Empire State Building’s landlord enjoys King Kong-size boost from tenant expansions

New York Post - Apr 16th, 2025

Empire State Realty Trust (ESRT) reported a strong performance in the Manhattan office market, with 94.2% of its 7.8 million square feet leased in the fourth quarter of 2024, a 1.6% increase year-over-year. Despite the overall Manhattan vacancy rate hovering around 17.8%, ESRT's success is attributed to the expansion, extension, and renewal of existing leases. Recent deals include Gerson Lehrman Group, Workday, and Carolina Herrera, collectively accounting for 150,000 square feet of renewals and expansions. ESRT's strategic upgrades and tenant retention efforts have driven its success, as highlighted by CEO Anthony Malkin ahead of their investor call.

ESRT's resilience challenges the perception that newer buildings are more desirable, proving that prewar properties can compete effectively. The company has invested over $1 billion to modernize its portfolio, including $725 million for the Empire State Building alone, elevating its properties to Class-A status. This contradicts the trend noted by JLL's Karen Brennan in 2021, who emphasized newer constructions as the key to positive net absorption post-pandemic. ESRT's ability to maintain high occupancy rates and command premium rents reflects its strategic repositioning and highlights the shifting dynamics in the Manhattan office market.

Investment Strategy Manhattan Real Estate Empire State Realty Trust Anthony Malkin Office Market Lease Renewals Empire State Building Class A Buildings

Story submitted by Fairstory

RATING

6.8

Fair Story

Consider it well-founded

The article provides a detailed overview of Empire State Realty Trust's leasing successes and modernization efforts, presenting a largely accurate and timely account of current trends in the Manhattan office market. Its strengths lie in clarity and readability, with a well-structured narrative and straightforward language that effectively convey complex information. However, the reliance on a single corporate source and the lack of diverse perspectives limit its balance and source quality. While the story is relevant to industry stakeholders and investors, its narrow focus may restrict broader public interest and engagement. The article's potential to influence public opinion or drive significant debate is moderate, as it primarily highlights corporate achievements without addressing broader systemic issues. Overall, the story is informative and accessible, but could benefit from greater transparency and a wider range of viewpoints.

Accuracy

The story largely presents accurate information, particularly regarding the leasing status and modernization efforts of Empire State Realty Trust (ESRT). Claims such as ESRT owning 7.8 million square feet of office space, being 94.2% leased in Q4 2024, and the Empire State Building being over 95% leased are consistent with available data. However, some claims, like the exact number of expansion leases since 2013, require further verification. The report on rental trends and tenant expansions, such as Workday's and Booking Holdings' expansions, align with known corporate activities, adding credibility to the narrative. The investment in modernization and the competitive positioning of ESRT's properties are also well-supported by external data, though the specific monetary figures could benefit from additional source citations.

Balance

The article primarily highlights the positive aspects of ESRT's performance and strategies, focusing on successful leasing and modernization efforts. It provides a favorable view of ESRT's ability to attract and retain tenants despite the age of its buildings, possibly at the expense of a more balanced perspective that considers challenges such as the broader market vacancy rate of 17.8%. The narrative lacks input from independent analysts or rival companies, which could provide a more nuanced view of the competitive landscape. The mention of competitors like Tishman Speyer and SL Green is brief and lacks depth, which could skew the reader's perception of the market dynamics.

Clarity

The article is generally clear and well-structured, with a logical flow that guides the reader through the key points about ESRT's leasing successes and modernization efforts. The language is straightforward, and the use of specific examples, such as tenant expansions and rental trends, aids comprehension. However, the narrative could benefit from clearer delineation between factual reporting and opinion, particularly in sections discussing market perceptions and the competitive landscape. Overall, the article is accessible and easy to follow.

Source quality

The article relies heavily on statements from ESRT's Chairman and CEO, Anthony Malkin, which could introduce bias. While Malkin is a credible source for information about his company, the absence of independent verification or third-party analysis limits the article's reliability. The story would benefit from additional sources such as market analysts or industry experts to corroborate the claims made and provide a broader context. The lack of diverse sourcing slightly undermines the overall credibility of the piece.

Transparency

The article provides some transparency regarding the source of its information, primarily through quotes from ESRT's CEO. However, it lacks disclosure about how the data was obtained or verified, particularly the financial and leasing statistics. The absence of methodology or acknowledgment of potential conflicts of interest, given the reliance on a single corporate source, diminishes transparency. Greater clarity on the basis for claims and any potential biases would enhance the article's trustworthiness.