NEW YORK CITY-Malkin Holdings LLC’s plan to ask co-investors in its properties, including the Empire State Building, for a vote on converting their interests into units of a proposed new REIT has gotten the go-ahead from the Securities and Exchange Commission. Just prior to the Christmas holiday, the SEC declared effective the S-4 for consolidation proposed by Malkin Holdings, a company spokesman confirms.
Before Empire State Realty Trust Inc.—which would trade under the symbol ESB, for the initials of the iconic skyscraper at 350 Fifth Ave.—can make its IPO a reality, the shareholders in three office assets overseen by Malkin Properties must agree to the conversion. Along with 350 Fifth, the properties include One Grand Central Place at 60 E. 42nd St. and the Fisk Building at 250 W. 57th St.; each is represented by a separate limited liability company.
The REIT proposed by Peter Malkin and Anthony Malkin, chairman and president, respectively, of Malkin Holdings and Malkin Properties, hasn’t yet specified the number of pricing of shares. The Malkin Holdings spokesman tells GlobeSt.com the company will commence its solicitation of investors “in due course.”
Assuming the proposed REIT acquires properties from co-investors as well as acquiring the management companies, Empire State Realty would own 12 office assets that encompass 7.7 million square feet of office space and another 433,5454 square feet of retail, six retail assets and a development site adjacent to one of the existing office properties in Stamford, CT. As of Sept. 30, the office portfolio was 79.8% leased, while the retail properties are 100% leased, according to SEC filings.
A key element of the Malkins’ rationale for consolidating the companies into a single REIT is the greater value they believe the properties will command thanks to a repositioning campaign. In line with that, W&H Properties, which manages 350 Fifth, on Wednesday announced a partnership with Patina Restaurant Group to open a 10,000-square-foot white-tablecloth restaurant with private dining rooms and a banquet catering facility on the tower’s ground floor.
“We look forward to being a part of the repositioning of the Empire State Building as a world-class destination for tenants, their clients and the entire community around the ESB, which is experiencing much growth and revitalization,” Patina CEO Nick Valenti says in a statement. Anthony Malkin calls the new facility “a key component in the total repositioning of the entire retail at ESB, and it complements the Empire Room lounge.”