(In second-to-last paragraph, corrects buyout price to $100
instead of "original $10,000 investment")
By Ilaina Jonas and Tanya Agrawal
March 15 The company that controls New York's
Empire State Building has garnered about three-quarters of the
investor votes it needs to realize a plan to roll the property
into a newly created real estate investment trust that could
eventually be taken public, according to regulatory documents
filed on Friday,
Malkin Holdings LLC, the company that manages the Empire
State Building - which for four decades after its completion in
1931 ranked as the world's tallest building - is seeking
investor approval to create a real estate investment trust,
called Empire State Realty Trust Inc. Of the investors
who have already cast votes, 90 percent have favored the Malkin
plan, according to a filing with the Securities and Exchange
"The very strong support we have received from our
participants in such a short period of time, both by their votes
and kind words, is very encouraging," Anthony Malkin, president
of Malkin Holdings, said in a statement.
Investors have until March 25 to vote on the move, though
that can be extended until the end of next year.
The proposed REIT includes more than 18 properties.
Investors in the other two Manhattan properties that need
approval voted more than 95 percent in favor of the plan.
Based on the two-thirds of the votes cast, Malkin Holdings
is almost three-quarters of the way to the 80 percent approval
needed from each of three groups that owners of the Empire State
Building were divided into when they first invested in the
building in 1961.
As of March 14, 62 percent to 66 percent of the consent
forms have been received, according to the filing. Of those who
have voted, 89 percent to 92 percent of each group approved the
plan to roll the Empire State Building into the REIT.
Richard Edelman, a member of a group of Empire State
Building investors opposed to the plan, challenged those
"We've polled our investors and it's over a 40 percent 'no'
vote," Edelman said.
"Not sending in a ballot is the same as voting 'no.' Most
'no' voters have told us that is how they are expressing their
disapproval of the REIT plan," he added.
If the 80 percent threshold is reached, the remaining
investors would have the choice of voting for the deal or
selling each ownership unit for $100 back to the sponsor. Some
investors are challenging that provision, which dates back to
the original investment agreement.
The units, now held by 2,824 investors, could be worth more
than $320,000 apiece if the REIT becomes publicly traded. A REIT
is a property or mortgage company that is exempt from corporate
income taxes if it distributes at least 90 percent of its
taxable income to shareholders in the form of dividends.
(Reporting by Ilaina Jonas in New York and Tanya Agrawal in
Bangalore; Editing by Leslie Adler and Dale Hudson)