SHEETS


Report of Independent Registered Public Accounting Firm		3

Financial Statements:

Consolidated Balance Sheets		4 and 5

Consolidated Statements of Income		6

Consolidated Statements of Changes in Equity		7

Consolidated Statements of Cash Flows		8 and 9

Notes to Consolidated Financial Statements		10 – 33

December 31,	2011		2010
ASSETS
Property—at cost:
Leasehold improvements	$	168,225,715	$	169,116,734
Subtenant improvements		62,001,552		62,001,552
Leasehold		740,000		740,000
Equipment		5,436,001		5,436,001
		236,403,268		237,294,287
Less accumulated depreciation and amortization		53,913,170		42,546,701
Net Property		182,490,098		194,747,586
Other Assets:
Cash and cash equivalents		32,210,735		42,797,338
Cash—restricted—tenants’ security deposits		5,890,221		4,836,544
Cash—tenant improvement escrow		7,268,591		683,147
Accounts receivable—net		1,507,232		2,263,592
Rent receivable—net		3,800,230		4,745,195
Unbilled rent receivable—net		43,796,054		35,403,198
Loans receivable		1,235,179		1,353,575
Prepaid expenses		16,390,511		16,024,792
Deferred charges and other deferred costs, net of accumulated amortization		12,392,263		16,186,225
Due from Lessor		6,067,806		1,888,629
Due from Supervisor		300,000		300,000
Other assets		—		314,445
Total Assets	$	313,348,920	$	321,544,266

~~The~~Empire ~~accompanying~~State ~~notes are~~Building anCompany ~~integral part of these consolidated financial statements~~L.L.C.

2(a Limited Liability Company)

~~EMPIRE~~We ~~STATE~~have ~~BUILDING~~audited ~~COMPANY~~the accompanying consolidated balance sheets of Empire State Building Company L.L.C. ~~AND~~(the ~~AFFILIATES~~“Company”) and Affiliates as of December 31, 2012 and 2011, and the related consolidated statements of income, changes in equity and cash flows for each of the two years in the period ended December 31, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

~~CONSOLIDATED~~We ~~BALANCE~~conducted ~~SHEETS~~our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal controls over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

December 31,	2011			2010
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	19,384,473		$	22,576,559
Tenants’ security deposits payable		5,890,221			4,836,544
Overage rent due to Lessor		28,780,449			—
Due to Lessor		—			8,963,473
Due to Supervisor		—			97,401
Deferred income		8,935,964			5,992,005
Total Liabilities		62,991,107			42,465,982
Commitments and Contingencies		—			—
Equity (Deficit):
Empire State Building Company L.L.C. members’ equity		252,164,398			282,084,869
Noncontrolling interest		(1,806,585	)		(3,006,585	)
Total Equity		250,357,813			279,078,284
Total Liabilities and Equity	$	313,348,920		$	321,544,266

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Empire State Building Company L.L.C. and Affiliates at December 31, 2012 and 2011, and the consolidated results of their operations and their cash flows for each of the two years in the period ended December 31, 2012, in conformity with U.S. generally accepted accounting principles.

~~The~~/s/ ~~accompanying~~Ernst & ~~notes~~Young ~~are~~LLP ~~an integral part of these consolidated financial statements.~~

3New York, New York

~~EMPIRE~~March 28, ~~STATE~~2013 ~~BUILDING COMPANY L.L.C. AND AFFILIATES~~

CONSOLIDATEDTable STATEMENTSof OF INCOME Contents

Years Ended December 31,	2011			2010
Income:
Rent:
Minimum rental revenue	$	71,027,944		$	63,238,062
Tenant reimbursements		25,652,065			30,041,000
Antenna license fees		16,410,246			16,056,286
Other		5,504,740			5,045,107
Total Rent		118,594,995			114,380,455
Observatory:
Revenue		80,562,446			78,879,919
Expenses		20,009,225			18,249,147
Observatory Net Income		60,553,221			60,630,772
Total Income		179,148,216			175,011,227
Operating Expenses:
Basic rent expense		8,439,772			8,094,750
Overage rent		28,780,449			4,111,371
Real estate taxes		30,009,907			27,664,886
Payroll and related costs		23,025,267			21,116,346
Repairs and maintenance		14,697,053			10,689,687
Utilities		12,557,405			15,539,915
Supervisory fees		583,368			574,000
Professional fees		5,340,405			5,543,394
Insurance		7,422,948			7,657,206
Advertising		2,113,253			2,538,242
Cleaning		2,881,196			2,924,560
Administrative		1,580,273			2,292,902
Acquisition fees		8,305,666			—
Depreciation		12,795,037			9,318,935
Amortization		3,038,347			2,374,619
Bad debts, net		5,423,352			2,405,578
Total Operating Expenses		166,993,698			122,846,391
Operating Income		12,154,518			52,164,836
Interest and Dividend Income		125,011			140,043
Net Income		12,279,529			52,304,879
Net Income of Affiliate Attributable to Noncontrolling Interest		(1,200,000	)		(1,935,159	)
Net Income Attributable to Empire State Building Company L.L.C.	$	11,079,529		$	50,369,720

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

~~The~~CONSOLIDATED ~~accompanying~~BALANCE ~~notes~~SHEETS ~~are an integral part of these consolidated financial statements.~~


December 31,	2012		2011
ASSETS
Property—at cost:
Leasehold improvements	$	176,313,109	$	168,225,715
Subtenant improvements		70,255,123		62,001,552
Leasehold		99,150		740,000
Equipment		5,002,576		5,436,001

		251,669,958		236,403,268
Less accumulated depreciation and amortization		56,365,487		53,913,170

Net Property		195,304,471		182,490,098
Other Assets:
Cash and cash equivalents		25,514,656		32,210,735
Cash—restricted—tenants’ security deposits		9,421,191		5,890,221
Cash—tenant improvement escrow		15,374,241		7,268,591
Accounts receivable—net		3,932,682		1,507,232
Rent receivable—net		3,056,141		3,800,230
Unbilled rent receivable—net		56,665,930		43,796,054
Loans receivable		1,115,356		1,235,179
Prepaid expenses		16,158,302		16,390,511
Deferred charges and other deferred costs, net of accumulated amortization		14,410,558		12,392,263
Due from Lessor		—		6,067,806
Due from Supervisor		300,000		300,000
Other assets		231		—

Total Assets	$	341,253,759	$	313,348,920

~~EMPIRE~~The ~~STATE~~accompanying ~~BUILDING~~notes are ~~COMPANY~~an ~~L.L.C.~~integral ~~AND~~part ~~AFFILIATES~~of these consolidated financial statements.

