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  • Empire State Realty Trust Ownership
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  • Therefore, each of Associates and Lessee will ultimately bear one-half of the cost of the improvement program
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  • 2/17/15: PLAINTIFF’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT'S MOTION FOR SUMMARY JUDGMENT AND IN SUPPORT OF PLAINTIFF’S CROSS MOTION FOR SUMMARY JUDGMENT
  • ESB SEC FOIA Requests Updated List
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  • 04/17/15 RICHARD EDELMAN, ) Plaintiff, ) ) v. ) Case No. 1:14-CV-1140 (RDM) ) SECURITIES AND EXCHANGE ) COMMISSION, ) Defendant.
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  • February 20, 2013 Re: In re Empire State Realty Trust, MNY-08894
  • SEC 662
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  • Malkin answer to SEC about unauthorized renewal of Empire State Building Master Lease
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  • Empire State Building Department of Justice FOIA ruling Malkin Holdings





P R O S P E C T U S  

September 9, 2013 Offer to buy Empire State Building.  click here


$39,000,000 of Participations in General Partnership Interests in

EMPIRE STATE BUILDING ASSOCIATES

Associates will own a net lease of the Empire Stale Building

which, with renewals, will extend for 114 years.

PRICE PER PARTICIPATION: $10,000

minimum or any multiple thereof

As to the ability of the Sublessees to pay the required rentals to Associates, see par. 7 on page 5.

As to the interest of the partners in Associates in the transactions described herein, see page 6.

By purchasing a Participation, an investor will have certain rights and liabilities as if a general partner, and therefore may become subject to certain individual liabilities. Sec par. 1 on page 6.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE FILING OF THIS PROSPECTUS WITH THE DEPARTMENT OF LAW OF THE STATE OF NEW YORK DOES NOT CONSTITUTE APPROVAL OF THE ISSUE OR THE SALE THEREOF BY THE DEPARTMENT OF LAW OR THE ATTORNEY GENERAL OF THE STATE OF NEW YORK. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.

As to the use of the proceeds of this offering, see page 4.

Dated October 31, 1961



No person has been authorized to give any information or to make any representations other than those contained in this Prospectus, and, if given or made, such information and representations must not be relied upon.

CO NTENTS

   Page I. GENERAL NATURE OF THE OFFERING

   4  A. DESCRIPTION OF THE TRANSACTION

   4  B. INTEREST OF AFFILIATED PERSONS

   6  II. TERMS OF THE OFFERING

   7  III. THE EMPIRE STATE BUILDING

   8  1. Description

   8  2. Rental Statistics — Competition

   9  IV. THE PURCHASE ARRANGEMENTS

   10  V. DESCRIPTION OF THE MASTER LEASE

   12  VI. OPERATION OF THE BUILDING UNDER SUBLEASE

   13  1. Provisions of the Sublease

   13  2. The Sublessee

   14  VII. FORMATION OF ASSOCIATES

   15  VIII. INFORMATION AS TO PARTNERS IN ASSOCIATES

   15  IX. STATUS OF PURCHASERS OF PARTICIPATIONS

   16  1. Participating Agreements

   16  2. Tax Status of Associates and the Joint Ventures

   17  3. Tax Treatment of Estimated Cash Distribution to Participants

   18  4. Delivery of Annual Financial Statements

   19  X. REPRESENTATIONS BY REGISTRANT

   19  XI. LEGAL OPINIONS

   20  XII. FINANCIAL STATEMENTS

   21  A Registration Statement has been filed with the Securities and Exchange Commission, Washington, D. C. by Empire State Building Associates for the Participations offered hereunder.

This Prospectus does not contain all of the information set forth in the Registration Statement, certain items of which are omitted or included in condensed form as permitted by the Rules and Regulations of the Commission, but does contain a fair summary of the material provisions thereof. Statements contained herein as to the contents of any contract or other

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document are not necessarily complete, and in each instance reference hereby is made to the copy of such contract or other document filed as an Exhibit to the Registration Statement, each such statement being qualified in all respects by such reference.

Copies of the Registration Statement may be obtained from the Commission on payment of the prescribed charges.

The Participations have not previously been offered. There is no present market therein, and there is no assurance of any future market therein. The transferability of the Participations is limited as set forth at page 17.

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I.

GENERAL NATURE OF THE OFFERING

A. DESCRIPTION OF THE TRANSACTION

1. EMPIRE STATE BUILDING ASSOCIATES (“Associates”), 60 East 42nd Street, New York, New York, is a general partnership consisting of Lawrence A. Wien, Henry W. Klein, and Peter L. Malkin. Upon completion of the transactions described below Associates will own a net lease (herein called the “Master Lease”) of the Empire State Building, 350 Fifth Avenue, New York City and the land thereunder. This lease, with renewal privileges, will run for approximately 114 years to January 5, 2076.

2. Associates’ acquisition of the Master Lease will result from the following transactions. Associates has contracted to purchase the Empire State Building, and the ground lease of the land underlying the building. The contract price is $65,000,000, and a $4,000,000 deposit has been made thereunder. The transaction is scheduled for closing on December 27, 1961 (the “closing date”).

In addition to the contract price, Associates will make disbursements of $3,000,000, for various fees and expenses as hereinafter described. These will include profits to Mr. Wien and Harry B. Helmsley, who initiated the transactions. Thus, the total cost of closing the transactions will be $68,000,000.

3. Associates proposes to obtain the $68,000,000 as follows:

$29,000,000  by causing the building to be sold to The Prudential Insurance Company of America (“Prudential”). Prudential already owns the land and is the lessor under the existing ground lease, having purchased the land in 1951 for $17,000,000. Upon acquiring the building, Prudential will execute the Master Lease of the land and building to Associates. The Master Lease will replace the former ground lease and will provide for the payment of an annual rent by Associates;13,000,000  by a Leasehold Mortgage; and26,000,000  through the sale to the public of that amount of the Participations being offered hereby. However, the mortgage may be a smaller amount or there may be no mortgage at all (see page 11). In the latter event, the maximum amount of $39,000,000 of Participations will be sold hereunder. Each partner in Associates will sell Participations in his partnership interest equal to one-third of the amount required.4. Associates will, therefore, acquire the Master Lease for $39,000,000. The $39,000,000 will be derived either from the proceeds of the sale of Participations and a Leasehold Mortgage, or from the sale of Participations alone.

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The Participations will become effective on January 1, 1962. Thereafter the purchasers of Participations will share proportionately in the ownership of the partnership interests in Associates.

5. Associates will not operate the property. Simultaneously with the purchase, it will execute a net Sublease of the entire premises to Empire State Building Company (the “Sublessee”), with the same term and renewal privileges as in the Master Lease. Empire State Building Company is a joint venture composed of Mr. Wien, Mr. Harry B. Helmsley, and two corporations owned by others (see page 14.)

6. The Sublessee will agree to pay all expenses of operating and maintaining the property and also to pay Associates an annual net rent (the “basic Sublease rent”) which, if paid, will enable Associates

(a) to pay the Master Lease rent and to make any Leasehold Mortgage payments;

(b) to defray administrative costs; and

(c) to make monthly cash distributions to each participant equal to $900 per year on each $10,000 Participation.

Reference is made to Page 13 For a discussion of possible increases in distributions to participants and accompanying reductions in the basic Sublease rent which may occur in the future as and when Associates’ Master Lease rent or mortgage requirements reduce.

The tax treatment of the estimated cash distributions to participants is discussed at Page 18.

7. Associates has the right to assign the Master Lease and be relieved of future liabilities thereunder. Since the Sublessee will have a corresponding right of assignment under the Sublease, the investment offered hereby should be judged primarily on the basis of the income-producing capacity of the property.

A Summary, showing the results of operations of the Empire State Building for the five years ended November 30, 1960, and for the nine-month periods ended August 31, 1960, and 1961, appears at Page 24 of the Prospectus. As there shown, the net operating revenues in 1960 and previous years were less than the maximum basic Sublease rent of $6,830,000.

The net operating revenues for 1960 and previous years are not identical with present net operating revenues. For example, in 1960 the total rents collected aggregated $10,577,327 (including percentage rentals of approximately $70,000), and net revenues were $6,095,000. As of August 15, 1961, the annual rentals collectible under the leases then in existence (adjusted to reflect the same amount of percentage rentals) had increased by $560,000. In addition, new annually renewable agreements relating to the use of the television antenna had been made, which will increase revenues from that source by about $80,000 a year. However, during the first 9 months of fiscal 1961 net revenues from the observatory were approximately $60,000 less than in the comparable period of the preceding year.

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Over the next five years, there will be further increases under existing leases. Increases aggregating approximately $45,000 will go into effect on January 1, 1962, and another $88,000 will take effect at varying times over the following four years. Also, tenant alterations during 1960 include certain items which are not annually recurring and were in excess of usual expenditures for that purpose. The anticipated expenditure for tenant alterations during fiscal 1961 should be approximately $770,000, or about $300,000 less than the expenditure in 1960.

Based upon the foregoing, Associates believes that the Sublessee should have sufficient earnings from the building to cover the maximum basic Sublease rent. However, no exact prediction can be made as to the amount of earnings that will be realized in 1962 or future years or that the net revenues in any particular year or years will be sufficient to cover the basic Sublease rent. The ability to earn such amounts will depend upon a number of factors, common to all real estate investments, which may vary from time to time. These include possible changes in occupancy rate, rent roll, operating expenses and repairs, as well as general economic conditions and competition. Since a majority of the tenants in the building are engaged in various aspects of the soft goods industries, economic changes which affect such industries also may affect the earning capacity of the property.

