NEW YORK CITY—In a $734-million transaction that expands itsManhattan portfolio by 1.64 million square feet, EmpireState Realty Trust Inc. reports it has completed theacquisition of the ground and operating leases at 112 West 34th St.and the ground lease at 1400 Broadway.

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The company acquired the interests in the two properties for$734 million in cash, common stock and operating partnership units.112 West 34th St. is a 26-story, 650,769-rentable-square-footoffice tower, with 92,455 square feet of retail space located inthe 34th Street/Penn Station submarket. An 89,529 square foot blockof retail space located directly across from Macy's flagshiplocation is currently being marketed for occupancy in mid-2016. Theproperty's office and retail space is 77.5% occupied and 83.2%leased, as of June 30, 2014, the company states.

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1400 Broadway is a 37-story 880,131-rentable-square-foot officetower with 19,815 square feet of retail space, located in the TimesSquare South submarket. The property's office and retail space is acombined 92.6% occupied and 92.7% leased, as of June 30, 2014.

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The leaseholds and fee title to a small contiguous property at112 West 34th St. were acquired for approximately $423.6 million,or approximately $570 per square foot, consisting of $87.7 millionby assumption of existing mortgage debt, $106.8 million in cash and$229.1 million in shares of Class A and Class B common stock andSeries PR OP units, the company states.

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The leasehold at 1400 Broadway was acquired for $310 million, orapproximately $346 per square foot, consisting of $80 million byassumption of existing mortgage debt, $79.7 million in cash, and$150.3 million in shares of Class A and Class B common stock andSeries PR OP units. In connection with these transactions, thecompany issued 2.7 million shares of Class A and Class B commonstock at a per share price of $16.65 and 20.1 million Series PR OPUnits at a unit price of $16.65.

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Anthony E. Malkin, chairman, president and CEOof Empire State Realty Trust, says of the firm's purchases, “Ouracquisition of these high-quality midtown office propertiesrepresents an excellent opportunity to enhance shareholder value.Their redevelopment programs are well underway, and we believethere is excellent upside in the re-leasing of the office andretail space at both properties that we expect to capture overtime.”

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John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.