~~CONSOLIDATED~~4 ~~STATEMENTS OF CHANGES IN EQUITY~~

Years Ended December 31, 2011 and 2010	Total			Empire StateBuildingCompanyL.L.C.Members’Equity			NoncontrollingInterest
Equity (Deficit)—January 1, 2010	$	230,373,405		$	235,315,149		$	(4,941,744	)
Distributions—2010		(3,600,000	)		(3,600,000	)		—
Net Income—2010		52,304,879			50,369,720			1,935,159
Equity (Deficit)—December 31, 2010		279,078,284			282,084,869			(3,006,585	)
Distributions—2011		(41,000,000	)		(41,000,000	)		—
Net Income—2011		12,279,529			11,079,529			1,200,000
Equity (Deficit)—December 31, 2011	$	250,357,813		$	252,164,398		$	(1,806,585	)

~~The~~EMPIRE ~~accompanying~~STATE ~~notes~~BUILDING ~~are~~COMPANY anL.L.C. ~~integral~~AND ~~part~~AFFILIATES ~~of these consolidated financial statements.~~

5CONSOLIDATED BALANCE SHEETS

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES


December 31,	2012			2011
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued liabilities	$	9,025,174		$	19,384,473
Tenants’ security deposits payable		9,421,191			5,890,221
Overage rent due to Lessor		24,199,368			28,780,449
Due to Lessor		11,913,872			—
Deferred income		8,705,402			8,935,964

Total Liabilities		63,265,007			62,991,107

Equity (Deficit):
Empire State Building Company L.L.C. members’ equity		278,647,337			252,164,398
Noncontrolling interest		(658,585	)		(1,806,585	)

Total Equity		277,988,752			250,357,813

Total Liabilities and Equity	$	341,253,759		$	313,348,920

~~CONSOLIDATED~~The ~~STATEMENTS~~accompanying OFnotes ~~CASH~~are ~~FLOWS~~an integral part of these consolidated financial statements.

Years Ended December 31,	2011			2010
Cash Flows from Operating Activities:
Net income	$	12,279,529		$	52,304,879
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		12,795,037			9,318,935
Amortization		3,038,347			2,374,619
Bad debts		5,423,352			2,405,578
Net change in operating assets and liabilities:
Accounts receivable		756,360			(2,533,006	)
Rent receivable		(4,478,387	)		1,359,668
Unbilled rent receivable		(8,392,856	)		(4,740,929	)
Loans receivable		118,396			46,334
Prepaid expenses		(365,719	)		(1,226,486	)
Deferred charges—leasing commissions and costs		(435,655	)		(2,516,294	)
Overage rent due from/to Lessor		30,669,078			540,960
Other assets		314,445			219,752
Accounts payable and accrued liabilities		5,062,734			(5,749,142	)
Deferred income		2,943,959			372,366
Net Cash Provided by Operating Activities		59,728,620			52,177,234
Cash Flows from Investing Activities:
Property additions		(7,025,547	)		(49,768,496	)
Tenant improvement escrow, net		(6,585,444	)		(3,539	)
Net Cash Used in Investing Activities		(13,610,991	)		(49,772,035	)
Cash Flows from Financing Activities:
Members’ distributions		(41,000,000	)		(3,600,000	)
Reimbursements from Lessor		48,189,857			—
Outlays on behalf of Lessor		(64,835,291	)		—
Other deferred costs		941,202			(941,202	)
Advances from Lessor to fund building improvements		—			1,658
Net Cash Used in Financing Activities		(56,704,232	)		(4,539,544	)
Net Decrease in Cash and Cash Equivalents		(10,586,603	)		(2,134,345	)
Cash and Cash Equivalents—beginning of year		42,797,338			44,931,683
Cash and Cash Equivalents—end of year	$	32,210,735		$	42,797,338
Net cash used in financing activities excludes increases of $1,069,069 and $-0- in accounts payable and accrued liabilities for the years ended December 31, 2011 and 2010, respectively.

TheTable accompanying notes are an integral part of these consolidated financial statements. Contents

6EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

~~EMPIRE~~CONSOLIDATED ~~STATE~~STATEMENTS ~~BUILDING~~OF ~~COMPANY~~INCOME ~~L.L.C. AND AFFILIATES~~

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)


Years Ended December 31,	2012			2011
Income:
Rent:
Minimum rental revenue	$	76,847,823		$	71,027,944
Tenant reimbursements		25,100,017			25,652,065
Antenna license fees		17,061,076			16,410,246
Other		4,427,863			5,504,740

Total Rent		123,436,779			118,594,995

Real Estate Tax Refund—net		10,131,396			—

Observatory:
Revenue		91,870,220			80,562,446
Expenses		20,708,587			20,009,225

Observatory Net Income		71,161,633			60,553,221

Total Income		204,729,808			179,148,216

Operating Expenses:
Basic rent expense		10,227,898			8,439,772
Overage rent		24,199,368			28,780,449
Real estate taxes		26,340,502			30,009,907
Payroll and related costs		22,174,690			23,025,267
Repairs and maintenance		17,445,198			14,697,053
Utilities		12,717,984			12,557,405
Supervisory fees		591,567			583,368
Professional fees		5,892,769			5,340,405
Insurance		7,239,712			7,422,948
Advertising		2,324,696			2,113,253
Cleaning		2,862,839			2,881,196
Administrative		1,972,563			1,580,273
Acquisition fees		7,894,232			8,305,666
Depreciation		11,695,513			12,795,037
Amortization		1,919,149			3,038,347
Bad debts, net		1,797,652			5,423,352

Total Operating Expenses		157,296,332			166,993,698

Operating Income		47,433,476			12,154,518
Interest and Dividend Income		97,463			125,011

Net Income		47,530,939			12,279,529
Net Income of Affiliate Attributable to Noncontrolling Interest		(1,148,000	)		(1,200,000	)

Net Income Attributable to Empire State Building Company L.L.C.	$	46,382,939		$	11,079,529

Years Ended December 31,	2011		2010
Supplemental Schedule of Noncash Activities -
For the year ended December 31, 2010, the Company entered into a lease modification agreement with a tenant which had a rent receivable balance in arrears.
Decrease in rent receivable	$	—	$	1,399,909
Increase in loans receivable		—		(1,399,909	)
	$	—	$	—

The accompanying notes are an integral part of these consolidated financial statements.

