Empire State Building IPO finally arrives

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Anthony Malkin is the chairman and CEO of Empire State Realty Trust. Peter Malkin is chairman emeritus.

Anthony Malkin is the chairman and CEO of Empire State Realty Trust. Peter Malkin is chairman emeritus.

If you’ve got $13 to $15 lying around, this could be a big day.

It certainly is for Greenwich real estate moguls Peter and Anthony Malkin, who stand to bag a lot more money than that. That’s because the Empire State Building, the centerpiece in a package of 20 or so Metro New York properties the father-and-son duo manage, has finally gone public in one of the priciest real estate investment trusts ever.

The trust raised $929.5 million in its IPO, which priced the shares at the low end of the range. Based in New York, the trust sold 71.5 million shares for $13 each, excluding the overallotment option, according to Bloomberg.

It offered them for $13 to $15. The shares start trading today on the New York Stock Exchange under the symbol ESRT.

The collection of commercial buildings has a total footprint of about 8.4 million square feet. It combines the Empire State Building with a smattering of Manhattan buildings in Midtown, Union Square, Columbus Circle, the Upper East Side and around Penn Station. It also includes the sleek First Stamford Place, the Stamford Metro Center (currently the Thomson Reuters building), a nearby downtown Stamford construction site, the MerrittView office park in Norwalk and a line of retail properties on Westport’s Main Street.

The Empire State Building, a 102-story NYC landmark, is the crown jewel of the new Empire State Realty Trust

The Empire State Building, a 102-story NYC landmark, is the crown jewel of the new Empire State Realty Trust

Of course, as with seemingly everything in this building’s colorful, star-studded history (including King Kong, Donald Trump, Leona Helmsley and court cases galore) the Malkins aren’t entirely out of the woods yet.

They’re still facing a legal battle over their techniques in getting 80 percent of the Empire State Building stakeholders to approve the IPO bid and have a smattering of private bids for that building, as well as a couple other buildings in the REIT.

In May, the Malkins — who have a minority, but controlling stake in the skyscraper — succeeded in a yearlong quest to persuade over 80 percent of the building’s stakeholders to approve plans for the REIT, a supermajority required by contract. Holdouts had 10 days to change their vote or forfeit their units — the value of which exceeds $320,000 each — in exchange for $100.

Quickly thereafter, though, a handful of private investors placed unsolicited bids for the Manhattan landmark, creating new hope for those opposed to the REIT. Activist stakeholders like Richard Edelman, a California businessman, have been calling for an open bidding process to find out how much private investors are willing to pay for the building, and whether it could be manifestly superior to the REIT.

And the efforts aren’t stopping yet. Last night, for example, a Canadian investor called OitcRoyce LLC put in a $391.1 million bid for the Fisk building, 250 W 57th St., according to Jason Meister, the real estate broker for Avison Young who has represented a handful of the bids.

That offer “is 115 percent of the exchange value plus the mortgage debt,” Stephen Meister, the broker’s father and an attorney who’s challenged the legality of the Malkin’s maneuverings, wrote in an email.

Nonetheless, midmorning Wednesday, shares of ESRT were trading at $13.44 a share.

More updates to come…

Categories: General
Tim Loh

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