Anyone who's ever wanted to own a piece of pricey real estate in New York, but couldn't afford to do so, may soon have the opportunity to own at least a sliver.
The owners of the Empire State Building have decided to put this landmark property on the stock market.
On Monday, the owners filed required paperwork with the U.S. Securities Exchange Commission (SEC) for an initial public offering.
According to the New York Times, this decision is the "culmination of efforts" by the Malkin family, the building's controlling family, to simplify control of its extensive real estate through consolidation. The estate of Leona Helmsley also has some ownership in the 102-story building owned by Malkin Holdings LLC.
The Malkins took ownership in 2002 after purchasing the Empire State Building from Donald Trump and his partner, and gained management rights after settling litigation with Leona Helmsley in 2006.
The renowned Empire State Building is the "crown jewel" of the consolidation of 12 properties in New York and Connecticut to form the real estate investment trust (REIT). Empire State Realty Trust Inc. is the name of the new company, and it will be headed up by Anthony E. Malkin as its chairman and chief executive officer.
The plan is to list Class A common stock on the New York Stock Exchange under the ticker symbol "ESB," with a target to raise $1 billion; the NYT notes this figure is an interim number used in the filing to determine filing fees.
Underwriters listed on the paperwork for the IPO are Bank of America, Merrill Lynch and Goldman Sachs.
This IPO would allow investors to gain ownership of not only a notable landmark building, but may possibly indicate a good investment.
Business Week reported, “Because it’s got an iconic building as a centerpiece, I expect it will be successful anyway, but you’re going to have more or less a higher percentage” of individual investors, said Lawrence Longua, director of the REIT Center at New York University’s Schack Institute of Real Estate. For institutional investors, the owners “are very recognized names in the industry, so I suspect all in all, it’ll do well,” he said.
Business Week also reported "Midtown Manhattan office values have gained 87 percent since a mid-2009 trough", this information comes from Green Street Advisors Inc., a REIT research firm in Newport Beach, California.
For those wanting to own a legendary piece of the Big Apple, if all goes as intended, the SEC will deem the Malkins' filing effective, and stock will be on the open market in the near future. No figures are currently available as to how many shares will be available and what the value of stock will be.