Empire State Building files for $1bn IPO

Malkin Holdings, plans to raise up to $1 billion for the Manhattan landmark
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The company that controls the Empire State Building plans to raise as much as $1 billion in an initial public offering, giving investors the opportunity to own a piece of the landmark 102-story Manhattan skyscraper. (Getty Pictures. Reporting by Bloomberg)
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Empire State Realty Trust Inc. plans to become a real estate investment trust and list shares on the New York Stock Exchange under the ticker symbol “ESB,” the company said in a U.S. Securities and Exchange Commission filing today. A group of closely held companies will be consolidated to form the REIT as part of the IPO, according to a separate filing. (Getty Pictures. Reporting by Bloomberg)
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The offering would give investors ownership of one of the world’s most famous buildings and other Midtown properties as New York’s real estate values rebound after the recession. Midtown Manhattan office values have gained 87 percent since a mid-2009 trough, according to Green Street Advisors Inc., a REIT research firm in Newport Beach, California. (Getty Pictures. Reporting by Bloomberg)
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“Because it’s got an iconic building as a centerpiece, I expect it will be successful anyway, but you’re going to have more or less a higher percentage” of individual investors, said Lawrence Longua, director of the REIT Center at New York University’s Schack Institute of Real Estate. For institutional investors, the owners “are very recognized names in the industry, so I suspect all in all, it’ll do well,” he said. (Getty Pictures. Reporting by Bloomberg)
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Malkin Holdings LLC, supervisor of the company that holds the title to the tower, said in November that it had “embarked on a course of action” that might result in it becoming part of a new REIT. Malkin Holdings supervises property partnerships led by Peter Malkin and his son Anthony Malkin. It owns the 2.9 million-square-foot (269,000-square-meter) Empire State Building in conjunction with the estate of Leona Helmsley. (Getty Pictures. Reporting by Bloomberg)
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The REIT would consolidate Manhattan and New York area properties owned by companies including Empire State Building Associates LLC, 60 East 42nd St. Associates LLC and 250 West 57th St. Associates LLC. Participants can opt to receive cash instead of shares for as much as 15 percent of the value. (Getty Pictures. Reporting by Bloomberg)
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Bank of America Merrill Lynch and Goldman Sachs Group Inc. will advise on the IPO. No price or number of shares was given in the filing. (Getty Pictures. Reporting by Bloomberg)
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The companies that would make up Empire State Realty owned 12 buildings totaling about 7.7 million square feet of rentable offices as of Sept. 30, according to the filing. Seven properties, including the Empire State Building, are in Midtown, totaling 5.8 million square feet. The other five are in New York’s Westchester and Connecticut’s Fairfield counties. (Getty Pictures. Reporting by Bloomberg)
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The REIT would also hold rights to develop land near the Metro North railroad station in Stamford, Connecticut, plus four standalone retail properties in Manhattan and two in Westport, Connecticut. (Getty Pictures. Reporting by Bloomberg)
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For years, the Empire State Building underperformed because of friction and litigation between parties in a complex chain of ownership. The landlord, Donald Trump’s organization for a time, leased the entire building to a venture controlled by Peter Malkin and Lawrence Wien, which then subleased it to a Helmsley partnership. (Getty Pictures. Reporting by Bloomberg)