The owner of the Empire State Building canceled plans to pay dividends to shareholders for the remainder of the year. It’s the first such move by New York City’s large, publicly-held landlords and another indication that the office market is struggling under the weight of the pandemic.
Empire State Realty Trust announced in a filing with the Securities and Exchange Commission Thursday that it will suspend its third- and fourth-quarter dividends.
Real estate investment trusts are required by law to pay 90 percent of their taxable income out as a dividend, but ESRT said it expects it will have no taxable income for the year.
“The company and its board believe that payment of a dividend is currently not the highest and best use of its balance sheet,” ESRT said in its filing.
A representative from the company was not immediately available for comment.
The company, which owns some 10 million square feet including the iconic Midtown skyscraper, has become a canary in the coal mine for New York’s commercial real estate sector — with some of the industry’s loudest critics taking a bearish stance on the firm.
The Anthony Malkin-led landlord lost $20 million during the second quarter. The company’s been hit particularly hard by the falloff in tourism to the Empire State Building’s observation deck, which accounted for about a quarter of the ESRT’s operating income last year.
Attendance last week was just 4 percent year-over-year, according to ESRT’s filing. That fell short of the 5 percent figure the company had projected in July.
Contact Rich Bockmann at [email protected] or 908-415-5229.