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The Empire Strikes Back

As the IPO market heats up with the usual technology, healthcare and consumer company players, an unusual pending deal will impact the New York skyline as well–the Empire State Building.
 
Last week, it was reported that at least 80 percent of the investors of Malkin HoldingsLLC, Peter Malkin’s company that owns the Empire State Building, approved a plan to take the historical New York City skyline tower public.
 
Malkin’s plan involves lumping in the Empire State Building into a newly created real estate investment trust (REIT), the Empire State Realty Trust Inc. The REIT is estimated to be valued at approximately $4.15 billion, more than a billion over the $2.33 billion that the building alone is valued at after debt. Through this plan, investors will be able to cash out, and Malkin will be able to stay in control.

Empire State Building

Empire State Building Photo Credit: wikipedia.com)

 
With its complicated ownership history, the 82-year-old, 102-story Empire State Building certainly will be the centerpiece of the new REIT, which in total will have more than 18 properties.  Should the IPO go through, Malkin’s share is calculated to be worth as much as $714 million. Investors would also see flexibility and have more access to their capital, making this IPO quite attractive.
 
It is very rare that any deal of this magnitude will please all parties. While the advantages of taking the Empire State Building public appear at first glance to outweigh the disadvantages, at least for top investors and the Malkins, it remains to be seen if this deal proves to be more profitable than costly.  How the Malkins approach IR will also be interesting to watch.  Such a high-profile building is likely to attract a significant retail following, and telling the REIT’s story to investors might be the biggest challenge yet for the Malkins, especially when all of Manhattan is already watching your biggest asset.

 

Joanne Sibug, jsibug@pondel.com
 
 
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On the Road (Show) Again

Two Ideas for Taking a Food Break in NYC without Busting Your Expense Account
 
You can release endorphins with top-rated Latin jazz—hot salsa (not the kind you eat), son and boleros—and eat well at the same time for less than $20, five days a week at Havana Central, 151 West 46th street.
 
OK, so I am a little crazier than most for this kind of music, triggered about five years ago by a trip to Havana.  But it’s a cool place with great food, and it takes your mind totally off work. Best yet, even though you may not see Poncho Sanchez, Chucho Valdez or Arturo Sandoval, the talent is awesome, and there’s never a cover charge. You can walk there from most parts of Midtown Manhattan. The general manager is Phil Colbaugh, 212 398-7440. Reservations are not usually necessary.
 
This next one—pure, unadulterated, totally authentic Greek, Taverna Kyclades, 3307 Ditmars Blvd., Astoria, Queens—requires about a 30-minute (could be a little longer, but well worth it) cab ride or subway.  But get ready for a true culinary feast, where the average entrée with appetizer, a glass of wine at a neat little bar down the street, and dessert, is $14. Trust me, this place is no dive. You won’t see tourists, you will hear Greek spoken, and you will make a return trip.
 
About that wine…there is usually a 30 to 60-minute wait to get seated at the restaurant. So former basketball player-turned-restaurateur Adrian Skenderi (718-545-8666) made a deal with a bar-owner friend a half a block away to provide a free glass of wine or hard drink absolutely free while waiting. When you sign in at the restaurant, you and your guests are given a coupon for the free booze and the name of the bar. Leave a tip, of course. You can get essentially the same meal, sans the wine, at Avra on 49th just east of Lex for about $60+ per person, but you will not likely hear many people speaking Greek.

 

Roger Pondel, rpondel@pondel.com