CORRESP 1 filename1.htmSeptember 13, 2012
VIA FACSIMILE AND OVERNIGHT COURIER
Ms. Louise Dorsey
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549-7010
Re: Empire State Realty Trust, Inc.
Empire State Realty OP, L.P.
Amendment No. 3 to Registration Statement on Form S-4
Filed August 13, 2012 Amendment No. 2 to Registration Statement on Form S-11 Filed July 3, 2012
File Nos. 333-179486; 333-179486-01
Dear Ms. Dorsey:
On behalf of Empire State Realty Trust, Inc., a Maryland corporation (the “Company”) and Empire State Realty OP, L.P. (the “Operating Partnership”), we are resubmitting our letter dated September 10, 2012 to reflect the requested clarifications to the September 5, 2012, September 7, 2012 and September 12, 2012 oral requests by the staff of the Division of Corporation Finance of the Commission (the “Staff”) for supplemental information providing additional analysis related to the accounting costs included in the table under the heading “Derivation of Consolidation Expenses,” relating to the Company’s Registration Statements on Form S-4 (Registration No. 333-179486). The clarifications include additional detail provided in the schedule included as Exhibit A.
We respectively advise the Staff that the work performed by external professional firms related to the consolidation and the initial public offering have been performed simultaneously and much of the same work and analysis is needed for both the consolidation and the initial public offering. As a result, the costs cannot be factually separated between the two activities. Further, we continue to believe that this transaction is one project – a capital event – and not a business combination followed by a capital event. We note that the planned acquisition of the non-controlled entities and the option property entities are being treated as a business combination and the costs allocated to those entities have been expensed as incurred.
We have provided a detail for the accounting costs as Exhibit A. We have reviewed the work performed by each accounting firm assisting us and separated costs between accounting services (such as journal entries and financial statement preparation) and services performed directly for the S-4 and S-11 filings. From January 1, 2010 through March 31, 2012, we have incurred $19.6 million of accounting costs as described on page 238 of our previous S-4 filing. Of this $19.6 million, we determined that $9.5 million related to accounting services that are to be expensed as incurred and $10.1 million relates to services directly related to the consolidation and initial public offering. The predecessor entities, non-controlled entities, and the option property entities
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expensed a combined $9.0 million, which approximates the $9.5 million expense amount in Exhibit A. It is also noted that the predecessor entities, non-controlled entities, and option property entities have expensed approximately $6.9 million of accounting and auditing costs that are in addition to the $19.6 million disclosed on page 238 of our previous S-4 filing and are included in Marketing, General, and Administrative expense.
We consider the costs incurred by the Company to effectuate the related and simultaneous steps of consolidation, registration, and the initial public offering as costs of the offering and we believe are properly deferred in accordance with SAB Topic 5.
We thank you for your prompt attention and look forward to hearing from you at your earliest convenience. Please direct any questions concerning this response to our counsel Larry Medvinsky, Esq. at (212) 878-8149 or Steven Fishman, Esq. at (212) 969-3025.
/s/ Andrew Prentice
Chief Accounting Officer
Malkin Holdings LLC
cc: Jessica Barberich Eric McPhee Angela McHale David L. Orlic Tom Kluck Anthony E. Malkin
David A. Karp
Thomas N. Keltner, Jr.
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The following is total accounting costs related to the Predecessor entities, non-controlled entities, and option properties for the period January 1, 2010 through March 31, 2012:
expenses Description of services
Incremental consolidation accounting expenses:
Ernst & Young
$8,612,800 Margolin Winer Evens
4,953,380 Mark Paneth & Shron
2,953,000 Anchin Block Anchin
425,626 Lewis Braff & Co.
73,995 Rogoff & Company
33,670 Total incremental consolidation accounting expenses
19,618,016 See additional detail belowMG&A accounting expenses:
Ernst & Young
1,208,246 Audits of existing registrants Other accounting firms and internal costs
5,669,256 Accounting services provided by local accounting firms and internal personnel Total MG&A accounting expenses
6,877,502 Total accounting and auditing costs
$26,495,518 The following are incremental accounting costs related to the Company's S-4 and S-11 filings for the period January 1, 2010 through March 31, 2012:
expenses Description of services
Consolidation accounting services—expensed
Margolin Winer Evens
$3,467,366 Financial statement compilation, tax to GAAP conversion Mark Paneth & Shron
2,362,400 Combined financial statements preparation and journal entries Ernst & Young
1,750,000 Financial statement audit for Predecessor Anchin Block Anchin
1,720,545 Financial statement compilation, tax to GAAP conversion Lewis Braff & Co.
73,995 Accounting preparation work Rogoff & Company
57,624 Accounting preparation work Deloitte
50,000 Financial systems consulting Other
33,670 Total consolidated accounting services—expensed
9,515,600 S-4 and S-11 services—deferred
Ernst & Young
$6,862,800 S-4/S-11 assistance and tax advisory services in connection with IPO Margolin Winer Evens
1,486,014 3-14 financial statements, assistance with individual private MD&As, pro forma, and straight line rent projections for pro forma Anchin Block Anchin
737,376 3-14 financial statements, assistance with individual private MD&As, pro forma, and straight line rent projections for pro forma Mark Paneth & Shron
590,600 Assistance with writing and analyzing MD&A Berdon
425,626 Preparation of initial individual and predecessor MD&As and analyses to include in the S-4 and S-11 Total S-4 and S-11 services—deferred
10,102,416 Total consolidation expenses