It should be noted that during the year 1962, approximately 23% of the building’s leases will expire. While in the past, leases have generally been renewed, or new tenants obtained, at increased rates, there is no certainty that this will continue in the future and it is, of course, possible that occupancy or rental rates may decrease as a result of these expirations. Additional expenditures for tenant changes may also be required. Although a wage increase amounting to approximately $63,000 a year will take effect on January 1, 1962, the cost thereof should be recovered under escalator clauses in tenants’ leases currently in existence.

B. INTEREST OF AFFILIATED PERSONS

Associates’ disbursements of $3,000,000 will include a fee estimated at $1,100,000 to the firm of Wien, Lane & Klein, in which the partners in Associates are members. A substantial portion of this fee represents a promoter’s profit for creating the investment. The disbursements also will include a $500,000 real estate brokerage commission to Helmsley-Spear, Inc., of which Mr. Helmsley is President and the major stockholder, as well as real estate transfer taxes, title and mortgage insurance costs, survey expenses, printing costs, documentary stamp taxes, mortgage recording taxes, inspection, appraisal and auditing fees, fees for special counsel, other real estate brokerage fees and the $100,000 estimated expenses of this offering.

To the extent that Associates’ actual disbursements to others than Wien, Lane & Klein are less than or exceed present estimates, there will be a corresponding increase or decrease in the fee to that firm. The principal variation would result if there is no mortgage placed on the property, so that estimated expenses allocable thereto are eliminated. It is expected that any variation in such fee will not exceed $200,000.

Wien, Lane & Klein will supervise the operation of Associates’ partnership agreements, and will act as its general counsel. Such services will include the maintenance of all partnership records, preparation of all tax information for each participant, the making of monthly distributions to participants, supervision of preparation of partnership income tax returns,

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preparation and filing of reports with various governmental authorities, and the registration and transfers of Participations. It will receive payments of $100,000 a year, a portion of which will be used to defray all of Associates’ regular expenses and accounting costs. The balance will represent compensation for the above services. As and when distributions to participants increase, the amount of such payments also will increase (see page 13).

The Sublessee, in which Messrs. Wien and Helmsley have an interest, will pay $90,000 a year to Wien, Lane & Klein for services as its general counsel and will pay $90,000 a year to Helmsley-Spear, Inc. for building management services. Helmsley-Spear, Inc. will receive leasing commissions based upon the recommended rates of the Real Estate Board of New York, Inc.

During the five-day period between the December 27, 1961 closing date and January 1, 1962 when the Participations become effective, the Sublease rent is in an amount sufficient to enable Associates to make mortgage payments, if any, and to pay Master Lease rent. These will be the only obligations of Associates during such period. The Sublessee will profit to the extent that net operating revenues for such five days exceed the required mortgage and Master Lease rent payments.

As to the reductions in rents payable by the Sublessee which will accompany any increased distributions to the participants, see page 13.

II.

TERMS OF THE OFFERING

1. The offering is being made by the partners in Associates. Helmsley-Spear, Inc. may seek to interest residents of New York State in the offering and may refer their names to Associates. That firm will receive no payment in addition to its $500,000 real estate brokerage commission for such activities, but may be deemed an “underwriter” hereunder. Associates may pay commissions, not in excess of 2%, to persons who assist in the sale of Participations. Such persons also may be deemed “underwriters” hereunder. To the extent that such commissions are paid, there will be an equivalent reduction in the fee payable to Wien, Lane & Klein described above.

2. Each offer to purchase a Participation must be for a minimum of $10,000 or a multiple thereof. However, the partners reserve the right, in their discretion, to accept offers for lesser amounts. Offers will be accepted only from individuals of full age. No offer will be effective until accepted in writing by one of the three partners in Associates.

3. A deposit up to the full amount of the price may be required for any Participation. All deposits will be held in trust, in a Special Account, by Wien, Lane & Klein, 60 East 42nd Street, New York, New York until expended for the purposes described herein. Should deposits of less than the full amount be initially required, the balances will be payable at the offices of Wien, Lane & Klein, upon demand. Once offers for the required amount have been accepted, all funds may be applied immediately for any of the purposes described herein. If the described transactions are not completed for any reason on or before January 10, 1962, all payments for Participations will be repaid in full, without interest.

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III.

THE EMPIRE STATE BUILDING

1. Description. The 1,472-foot high Empire State Building is the tallest building in the world. It occupies the Fifth Avenue blockfront from 33d to 34th Streets, between Grand Central and Pennsylvania Stations, in midtown New York City. The building covers a ground area of about 91,000 square feet, fronting approximately 198 feet on Fifth Avenue, 425 feet on 34th Street and 500 feet on 33d Street.

Completed in 1931, the Empire State Building is of concrete, stone, and steel construction. It rises 102 stories above the street, has two stories below grade, and contains a cubic volume of approximately 37,000,000 cubic feet. Glass-enclosed sightseeing observatories are located on the 86th and 102d-story levels. A 22-story television lower, erected in 1951, is located atop the 102d floor. The building is served by 69 signal control micro-leveling passenger elevators, 6 freight elevators, and 7 escalators.

The first 85 floors of the building constitute tenant space with a total net rentable area of approximately 1,753,000 square feet. There are 23 stores on the ground floor. The 850 tenants are of diversified types, although the majority are engaged in various aspects of the soft goods industries which are concentrated in the area surrounding Fifth Avenue and 34th Street. No single tenant occupies as much as 10% of the building’s rentable area or accounts for as much as 10% of annual rent collections.

Air conditioning is available for all tenant areas from a 5,250-ton air conditioning plant, completed in May, 1957. At present, 80 per cent of the building is air conditioned. Over 69 per cent of the air conditioning facilities are landlord owned, and the balance are tenant-owned units which are connected to the building’s central plant.

In the opinion of Associates, based upon examination of the property, the building has been well maintained and is not in need of any major repair or maintenance work. Major improvements during the past five years consisted primarily of the air conditioning described above and related electrical work. The Sublessee has advised Associates that upon commencement of the Sublease, it will make a survey of future requirements for air conditioning and electrical power and the feasibility of converting the building elevators to automatic operation. After such survey the Sublessee wilt determine whether such improvements will be made. Arrangements have been made whereby Prudential will finance a portion of the cost of specified improvements made within the next four years, for which it will receive an increase in the Master Lease rent. The balance of the cost of such improvements will be paid by the Sublessee. (See page 12.)

Its two observatories have made the Empire State Building an international tourist attraction. More than 20,000,000 people have visited the observatories since their opening. All seven of New York City’s television stations transmit their programs, on a license-fee basis, from the television tower atop the building. The tower also is used by the Federal Communications Commission, and by various FM radio stations.

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There are approximately 550 building employees, of whom about 450 are covered by union contracts which extend to 1963.

2. Rental Statistics — Competition. Associates is advised that as of August 15, 1961, the building was 98.14% rented. In the past ten years rental percentages were as follows:

 1960 — 97.7%   1957 — 98.9%   1954 — 99.2%   1952 — 98.9%  1959 — 93.1    1956 — 99.0    1953 — 99.3    1951— 99.7   1958 — 97.9    1955 — 99.8    On July 1, 1961, the average rental rate per square foot for office space was $6.69. For each of the past five years such average rate was: 1960 — $6.31; 1959 —$6.08; 1958 —$5.96; 1957 — $5.80; and 1956 — $5.40.

Assuming the continuation of existing average rates, and a continuance of other income and expenses at the same rate as during 1961, it is estimated that the building; would have to maintain an occupancy rate of approximately 95% to enable the Sublessee to meet the basic sublease rent.

The total annual rent collections, as of July 1, 1961, were at the rate of $10,914,000. This is exclusive of (a) percentage rentals, which aggregated approximately $70,000 in 1960, and (b) annual increases under existing leases which will amount to about $133,000 over the next several years.

In addition to income from space tenants, 1960 revenues from the observatories were in excess of $2,000,000, and income from antenna license fees and miscellaneous sources was approximately $772,000.

On July 1, 1961, the following lease expiration schedule applied:

Year

  Number of
Leases
Expiring
   Square Foot
Area
   Annual Rental of
Expiring Leases
   Percentage of
Gross Annual
Rental of Expiring
Leases
 1961

   10     20,432    $129,012     1.17  1962

   227     417,028     2,598,384     23.47  1963

   156     210,703     1,367,587     12.35  1964

   170     206,701     1,424,704     12.87  1965

   201     290,329     1,983,774     17.92  1966

   112     265,034     1,720,042     15.54  1967

   29     68,910     493,124     4.45  1968

   8     26,533     188,397     1.70  1969

   14     72,849     499,279     4.51  1970

   7     43,626     283,400     2.56  1971

   —       —       —       —    1972

   1     14,705     149,399     1.35  9



Year

  Number of
Leases
Expiring
   Square Foot
Area
  Annual Rental of
Expiring Leases
  Percentage of
Gross Annual
Rental of Expiring
Leases
 1973

   1     19,179    108,520    .98  1974

   1     11,195    55,000    .50  Statutory

   6     5,547    29,597    .27  Month to month

   12     16,568    40,175    .36            Total

   955     1,689,339*  $11,070,394*   100% Vacant

     63,418**               1,752,757    *Approximately 19,000 square feet of the space shown as rented on July 1, 1961 had been rented but were not yet occupied on that date. The rental value of such space was about $156,000, accounting for the difference between the $11,070,394 shown in the schedule and the July 1st rent collection figure of $10,914,000.**Approximately 31,000 square feet of the 63,418 square feet shown vacant as of July 1, 1961, had been rented as of August 15, 1961.Office buildings in New York City are highly competitive. The Empire State Building competes with office structures in the midtown area and other sections of Manhattan. In the past five years, new construction has accounted for over 27,500,000 square feet of rentable space in Manhattan. Associates is advised that virtually all of this space is rented, and is occupied for the most part by tenants under long term leases. At present, other new buildings under construction are expected to result in approximately 12,000,000 square feet of additional space in Manhattan. Only an insubstantial part of the new or pending construction is in the Fifth Avenue-34th Street area.

