(Bloomberg) — A proposal to include the Empire State Building in a public real estate investment trust has been approved by 90% of the tower’s unitholders who have voted so far, according to the skyscraper’s supervisors.
Support is even higher from unitholders of two other Manhattan buildings slated to be part of the REIT, Malkin Holdings LLC said in a letter to investors, filed today with the Securities and Exchange Commission. Holders of 1 Grand Central Place shares have voted 95% in favor, while 97% of investors in 250 West 57th St. have approved the plan. About two-thirds of unitholders have voted, the Malkins said.
The fate of the proposed initial public offering may depend on what the other third of Empire State Building investors do. The plan requires support from holders of 80% of the 3,300 units of Empire State Building Associates LLC, which owns the iconic tower, to proceed.
“This remarkable level of participation in such a short period has exceeded our hopes,” Malkin Holdings Chairman Peter Malkin and President Anthony Malkin said in the letter. “We encourage the very small percentage of participants who have voted against any proposal to consider now changing their votes to be for all the proposals.”
Members of Empire State Building Associates have been voting since late January on a plan that would entitle them to receive about half the skyscraper’s appraised $2.53 billion value in shares of the REIT. The Malkins hold a 15.4% stake in the company, according to filings related to the offering. Most of the remaining interests are scattered among more than 2,800 investors, many of them elderly original unitholders or descendants of ones who have died.
The other half of the Empire State Building’s value would go to investors in Empire State Building Company LLC, which holds a sublease on the property. That entity is majority-owned by the estate of Leona Helmsley, which is seeking to liquidate its holdings.
In a March 6 letter to investors, Peter Malkin urged unitholders to get their consents in by March 25, the first day under SEC rules that the solicitation may be completed. A quick approval will reduce costs and the risk of litigation, he wrote.
Crain’s New York Business via Bloomberg.