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Empire State Building IPO Challenged by Legacy Investors By David M. Levitt - Aug 22, 2012 2:47 PM PT
Al Weiner’s stake in New York’s Empire State Building came to him by way of his grandfather’s death in a 1950 train crash in Richmond Hill, Queens. His grandmother sued the Long Island Rail Road, and her lawyer was Lawrence Wien, a family friend. Click here for rest of story
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(Corrects paragraph 2 in Aug 14 story to show the trust is seeking ownership, and is not the current owner of the Empire State Building)
Aug 14 (Reuters) - The Empire State Building, a signature feature of the Manhattan skyline caught up in lawsuits to block a proposed IPO, expects to more than double its income in another three years, a realty trust seeking ownership of the building said in a securities filing on Monday. Empire State Realty Trust, seeking ownership of the 102-floor Art Deco building, filed in February to sell up to $1 billion of its Class A common stock, but several investors have sued to prevent the move, saying it unfairly undervalues their interests. Monday's filing said the building's net operating income is expected to surge to $160.6 million in June 2015 from the current $76.9 million, while revenue is projected to grow to $262.4 million by 2015 from the current $176.8 million. The company provided financial projections until 2026 in the filing with the U.S. Securities and Exchange Commission (SEC). The valuations are based on the discounted cash flow method and were calculated by an independent valuer, the company said in the filing. While the building is still leasing below comparable properties in Midtown, the gap has narrowed such that the Empire State's average rent is now a third under market, compared with two-thirds below in 2006, according to data supplied by Studley, a real estate services firm representing tenants. (Reporting by Sakthi Prasad in Bangalore; Editing by Edmund Klamann) http://in.reuters.com/article/2012/08/16/empirestate-income-idINL4E8JE1J920120816 Wall Street Journal: Income to Soar for Empire State Building
By Craig Karmin The Empire State Building’s income is poised to double within four years and more than triple by 2026, according to a new securities filing related to the proposed public sale of the building. The surge in income comes amid a $550 million upgrade to the building. The Malkins, the New York real estate family that manages the skyscraper and is spearheading the initial public offering, has been combining the more than 850 office spaces in the building in an effort to attract larger and higher-paying tenants. That effort, which has restored the lobby and upgraded the 81-year old building to make it more energy efficient, is already starting to pay off with new tenants like Swedish construction company Skanska and Air China. The building’s net operating income is projected to rise to $160.6 million in June 2015, up from $76.8 million in June 2012, according to Securities and Exchange documents filed on Monday. Income is seen rising to $248.5 million by 2026, and balloons to $422 million by 2041. Rental income at the Empire State Building has been largely flat for the past several years, though the observation deck has been profitable. The new income projections do not provide separate figures for the observation deck. This long-anticipated rise in the building’s income has caused some of the 2,800 current investors in the Empire State building to wonder if they would be better off from an IPO or by voting against it. The proposed plan requires 80% of the shares to approve it. The projections are based on a discounted cash-flow analysis conducted by Duff & Phelps, which has issued its opinion that these valuations are fair to investors, according to the securities filings. The new public company, which will be known as Empire State Realty Trust, would roll up the iconic building with 17 other Malkin properties. The Empire State Building has been valued at $2.52 billion of the new company’s $4 billion valuation, according to securities filings. The filings released today are the first time the Malkins have made public income forecasts for the Empire State Buildings and the other properties. The Malkins have told investors that the status quo for the Empire State Building is not possible because Leona Helmsley’s estate, which has a stake valued at $1 billion, needs to cash out its position in the building’s operating company. Their other buildings are also projected to see rising incomes, filings show. http://blogs.wsj.com/developments/2012/08/13/income-to-soar-for-empire-state-building/ |
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