New York City landlords might be enjoying a rise in office space leasing thanks to growing artificial intelligence needs. But the Empire State Building – one of the largest office buildings in the world – isn’t benefiting enough to keep its owner from posting a Q2-26 net loss.
Empire State Realty Trust (ESRT), a real estate investment trust (REIT) that almost exclusively holds NYC properties, reported $57 million in funds from operations (FFO) for the quarter, or $0.21 per share. That’s down $25.8 million, or $0.15 per share, from Q2-25.
That loss is apparently very much connected to the fact that international tourists just aren’t flocking to the Big Apple anymore. Which naturally means they’re not paying to see the view from the Empire State Building observatory .
In good times, that 86th-floor view brings in a lot of revenue. But visits were down 28.5% year over year, leading to a 48.5% drop in net income.
And, no, the World Cup didn’t help. CEO Anthony Malkin called that event “a distraction” that “had a lot of people on the streets, but not a lot of people who were there for anything but the World Cup.”
The overall decline continues last year’s trend, when the number of international visitors fell 3.2%. This was attributed to Trump’s immigration, border control, and aggressive tariff policies. And considering how NYC tourism actually increased in 2024, that’s almost certainly true.
On the plus side, the U.S. got rave reviews from World Cup travelers who loved the food, the food portions, and only-in-America experiences like Buc-ee’s. One German traveler, FreddyLA7, called us “probably the most welcoming country” he’d “ever visited.” And English tourist Oliver Henry said his trip “exceeded every expectation.”
So maybe we’ll see tourism gains going forward as the word spreads that we’re actually a pretty neat place to see.
Billions and billions of dollars for housing
Who believes in the American Dream?
This guy! If “this guy” means JPMorgan (JPM).
The world’s largest bank announced it will be deploying $750 billion through 2035 “to increase housing supply and support homeownership in the United States.” That’s over 40% more than it’s allocated toward the housing market in the last 10 years.
I imagine this means it finds profitable opportunities in the recently passed ROAD to Housing Act. Though, naturally, JPMorgan’s Michelle Herrick, head of commercial real estate, phrased it in much more altruistic terms:
An affordable and resilient housing market is essential to driving economic growth and increasing opportunity. We’re focused on helping more people access quality housing they can afford – and we’re working across the real estate community, local governments, and nonprofits to scale housing solutions throughout the U.S.
As part of its already existing American Dream Initiative (announced last year), JPMorgan intends to finance 1 million affordable housing units, whether through altogether new properties or by renovating old ones. Another 500,000 consumers will get direct aid in buying homes.
In addition, it looks to hire 850 home-lending advisers. Despite already being the nation’s largest big-bank home lender, it wants to increase residential mortgages by over 45% from their current levels.
To help facilitate these plans, JPMorgan will also:
… deepen collaboration with policymakers and community partners to accelerate and scale state and local solutions – such as streamlined zoning, building codes, permitting, expanded tax credits, and public-private partnerships – that help create more housing at all income levels.
In short, the bank seems to be covering all of its housing investment bases, with no angle left uncovered and no nail left raised.
Swinging for survival
LIV Golf is fighting with everything it has to stay in business, including seeking further investment money from various sources. And it looks like it just got a lifeline, at least for the time being.
Created in 2021, the professional men’s golf league differs from the much more established (and profitable) PGA Tour “primarily through its faster-paced format, smaller 48-player fields, simultaneous shotgun starts, and dual individual and team competitions.”
That description, for the record, is taken directly from Google’s Gemini AI search results. Being much more of a basketball guy myself, I couldn’t tell you much about LIV Golf otherwise.
Topgolf, yes, since that experiential chain pays a lot of rent to certain real estate investment trusts (REITs) I follow. But not LIV Golf.
What I do know about the latter, however, is that it’s probably not going to last much longer. I wish it the best, mind you. However, things aren’t looking great in that regard considering how it recently canceled one of its biggest events, the $40 million Team Championship. And bankruptcy rumors are now officially circulating.
CEO Scott O’Neill announced on Wednesday that the company “has an agreement in place with a lead investor, signed by the investor, and approved by the board” for $300 million.
Who exactly that investor is was unknown when I checked last. But I do know that the program’s original backer, the Saudi Public Investment Fund, hasn’t seen a single return on investment from the $6 billion it’s put into the tour since 2022.
Happy SWAN investing!
Brad Thomas
Editor, The Wide Moat Daily