~~The~~6 ~~accompanying notes are an integral part of these consolidated financial statements.~~

7Table of Contents

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

~~NOTES~~CONSOLIDATED TOSTATEMENTS ~~CONSOLIDATED~~OF ~~FINANCIAL~~CHANGES ~~STATEMENTS~~IN EQUITY

1.Years ~~Organization~~Ended ~~and~~December 31, ~~Nature~~2012 ofand ~~Business~~2011

Empire State Building Company L.L.C. (“ESB”) was originally organized on August 15, 1961 as a joint venture to lease and sublease the approximately 2,800,000 square foot office building and Observatory, more commonly known as the Empire State Building situated at 350 Fifth Avenue, New York, New York, (the “Property”). At December 31, 2011, the Property was approximately 68% occupied. On April 2, 1971, ESB converted from a joint venture to a general partnership. On December 17, 2001, ESB converted from a general partnership to a New York limited liability company and is now known as Empire State Building Company L.L.C. Although limited liability companies are unincorporated associations, their members have limited personal liability for the obligations or debts of the entity similar to stockholders of a corporation.


	Total			Empire State Building Company L.L.C. Members’ Equity			Noncontrolling Interest
Equity (Deficit)—January 1, 2011	$	279,078,284		$	282,084,869		$	(3,006,585	)
Distributions—2011		(41,000,000	)		(41,000,000	)		—
Net Income—2011		12,279,529			11,079,529			1,200,000

Equity (Deficit)—December 31, 2011		250,357,813			252,164,398			(1,806,585	)
Distributions—2012		(19,900,000	)		(19,900,000	)		—
Net Income—2012		47,530,939			46,382,939			1,148,000

Equity (Deficit)—December 31, 2012	$	277,988,752		$	278,647,337		$	(658,585	)

~~ESB~~The ~~commenced~~accompanying ~~operations~~notes onare ~~August 15,~~an ~~1961~~integral ~~and~~part ~~is to continue until the earlier~~ of ~~the complete~~these ~~disposition~~consolidated offinancial ~~all of the Company’s assets, unless sooner terminated pursuant to the Operating Agreement or by law~~statements.

On7 February 9, 1962, Empire State Building, Inc. (the “Observatory” or “Inc.”) was formed to sublease from ESB and operate the observation decks located on the 86th and 102nd floors of the Property. A new lease was entered into in 2010 (the “2010 Lease”) under which Inc. acted as agent for a joint venture (the “Joint Venture”) owned 99% by ESB and 1% by Inc. The Joint Venture arrangement has no significant impact on the financial position or results of operations reported in the consolidated financial statements. The 2010 Lease expired on December 31, 2010 and was not renewed.

OnTable January 1, 2011, ESB entered into a lease for the observation decks with ESB Observatory LLC, a newly organized limited liability company owned 99% by ESB and 1% by ESB 102 Corporation (which, in turn, is owned 100% by ESB), for a five-year term commencing January 1, 2011 and expiring December 31, 2015. ESB Observatory LLC is to pay fixed annual rent of $6,700,000, adjusted each year commencing 2012 to reflect the increase in the Consumer Price Index, plus additional rent, as defined in the lease. The new leasing arrangement does not have a significant impact on the financial position or results of operations reported in the consolidated financial statements. Contents

OnEMPIRE ~~July 15,~~STATE ~~2009,~~BUILDING ~~ESB~~COMPANY ~~Captive Insurance Company~~ L.L.C. ~~(the~~AND ~~“Captive”)~~AFFILIATES was formed in the State of Vermont, as a captive insurance company to insure the Property and business interruption risks of ESB and the Observatory, including, but not limited to, terrorism risks. The Captive was formed as a single member limited liability company, wholly owned by ESB. For income tax reporting purposes, a single member LLC is classified as a division of its member, accordingly, the single member LLC’s taxable income or loss is reportable by its member. The Captive reinsures certain coinsurance amounts. There were no losses incurred through December 31, 2011.

8CONSOLIDATED STATEMENTS OF CASH FLOWS

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES


Years Ended December 31,	2012			2011
Cash Flows from Operating Activities:
Net income	$	47,530,939		$	12,279,529
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		11,695,513			12,795,037
Amortization		1,919,149			3,038,347
Bad debts		1,899,435			5,423,352
Net change in operating assets and liabilities:
Accounts receivable		(2,425,450	)		756,360
Rent receivable		(2,111,292	)		(4,478,387	)
Unbilled rent receivable		(12,869,876	)		(8,392,856	)
Loans receivable		119,823			118,396
Prepaid expenses		232,209			(365,719	)
Deferred charges—leasing commissions and costs		(3,937,444	)		(435,655	)
Overage rent due from/to Lessor		(4,581,081	)		30,669,078
Other assets		(231	)		314,445
Accounts payable and accrued liabilities		(11,115,822	)		5,062,734
Deferred income		(230,562	)		2,943,959

Net Cash Provided by Operating Activities		26,125,310			59,728,620

Cash Flows from Investing Activities -
Property additions		(22,797,417	)		(7,025,547	)

Net Cash Used in Investing Activities		(22,797,417	)		(7,025,547	)

