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Activist Erez Takes 5.8% Stake in Empire State Realty
By @sharedot · · 6 pages
- Stock Market
- Empire State Realty Trust
- Activist Investor
- Reits
Bruce Schanzer's Erez Asset Management disclosed a 5.8% stake in Empire State Realty Trust, sending the beaten-down REIT's shares up 4.7% on Tuesday.
A $43M Bet on the Empire State Building
Bisnow reports that Erez Asset Management, the activist firm founded by former Cedar Realty Trust CEO Bruce Schanzer, paid $43 million combined through two entities on October 1 for a 5.8% stake in Empire State Realty Trust, per an SEC filing. The REIT owns the Empire State Building plus 7.5 million square feet of Manhattan office space, 800,000 square feet of retail centered in Williamsburg, and three apartment buildings totaling 743 units. In the filing, Schanzer called ESRT's shares "undervalued and represent an attractive investment opportunity." The market's reaction was immediate: ESRT stock rose 4.7% in Tuesday trading once the stake became public, after a year in which the shares had lost roughly a third of their value. Schanzer declined to comment beyond the filing, and an ESRT spokesperson did not immediately respond to Bisnow's request for comment.
A Struggling Cash Cow Creates the Opening
The activist arrives at a moment of unusual weakness in ESRT's signature asset. Bisnow reports that ESRT wrote down the value of the Empire State Building observation deck by $166 million in the second quarter after a sluggish summer, with the attraction's net operating income falling from $24 million to $12.4 million year over year. The stock dropped 14% the day that disclosure hit and kept sliding before Erez's purchase. The core portfolio, by contrast, has been recovering: occupancy climbed to 89.4% from 88.2% three months earlier, and New York's broader market is resurgent, with Bisnow noting prime retail occupancy at a 10-year high per JLL, soaring office rents, and rental vacancy below 2%. That gap between improving assets and a beaten-down share price is precisely the setup activists hunt for.
Schanzer's Playbook and the Malkin Dynasty
The filing signals this is more than a passive position. Bisnow reports that Erez has already contacted ESRT's leadership about capital allocation, business management and operations, and strategy — including "a potential strategic review of some or all of the Issuer's assets." Schanzer spent 11 years as CEO of Long Island shopping center REIT Cedar Realty Trust before founding Erez in 2022, and the firm has a track record of pressing REIT managements for change: at manufactured home REIT UMH, Bisnow notes, Erez has agitated for a board shake-up for months and last week launched saveumh.com with a presentation titled "Right Horse, Wrong Jockey." ESRT remains led by chairman and CEO Anthony Malkin, the third generation of the family that has owned the Empire State Building since 1961 — a control story investors now have to weigh.
Activists Are circling Weak Performers
Erez's move lands in a market where activists are targeting underperformers across sectors. The Economic Times reports that Elliott Investment Management built a roughly $4 billion stake in PepsiCo in September 2025 and pushed for margin and growth targets, while GLP-1 weight-loss drugs weigh on snacks and sugary drinks; PepsiCo's shares are down nearly 12% this year ahead of Thursday's quarterly results. The pattern is the same as at ESRT: a stock that has badly lagged, a management team under pressure to justify its strategy, and an activist demanding capital allocation or strategic change. For ESRT, the question now is whether Schanzer pushes for an asset review, a board change, or something more structural — and whether the Malkin family's control resists. Tuesday's 4.7% pop shows traders are betting at least on action.