IV.

THE PURCHASE ARRANGEMENTS

1. On August 22, 1961, Associates contracted to purchase the Empire State Building front an unaffiliated person, Empire State Building Corporation, whose president is Robert Crown. The closing is scheduled for December 27, 1961. The total cost of effecting the transaction will be $68,000,000, consisting of the contract price of $65,000,000 and $3,000,000 of disbursements previously described.

2. A $4,000,000 deposit has been made under the contract with funds supplied by the Sublessee. These funds will be repaid from the proceeds of the offering.

3. Arrangements have been made for the sale of the building to Prudential for $29,000,000. Simultaneously, Prudential will give the Master Lease of the land and building to Associates.

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4. As a result of the Prudential payment, a balance of $39,000,000 will be required to effect the acquisition of the Master Lease. Associates has agreed that prior to the closing, the Sublessee will have the right to provide a Leasehold Mortgage in an amount up to $13,000,000. Sublessee has advised that it is seeking a mortgage in the amount of $13,000,000, requiring constant monthly payments at the rate of 8 1/2% per annum, applicable first to the payment of interest at the rate of 6 1/2% per annum. If such mortgage is obtained, and if such payments are made, the mortgage will be fully liquidated in twenty-two years and four months from the closing date.

If the Sublessee docs not obtain a mortgage on such terms, it may nevertheless endeavor to obtain a different mortgage, provided that such mortgage must (a) not exceed $13,000,000 in amount, (b) be self-liquidating in not more than 30 years, (c) provide that Associates will not be personally liable for the repayment thereof, and (d) provide for total annual payments which, together with the 9% estimated cash distribution to participants, will not exceed $3,510,000. To the extent that such combined requirements are less than $3,510,000, there will be an equivalent reduction in the initial basic Sublease rent. No commitment has yet been obtained for any such mortgage financing and there is, of course, no assurance that it will be available.

5. The purchase contract provides a mortgage alternative, which may be used in lieu of those described above, in that a $6,000,000 first mortgage on the Leasehold can be given to the Seller as part payment of the purchase price. This mortgage would require quarterly payments at the rate of $480,000 per annum, to be applied first to interest at the rate of 6%, and the balance in reduction of principal. It would call for an additional $2,000,000 principal payment at the end of the tenth year. Thereafter, it would continue until December 27, 1976 when the unpaid principal balance of $419,849 would be due. Neither Associates nor the participants would have any personal liability under this mortgage. If this mortgage is used, it will be necessary for Associates to refinance it at the end of the tenth year, when the $2,000,000 principal payment becomes due. The terms of any such refinancing cannot be predicted at this time.

6. If the Sublessee provides a Leasehold Mortgage, it will be accepted by Associates and the trans action will be consummated on that basis. If not, Associates will consider all other financing alternatives available, including the possibility of eliminating any Leasehold Mortgage, in which event it will sell the full amount of $39,000,000 of Participations.

7. Thus, the total amount of Participations that will be sold will be equal to $39,000,000 less the amount of the Leasehold Mortgage, if any. It will not be necessary for Associates to sell all such Participations prior to the closing date. The Seller has agreed that under specified circumstances it will accept Mr. Wien’s note in payment of a portion of the purchase price, not to exceed $10,400,000. The note, which must be guaranteed by Mr. Helmsley to the extent of $1,300,000, will be repayable in four equal monthly installments commencing January 31, 1962 and will bear interest at the rate of 6% per annum. If such note is utilized, it will constitute a capital contribution to Associates by Mr. Wien, and, from time to time after the closing, he may continue to sell Participations in his partnership interest at the original offering price in order to be reimbursed therefor. The note would constitute the personal obligation of Mr. Wien. The participants would have no responsibility for its repayment, and it would not constitute a lien on the property to be owned by Associates.

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In addition to Mr. Wien’s note, the partners in Associates may make further cash contributions to the capital of Associates in order to provide a portion of the funds required for the closing. To the extent that they do so, they may continue to sell Participations after the closing date at the original offering price to obtain reimbursement for such contributions.

8. The purchase contract provides for apportionment between Seller and Purchaser of items such as rents, insurance, taxes, wages and salaries and requires the Purchaser to pay for various items of personal property located on the premises. All such costs will be paid by the Sublessee.

9. On the closing date, all present mortgages on the property will be paid so that if a Leasehold Mortgage is given, it will then be the only mortgage thereon.

V.

DESCRIPTION OF THE MASTER LEASE

The following are important provisions of the Master Lease to he held by Associates:

1. The initial term will be 30 years and nine days to January 5, 1992. Associates will have renewal options for four additional 2l-year terms. Renewals are automatic upon the giving of appropriate notice by Associates, and do not require the payment of any additional consideration.

2. The rent during the initial term will be $3,220,000 a year. During the first renewal term the rent will be §1,840,000 a year. During each of the remaining renewal terms, it will be $1,610,000 a year.

3. Associates will be obligated to pay real estate taxes and all other operating and maintenance expenses, to make all necessary repairs, to maintain insurance coverage of various types, and to rebuild or replace the building in the event of fire or other casualty. However, the Sublease will impose upon the Sublessee obligations which in all respects are at least equivalent to those of Associates under the Master Lease.

4. Prudential, as Lessor, will agree to pay 75% of the cost, up to a maximum contribution of $3,750,000, for any capital improvements to the property within four years, provided that three-fourths of such expenditures shall be for the purpose of converting elevators to automatic operation. If such contribution is made by Prudential, additional rent will be payable under the Master Lease. During the remainder of the initial lease term, such additional rent will be 7% to 7.41% of the Prudential contribution, depending on the date such contribution is made. During the first renewal term, any such additional rent will drop to 4% of the Prudential contribution, and during the last three terms it will drop to 3 1/2%.

The Sublessee will have the right to decide whether such capital improvements are to be made, and will pay 25% of the cost thereof. If the improvements are made, additional rent will be payable under the Sublease to provide funds for the increased rent payments to Prudential.

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5. Associates may assign the Master Lease at any time upon prior written notice to the Lessor, provided the assignment is to a New York corporation or to a partnership whose principal place of business is in New York County. Upon assumption by the assignee of the obligations of the Master Lease, including any accrued liabilities up to the date of assignment, Associates will be relieved of any future obligation thereunder, but not of those previously accrued.

6. The Master Lessor has agreed to look solely to the partnership property for collection of any judgment which it may recover against Associates. The effect of this agreement is to eliminate personal liability of the participants for lease obligations. (See par. 1 on page 16).

VI.

OPERATION OF THE BUILDING UNDER SUBLEASE

1. Provisions of the Sublease.

(a) The Sublease will be for the same initial term as the Master Lease, less one day. It will have coextensive renewal privileges.

(b) The basic Sublease rent will be as follows:

(i) The annual basic rent during the initial term of the Sublease will be set at a sum sufficient to enable Associates to meet all mortgage requirements, to pay the rent under the Master Lease, to defray all administrative costs, and to make cash distributions to participants from January 1, 1962, at the rate of $900 per $10,000 Participation.

The maximum basic Sublease rent will be $6,830,000 per year, the amount payable if no mortgage is given. The amount of rent payable if a Leasehold Mortgage is given will depend upon the requirements thereof. In any event, the rent, if paid, will provide sufficient funds to Associates to make all of the payments and cash distributions specified above.

(ii) If a Leasehold Mortgage is placed at the time of closing, there will be an automatic reduction in the basic Sublease rent equal to 50% of any reduction or elimination of mortgage charges. In any event, in 1991 there will be a reduction of $690,000 in the basic Sublease rent. This is one-half of the amount by which the Master Lease rent reduces at that time. In the second renewal term, the basic Sublease rent will be further reduced by $115,000 per annum, which is one-half of the amount of the reduction in the annual Master Lease rent at the commencement of the second renewal term. Thereafter, the rental will remain the same.

When each of the foregoing reductions in the basic Sublease rent occurs, additional funds will be available to Associates to the extent of one-half of the decrease in the Master Lease or Leasehold Mortgage or requirements which become effective at that time. If such rent is paid, 94% of such additional funds wilt be paid to participants as increased cash distributions, and 6% to Wien, Lane & Klein as additional payments for supervisory services.

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(c) During the initial Sublease term and all renewals the Sublessee will be required to pay, as additional rent, all sums necessary to meet any increased rent requirements imposed under the Master Lease as a result of a contribution by Prudential to the cost of capital improvements to the building. As noted above, the rent payable under the Master Lease on account of such improvements decreases during the first and second renewal terms (see par. 4 on page 12). At such times, there will be a reduction in the Sublease rent equal to 50% of the reduction in the Master Lease rent, and the balance will be available to Associates. 94% of such balance will be distributed pro-rata to the participants, and 6% will be paid to Wien, Lane & Klein.

(d) The Sublessee also will be required to pay as additional rent 50% of the amount of the net operating profit of the building in any year in excess of $1,000,000, after payment of rent, but before income taxes and amortization of any cost attributed to the Sublease. 94% of any such additional rent will be distributed pro-rata to the participants, and 6% will be paid to Wien, Lane & Klein.

(e) The Sublessee will be obligated to pay all real estate taxes and other operating and maintenance costs, to keep the property in good repair, to maintain full insurance coverage, to rebuild in case of fire or other casualty, and to satisfy all obligations of Associates under the Master Lease and Leasehold Mortgage (other than the rent and interest and amortization payments required thereunder).

(f) The Sublessee will have the right to assign the Sublease, provided that the assignee is a New York corporation or a partnership whose principal place of business is in New York County, and that the assignee assumes the past and future liability of the Sublease. Upon any such assignment, the Sub lessee will be relieved of future obligations under the Sublease, but not of those previously accrued.

