Anthony Malkin and Christina Chiu
Chairman, president and CEO; chief operating officer and chief financial officer at Empire State Realty Trust
Last year's rank: 17
The youngest building in Empire State Realty Trust’s portfolio is from 1954, but the company is so future-proofed that its assets feel much younger.
Not only has $1 billion been pumped into ESRT’s office portfolio, which accelerated leasing in the last 18 months, but Anthony Malkin and Christina Chiu have used the pandemic’s lessons to make the tourism component of the business more profitable. The pivot has been a necessary one: ESRT’s funds from operations in the first quarter of 2023 declined $6 million annually.
At this point, 95 percent of ESRT’s office space has been “scraped clean” in its modernization sweep, according to Malkin.
“We just know that we have to create a balance sheet canvas that allows us to execute on the business and be strategic,” Chiu said. “That’s what we’ve done: added the fourth leg of the business in multi-
family, spent a decade on sustainability now, seeing how every tenant is looking for this, and spent the time repositioning assets by adding amenities.”
Leasing increased 390 basis points annually in the first quarter of 2023 in nine Manhattan office buildings that ESRT controls, and the company has almost completely cut ties with “cash-consuming” suburban office properties, save for two near a transportation center in Stamford, Conn., the company said. Altogether, ESRT decreased its exposure to the suburbs by about 750,000 square feet and invested instead in multifamily assets in New York City.
For the observatory at the top of the Empire State Building, the health crisis forced ESRT to require reservations for visitors. But this did away with the famously long lines and crowded scene. Now, ESRT can plan operating hours and staffing around reservations and demand. It runs lean and with a higher yield.
“Our visitors now bring us a higher income per ticket than we’ve ever had before, and that’s because people are prepared to pay up for the experience since it has improved so much,” Malkin said. “They’re not waiting in line, and they are not at sunset eight deep. We limit the number of people who come in at sunset so that everybody gets a better experience.”
