(Bloomberg News) The company that controls the Empire State Building, the landmark 102-story skyscraper in midtown Manhattan, plans to raise as much as $1 billion in an initial public offering and become a real estate investment trust.
Empire State Realty Trust Inc. will list shares on the New York Stock Exchange, it said in a Securities and Exchange Commission filing today. The company will consolidate a group of closely held companies to form the REIT as part of the IPO, it said in a separate filing.
A public offering would give investors the opportunity to own a piece of one of the world's most famous buildings as New York's real estate values rebound after the recession. Midtown Manhattan office property prices have gained 87 percent since a mid-2009 trough, according to Green Street Advisors Inc., a REIT research firm in Newport Beach, California.
Malkin Holdings LLC, supervisor of the company the holds the title to the tower, said in November that it had "embarked on a course of action" that could 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.
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.
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.
Partnerships including the Malkins control more than 10 million square feet of office properties in Manhattan, New York's Westchester County and Fairfield County in Connecticut.
The Empire State Building was the tallest in the world from its completion in 1931 until the World Trade Center's north tower was finished in 1972