(g) The Sublessor has agreed to look solely to the assets of the joint venture for collection of any judgment which it may recover against the Sublessee. The effect of this agreement is to eliminate personal liability of the joint venturers for Sublease obligations, although the capital of the joint venture would be subject thereto.

2. The Sublessee. Empire State Building Company is a joint venture among Lawrence A. Wien (25% interest), Harry B. Helmsley (25%), Cargo Despatch, Inc. (37 1/2%), a wholly owned subsidiary of American-Hawaiian Steamship Company, the principal stockholder of which is Mr. D. K. Ludwig, Darien, Connecticut, and Martin Weiner Realty Corporation (12 1/2%), owned by Mr. Martin Weiner, Paterson, New Jersey.

The joint venturers have agreed that Messrs. Wien and Helmsley will control all matters relating to the operation of the building. Mr. Helmsley’s firm, Helmsley-Spear, Inc., will act as managing agents for the building.

Biographical information regarding Mr. Wien appears below. He is a member of various groups which operate major office buildings, including the Equitable Building at 120 Broadway, the Lincoln Building at 60 East 42nd Street, the Garment Capitol Buildings at 498, 500 and 512 Seventh Avenue, and many others in New York City.

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Mr. Helmsley has been engaged in all phases of real estate management, brokerage, appraisal and mortgage financing for more than 34 years. Helmsley-Spear, Inc. has been in existence since 1866 and is one of the nation’s largest real estate management and brokerage firms. The firm manages over 110 office buildings in New York City.

VII.

FORMATION OF ASSOCIATES

1. Associates was formed in New York, by a written agreement dated July 11, 1961, for the sole purpose of acquiring the Master Lease on the Empire State Building, to receive the rent under the Sublease and to make the distributions herein described. It does not propose to engage in any other activities or to issue any securities except as set forth in this Prospectus.

2. Under the partnership agreement, the partners will share equally in the profits and losses of the partnership.

3. The partnership will continue until it has disposed of all of its assets. The partnership is not to be interrupted for any other cause, including the death of a partner or assignment of his interest. Provision is made for succession to the interest of a deceased partner.

4. The consent of all partners is required for any sale, transfer, modification or renewal of the Master Lease, the making or modification of any mortgage thereon, the making or modification of any Sublease of the entire property or the disposal of any partnership asset.

VIII.

INFORMATION AS TO PARTNERS IN ASSOCIATES

Mr. Lawrence A. Wien, Newtown Turnpike, Weston, Connecticut, is a graduate of Columbia College and Columbia Law School, and has been practicing law in New York City since 1928. He is the senior partner in the firm of Wien, Lane & Klein. He has specialized in the field of real estate law for over thirty-three years and has been particularly active in creating investments in real property. Such investments include the Hotel Plaza at Fifth Avenue and 59th Street, the Graybar Building at 420 Lexington Avenue, Hotel Taft at Seventh Avenue and 50th Street, the Equitable Building at 120 Broadway, the Lincoln Building at 60 East 42nd Street, the Garment Center Capitol Buildings at 498, 500 and 512 Seventh Avenue, the Fisk Building at 250 West 57th Street, the Rogers Peet Building at 485 Fifth Avenue, and the Bread-Exchange Building at 25 Broad Street, all in New York City; the Warwick Hotel in Philadelphia, Pennsylvania; the Leader Building in Cleveland, Ohio; the Howard Johnson’s Motor Lodge in Springfield, Virginia; the Dyckman Hotel in Minneapolis, Minnesota; the Senator Hotel in Sacramento, California; the Roosevelt and Consolidated Buildings in Los Angeles, California; the Desert Inn in Las Vegas, Nevada; and the Zayre Self-Service Department Stores in Pittsburgh, Pennsylvania, Louisville, Kentucky, and Atlanta, Georgia.

15



Mr. Henry W. Klein, Sterling Road, Harrison, New York, is a graduate of Cornell University and Harvard Law School, has been a member of the Bar of New York since 1942, and is a partner in the firm of Wien, Lane & Klein.

Mr. Peter L. Malkin, Summit Ridge Road, Stamford, Connecticut, is a graduate of Harvard University and Harvard Law School, has been a member of the Bar of New York since 1958, and is a partner in the firm of Wien, Lane & Klein.

IX.

STATUS OF PURCHASERS OF PARTICIPATIONS

1. Participating Agreements. Each partner in Associates will enter into a Participating Agreement with investors contributing one-third of Associates’ total cash investment.

Each Participating Agreement will create a joint venture among the parties thereto, who will own the particular partner’s one-third interest in Associates in proportion to their respective contributions to its total cost. The Agreements will contain the following provisions:

1. The partner will act as “Agent” for the participants in his partnership interest. The participants will share proportionately in all profits or losses realized by the Agent as a partner in Associates after the effective date of the Participations. Under New York law, one participant may be liable to a person outside the venture for the full amount of any obligation of the Agent as a partner in Associates or any liability of the partnership arising after the effective date of the Participations. However, subject to jurisdictional questions, in such event he would he entitled to demand and receive pro rata contributions from his co-participants. Participants will not be personally liable for any obligations or liabilities of the partnership arising prior to the effective date of the Participations, although the capital contributed by them will be subject to such obligations or liabilities.

With respect to the elimination of personal liability under any Leasehold Mortgage see paragraph 4 on page 10. With respect to the elimination of personal liability under the Master Lease, see paragraph 6 on page 13.

2. The Agent may not agree to sell or transfer the partnership interest or the Master Lease, to make or modify any mortgage thereon, to renew the Master Lease, to make or modify any sublease of the entire premises, to dispose of any partnership asset or to convert the partnership to a trust or other form of ownership, without the consent of all his participants. The Participating Agreement itself may not be modified in any way without such unanimous consent. However, if participants owning 80 per cent of the Agent’s interest consent to any such action, the Agent or his designee shall have the right to purchase the interest of any non-consenting participant at a price equal to the lesser of: (i) its original cost, less any capital repaid thereon as part of the monthly cash distributions or from the proceeds of any newly created mortgage or mortgage refinancing or modification of the Master Lease or (ii), the appraised value of the Participation, determined by independent appraisal. This provision is included to prevent a small minority of participants from interfering with any program desired by the great majority.

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3. Except as above limited, the Agent may bind his participants, and the participants will agree to indemnify him proportionately against any liability arising after the Participations become effective, by reason of his acting as Agent. The Agent will incur no personal liability for any action taken by him after the effective date of Participations, except for willful misconduct, gross negligence or any liabilities under the Securities Act of 1933. The partners in Associates are not required to be bonded.

4. The Agent may resign without further liability upon accounting to his successor for all funds he has received. He may be removed by the written direction of participants owning at least three-fourths of the Agent’s interest.

5. If the Agent dies, is removed, resigns or is unable to act, he will be succeeded by one of seven persons named as successors in each agreement, all of whom are members of the firm of Wien, Lane & Klein. If no such designee qualifies, the owners of at least three-fourths of the interest shall select the new Agent.

6. Each joint venture shall continue until it has disposed of its entire interest in Associates. Under the terms of the participating agreement, the joint venture shall not be interrupted for any other cause, including the death of a participant or transfer of his interest.

7. A participant may transfer his Participation in the joint venture to any individual of full age. Any transfer during his lifetime must be of the full Participation owned, unless such Participation exceeds $10,000. In the latter case, the transfer must be in multiples of $5,000, with $10,000 being the minimum Participation that may be transferred. The transferee must accept the transfer in writing, and duplicate originals of the transfer instruments must be filed with the Agent, before the transfer shall be effective.

8. Upon the death of a participant, any individual of full age designated in the decedent’s will or by his executor or administrator may succeed to his interest. If no such individual qualifies within eight months after date of death, the surviving parties to the joint venture may purchase proportionately the interest of the decedent, at its original cost, less any capital repaid thereon.

2. Tax Status of Associates and the Joint Ventures. Paul, Weiss, Rifkind, Wharton & Garrison, tax counsel, have furnished Associates with an opinion that the members of Associates and of the joint ventures to be formed under the Participating Agreements will qualify as partners for Federal income tax purposes. Therefore, each individual member of Associates and each participant will be taxed on his distributive share of the net income, but the net incomes of Associates and the joint ventures will not be taxable as such.

The opinion notes that the Treasury Regulations contain provisions under which partnerships or joint ventures may be taxed on their net income in the same manner as corporations, and the members thereof may be taxed as shareholders. The opinion concludes, however, that Associates and the joint ventures involved herein do not fall within these provisions of the regulations, and therefore will not be taxable as corporations.

17



3. Tax Treatment of Estimated Cash Distribution to Participants. The following table, which assumes that Associates and the joint ventures will be taxable as partnerships, estimates the aggregate cash income to Associates during the first full calendar year of ownership of the Master Lease. It also shows the portion of such income distributable to participants under the Participating Agreements. The specific terms of the mortgage, if any, that actually may be placed on the Master Lease, are not known at this time. However, for purposes of illustration, the rent income and expenses shown in the table arc based on the assumption that the $13,000,000 mortgage, with requirements of 8 1/2% per annum, which is being sought by the Sublessee, is placed on the Master Lease.

