Activist investor Jonathan Litt is shorting big NYC office landlords

Land & Buildings founder sees not only “headwinds,” but “existential hurricane” for sector

TRD New York /
May.May 26, 2020 09:00 AM
From left: SL Green CEO Marc Holliday, Land & Buildings Investment Management founder Jonathan Litt and Vornado chairman Steven Roth (Unsplash; Land & Buildings Investment Management; Getty)

From left: SL Green CEO Marc Holliday, Land & Buildings Investment Management founder Jonathan Litt and Vornado chairman Steven Roth (Unsplash; Land & Buildings Investment Management; Getty)

Activist investor Jonathan Litt, who in recent years has pushed to turn around struggling retailers, now has a new sector in his sights.

Litt’s hedge fund, Land & Buildings Investment Management, is taking short positions in New York City landlords Empire State Realty Trust, SL Green Realty and Vornado Realty Trust, the Wall Street Journal reported.

“Numerous headwinds have weighed on New York office landlords in recent years as rent growth has stalled and values plateaued,” Litt wrote in a four-page statement on the hedge fund’s website, noting that 2018’s SALT tax deduction cap and WeWork’s struggles have compounded these challenges.

“Now in 2020, this existential hurricane has become a Category 5, as NYC is the epicenter for Covid-19 in the United States – and Empire State Realty Trust is poised to bear the full brunt of this storm,” he continued. The statement does not mention the short positions.

Major tech tenants like Twitter and Facebook, who as recently as late 2019 were emerging as a major force in New York’s office leasing market, have announced that they are reconsidering their need for office space in light of the coronavirus pandemic. Manhattan office leasing volume in the first quarter was 47 percent below the 10-year average, according to JLL.

Empire State Realty Trust chairman and CEO Anthony Malkin told the Journal that his firm thinks “New York City will remain attractive” over the long term. Vornado and SL Green did not respond to requests for comment. [WSJ] — Kevin Sun


Related Articles

arrow_forward_ios
Major new leases of Q2 2020 included the SEC’s 241,000 sq ft lease at 100 Pearl Street (Downtown), Match Group's 41,000 sq ft lease at 60-74 Gansevoort (Midtown South) and TikTok’s 232,000 sq ft lease at 151 West 42nd Street (Midtown) (Google Maps, BKSK Architects)

Bad to worse: Manhattan office leasing sees slowest quarter since 2009

Bad to worse: Manhattan office leasing sees slowest quarter since 2009
Match Group CEO Shar Dubey with a rendering of 60-74 Gansevoort and (inset) 555 West 18th Street (BKSK Architects, Google Maps)

A Match made in Meatpacking: Tinder, Hinge parent company signs lease on Gansevoort Row

A Match made in Meatpacking: Tinder, Hinge parent company signs lease on Gansevoort Row
1633 Broadway and Paramount CEO Albert Behler (Google Maps, Getty)

TRD Insights: The rents at Paramount Group’s 1633 Broadway

TRD Insights: The rents at Paramount Group’s 1633 Broadway
Blackstone’s Jonathan Gray, Starwood Capital Group’s Barry Sternlicht, and Oaktree Capital co-chairman Howard Marks (Getty)

“Phenomenal returns” for some distressed real estate investors in stocks

“Phenomenal returns” for some distressed real estate investors in stocks
Isaac Zion

SL Green’s co-CIO leaving firm

SL Green’s co-CIO leaving firm
Michael Shvo, 530 Broadway and 711 Fifth Avenue (Shvo)

TRD Insights: Here’s what tenants are paying at Michael Shvo’s latest office acquisitions

TRD Insights: Here’s what tenants are paying at Michael Shvo’s latest office acquisitions
From left: Port Authority Bus Terminal, Grand Central and Penn Station (Wikipedia, Pixabay, CDC)

TRD Insights: Focus may shift to Manhattan’s 3 transport hubs in post-Covid office market

TRD Insights: Focus may shift to Manhattan’s 3 transport hubs in post-Covid office market
WeWork CEO Sandeep Mathrani (iStock, Getty)

WeWork in talks to offer classroom space for NYC private schools

WeWork in talks to offer classroom space for NYC private schools
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...