Cash Flows from Financing Activities:
Members’ distributions		(19,900,000	)		(41,000,000	)
Reimbursements from Lessor		75,060,186			48,189,857
Outlays on behalf of Lessor		(57,078,508	)		(64,835,291	)
Other deferred costs		—			941,202
Tenant improvement escrow, net		(8,105,650	)		(6,585,444	)

Net Cash Used in Financing Activities		(10,023,972	)		(63,289,676	)

Net Decrease in Cash and Cash Equivalents		(6,696,079	)		(10,586,603	)
Cash and Cash Equivalents—beginning of year		32,210,735			42,797,338

Cash and Cash Equivalents—end of year	$	25,514,656		$	32,210,735

Non-Cash Investing Activities:
Purchases of property additions included in accounts payable and accrued liabilities	$	1,052,147		$	295,480

~~NOTES~~The TOaccompanying ~~CONSOLIDATED~~notes are ~~FINANCIAL~~an ~~STATEMENTS~~integral part of these consolidated financial statements.

2.8 ~~Summary of Significant Accounting Policies~~

PrinciplesTable of consolidation — The accompanying consolidated financial statements include the accounts of Empire State Building Company L.L.C. and its wholly owned subsidiaries: ESB Captive Insurance Company L.L.C., ESB 102 Corporation, and ESB Observatory LLC; and Empire State Building, Inc. (collectively, the “Company”). Contents

~~All~~EMPIRE ~~significant~~STATE ~~intercompany~~BUILDING ~~accounts~~COMPANY ~~and~~L.L.C. ~~transactions~~AND ~~have~~AFFILIATES ~~been eliminated in consolidation.~~

~~The~~CONSOLIDATED ~~Company~~STATEMENTS ~~follows~~OF ~~the~~CASH ~~provisions~~FLOWS ~~pertaining to noncontrolling interests of Financial Accounting Standards Board~~ (~~FASB~~Continued) Accounting Standards Codification (ASC) 810, “Consolidation.” A noncontrolling interest is the portion of equity in a subsidiary not attributable, directly or indirectly, to a parent. Among other matters, the noncontrolling interest standards require that noncontrolling interests be reported as part of equity in the consolidated balance sheets (separately from the controlling interest’s equity). The noncontrolling interest standards also require companies to disclose the changes in the noncontrolling interest in the statement of equity or in a separate note to the financial statements; and require that net income include earnings attributable to the noncontrolling interest with disclosure on the face of the statement of income of the amounts attributable to the parent and to the noncontrolling interest.

The Company’s interest in Empire State Building, Inc. is classified as a noncontrolling interest in the accompanying consolidated financial statements.


Years Ended December 31,	2012			2011
Supplemental Schedule of Noncash Activities -
In connection with a new tenant, as an inducement for an existing tenant to vacate its space, the Company forgave the existing tenant’s outstanding rent receivable.
Decrease in rent receivable	$	(955,946	)	$	—
Increase in subtenant improvements		955,946			—

	$	—		$	—

~~Variable interest~~The ~~entities~~accompanying —notes ~~Under~~are ~~FASB~~an ~~ASC~~integral ~~810,~~part ~~“Consolidation,” when a reporting entity (ESB) is the primary beneficiary~~ of anthese ~~entity that is a variable interest entity as defined in FASB ASC 810, the variable interest entity must be~~ consolidated ~~into the~~ financial statements ~~of the reporting entity~~. The determination of the primary beneficiary of a VIE is based on a qualitative rather than a quantitative analysis. An entity is required to consolidate a VIE if it has (i) the power to direct the activities that most significantly impact the entity’s economic performance and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could be significant to the VIE.

~~Prior~~9 to January 1, 2011, ESB had determined that both Inc. and the Joint Venture were VIEs of which ESB was the primary beneficiary. As a result, ESB consolidated both the Joint Venture and Inc. at December 31, 2010, as ESB through its design of the Joint Venture and Inc. and its lease to the Joint Venture, had both the power to direct the activities that most significantly impact both the Joint Venture and Inc.’s economic performance and the obligation to absorb losses of both the Joint Venture and Inc. and the right to receive benefits from both the Joint Venture and Inc. that could be significant to both the Joint Venture and Inc.

9Table of Contents

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~On January~~ 1,. ~~2011,~~Organization and Nature of Business Empire State Building Company L.L.C. (“ESB”) ~~deconsolidated~~was ~~the~~originally ~~Joint~~organized ~~Venture~~on August 15, 1961 as a ~~result~~joint ofventure to lease and sublease the ~~expiration~~ ofapproximately 2,900,000 square foot office building and Observatory, more commonly known as the ~~2010~~Empire ~~Lease.~~State AsBuilding ofsituated at 350 Fifth Avenue, New York, New York, (the “Property”). At December 31, ~~2011~~2012, the Property was approximately 69% occupied. On April 2, 1971, ESB ~~continued~~converted from a joint venture to ~~report~~a angeneral ~~estimated~~partnership. $1On December 17,~~910~~ 2001,~~000~~ ~~income~~ESB ~~tax~~converted ~~liability~~from ~~relating~~a general partnership to ~~uncertain~~a ~~tax~~New ~~positions~~York oflimited ~~Inc.~~liability ascompany ~~ESB~~and is ~~responsible~~now ~~for~~known ~~such~~as ~~liability~~Empire State Building Company L.L.C. Although limited liability companies are unincorporated associations, their members have limited personal liability for the obligations or debts of the entity similar to stockholders of a corporation.

~~The~~ESB ~~deconsolidation~~commenced ofoperations ~~the~~on ~~Joint~~August ~~Venture~~15, ~~had~~1961 noand ~~impact~~is onto ~~ESB’s~~continue ~~consolidated~~until ~~balance~~the ~~sheets~~earlier ~~and~~of ~~statement~~the complete disposition of ~~income~~all asof ~~ESB~~the ~~owned~~Company’s ~~99% of~~assets, unless sooner terminated pursuant to the ~~Joint~~Operating ~~Venture.~~Agreement or by law.

