Empire State Realty Trust CEO Tony Malkin (Getty, iStock)
Empire State Realty Trust is bracing for its second largest tenant to exit its most iconic office property.
While the real estate investment trust reported a second quarter uptick in leases across its portfolio, CEO Tony Malkin shared the news on Thursday that GBG, which leases 353,000 square feet at the Empire State Building, had just filed Chapter 11 proceedings.
But Malkin told analysts at the earnings call that “we’ve been on top of this situation for several months.”
GBG, a subsidiary of Global Brands Group Holding, is only behind LinkedIn as the largest tenant at ESRT’s Empire State Building. GBG has already subleased 162,000 square feet of space to a single tenant, said ESRT Chief Financial Officer Christina Chiu. She added the REIT will continue to receive rent payments directly from the subtenant as GBG goes through its restructuring process.
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Empire State Realty Trust reports 97.5% drop in Q4 earnings
2020 ended with $23M net loss New York /
Tony Malkin (Getty, iStock)
Visitors have been slow to return to the Empire State Building’s observation deck after it reopened to the public last July. That hesitancy has led to a sharp decline in revenue from the tourist destination and is just one of the factors leading to a dismal fourth quarter for Empire State Realty Trust, which operates the attraction.