Empire State Building flies for $1 billion IPO

Empire State Realty Trust Inc., the company that owns the iconic 102-story building on 34th Street and Fifth Avenue in midtown Manhattan, has filed to sell investors $1 billion worth of its Class A shares, the company said in a Securities and Exchange Commission filing.

The Malkin family bought the property in 2002 and gained total control of the 102-story building in 2010.

In November 2011, Malkin Holdings had said it would likely file to become a publicly traded real estate investment trust within three months.

 

Like a slew of recent tech and internet IPOs, the company will have two classes of stock — class A share being sold to the public worth one vote and class B shares with 50 votes each. The structure gives significant control to the Malkin family.

 

The proceeds will be used to pay existing stakeholders in the buildings who chose to receive cash in exchange for their interests, and to repay debt.

 

The REIT plans to list on the New York Stock Exchange under the symbol “ESB.”

 

The Empire State Building held its own in the New York commercial real estate market, helped by the expensive renovations to its Art Deco structure.

Though the skyscraper, also known for its starring role in the movie King Kong, accounts for the largest chunk of the REIT’s revenue, the company also owns 12 office properties and 6 standalone retail properties, as of September 30, mostly located in midtown Manhattan.

A REIT is a real estate-linked company that can avoid paying U.S. corporate income taxes if it distributes at least 90 percent of its taxable income to shareholders.

Source: msnbc.com

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