| NEW YORK
NEW YORK The company that controls the Empire State Building has begun asking investors to vote on a plan to fold the iconic building into a new real estate investment trust (REIT) that will eventually be publicly traded, according to regulatory documents filed Tuesday.
Malkin Holdings LLC is asking investors in one of the world's most recognizable buildings to vote on the plan to make the building the centerpiece of more than 18 properties in Empire State Realty Trust Inc, according to a filing with the U.S. Securities and Exchange Commission.
The more than 2,800 investors have until March 25 to vote. Although investors in two other properties will also cast votes, the viability of the proposed REIT depends upon the inclusion of the Empire State Building.
If the Empire State Building investors approve the proposal, the new company will move ahead with its plan to become a publicly traded company, launching an initial public offering (IPO) of shares.
The REIT proposal has divided the Empire State investors. Some believe Malkin is getting too much from the split of the ownership at their expense, while others support the plan as a way to cash out of a long-term investment they inherited from parents and grandparents.
The 2,824 investors hold 3,300 units that originally were sold for $10,000 in 1961 in Empire State Building Associates, the company that owns the building. The investors were divided into three groups holding 1,100 units per group. The REIT plan requires the approval of holders of at least 80 percent of the units in each of the three groups.
The initial $10,000 investment is estimated to be worth about $323,803 or $358,670 depending upon how the initial investor opted to structure the investment more than 50 years ago, according to the filing. However, that could be different than ultimate value to be determined by the stock market if the IPO proceeds.
As of September 30, 2012, the Empire State Building's office space was 67.4 percent leased, with tenants including Coty Inc. Its retail space was 85.9 percent leased.
(Reporting by Ilaina Jonas; editing by Matthew Lewis)