The table and accompanying text below are based on present tax laws and assume that the Sublease will continue in accordance with its terms over all of the years discussed. There is no assurance that the foregoing assumptions necessarily will hold true, but if such rent is paid, Associates and the joint ventures are taxable as partnerships and the present tax laws remain unchanged, the following information is applicable:

ESTIMATED INCOME AND EXPENSES

DURING

FIRST YEAR OF OWNERSHIP

Rent Income

    $6,765,000.00  Expenses:

    Master Lease rent

  $3,220,000.00    Interest on mortgage

   837,112.90    Supervisory fees

   100,000.00         Total expenses

     4,157,112.90       Net income before write-off of leasehold

     2,607,887.10  Leasehold, write off over 30 years, 3 1/3 of $39,000,000

     1,300,000.00       Net income to participants for Federal income tax purposes

    $1,307,887.10       ESTIMATED CASH AVAILABLE FOR DISTRIBUTION  Net income before leasehold write-off (as above)

    $2,607,887.10  Less, annual amortization of mortgage

     267,887.10       Cash available for distribution

    Total:

    $2,340,000.00  Per 10,000 Participation

     900.00       The estimated cash available for distribution, shown immediately above, will represent both income, and to the extent that the annual write-off of leasehold cost exceeds mortgage amortization, a return of invested capital. That portion which represents a return of invested capital will not be reportable as income for Federal income tax purposes. Deducting the return of invested capital from the original cost, the rate of income from the remaining invested capital increases each year. It should be noted that although each such return of invested capital constitutes a partial reduction of the cost of the investment, and a reduction in the tax bases of the participants, it does not in any way change the proportionate interest of each participant in Associates. Thus, if the Master Lease were sold, each participant would share pro-rata in the proceeds. However, if the proceeds were in excess of the tax basis, capital gains taxes would be payable on such excess.

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The following table provides a breakdown on this basis of the estimated cash distribution to the holder of a $10,000 Participation during the first calendar year of ownership of the Master Lease, from January 1, 1962 through December 31, 1962:

Estimated
Cash
Distribution


  Portion
Reportable
as Ordinary Income
  Portion
Representing
Return of
Invested Capital
  Percent
of Estimated Cash
Distribution
Reportable
as Ordinary Income
$900  $503  $397  55.9%The breakdown will vary in future years of the initial Master Lease term depending upon the amount paid in reduction of the mortgage. In the second through fifth years of ownership, the portion of the $900 yearly estimated cash distribution constituting reportable income will range from $510 to $534 and the portion representing a return of invested capital will range from $390 to $366. Thereafter the portion of each distribution constituting reportable income will gradually increase. At the expiration of the initial term in 1991, the cost of the Master Lease will have been fully written-off and the full amount of all future cash distributions will be reportable as income.

In the event that a mortgage other than that described at page 16 is placed on the Master Lease, the foregoing breakdown will be inapplicable. The allocation of cash distributions as between reportable income and return of invested capital that will apply in such case is not now ascertainable.

If the transaction is financed without a Leasehold Mortgage, the portion of each $900 yearly estimated cash distribution constituting reportable income in the first through thirtieth years will be $567 and the portion thereof constituting a return of invested capital will be $333.

4. Delivery of Annual Financial Statements. The partners in Associates will provide all participants, at the end of each fiscal year of the partnership, with an annual report, including a Balance Sheet and Profit and Loss Statement of the partnership, prepared and certified by an independent Certified Public Accountant.

X.

REPRESENTATIONS BY REGISTRANT

There is no material litigation presently pending by or against the Registrant. This prospectus does not knowingly omit any material fact or contain any untrue statement of a material fact.

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XI.

LEGAL OPINIONS

The legality of the Participations and other matters of New York State law relating to this offering have been passed upon by Wien, Lane & Klein, Esqs., New York, New York. Legal matters in connection with the Securities Act of 1933 have been passed upon by Milton P. Kroll, Esq., of Freedman, Levy, Kroll & Simonds, Washington, D.C. Questions relating to the status for federal income tax purposes of Associates and the joint ventures created under the Participating Agreements have been passed upon by Paul, Weiss, Rifkind, Wharton & Garrison, Esqs., New York, New York.

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XII.

FINANCIAL STATEMENTS

CERTIFICATE

EMPIRE STATE BUILDING ASSOCIATES

60 East 42nd Street

New York 17, N. Y.

We have examined the balance sheet of Empire State Building Associates and the accompanying note thereto, as of August 22, 1961. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and other auditing procedures as we considered necessary in the circumstances.

In our opinion, the balance sheet and the accompanying note, present fairly the financial position of Empire State Building Associates at August 22, 1961, in conformity with generally accepted accounting principles.

We hereby consent to the inclusion of this certificate in the filing by Empire State Building Associates of its Form S-1, Registration Statement under the Securities Act of 1933.

New York, N. Y.

August 22, 1961

  DAVID B. JACOBS & COMPANY21



EMPIRE STATE BUILDING ASSOCIATES

(A Partnership)

BALANCE SHEET AS OF AUGUST 22, 1961

ASSETS

Deposit made under Agreement dated August 22, 1961 for Purchase of the Empire State Building at 350 Fifth Avenue, New York City, and the Ground Lease of the land underlying said Building

  $4,000,000.00     LIABILITIES

Due to Empire State Building Company

  $4,000,000.00     NOTE:

The $4,000,000 deposited under the purchase agreement on August 22, 1961 was furnished to Empire State Building Associates by Empire State Building Company. Upon the title closing, Empire State Building Associates will repay to Empire State Building Company the $4,000,000, together with any interest on the deposit received by Empire State Building Associates from Seller under the contract. In the event title does not close under conditions resulting in the forfeiture or the deposit, Associates will have no obligation to repay Company.

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AUDITORS’ OPINION

TO EMPIRE STATE BUILDING ASSOCIATES:

We have examined the Summary of Operations of the Empire State Building located at 350 Fifth Avenue, New York, New York, for the five years ended November 30, 1960. During these periods the building was operated by Empire State Building Corporation. Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The Summary of Operations indicates net income from operations before deductions for ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes. These items have not been included since they have no historical significance in depicting operations because of changed conditions that will result from the transfer of the property to successor owners.

In our opinion, the aforementioned statement presents fairly the results from operations of the building for the periods indicated before deducting ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes, in conformity with generally accepted accounting principles applied on a consistent basis.

Chicago, Illinois

October 9, 1961

  DAVID HIMMELBLAU & CO.

Certified Public Accountants

23



EMPIRE STATE BUILDING — NEW YORK, NEW YORK

SUMMARY OF OPERATIONS

   FISCAL YEAR ENDED NOVEMBER 30   (UNAUDITED)
NINE MONTHS
ENDED AUGUST 31
 Gross income:

   1956     1957     1958     1959     1960     1960     1961  Rents (including percentage rents and air conditioning)

  $9,518,499    $9,796,998    $10,060,028    $10,262,606    $10,577,327    $7,866,635    $8,199,757  Observatory

   1,599,577     1,799,630     1,786,527     1,953,413     2,051,600     1,566,125     1,478,134  Sale of electricity

   469,843     521,174     530,715     544,185     583,969     422,992     475,603  Antenna license fees and other income

   715,517     705,914     735,146     764,528     772,064     568,998     601,602                       Total income

  $12,303,436    $12,823,716    $13,112,416    $13,524,732    $13,984,960    $10,424,750    $10,755,096                       Deduct—Operating expenses:

              Real estate tax

  $1,843,067    $1,880,250    $1,899,033    $1,942,350    $1,946,566    $1,461,267    $1,453,600  Observatory expenses

   505,685     465,483     470,292     441,659     474,269     361,945     333,183  Provision for doubtful accounts

   13,275     19,229     48,837     28,783     64,550     22,227     23,177  Repairs and decorating

   163,311     253,848     454,537     468,375     424,964     354,408     290,298  Alterations in tenants’ space

   547,958     500,078     438,021     515,538     1,066,470     850,907     646,722  All other operating expenses

   3,722,265     3,444,963     3,555,817     3,725,360     3,912,271     2,935,960     3,012,906                       Total

  $6,795,561    $6,563,851    $6,866,537    $7,122,065    $7,889,090    $5,986,714    $5,759,886                       Net income from operations of building before ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes

  $5,507,875    $6,259,865    $6,245,879    $6,402,667    $6,095,870    $4,438,036    $4,995,210                       The unaudited figures for the nine month periods ended August 31, 1960 and 1961 include all adjustments, consisting solely of normal recurring accruals, which the operator considered necessary to a fair presentation of the results for both periods. Such results arc not necessarily indicative of a pro-rata portion of a full year’s operations.

24



EMPIRE STATE BUILDING ASSOCIATES

Supplement to Prospectus Dated October 31, 1961

1. The transactions described in the Prospectus closed on December 27, 1961, at which time Empire State Building Associates acquired the 114 year Master Lease of the Empire State Building for $39,000,000.

2. $6,000,000 of Associates’ total acquisition cost was represented by the mortgage described at paragraph 5 on page 11 of the Prospectus.

3. The Sublease described in the Prospectus under the caption “Operation of the Building Under Sublease” was executed at the closing. Based on the requirements of the above mortgage, the basic Sublease rent to Associates during the initial Sublease term is $6,770,000 per year.

4. The net operating revenues (before inapplicable items) of the Empire State Building for the 11 months ended October 31, 1961 were $6,302,020, as compared to like revenues of $5,683,634 derived from the property in the comparable period of 1960. Such figures are unaudited and include all adjustments, consisting solely of normal recurring accruals, necessary for a fair statement of the results for such periods.

5. Lawrence A. Wien has made a cash contribution of $1,825,000 to the capital of Associates. In order to obtain reimbursement for a portion of such contribution, he may sell $1,000,000 of Participations hereunder at the original offering price.

Lawco Realty Corporation, a corporation owned by Mr. Wien, members of his family, and partners in his law firm, purchased $10,000,000 of Participations, and Harry B. Helmsley purchased $4,000,000 of Participations. These are not being offered for resale hereunder.

