An activist shareholder has arrived at Empire State Building Trust (ESRT). 

Erez Asset Management, a New Rochelle, N.Y.-based activist investment firm and hedge fund manager, has disclosed its acquisition of 10 million shares, or a 5.8 percent stake, in ESRT, Bisnow first reported. Erez has already begun putting pressure on ESRT leadership to sell some or all of its 8 million-square-foot Manhattan portfolio, Crain’s New York reported, which includes the Empire State Building, 1400 Broadway and 1 Grand Central Place.

The acquisition by Erez is likely unwelcome news for Tony Malkin, ESRT’s CEO and controlling shareholder. Shares in the New York-based real estate investment trust (REIT), currently one of New York’s largest landlords, have lost nearly 60 percent of their value over the past two years. They currently trade at around $4.40 per share.

Erez plans to have discussions with ESRT’s management and board members about governance, corporate structure, compensations and financial decisions, according to its Securities Exchange Commission (SEC) filing. Erez is managed by Bruce Schanzer, the former CEO of Cedar Realty Trust. Undervalued, small-capitalization real estate stocks are the firm’s speciality. 

Erez said in its filing that it believes ESRT’s portfolio is undervalued — a common refrain in the world of REITs, although many others have enjoyed some recovery of values this year. ESRT, on the other hand, has seen its market capitalization decline from $3.3 billion in 2024 to just $1.3 billion in recent months.

Multiple quarters of earnings calls by ESRT leadership dwelled on declining visits to the Empire State Building’s observatory, largely linked to persistent drops in international tourism. The iconic destination is also contending with new competition from viewing platforms at One Vanderbilt and at Hudson Yards towers. 

The observatory generated $12.4 million of net operating income in the second quarter of this year, a sharp 48.5 percent decrease from $24.1 million for the same period in 2025. Around 450,000 visitors hit the observation deck between April and June, according to ESRT’s more recent round of earnings, a 28.5 percent year-over-year decline. 

Despite its troubles, ESRT’s leadership remains in the driver’s seat. The Malkin family’s 65-year ownership of ESRT has secured them a special 50 votes per share, according to Crain’s, while Erez possesses just one. 

Spokespeople for ESRT did not immediately respond to requests for comment, and a representative of Erez could not be reached by press time.

Emily Davis can be reached at edavis@commercialobserver.com.