~~The~~On ~~aggregate~~February ~~assets~~9, ~~liabilities~~1962, ~~and~~Empire ~~deficit~~State ofBuilding, Inc. as(the of“Observatory” ~~December 31,~~or ~~2011~~“Inc.”) ~~were~~was ~~$4,574,414, $6,380,999~~formed ~~and~~to ~~$(1,806,585),~~sublease ~~respectively,~~from ESB and ~~net~~operate ~~income for~~ the ~~year~~observation ~~ended~~decks ~~December 31,~~located ~~2011~~on ~~consisted~~the of86th anand ~~income~~102nd ~~tax~~floors ~~benefit~~ of ~~$1,200,000.~~the ~~The liabilities of Inc~~Property. ~~consist~~A ofnew ~~$1,910,000~~lease ofwas ~~income~~entered ~~tax~~into ~~liability~~in ~~and~~2010 ~~approximately~~(the ~~$4,470,000 of~~“2010 ~~intercompany~~Lease”) ~~payable~~under ~~due to ESB,~~ which ~~eliminates in consolidation~~Inc. ~~The~~acted ~~aggregate~~as ~~assets,~~agent ~~liabilities~~for ~~and~~a ~~deficit~~joint ofventure (the “Joint Venture”) asowned of99% ~~December 31,~~by ~~2010~~ESB ~~were $6,895,694, $9,902,279~~ and ~~$(3,006,585)~~1% ~~(includes~~by Inc.’s 1%The ~~interest in the~~ Joint Venture), ~~respectively.~~arrangement ~~Net~~has ~~income~~no ~~for~~significant ~~the~~impact ~~year~~on ~~then~~the ~~ended~~financial ~~was~~position ~~$4,515,868~~or ~~(net~~results of ~~rent~~operations ~~paid~~reported toin ~~ESB).~~the ~~Net~~consolidated ~~income~~financial ~~attributable~~statements. toThe ~~the~~2010 ~~noncontrolling~~Lease ~~interest~~expired ~~was~~on $1December 31,~~935,159~~ ~~(inclusive~~2010 ofand awas ~~$1,890,000~~not ~~income tax benefit)~~renewed.

~~Revenue~~On ~~recognition:~~January 1, 2011, ESB entered into a lease for the observation decks with Empire State Realty Observatory TRS, LLC (formerly ESB Observatory LLC), a newly organized limited liability company owned 99% by ESB and 1% by ESB 102 Corporation (which, in turn, is owned 100% by ESB), for a five-year term commencing January 1, 2011 and expiring December 31, 2015. Empire State Realty Observatory TRS, LLC is to pay fixed annual rent of $6,700,000, adjusted each year commencing 2012 to reflect the increase in the Consumer Price Index, plus additional rent, as defined in the lease. The new leasing arrangement does not have a significant impact on the financial position or results of operations reported in the consolidated financial statements.

~~Empire~~On ~~State~~July ~~Building~~15, 2009, ESB Captive Insurance Company L.L.C. —(the ~~Minimum~~“Captive”) ~~rental~~was ~~revenue~~formed isin ~~recognized~~the onState aof ~~straight-line~~Vermont, ~~basis~~as ~~over~~a ~~the~~captive ~~terms~~insurance ofcompany to insure the ~~subleases.~~Property ~~The~~and ~~excess~~business ofinterruption ~~rents~~risks soof ~~recognized~~ESB ~~over~~and ~~amounts contractually~~the ~~due~~Observatory, ~~pursuant~~including, tobut ~~the~~not ~~underlying~~limited ~~subleases~~to, isterrorism ~~included~~risks. inThe ~~unbilled~~Captive ~~rents~~was ~~receivable~~formed onas ~~the~~a ~~accompanying~~single ~~balance~~member ~~sheets.~~limited ~~Leases~~liability ~~generally~~company, ~~contain~~wholly ~~provisions~~owned ~~under~~by ~~which~~ESB. ~~tenants~~For ~~reimburse~~income ~~the~~tax ~~Company~~reporting ~~for~~purposes, a ~~portion~~single ofmember ~~property~~LLC ~~operating expenses,~~is ~~real~~classified ~~estate~~as ~~taxes~~a ~~and~~division ~~other~~of ~~recoverable~~its ~~costs.~~member, ~~Receivables~~accordingly, ~~for~~the ~~escalation~~single ~~and~~member ~~expense~~LLC’s ~~reimbursements~~taxable ~~are~~income ~~accrued~~or inloss ~~the~~is ~~period~~reportable ~~the~~by ~~related~~its ~~expenses~~member. ~~are~~The ~~incurred.~~Captive ~~Rental~~reinsures ~~payments~~certain ~~received~~coinsurance ~~before~~amounts. ~~they~~There ~~are~~were ~~recognized~~no aslosses ~~income~~incurred ~~are~~through ~~recorded~~December ~~as deferred~~31, ~~income~~2012.

~~ESB~~10 provides an estimated allowance for uncollectible rent and loans receivable based upon an analysis of tenant and loan receivables and historical bad debts, tenant concentrations, tenant credit worthiness, tenant security deposits (including letters of credit and lease guarantees provided by the tenant), current economic trends and changes in tenant payment terms. Rent receivable is shown net of an estimated allowance for doubtful accounts of $1,455,000 and $1,192,000 at December 31, 2011 and 2010, respectively. Unbilled rent receivable is shown net of an estimated allowance for doubtful accounts of $710,000 and $165,000 at December 31, 2011 and 2010, respectively.

10Table of Contents

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Bad~~2. ~~debt~~Summary ~~expense~~of isSignificant ~~shown~~Accounting ~~net~~Policies Principles of ~~recoveries~~consolidation—The accompanying consolidated financial statements include the accounts of Empire State Building Company L.L.C. and its wholly owned subsidiaries: ESB Captive Insurance Company L.L.C., ESB 102 Corporation, and Empire State Realty Observatory TRS, LLC; and Empire State Building, Inc. (collectively, the “Company”).

