Empire State Realty Trust Outlines Comprehensive Capital Allocation Plan

Empire State Realty Trust, a real estate investment trust, is implementing a clear and multifaceted capital strategy. The company's recent moves combine shareholder returns with portfolio growth, demonstrating a flexible approach to capital deployment in the Manhattan and Brooklyn markets.

A central component of the strategy is the expansion of its core portfolio. Empire State Realty Trust has agreed to acquire the Scholastic Building in Manhattan's SoHo neighborhood for $386 million in cash. The property, located at 555-557 Broadway, offers approximately 368,000 square feet of office space and 28,000 square feet of retail space. Currently 70% leased, it includes a significant 15-year lease with Scholastic for 222,000 square feet of office area. The transaction is anticipated to close in December 2025. This purchase presents an opportunity to market a distinctive 110,000-square-foot office block in a premier location.

Shareholder Returns: Buybacks and Consistent Dividends

Alongside growth initiatives, the company is reinforcing its commitment to returning capital to shareholders. The board of directors has approved a new share repurchase program authorizing the buyback of up to $500 million of its Class A common stock and operating partnership units. This program, effective from January 1, 2026, through December 31, 2027, replaces an existing $500 million authorization for 2024-2025. The timing and volume of repurchases will be contingent on prevailing market conditions.

Should investors sell immediately? Or is it worth buying Empire State Realty?

Concurrently, the board declared a quarterly cash dividend for the fourth quarter of 2025. Shareholders of record on December 15, 2025, will receive a payment of $0.035 per common share on December 31, 2025. This distribution marks the thirteenth consecutive year of dividend payments by the REIT.

Retail Leasing Gains Momentum

Beyond major acquisitions, Empire State Realty is also making progress in filling its retail spaces. The company recently finalized two new leases with the brands HOKA and Tecovas. These agreements cover a total of 8,322 square feet within ESRT's North Sixth Street Collection in Williamsburg, Brooklyn. Such targeted leasing activity highlights ongoing efforts to enhance portfolio performance through strategic occupancy.

Together, these actions—the new repurchase authorization, sustained dividend, and portfolio expansion—form a coherent capital allocation framework. The focus remains on generating shareholder returns while simultaneously strengthening the company's holdings in key, attractive markets.