2024 property operating expenses also reflect inflationary cost increases. Turning to the Observatory. We expect 2024 Observatory NOI to be approximately $94 million to $102 million, up from $94 million in 2023. This NOI guidance assumes Observatory expenses of approximately $9 million per quarter for 2024. We continue to leave room within our 2024 FFO guidance range for uncertainty around tourism fluctuations and bad weather that could impact results in any given quarter. Please note that the guidance estimates and assumptions just described do not include the impact of any meaningful future lease termination fee income or any unannounced future property acquisitions, dispositions or capital markets activity. In summary, over the last year, the company has executed well on its priorities.
We leased over 950,000 square feet of total commercial space and achieved over 100 basis points of positive occupancy absorption across the portfolio. We continue to benefit from tenants’ demand for our high-quality assets and the unique value proposition and balance sheet strength that we offer as a landlord. Importantly, we have already invested to fully modernize our portfolio, and our portfolio now reaps the rewards of those forward-looking efforts. We are 92% leased and positioned to lease up further. Our Observatory business remains TripAdvisor’s number one attraction in the U.S. for the second consecutive year and has seen a strong recovery, and we expect continued growth into 2024. The company continues to manage our best-in-class balance sheet prudently and strategically with net debt to EBITDA, which continue to trend down to 5.4x and strong equity to take advantage of attractive investment opportunities that may emerge in this period of uncertainty and capital dislocation.
And our fourth leg of growth, multifamily has performed well and adds to the resiliency of ESRT’s cash flows. Before I turn it over to Q&A, I’d like to congratulate Steve on his promotion to Chief Financial Officer and Chief Accounting Officer. Steve has been a tremendous asset to ESRT since he joined us in December 2020, and this promotion was a natural part of our succession plan that we had in mind when we brought Steve on board. I will continue to work closely with Steve on his growth and development in his new role at ESRT. And with that, I’ll turn the call back to the operator for Q&A. Operator?
Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions]. Our first questions come from the line of John Kim with BMO Capital Markets. Please proceed with your questions.
John Kim: Thank you and congratulations to Christina and Steve. I wanted to ask about Flagstar. I realize it’s a little bit of a deja vu potentially, but how concerned are you with Flagstar’s lease given NYCB stock price? And it looks like they gave a little bit of space at 1333 Broadway. Was that already known? Or was that foreshadowing more space they may give up?
Thomas Durels: Yes, John, the giveback of the small space of 1333 Broadway was anticipated. It had previously been leased in temporary space in connection with the larger expansion previously done to 1400 Broadway. Flagstar leases 313,000 square feet of 1400 Broadway. Their in-place fully escalated rent is about $58 a foot. This compares favorably low compared to, say, where the lease was just done with Burlington in the low 60s per square foot. Remember, Flagstar only represents about 3.4% of our total commercial portfolio rent and about 2.5% of our total annual revenue. Beyond that, I’d say that — but 1400 Broadway is a fantastic building. It’s 100% leased. It’s fully modernized. We have a new tenant lounge, new town hall facility. The tenants have access to campus amenities. Burlington just expanded by 68,000 square feet. So whatever happens with Flagstar, we’re confident that our leasing at 1400 Broadway will do very, very well.
John Kim: Okay. And my second question is on opportunistic investments. It seems like there’s a lot of opportunities that are attractive on the debt side. I was wondering if you could comment on that. And I know you’ve been buying — repurchasing shares recently. I wanted to know if you would consider going the other route, raising capital, either your own stock or third-party capital and go on defense because you can make that argument that it would be accretive depending on the investments you make.
Tony Malkin: Sure. Thanks, John, Tony here. We believe the crisis created by capital dislocation, rising rates and heavy near-term market maturities will create a once-in-a-generation opportunity to buy a certain New York City office assets with great upside. We have unique intellectual property and a track record of success in the redevelopment of assets in the top of tier modernized, amenitized, energy-efficient buildings which are competitive and attractive to lease. We continue to look for these opportunities. And of course, we’ll be prudent in our underwritings. We know the costs required to create prime assets. We’ll be patient to find the right deals and the right partners. We always look. We’ll let you know if we find anything.
At the same time, we are omnivorous opportunivores. So we have acquired resi and we’ve acquired retail. We’ll keep our eyes open for opportunities in any of the above. I don’t know whether or not Christina or Tom wants to add anything to that response.
Christina Chiu: The only thing is to address John’s other question on access to capital. And all I would say is as we’ve demonstrated, we evaluate actions and capital allocation decisions in the best interest of our stakeholders. So wouldn’t red line any options, but really depends on the situation. I think too soon to roll either way what you do in offensive equity issuance. But we’re certainly looking at opportunities, as Tony mentioned.