6. $5,000,000 of Participations were purchased by an unaffiliated person, Kirkeby Corporation (“Kirkeby”), a wholly owned subsidiary of Kirkeby-Natus Corporation. The purchase was made under an agreement whereby Mr. Wien has offered to repurchase such Participations at the original sales price, at the rate of $500,000 per month during the period from March 22, 1962 to December 22, 1962. Con versely, even if Kirkeby does not desire to sell such Participations, Mr. Wien has the right to purchase them if he so” desires, at the price and rate above set forth. Mr. Wien’s agreement has been guaranteed by all of the partners in the firm of Wien, Lane & Klein. Neither Associates nor the participants are in any way obligated under this agreement.

Participations purchased by Mr. Wien or anyone designated by him under such agreement may be reoffered hereunder from time to time at the original sales price.

7. Offers for all Participations offered hereby may be accepted from individuals of full age, and from trusts, corporations, firms and other entities. The Participating Agreements will provide for the transfer of Participations, on the terms set forth in paragraph 8 on page 17 of the Prospectus, to trusts, corporations, firms, or other entities, as well as to individuals of full age.



8. It should be noted that the Participating Agreements now will provide that the property shall at no time be operated by Associates. Also, as stated in the Prospectus, the Mortgage and Master Lease expressly eliminate any personal liability thereunder. Accordingly, Associates believes that the possibility of participants incurring personal liability (see paragraph 1 on page 16 of the Prospectus) is extremely remote.

9. The 37 1/2% interest in the Sublessee formerly owned by Cargo Despatch, Inc., now is owned by Parempco Inc., a corporation owned by Mr. Ira Paris of New York City, and other persons, none of whom is affiliated with Associates.

Dated: December 27, 1961



SUPPLEMENT TO PROSPECTUS

OF

EMPIRE STATE BUILDING ASSOCIATES

Dated October 31, 1961

1. Empire State Building Associates completed the purchase of the 114-year Master Lease of the Empire State Building, for the sum of $39,000,000, on December 27, 1961. $6,000,000 of this amount was represented by the purchase money mortgage described at paragraph 5 on Page 11 of the Prospectus.

2. On the same date, the Sublease described on Page 13 of the Prospectus was executed. It provides for a basic rent to Associates from the Sublessee, Empire State Building Company, of $6,770,000 per annum. The rent includes the required payments on the $6,000,000 purchase money mortgage.

3. The net income from operation of the Empire State Building (before leasehold amortization) for the year ended November 30, 1961 (audited) and for the five months ended May 31, 1962 (unaudited), shown in the Summary of Operations which appears on Page 5 of this Supplement, was at a rate in excess of the Sublease rent.

4. The following are the recent rental statistics relating to the property:

(a) The occupancy of the rentable space in the Empire State Building for the calendar year 1961, was 97.1%. The occupancy of the same space on July 15, 1962, was 98.2%. In addition, Empire State Building Company has consolidated the operating offices, so that approximately 17,500 square feet of space will be made newly available for rental by August 15, 1962.

(b) The average rate per square foot for office space during the calendar year 1961 was $6.62. The rate per square foot for such space on July 15, 1962, was $6.99.

(c) The building’s rent roll on July 1, 1961, was $11,070,000. The rent roll on July 1, 1962, was $11,531,000.

(d) On Page 9 of the Prospectus, it was indicated that occupancy of 95% would be required to enable the Sublessee to pay the Sublease rent. Assuming continuation of the average rates shown above and the continuation of expenses and other income at the same rate as during 1961, an occupancy rate of approximately 88.4% is now required for this purpose.

(e) The Observatory income for the five months ended May 31, 1961, was $575,827. Such income for the five months ended May 31, 1962, was $653,710.

(f) Page 9 of the original Prospectus indicates that, as of July 1, 1961, 237 leases would terminate during the remainder of 1961 and 1962. Only 40 leases, for a total of 47,000 square feet, will terminate between July 1, 1962, and the end of 1962. All others have either been renewed, replaced by new tenants, or are reflected in the vacancies indicated in (a) above.

Dated: July 31, 1962



(g) On May 1, 1962 renewal of the lease of Schenley Industries, Ltd. for a period of six years, became effective. The lease covers approximately 137,000 net square feet of space at an annual rental of $874,000. This corporation expects to move to a new building. No assurance can be given as to the ability of the Sublessee to relet such space. If Schenley vacates its premises before December 1, 1962, it will pay a cancellation penalty of $375,000. If it vacates its premises between December 1, 1962 and January 31, 1963, the penalty will be $875,000. If it vacates after January 31, 1963 and before June 1, 1963, the penalty will be $1,125,000. If it does not vacate by May 31, 1963, it will remain liable for the full six-year term. When Schenley vacates the Sublessee plans substantial modernization and renovation of such space, including air-conditioning. While no precise estimate of the cost of such modernization and renovation can be made at this time, it will probably exceed the cancellation penalty. Such excess cost will be defrayed out of operating profits, or if such profits are insufficient, will require a capital expenditure by the Sublessee.

(h) The real estate tax assessment for the 1962-63 tax year has been fixed at $55,000,000, an increase of $9,000,000 over the previous year. At the tax rate for 1962-63 this will result in increased real estate taxes of $415,600 over the taxes paid for the 1961-62 tax year. This increase in assessment is being protested by Empire State Building Company. However, if the assessment is not reduced as a result of such protest, approximately 90% of the tax increase will be recovered from tenants through the operation of escalator clauses in existing leases. These additional payments which may be required from Tenants, amounting to approximately 3% of the current rent roll, may adversely affect the future rentals which can be obtained by the Sublessee from, as well as its ability to rent, the space covered by such escalator clauses.

5. Offers for all Participations offered hereby may be accepted from individuals of full age, and from trusts, corporations, firms and other entities. The Participating Agreements allow the transfer of Participations, on the terms set forth in Paragraph 7 on Page 17 of the Prospectus, to trusts, corporations, firms, or other entities, as well as to individuals of full age.

6. It should be noted that the Participating Agreements provide that the property shall at no time be operated by Associates. Also, as stated in the Prospectus, the Mortgage and Master Lease expressly eliminate any personal liability thereunder. Accordingly, Associates believes that the possibility of Participants incurring personal liability (see Paragraph 1 on Page 16 of the Prospectus) is extremely remote.

7. As of the date of this supplement $23,632,500 of Participations have been sold, exclusive of those being offered hereby. Lawrence A. Wien, individually, or through Lawco Realty Corporation, a corporation controlled by him, or through his designees, may offer, at the original offering price, up to $9,367,500 of Participations. This amount would include $2,500,000 of Participations which Mr. Wien has agreed to repurchase at the original offering price from Kirkeby Corporation (“Kirkeby”), an unaffiliated person, and $1,030,000 of Participations which he has agreed to purchase at the original offering price from Harry B. Helmsley. Kirkeby originally acquired $5,000,000 of Participations, of which $2,500,000 have been repurchased by Mr. Wien at the rate of $500,000 a month beginning March 22, 1962. The remaining $2,500,000 will similarly be repurchased at $500,000 a month through December 22, 1962. Mr. Wien, Lawco Realty Corporation, such designees and Mr. Helmsley may be deemed to be “underwriters,” to the extent of sales made by them hereunder.

2



8. The 37 1/2% interest in the Sublessee formerly owned by Cargo Despatch, Inc., now is owned by Parempco Inc., a corporation owned by Mr. Ira Paris of New York City, and other persons, none of whom is affiliated with Associates.

3



FINANCIAL STATEMENTS

Auditors’ Opinion

TO EMPIRE STATE BUILDING ASSOCIATES:

We have examined the Summary of Operations of the Empire State Building, located at 350 Fifth Avenue, New York, New York, for the year ended November 30, 1961. During this period the building was operated by Empire State Building Corporation. Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The Summary of Operations indicates net income from operations before deduction for ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes. These items have not been included since they have no historical significance in depicting operations because of changed conditions resulting from the transfer of the property to successor owners.

In our opinion, the aforementioned statement presents fairly the results from operations of the building for the year ended November 30, 1961 indicated before deducting ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes, in conformity with generally accepted accounting principles applied on a consistent basis.

Chicago, Illinois

July 18, 1962

  DAVID HIMMELBLAU & CO.

Certified Public Accountants

4



EMPIRE STATE BUILDING — NEW YORK, NEW YORK

SUMMARY OF OPERATIONS

   FISCAL YEAR
ENDED
NOVEMBER 30,
1961
   (UNAUDITED)
FIVE MONTHS
ENDED MAY 31
     1961   1962 Gross income:

      Rents (including percentage rents and air conditioning)

  $11,002,782    $4,558,220    $4,761,725  Observatory

   1,945,157     575,827     653,710  Sale of electricity

   652,847     256,963     344,229  Antenna license fees and other income

   836,760     334,051     376,029           Total income

  $14,437,546    $5,725,061    $6,135,693           Deduct—Operating expenses:

      Real estate tax

  $1,935,450    $808,833    $803,083  Observatory expenses

   450,140     164,223     186,317  Provision for doubtful accounts

   39,481     12,837     —    Repairs and decorating

   377,660     119,226     126,389  Alterations in tenants’ space

   774,485     320,606     167,804  All other operating expenses

   4,064,852     1,652,380     1,792,955           Total

  $7,642,068    $3,078,105    $3,076,548           Net income from operations of building before ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes

  $6,795,478    $2,646,956    $3,059,145           NOTES RELATING TO SUMMARY OF OPERATIONS FOR

5-MONTHS’ PERIODS ENDED MAY 31, 1961 AND MAY 31, 1962

The unaudited figures for the five-month periods ended May 31, 1961 and 1962 include all adjustments, consisting solely of normal recurring accruals, which the operator considered necessary to a fair presentation of the results for both periods. Such results are not necessarily indicative of a pro-rata portion of a full year’s operations.