~~ESB~~All ~~Observatory~~significant ~~LLC~~intercompany ~~and~~accounts ~~Empire State Building, Inc. — Revenues from the sale of Observatory tickets are recognized upon admission. Deferred income related to unused~~ and ~~unexpired~~transactions ~~tickets~~have asbeen ofeliminated ~~December 31,~~in ~~2011 was approximately $3,400,000~~consolidation.

~~ESB~~The ~~Observatory~~Company ~~LLC~~follows ~~and~~the ~~Empire~~provisions ~~State~~pertaining ~~Building,~~to ~~Inc.~~noncontrolling ~~provide~~interests anof ~~estimated~~Financial ~~allowance~~Accounting ~~for~~Standards ~~uncollectible~~Board ~~accounts~~(FASB) ~~receivable~~Accounting ~~based~~Standards ~~upon~~Codification ~~an analysis~~(ASC) 810, “Consolidation.” A noncontrolling interest is the portion of ~~accounts~~equity ~~receivable~~in ~~and~~a ~~historical~~subsidiary ~~bad~~not ~~debts~~attributable, ~~customer~~directly ~~credit~~or ~~worthiness~~indirectly, ~~current~~to ~~economic~~a ~~trends~~parent. ~~and~~Among ~~changes~~other matters, the noncontrolling interest standards require that noncontrolling interests be reported as part of equity in ~~payment~~the ~~terms~~consolidated balance sheet (separately from the controlling interest’s equity). ~~Management~~The ~~believes~~noncontrolling nointerest ~~allowance~~standards isalso ~~necessary~~require ~~for~~companies ~~outstanding~~to ~~accounts~~disclose ~~receivable~~the ~~balances~~changes ~~at December 31,~~in ~~2011~~the noncontrolling interest in the statement of equity or in a separate note to the financial statements; and ~~2010.~~require that net income include earnings attributable to the noncontrolling interest with disclosure on the face of the statements of income of the amounts attributable to the parent and to the noncontrolling interest.

~~Cash and cash equivalents —~~ The Company’s ~~considers~~interest ~~highly~~in ~~liquid~~Empire ~~investments~~State ~~with an~~Building, ~~original~~Inc. ~~maturity~~is ofclassified ~~three~~as ~~months~~a ornoncontrolling ~~less~~interest ~~when~~in ~~purchased~~the toaccompanying beconsolidated ~~cash~~financial ~~equivalents~~statements.

AtReclassifications—For ~~times~~purposes ~~the~~of ~~Company~~comparison, ~~has~~certain ~~demand~~items ~~and~~shown ~~other deposits with a bank~~ in ~~excess~~the of2011 ~~federally~~consolidated ~~insured~~financial ~~limits.~~statements ~~The~~have ~~possibility~~been ofreclassified ~~loss~~to ~~exists~~conform ifwith the ~~bank~~presentation ~~holding~~used ~~uninsured~~for ~~deposits were to fail~~2012.

~~Property~~Variable interest entities—Under ~~The~~FASB ~~Company~~ASC ~~reviews~~810, ~~real~~“Consolidation,” ~~estate~~when ~~assets~~a ~~for~~reporting ~~impairment~~entity ~~whenever~~(ESB) ~~events~~is orthe ~~changes~~primary inbeneficiary ~~circumstances~~of ~~indicate~~an ~~the~~entity ~~carrying~~that ~~amount~~is ofa ~~assets~~variable tointerest beentity ~~held~~as ~~and~~defined ~~used~~in ~~may~~FASB ~~not~~ASC 810, the variable interest entity must be ~~recoverable.~~ ~~Impairment~~consolidated ~~losses~~into ~~are~~the ~~recognized~~financial ~~when~~statements of the ~~estimated~~reporting ~~undiscounted~~entity. ~~cash~~The ~~flows~~determination ~~expected~~of tothe beprimary ~~generated~~beneficiary byof ~~those~~a ~~assets~~VIE ~~are~~is ~~less~~based ~~than~~on ~~the~~a ~~assets’~~qualitative ~~carrying~~rather ~~amount~~than a quantitative analysis. ~~Impaired~~An ~~assets~~entity ~~are~~is ~~recorded~~required atto ~~their~~consolidate ~~estimated~~a ~~fair~~VIE ~~value~~if ~~calculated based~~it onhas (i) the ~~discounted~~power ~~cash~~to ~~flows~~direct ~~expected~~the activities that most significantly impact the entity’s economic performance and (ii) the obligation to beabsorb ~~generated~~losses byof the ~~asset.~~VIE Noor ~~impairment~~the ~~loss~~right ~~has~~to ~~been~~receive ~~recorded~~benefits ~~for~~from the ~~years~~VIE ~~ended~~that ~~December 31,~~could ~~2011~~be ~~and~~significant ~~2010.~~to the VIE.

~~Depreciation~~11 and amortization — Depreciation is computed by the straight-line method over the estimated useful lives of forty years for the leasehold improvements and seven years for equipment. The leasehold is being depreciated by the straight-line method over the term of the sublease. Subtenant improvements, leasing commissions and leasing costs are amortized by the straight-line method over the terms of the related tenant leases.

11Table of Contents

EMPIRE STATE BUILDING COMPANY L.L.C. AND AFFILIATES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Repairs~~Prior to January 1, 2011, ESB had determined that both Inc. and ~~maintenance~~the ~~are~~Joint ~~charged~~Venture towere ~~expense~~VIEs of which ESB was the primary beneficiary. As a result, ESB consolidated both the Joint Venture and Inc. at December 31, 2010, as ~~incurred~~ESB through its design of the Joint Venture and Inc. ~~Expenditures~~and ~~which~~its ~~increase~~ lease to the ~~useful~~Joint ~~lives~~Venture, had both the power to direct the activities that most significantly impact both the Joint Venture and Inc.’s economic performance and the obligation to absorb losses of both the ~~assets~~Joint ~~are~~Venture ~~capitalized~~and Inc. and the right to receive benefits from both the Joint Venture and Inc. that could be significant to both the Joint Venture and Inc.

