Empire State Review Contributor 
Empire State Realty Trust (ESRT), the company behind New York’s most iconic skyscraper, defies the odds as it reports surging office leasing activity while much of the city’s commercial real estate sector struggles.
While the broader Manhattan office market continues to wrestle with record-high vacancy rates, ESRT has emerged as a surprising outlier. In its latest quarterly update, the trust announced that it had reached a 94.2% leasing rate across its New York office portfolio—well above the citywide average vacancy rate of 17.8%.
Strategic Expansions and Renewals Fuel Growth
The impressive figures are underpinned by a steady stream of tenant renewals and strategic expansions within ESRT’s portfolio. Notable highlights include:
- Workday, a leading enterprise software company, expanding its footprint within the Empire State Building itself.
- Carolina Herrera, the fashion powerhouse, increasing its leased space at 501 Seventh Avenue.
- Gerson Lehrman Group, a global expert network and consultancy firm, renewing its lease at One Grand Central Place.
These developments demonstrate growing confidence among high-profile tenants in ESRT’s ability to deliver value and operational reliability—even as uncertainty continues to cloud the broader real estate market.
Billion-Dollar Modernization Pays Off
A critical component of ESRT’s success has been its long-term investment strategy. Since going public in 2013, the company has injected more than $1 billion into upgrading and modernizing its legacy buildings. CEO Anthony Malkin credits this initiative as a key driver behind the company’s competitive leasing edge.
“People want value, and they want trust,” Malkin said in a recent interview. “We’ve focused on making our spaces modern, efficient, and sustainable. That’s a real differentiator.”
ESRT’s properties now compete with new Class-A developments, thanks to energy-efficient retrofitting, modern amenities, and updated infrastructure—all while maintaining the historic character of some of Manhattan’s most beloved landmarks.
An Outlier in a Struggling Market
New York City’s office sector remains under pressure due to the remote work revolution and shifting preferences toward hybrid models. According to recent data from real estate firm CBRE, Manhattan’s overall office vacancy rate has hovered near 18%, with some submarkets experiencing rates even higher.
In contrast, ESRT’s steady trajectory points to an evolving market where tenant loyalty, upgraded infrastructure, and centralized locations are proving to be winning attributes.
“Landlords that have invested in their properties and built strong tenant relationships are best positioned to weather the storm,” said Nicole LaRusso, Senior Director of Research and Analysis at CBRE. “ESRT is showing that the right mix of legacy appeal and modern functionality still has strong appeal.”
The Empire State Building’s Symbolic Role
The Empire State Building, once the tallest building in the world, remains a vital symbol—not just of New York City’s architectural legacy, but now, also of its commercial resilience. Its leasing strength serves as a bellwether for Midtown Manhattan’s viability in a post-pandemic era.
The skyscraper, which recently celebrated its 94th anniversary, continues to draw both office tenants and tourists in large numbers. Its observatory welcomed nearly 4 million visitors in 2024, reflecting the enduring appeal of the structure beyond just its corporate tenants.
Looking Ahead
ESRT’s positive leasing momentum offers a glimmer of hope in a sluggish office market and could indicate a potential path forward for other landlords with aging assets. By reinvesting in properties and cultivating long-term tenant relationships, legacy buildings may yet outshine some of their newer, glossier counterparts.
Investors and analysts will be watching closely to see if ESRT can sustain its momentum as the commercial landscape continues to evolve. For now, it appears that smart stewardship, a focus on quality, and a willingness to innovate can still yield success—even in New York’s turbulent real estate climate.
