ESRT Closes IPO at 82 Million Shares

NEW YORK CITY-Empire State Realty Trust, the newly launched public REIT backed by the Empire State Building and other office and retail properties, closed its IPO Monday afternoon with 82,225,000 common shares sold at $13 apiece. The figure included the full exercise of the underwriters' option to buy up to 10,725,000 shares.

Net proceeds from the IPO are approximately $884.1 million after discounts, commissions and expenses are factored in. ESRT says it intends to use the net proceeds mainly to fund certain formation transaction costs and fees, and make cash payments to holders of interests in the existing entities, including the Helmsley estate.

Although the iconic office tower at 350 Fifth Ave. is figuratively and literally the highest-profile asset in the REIT's portfolio, an article in the Wall Street Journal this past Sunday suggested that the other properties are hardly just going along for the ride. “Many of these buildings, like 1350 Broadway, are turnaround stories—and the future of the company depends in part on whether the management team led by Anthony Malkin can do just that,” according to the WSJ. As of Tuesday morning, ESRT stock was trading on the New York Stock Exchange at $13.29 per share.

ESRT encompasses 18 properties: seven Manhattan office assets totaling 5.9 million square feet, with the ESB comprising 2.8 million square feet of that tally; five suburban office assets in Westchester and Fairfield counties that comprise another 1.8 million square feet; and six standalone retail properties, including four in Manhattan. The REIT also has the option to buy two more Manhattan assets that would add another 1.5 million square feet of office.