~~Sales~~On ~~tax~~January —1, ~~Sales~~2011, ~~tax~~ESB ~~collected~~deconsolidated bythe ~~ESB~~Joint ~~from~~Venture ~~tenants~~as ~~for sub-metered~~a ~~electricity~~result isof ~~presented~~the inexpiration of the ~~financial~~2010 ~~statements~~Lease. onAs aof ~~gross~~December ~~basis and~~31, ~~accordingly~~2012, ~~included~~ESB incontinued ~~revenue~~to ~~and~~report ~~expenses.~~an ~~Observatory~~estimated ~~admission~~$762,000 ~~ticket~~income ~~sales~~tax ~~are~~liability ~~reported~~relating ~~net~~to uncertain tax positions of ~~sales~~Inc. ~~tax~~as ~~and,~~ESB ~~accordingly,~~is ~~excluded~~responsible ~~from~~for ~~revenue~~such ~~and expenses~~liability.

~~Income~~The ~~taxes~~deconsolidation —of ~~ESB~~the ~~and~~Joint ~~ESB~~Venture ~~Observatory~~had ~~LLC are not subject to federal and state income taxes and, accordingly, make~~ no ~~provision~~impact ~~for~~on ~~federal and state income taxes in the accompanying financial statements.~~ ESB’s ~~rental~~consolidated ~~operations~~balance ~~are~~sheets ~~not~~and ~~subject~~statement toof ~~local~~ income ~~taxes.~~as ESB’s ~~taxable~~owned ~~income~~99% orof ~~loss (which includes~~ the ~~income~~Joint ~~or loss of the Captive) is reportable by its members~~Venture.

~~Empire~~The ~~State~~aggregate ~~Building~~assets, ~~Inc.~~liabilities ~~has~~and ~~elected~~deficit toof beInc. ~~taxed~~as ~~under~~of ~~the~~December ~~Subchapter S provisions~~31, of2012 ~~the~~were ~~Internal~~$4,574,414, ~~Revenue~~$5,232,999 ~~Code~~ and ~~applicable New York State income tax law effective January 1~~$(658,585) ~~1971. Accordingly~~respectively, ~~the~~and ~~Company~~net ~~has not provided for federal or state~~ income ~~taxes since all income is passed through directly to the stockholders~~ for the ~~years~~year ended December 31, ~~2011~~2012 ~~and~~consisted ~~2010.~~of ~~New~~an ~~York~~income ~~City~~tax ~~does~~benefit ~~not~~of ~~recognize S Corporations as pass-through entities~~$1,148,000. ~~Therefore,~~The ~~Empire~~liabilities ~~State~~of ~~Building,~~ Inc. isconsist ~~subject~~of to$762,000 ~~New~~of ~~York~~income ~~City general corporate~~ tax ~~which~~liability ~~totaled~~ and approximately $24,~~500~~470,000 ~~for~~of ~~the~~intercompany ~~year~~payable ~~ended~~due ~~December 31~~to ESB, ~~2010.~~which ~~ESB~~eliminates ~~and~~in ~~ESB~~consolidation. ~~Observatory~~The ~~LLC~~aggregate ~~are~~assets, ~~subject~~liabilities toand ~~New~~deficit ~~York~~of ~~City~~Inc. ~~Unincorporated~~as ~~Business~~of ~~tax~~December ~~which~~31, ~~totaled~~2011 ~~approximately~~were $~~177~~4,~~000~~574,414, ~~and~~ $~~184~~6,~~000 for the years ended December 31~~380,999 ~~2011~~ and ~~2010~~ $(1,806,585), respectively~~. ESB 102 Corporation is subject to federal~~, ~~New York State~~ and ~~New~~net ~~York~~income ~~City corporation tax, which totaled approximately $11,000~~ for the year ended December 31, 2011. ~~ESB~~consisted ~~Observatory~~of ~~LLC~~an ~~was~~income intax ~~place~~benefit as of ~~January~~ $1, ~~2011~~200,000. The liabilities of Inc. consist of $~~184~~1,910,000 isof ~~related~~income totax ~~ESB~~liability ~~Co.~~and ~~Inc.~~approximately JV$4,470,000 ~~which~~of ~~was~~intercompany ~~the~~payable JVdue into ~~place~~ESB, which eliminates in ~~2010~~consolidation.

~~The~~Revenue ~~Company follows the provisions pertaining to uncertain tax positions of FASB ASC 740, “Income Taxes,” which provides a financial statement~~ recognition threshold and measurement attribute for a tax position taken or expected to be taken in a tax return. Under FASB ASC 740 the tax benefit from an uncertain tax position may only be recognized if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Among other matters, FASB ASC 740 also provides guidance on accounting for interest and penalties associated with tax positions. As of December 31, 2011, the Company has recorded a liability of $1,910,000 for uncertain tax positions, which is included in accounts payable and accrued liabilities on the Company’s consolidated balance sheet (including $619,000 of accrued interest and penalty). During the years ended December 31, 2011 and 2010, the Company recorded a tax benefit of $1,200,000 and $1,890,000 (inclusive of reductions in interest and penalties of $330,000 and $496,000) as a component of Observatory Income, net on the accompanying consolidated statement of income. The liability is based on amounts of possible outcomes, using facts, circumstances and information available at the reporting date. Interest and penalties are included as a component of income tax benefit on the accompanying consolidated statement of income. :

12Empire State Building Company L.L.C.—Minimum rental revenue is recognized on a straight-line basis over the terms of the subleases. The excess of rents so recognized over amounts contractually due pursuant to the underlying subleases is included in unbilled rents receivable on the accompanying balance sheets. Leases generally contain provisions under which tenants reimburse the Company for a portion of property operating expenses, real estate taxes and other recoverable costs. Receivables for escalation and expense reimbursements are accrued in the period to which they relate. Rental payments received before they are recognized as income are recorded as deferred income.

