Malkin Holdings LLC, the supervisor of Empire State Building, filed a registration statement with the U.S. Securities & Exchange Commission to convert the iconic tower's ownership into a public REIT.
Malkin intends to consolidate into a new REIT to be called Empire State Realty Trust Inc. There are 22 private entities involved in the consolidation, all of which will get shares in the new REIT.
Through the public offering, the REIT is looking to raise $1 billion.
Besides the Empire State Building itself, the REIT will include total holdings of 18 office and retail properties, one development site, and five related management companies.
As of Sept. 30, 2011, the entities involved owned 12 office properties encompassing approximately 7.7 million rentable square feet of
office space, which were approximately 79.9% leased (or 83% giving effect to leases signed but not yet commenced as of that date). Seven of these properties are in the midtown Manhattan market and encompass 5.8 million rentable square feet of office space, including the Empire State Building, perhaps the world's most famous
office building.
The entities' Manhattan office properties also contain 432,176 rentable square feet of premier
retail space on their ground floor and/or lower levels.
The entities' remaining five office properties are in Fairfield County, CT, and Westchester County, NY, encompass 1.8 million rentable square feet.
In addition, the entities have entitled land at the Stamford Transportation Center in Stamford, CT, adjacent to one of its office properties, that will support the development of an approximately 340,000 rentable square foot office building and garage.
The portfolio also includes four stand-alone retail properties in Manhattan and two stand-alone retail properties in the city center of Westport, CT, encompassing 204,452 rentable square feet. The stand-alone retail properties were 96.8% leased.
In addition, the company has an option to acquire two additional Manhattan office properties encompassing approximately 1.4 million rentable square feet of office space and 153,298 rentable square feet of ground floor retail space.
The Empire State Building will still be the REIT's flagship property and provides the company with a significant source of revenue through its office and retail leases, observatory operations and broadcasting licenses and related leased space. The Empire State Building comprises 2.68 rentable square feet of office space and 163,655 rentable square feet of retail space.
On a pro forma basis, during the nine months ended Sept. 30, 2011, the building generated $156.7 million of revenue. That represented about 78% of total revenues for the portfolio of properties. The predecessor portfolio generated $34.2 million in net income.
The Empire State Building is home to such tenants as: LF USA; Skanska; Coty Inc.; the FDIC; Funaro & Co.; LinkedIn; Noven Pharmaceuticals; People's Daily Online USA; Taylor Global; Turkish Airlines; and World Monuments Fund.
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