Peter and Anthony Malkin rang the bell at the opening of the New York Stock Exchange last week, after a year-long battle to take the Empire State Building and other buildings in the Malkin portfolio public.
The Empire State Realty Trust made its delayed debut on the exchange Wednesday, trading at $13 per share, at the low end of its expected range. A week later, shares were valued at $12.19 at the close of the market Tuesday.
In addition to the new REIT’s iconic landmark namesake, its portfolio includes other office buildings managed by the former Malkin Holdings. The 12 properties are located in Manhattan, Westchester County and Stamford, Conn., and encompass 7.7 million s/f of office space; the portfolio was approximately 83.5 percent leased as of the end of June, according to the REIT’s IPO filing.
The IPO was delayed for over a year by litigation on the part of a group of the 2,800 shareholders in the Empire State Building’s former private ownership structure, who objected to bundling the Empire State Building with the rest of the portfolio and to the public offering.
There were also unsolicited, eleventh-hour offers from private investors interested in individual assets in the portfolio, including one offer for one offer for One Grand Central Place, and a number of offers for the Empire State Building, which Malkin Holdings rejected in favor of going ahead with the public offering.
The highest reported offer came from Joe Sitt of Thor Equities, who was ready to pay $1.4 billion for the title and master lease on the tower. Compared to the IPO, which valued each share of Empire State Building Associates at $277,000, Sitt’s offer would have paid approximately $100,000 more per share, according to Jason Meister, a broker with Avison Young who represented a number of the would-be buyers, including Sitt.
