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Public offering for Empire State Building worth $2.5 billion

empirestatebuilding021412_optBY BOB HOLT
NEWJERSEYNEWSROOM.COM

The Empire State Building was the world's tallest until the World Trade Center went up in 1973. It was featured in successful films "An Affair to Remember" and "Sleepless in Seattle," and created a star out of a rather large monkey in "King Kong."

Now the 102-story, 81-year old skyscraper that still sees more than four million visitors a year is about to be offered to the public.

CNN Money reported that building controller Malkin Holdings LLC has filed for an initial public offering for a real estate investment trust for the landmark, along with its two other Manhattan properties, One Grand Central Place and 250 West 57th Street. The Empire State Building was valued at an estimated $2.5 billion in the filing.

USA Today reports that real estate investor Peter Malkin bought the Empire State Building from Donald Trump and a partner 10 years ago for $57.5 million. Peter and son Anthony Malkin will list their shares of their Empire State Realty Trust on the New York Stock Exchange under ticker symbol “ESB,” according to the New York Post.

The company will be selling two classes of stock. The A shares will be offered to the public while the B shares will hold 50 percent of the voting power. The filing showed a fund raising goal of $1 billion.

According to Financial Advisor, New York’s real estate values have rebounded since they hit bottom. Prices of midtown Manhattan office property have risen 87 percent since mid-2009. And Daily Finance says that the potential for future growth is high because going public gives Empire State Realty Trust regular access to capital through public equity markets.

SmartMoney advises investors to look elsewhere. They say investing in a private REIT relates less to the movements of the stock market, and some of the yield from can be tax-free, and provide better protection against inflation.

Philip Martin, director of REIT research at investment resource Morningstar, told SmartMoney that the building is not in the most desirable location. He said, “It’s an older building, and may not offer the space tenants are seeking. When you throw the Empire State Building into a portfolio you’re likely to see a lack of diversification.”

 
Comments (1)
1 Wednesday, 15 February 2012 20:29
James Lahey
The empire state building was sold for $57million??

Even 10 years ago, that figure sounds like chump change, especially for a monumental landmark like the ESB.

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