Anthony E. Malkin

Where will ESRT be in the next 10 years?

ESRT’s portfolio is modernized, amenitized, and energy efficient with superior indoor environmental quality. We are at the top of our tier, and our leasing success proves we are a destination for the market’s flight to quality.  We will maintain our New York City focus. We have four drivers of upside — office, retail, residential and tourism — and will build on that platform. We will continue our actions as leaders in energy efficiency and decarbonization throughout our portfolio.

Just in the last 20 months or so, we have purchased nearly half a billion dollars in property, primarily funded by dispositions of suburban assets, and diversified into residential to become an NYC-focused portfolio. Over the next three years or so, we think there will be an improved opportunity to buy property. We are prepared for this with our best-in-class balance sheet and future-ready properties.

Tell us about a successful financing in the last 12 months. Or tell us about an unsuccessful one. 

We have not required a single financing over the last 12 months. We did acquire a multifamily asset and a retail asset, both in excellent locations, and we bought both without debt. The financing environment over the last year has challenged many with higher rates, high hedging costs, and reduced proceeds. That said, ESRT is able to borrow if it wants with our strong balance sheet with no meaningful debt maturity until early 2025, no floating-rate debt exposure, and strong liquidity.

When will we know the market has stabilized?

My grandfather Lawrence Wien once told me to borrow as little as we need when interest rates are low, and borrow as much as we can afford when interest rates are high. My experiences from the early 1990s told me to maintain high levels of liquidity, low levels of debt overall, and the ability to make choices. 

Most of today’s problems are caused by those who borrowed as much as they could afford at low interest rates, and they are now not in the best position. So, while the leasing market may stabilize sooner — in fact, for strong landlords like us with high-quality product, it is pretty good right now — the ownership market will not stabilize until broken financing structures are purged from the market. We expect the issues of poor capitalization to be mostly behind us by late 2026. 

If you were to invest your own money in someone else’s real estate, who do you like and why?

There is no one out there today in New York City to whom we would entrust our capital. We have a unique, experience-driven knowledge base on how to modernize, amenitize and integrate energy efficiency and indoor environmental quality into office buildings. This proprietary IP makes us best suited to make investments in our own business.

 What business advice are you most tired of hearing?

We tend to look further ahead than most. For instance, for years investors and analysts criticized us for our decisions not to buy property late in the market upswing and not to buy our stock when it was priced higher. Now, they recognize that it was not smart to invest with high leverage at that time, and we were right to buy our stock at a lower price. We think our job is to be where the puck will be and live with those who do not get it until they see the puck get there. By that time, we will have planned our next move, and we plan for our decisions to reward our investors.

What’s the biggest market opportunity as we round out 2023?

Modernized, amenitized, energy-efficient office buildings with indoor environmental quality and great locations, well-located retail with attractive basis, and good residential that is sold because its current ownership cannot repay their debts.  

 Have you had a lot of staff turnover?

ESRT maintains an excellent, collaborative in-person culture. We trust our business with employees who understand, live, breathe, and bleed what we do. Our turnover has been no higher than at any other time in our history.

Who do you like for POTUS in 2024? None of the above.

Do you feel personally safe moving through NYC? Absolutely.

Jerome Powell: Are you a fan or critic? Fan.

Can’t-live-without technology now? My Samsung Galaxy S-23.

Elon Musk is…? A genius. 

Taylor Swift or Beyoncé?  Janis Joplin or Joni Mitchell.

Artificial intelligence — good or bad?  Good.

Mischa’s or Nathan’s for a hot dog?  Nathan’s. 

What character are you in “Succession?” I am not in “Succession”!