~~EMPIRE~~12 ~~STATE BUILDING COMPANY L.L.C. AND AFFILIATES~~

NOTESTable TOof CONSOLIDATED FINANCIAL STATEMENTS Contents

~~Taxable~~EMPIRE ~~years~~STATE ~~ended~~BUILDING ~~December 31,~~COMPANY ~~2008,~~L.L.C. ~~2009,~~AND ~~2010~~AFFILIATES ~~and 2011 are subject to IRS and other jurisdictions tax examinations.~~

~~Advertising~~NOTES —TO ~~The~~CONSOLIDATED ~~Company~~FINANCIAL ~~expenses~~STATEMENTS advertising costs as incurred. The Company incurred advertising costs of $4,703,117 and $5,054,935, respectively (inclusive of $2,589,864 incurred by ESB Observatory LLC in 2011 and $2,516,693 incurred by Empire State Building, Inc. in 2010), for the years ended December 31, 2011 and 2010.

~~Environmental~~ESB ~~costs~~provides —an ~~The~~estimated ~~Property~~allowance ~~contains~~for ~~asbestos.~~uncollectible ~~The~~rent ~~asbestos~~and isloans ~~appropriately~~receivable ~~contained,~~based ~~in accordance~~upon ~~with~~an ~~current~~analysis ~~environmental~~of ~~regulations.~~tenant Asand ~~certain~~loan ~~demolition~~receivables ofand ~~the~~historical ~~space~~bad ~~occurs~~debts, ~~environmental~~tenant ~~regulations~~concentrations, ~~are~~tenant incredit ~~place~~worthiness, ~~which~~tenant ~~specify~~security ~~the~~deposits ~~manner~~(including inletters ~~which~~of credit and lease guarantees provided by the ~~asbestos~~tenant), ~~must~~current beeconomic ~~handled~~trends and ~~disposed.~~changes ~~Because~~in ~~the~~tenant ~~obligation~~payment toterms. ~~remove~~Rent ~~the asbestos~~receivable ~~has~~is shown net of an ~~indeterminable~~estimated ~~settlement~~allowance ~~date~~for doubtful accounts of $1,359,000 ~~the~~at ~~Company~~December is31, ~~unable~~2012 to($1,455,000 ~~reasonably~~at ~~estimate~~December ~~the~~31, ~~fair~~2011). ~~value~~Unbilled rent receivable is shown net of ~~this~~an ~~obligation.~~estimated ~~Asbestos~~allowance ~~abatement~~for ~~costs~~doubtful ~~are~~accounts ~~charged~~of to$830,000 ~~expense~~at asDecember ~~incurred.~~31, 2012 ($710,000 at December 31, 2011).

~~Estimates~~Empire —State ~~The~~Realty ~~preparation~~Observatory ofTRS, ~~financial~~LLC ~~statements~~and inEmpire ~~conformity~~State ~~with~~Building, UInc.S.—Revenues ~~generally~~from ~~accepted~~the ~~accounting~~sale ~~principles~~of ~~requires management~~Observatory totickets ~~make~~are ~~estimates~~recognized ~~and~~upon ~~assumptions~~admission ~~that~~or ~~affect~~ticket ~~certain reported amounts and disclosures~~expiration. ~~Actual~~Deferred ~~results~~income ~~could~~related ~~differ~~to ~~from~~unused ~~those~~and ~~estimates.~~unexpired ~~The~~tickets ~~Company regards the allowance for uncollectible rents (including unbilled rent receivable)~~ as ~~being~~ ~~particularly~~of ~~sensitive.~~December ~~Further~~31, ~~when~~2012 ~~tenants~~and ~~experience~~2011 ~~financial~~was ~~difficulties~~approximately $3,200,000 ~~uncertainties associated with assessing the recoverability of subtenant improvements~~ and ~~leasing~~$3,400,000, ~~commissions increase~~respectively.

~~Other~~Empire ~~items~~State ~~subject~~Realty toObservatory ~~such~~TRS, ~~estimates~~LLC ~~and~~provides ~~assumptions~~an ~~include~~estimated ~~the~~allowance ~~determination~~for ofuncollectible ~~the~~accounts ~~useful~~receivable ~~life~~based upon an analysis of ~~real~~accounts ~~estate~~receivable and ~~other~~historical ~~long-lived assets~~bad asdebts, ~~well~~customer ascredit ~~the~~worthiness, ~~valuation~~current economic trends and ~~impairment~~changes ~~analysis~~in ofpayment ~~real~~terms. ~~property~~Management ~~and~~believes ~~other~~no ~~long-lived~~allowance ~~assets.~~is necessary for outstanding accounts receivable balances at December 31, 2012 and 2011.

13Cash and cash equivalents—The Company considers highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.

~~EMPIRE~~At ~~STATE~~times ~~BUILDING~~the ~~COMPANY~~Company Lhas demand and other deposits with a bank in excess of federally insured limits.~~L.C.~~ ~~AND~~The ~~AFFILIATES~~possibility of loss exists if the bank holding uninsured deposits were to fail.

~~NOTES~~Property—The TOCompany ~~CONSOLIDATED~~reviews ~~FINANCIAL~~real ~~STATEMENTS~~estate assets for impairment whenever events or changes in circumstances indicate the carrying amount of assets to be held and used may not be recoverable. Impairment losses are recognized when the estimated undiscounted cash flows expected to be generated by those assets are less than the assets’ carrying amount. Impaired assets are recorded at their estimated fair value calculated based on the discounted cash flows expected to be generated by the asset. No impairment loss has been recorded for the years ended December 31, 2012 and 2011.

~~The~~Depreciation ~~real~~and ~~estate~~amortization—Depreciation ~~industry~~is ~~has~~computed ~~historically~~by ~~been~~the ~~cyclical~~straight-line ~~and~~method ~~sensitive~~over tothe ~~changes~~estimated ~~in economic~~useful ~~conditions~~lives ~~such~~of asforty ~~interest~~years ~~rates,~~for ~~credit~~the ~~availability~~leasehold improvements and ~~unemployment~~seven ~~levels~~years for equipment. ~~Changes~~The inleasehold ~~these~~is ~~economic~~being ~~conditions~~depreciated ~~could~~by ~~affect~~the straight-line method over the ~~assumptions~~

Filing Compare · EMPIRE STATE BUILDING ASSOCIATES L.L.C.