Operations for all periods shown prior to January 1, 1962 were conducted by Empire State Building Corporation. On December 27, 1961, the sublease to Empire State Building Company went into effect, and the results of operations for the five-month period ended May 31, 1962 are those of Empire State Building Company. Associates have been unable to obtain a summary of operations for the month of December, 1961 from Empire State Building Corporation, the former operator.

Rent payable by Empire State Building Company to Empire State Building Associates for the five-month period ended May 31, 1962 was in the aggregate amount of $2,782,150.

5



Accountant’s Opinion

EMPIRE STATE BUILDING ASSOCIATES

60 East 42nd Street

New York 17, N. Y.

  July 31, 1962We have examined Balance Sheet and Statement of Capital of Empire State Building Associates as of May 31, 1962 and the related Statements of Income for the fiscal periods July 11, 1961 to December 31, 1961 and January 1, 1962 to May 31, 1962. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the accompanying Balance Sheet and the related Statements of Income and of Capital present fairly your financial position on May 31, 1962 and the results of operations for the fiscal periods July 11, 1961 to December 31, 1961 and January 1, 1962 to May 31, 1962, in conformity with generally accepted accounting principles applied on a consistent basis.

We hereby consent to the inclusion of this certificate in the filing by Empire State Building Associates of its Amended Form S-1, Registration Statement under the Securities Act of 1933.

JACOBS, EVALL, HIRSON & HONIGCertified Public Accountants
6



EMPIRE STATE BUILDING ASSOCIATES

BALANCE SHEET—MAY 31, 1962

ASSETS

Current Assets:

    Cash in The Chase Manhattan Bank

  $     $80,000.05  Prepaid rent

     34,623.65       Total Current Assets

    $114,623.70  Leasehold on Empire State Building, New York City

   39,000,000.00    Less: Accumulated amortization on leasehold

   557,236.24     38,442,763.76        Total Assets

    $38,557,387.46       LIABILITIES

Current Liabilities:

    Accrued interest on mortgage

  $     $63,268.99  Installments payable on 6% leasehold mortgage within one year

     124,568.01  Rent received in advance

     72,795.70       Total Current Liabilities

    $260,632.70  Noncurrent Liability:

    6% leasehold mortgage, maturing December 27, 1976

   5,970,000.00    Less: Installments payable within one year

   124,568.01     5,845,431.99       Capital, May 31, 1962

     32,451,322.77       Total Liabilities and Capital

    $38,557,387.46       7



EMPIRE STATE BUILDING ASSOCIATES

STATEMENT OF INCOME

   JULY 11, 1961
TO
DECEMBER 31, 1961 
   JANUARY 1, 1962
TO
MAY 31, 1962
    (SEE NOTE)     Rent income

    $43,790.32      $2,782,150.55  Expenses:

        Leasehold rent

  $38,951.61      $1,345,994.61    Interest on mortagage

   4,838.71       148,430.28    Legal and accounting fees

   —         41,666.65                   43,790.32       1,536,091.54            Net income before amortization of leasehold

     —         1,246,059.01  Amortization of leasehold

     16,014.24       541,222.00            Net loss, July 11, 1961 to December 31, 1961

    $16,014.24               Net income, January 1, 1962 to May 31, 1962

        $704,837.01           Note:

The period July 11, 1961 to December 31, 1961 includes income and expenses only from December 27, 1961, the date on which the leasehold was acquired.

STATEMENT OF CAPITAL

MAY 31, 1962

Net Loss, July 11, 1961 to December 31, 1961 (after amortization of leasehold in the amount of $16,014.24)

    $16,014.24  Capital Contributions, January 1, 1962

     33,000,000.00       Net Income, January 1, 1962 to May 31, 1962 (after amortization of leasehold in the amount of $541,222.00)

  $704,837.01     32,983,985.76  Less: Distributions to partners, January 1, 1962 to May 31, 1962*

   1,237,500.00              532,662.99       Capital, May 31, 1962

    $32,451,322.77       *Distributions to partners of $1,237,500.00 (amounting to $375.00 per $10,000 Participation) during the period January 1, 1962 to May 31, 1962 consist of distributions of cash generated from operations of the partnership. Net income before amortization of leasehold for the period January 1, 1962 to May 31, 1962 was $1,246,059.01.8



SUPPLEMENT TO PROSPECTUS

OF

EMPIRE STATE BUILDING ASSOCIATES

Dated October 31, 1961

1. Empire State Building Associates completed the purchase of the 114-year Master Lease of the Empire State Building for the sum of $39,000,000 on December 27, 1961. $6,000,000 of this amount was represented by the purchase money mortgage, described at paragraph 5 on Page 11 of the Prospectus. As of April 1, 1963, the principal balance of this mortgage had been reduced to approximately $5,845,500.

2. On December 27, 1961, the Sublease described on Page 13 of the Prospectus was executed. It provides for a basic rent to Associates from the Sublessee, Empire State Building Company, of $6,770,000 per annum. This rent includes the required payments on the purchase money mortgage.

3. The net income from operations of the Empire State Building (before leasehold amortization) for the year ended November 30, 1961, and for the first full year of operation by Empire State Building Company which ended December 31, 1962, was at a rate in excess of the Sublease rent. (See the Summary of Operations which appears on Page 6 of this Supplement.)

4. The income and expenses shown on the Summary of Operations do not necessarily reflect the current or future operations of the building. There has been a substantial increase in the average rate per square foot for office space. However, vacancies are presently higher than they have been, primarily because of the removal on December 1, 1962 by Schenley industries (see par. 6 below). As of April 15, rents which will be collectible under leases in existence were at an annual rate approximately $130,000 below rent collections for 1962.

Real estate taxes during 1963 will be approximately $215,000 higher than in 1962. Escalator clauses in existing leases will offset approximately $100,000 of this increase through additional rent. In addition, an expense of $165,000 incurred in 1962 for cleaning and painting the exterior of the building will not be incurred in 1963. Finally, the annual rate for payroll and contract labor costs as of April, 1963 was approximately $400,000 less than the annual rate for such costs during 1962.

Giving effect to these variations in income and costs, net operating income for the building remains at a rate in excess of the Sublease rent.

5. The Sublessee has determined that conversion of the building elevators to automatic operation is feasible (see page 8 of the Prospectus). Accordingly, it has entered into contracts for conversion of 58 of the elevators to automatic operation at a cost of approximately $1,700,000 (see page 8 of the Prospectus.). The conversion of 48 of the elevators is to be completed prior to December 1, 1965 and the balance will be completed prior to July 1, 1968. Associates has been advised by the Sublessee that the estimated annual payroll savings upon completion of the installation of the automatic elevators will approximate $580,000 a year. The net saving in operating costs after deducting the cost of financing the installation, either by an increase in rents pursuant to arrangements with Prudential described in Paragraph 4 on page 12 of the Prospectus or through other financing arrangements which may be made by the Sublessee, will approximate $375,000 a year.

Dated: July 31, 1962



6. The following are recent rental statistics for the building:

(a) Occupancy rates in 1961 and 1962 were 97.1% and 96.2% respectively. On April 15, 1963, the occupancy rate was 90.5%. This reduction is principally due to the termination of the lease of Schenley Industries, Ltd. covering approximately 137,000 square feet at an annual rental of $874,000. The lease with Schenley Industries contained a provision giving the tenant the right to terminate its lease on or before December 1, 1962 upon payment of a cancellation penalty of $375,000. This right was exercised by Schenley. $60,000 of the penalty was payable in 1962 and the balance of $315,000 will be received during the current year.

Upon termination of the Schenley lease, a program of renovation of the space was undertaken. Central airconditioning has now been installed in the entire area and the space now is being offered for rental. Additional renovations will be undertaken as and when new leases are made. No precise estimate of the cost of the remaining work can be made at this time, since the nature and extent thereof will depend upon the terms of the new leases.

(b) The average rate per square foot for office space was $6.62 in 1961 and $6.99 as of July 15, 1962. The average rate per square foot for such space on April 15, 1963 was $7.21.

(c) On page 9 of the Prospectus it was estimated that occupancy of 95% would be required to enable the Sublessee to pay the Sublease rent. Assuming continuation of the average rate              and the continuation of expenses and other income at the same rate as 1962 (except for the              adjustments reflected in sub-paragraph 4 above), an occupancy rate of approximately 86.8% is now required for this purpose.

(d) On April 15, 1963, the following lease expiration schedule applied:

Year  Number of
Leases
Expiring
   Square
Foot Area
   Annual
Rental of
Expiring Leases
   Percentage of
Gross Annual
Rentals of
Expiring Leases
 1963 (from 4/15)

   132     145,296    $933,768     8.27  1964

   175     181,371     1,239,555     10.98  1965

   236     299,458     2,216,984     19.64  1966

   148     281,907     1,941,465     17.20  1967

   160     254,668     1,843,250     16.33  1968

   105     179,988     1,377,513     12.20  1969

   20     88,254     542,367     4.80  1970

   9     42,321     349,850     3.10  1971

   3     33,185     256,446     2.27  1972

   6     20,865     218,195     1.93  1973

   4     44,872     289,150     2.56  2



Year  Number of
Leases
Expiring
   Square
Foot Area
   Annual
Rental of
Expiring Leases
   Percentage of
Gross Annual
Rentals of
Expiring Leases
 1974

   1     6,752     55,000     .49  Statutory

   3     3,847     21,233     .19  Month to month

   3     2,533     4,501     .04                 1.005     1,585,317    $11,289,280     100.00  Total Vacant

     167,440                    1,752,757      7. Offers for the Participations may be accepted from individuals of full age, and from trusts, corporations, firms and other entities. The Participating Agreements allow the transfer of Participations, on the terms set forth in paragraph 7 on page 17 of the Prospectus, to trusts, corporations, firms, or other entities, as well as to individuals of full age.

8. Reference is made to the discussion of personal liability of Participants contained in paragraph 1 on page 16 of the Prospectus. It should be noted that the Participating Agreements provide that the property shall at no time be operated by Associates. Also, as stated in the Prospectus, the Mortgage and Master Lease expressly eliminate any personal liability thereunder. Accordingly, Associates believes that the possibility of Participants incurring personal liability is extremely remote.

9. As of April l5, 1963 $26,620,000 of Participations have been sold, exclusive of those being offered hereby. Lawrence A. Wien, individually, or through his designees, may offer, at the original offering price, up to $6,380,000 of Participations. Approximately $4,000.000, of these Participations are presently owned by unaffiliated persons, who have options to sell them to Mr. Wien at their original offering price. If these options are exercised, the Participations repurchased by Mr. Wien may be offered hereunder. The Participations being offered also include $400,000 of Participations which Mr. Wien has agreed to repurchase at their original offering price from Mr. Harry B. Helmsley. Mr. Wien, his designees and Mr. Helmsley may be deemed to be “underwriters” to the extent of sales made by them hereunder.

10. The entire interest in the Sublessee now is owned by Lawrence A. Wien (43 3/4%), Harry B. Helmsley (43 3/4%), and Martin Weiner Realty Corporation (12 1/2%).

3



FINANCIAL STATEMENTS

Auditors’ Opinions

TO EMPIRE STATE BUILDING ASSOCIATES:

We have examined the Summary of Operations of the Empire State Building, located at 350 Fifth Avenue, New York, New York, for the year ended November 30, 1961. During this period the building was operated by Empire State Building Corporation. Our examination was made in accordance with generally accepted auditing standards and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The Summary of Operations indicates net income from operations before deduction for ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes. These items have not been included since they have no historical significance in depicting operations because of changed conditions resulting from the transfer of the property to successor owners.

In our opinion, the aforementioned statement presents fairly the results from operations of the building for the year ended November 30, 1961 indicated before deducting ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes, in conformity with generally accepted accounting principles applied on a consistent basis.

Chicago, Illinois

July 18, 1962

  DAVID HIMMELBLAU & CO.

Certified Public Accountants

4



EMPIRE STATE BUILDING ASSOCIATES

60 East 42nd Street

New York, New York

We have examined the summary of operations of the Empire State Building, located at 350 Fifth Avenue, New York, New York, for the year ended December 31, 1962. During this period, the building was operated by Empire State Building Company. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

The summary of operations indicates net income from operations before deduction for interest and depreciation of furniture, fixtures and improvements. The amount of interest and depreciation of furniture, fixtures and improvements has not been included for the year ended December 31, 1962 since it was not deemed significant in determining whether the results of operations have been sufficient to cover the rent payable to the Empire State Building Associates.

In our opinion, the aforementioned statement presents fairly the results of operation of the building for the year ended December 31, 1962, before deducting interest and depreciation of furniture, fixtures and improvements, in conformity with generally accepted accounting principles applied on a consistent basis.

New York, New York

February 1, 1963

  JACOBSON, GREENFELD & LAVENTHOL.
KREKSTEIN & CO.

Certified Public Accountants

5



EMPIRE STATE BUILDING—NEW YORK, NEW YORK

SUMMARY OF OPERATIONS

   FISCAL YEAR
ENDED
NOVEMBER 30,
1961
   FISCAL YEAR
ENDED
DECEMBER 31,
1962
 Gross income:

    Rents (including percentage rents and air conditioning)

  $11,002,782    $11,469,523  Observatory

   1,945,157     2,168,224  Sale of electricity

   652,847     810,116  Antenna license fees and other income

   836,760     969,565        Total Income

  $14,437,546    $15,417,428        Deduct—Operating expenses:

    Real estate tax

  $1,935,450    $   Observatory expenses

   450,140     476,217  Provision for doubtful accounts

   39,481     32,469  Repairs and decorating

   377,660     707,700  Alterations in tenants’ space

   774,485     803,883  Management fees

     90,000  Service contract fees

     1,221,745  All other operating expenses

   4,064,852     3,132,004        Total

  $7,642,068    $8,598,218        Net income from operations of building before ground rent, interest, financial income and expenses, depreciation, amortization, corporate expenses and provisions for federal income and state franchise taxes

  $6,795,478         Net income from operations of building before rent, interest, and depreciation of furniture, fixtures and improvements

    $6,819,210  Deduct—Rent

     6,731,317       Net income from operations of building before interest and depreciation of furniture, fixtures and improvements

    $87,893       Note: Operations for all periods shown prior to January 1, 1962 were conducted by Empire State Building Corporation. On December 27, 1961 the sublease to Empire State Building Company went into effect, and the results of operations for the twelve months ended December 31, 1962 are those of Empire State Building Company. Associates have been unable to obtain a summary of operations for the month of December, 1961 from Empire State Building Corporation, the former operator.

The amount of interest and depreciation of furniture, fixtures and improvements has not been included for the year ended December 31, 1962 since it was not seemed significant in determining whether the results of operations have been sufficient to cover the rent payable to the Empire State Building Associates. Interest expense during 1962 was incurred in connection with funds borrowed for working capital.

Commencing January 1, 1963 the rent payable was at the rate of $6,770,000 per annum.

Reference is made to page 24 of the Prospectus for a summary of operations for prior years.

6



EMPIRE STATE BUILDING ASSOCIATES

60 East 42nd Street

New York 17, N. Y.

  May 15, 1963We have examined the Balance Sheet of Empire State Building Associates as of December 31, 1962 and the related Statements of Income and of Capital for the year January 1, 1962 to December 31, 1962. Our examination was made in accordance with generally accepted auditing standards, and accordingly included such tests of the accounting records and such other auditing procedures as we considered necessary in the circumstances.

In our opinion, the accompanying Balance Sheet and the related Statements of Income and of Capital present fairly your financial position on December 31, 1962 and the results of operations for the period January 1, 1962 to December 31, 1962, in conformity with generally accepted accounting principles applied on a consistent basis.

We hereby consent to the inclusion of this certificate in the filing by Empire State Building Associates of its Amended Form S-1, Registration Statement under the Securities Act of 1933.

JACOBS, EVALL, HIRSON & HONIG

Certified Public Accountants

7



EMPIRE STATE BUILDING ASSOCIATES

BALANCE SHEET—DECEMBER 31, 1962

ASSETS

Current Assets:

    Cash in The Chase Manhattan Bank

  $     $247,500.08  Prepaid rent

     38,951.61       Total Current Assets

    $286,451.69  Leasehold on Empire State Building, New York City (at cost)

   39,000,000.00    Less: Accumulated amortization on leasehold*

   1,314,947.04     37,685,052.96        Total Assets

    $37,971,504.65       LIABILITIES

Current Liabilities:

    Accrued interest on mortgage

  $     $4,739.70  Installments payable on 6% leasehold mortgage within one year

     130,258.08       Total Current Liabilities

    $134,997.78  Noncurrent Liability:

    6% leasehold mortgage, maturing December 27, 1976**

   5,877,272.90    Less: Installments payable within one year

   130,258.08     5,747,014.82       Capital, December 31, 1962

     32,089,492.05       Total Liabilities and Capital

    $37,971,504.65       *The cost of the leasehold is being amortized on the straight line method over the period of 30 years and 9 days, the initial term of the master lease.**Principal payments falling due in the first five calendar years following the date of the Balance Sheet are, in chronological order:Year Ending December 31, 1963

  $130,258.08  Year Ending December 31, 1964

   138,281.17  Year Ending December 31, 1965

   146,734.75  Year Ending December 31, 1966

   155,738.92  Year Ending December 31, 1967

   165,295.61  As noted on page 11 or the Prospectus, an additional principal payment of $2,000.000, will be payable on December 27, 1971.

8



EMPIRE STATE BUILDING ASSOCIATES

STATEMENT OF INCOME

JANUARY 1, 1962 TO DECEMBER 31, 1962

Rent income

    $6,804,112.94  Expenses:

    Leasehold rent

  $3,219,999.96    Interest on mortgage

   357,173.89    Legal and accounting fees

   100,000.00              3,677,173.85       Net income before amortization of leasehold

    $3,126,939.09  Amortization of leasehold

     1,298.932.80       Net income, January 1, 1962 to December 31, 1962

    $1,828,006.29       EMPIRE STATE BUILDING ASSOCIATES

STATEMENT OF CAPITAL

JANUARY 1, 1962 TO DECEMBER 31, 1962

Capital, January 1, 1962

    $32,983,985.76  Net Income, January 1, 1962 to December 31, 1962 (after amortization of leasehold in the amount of $1,298,932.80)

  $1,828,006.29    Less: Distributions to partners, January 1, 1962 to December 31, 1962*

   2,722,500.00     894,493.71        Capital, December 31. 1962

    $32,089,492.05       *Distributions to partners during the year 1962 in the sum of $2,722,500 consist of 11 monthly distributions at the rate of $247,500 each, from February 1, 1962 through December 1, 1962. The distribution of December, 1962 income was included in the 12th monthly distribution on January 1, 1963 in the sum of $247,500. Accordingly total distributions applicable to profit for the year 1962 amounted, to $2,970,000. The distributions totalling $2,970,000 were made from cash generated by rental income after payments in reduction of principal on the leasehold mortgage. Thus, from net income before leasehold amortization, in the sum of $3,126,939.09 principal payments in reduction of the leasehold mortgage were made in the sum of $122,727,10. The balance of net income before leasehold amortization in the sum of $3,004,211.99 was available for the 12 distributions totalling $2,970.000. The distributions of $2,970,000 represent distributions at the rate of $900 on each $10,000 participation. The distributions of $900 included reportable income in the sum of $554, and return of capital in the sum of $346.










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