The Malkins are getting tantalizingly close to winning their bid to make the Empire State Building part of a Real Estate Investment Trust.
A letter sent today by Peter Malkin and Anthony Malkin to investors states that the controlling owners (the Malkins) have received 94 percent of the votes needed to proceed with the IPO that would launch the contentious REIT.
“I think it’s going to happen,” said one Malkin colleague, an executive at a leading real estate firm in New York City, upon hearing the news. “It seems like they continue to garner more and more positive votes.”
Between March 15 and April 2, the percentage of the tower’s unit-holders approving the plan increased from roughly 75 to 94 percent of the total number needed; and from roughly 70 to 96 percent at 1 Grand Central Place (the third building where votes are being tallied, 250 West 57th Street, has now reached the number of votes needed to proceed).
But roughly 13 percent of the investors in the tower and about 10 percent of those invested in 1 Grand Central Place have yet to vote.
Today’s letter, filed with the Securities and Exchange Commission, urges those who have not voted to do so, as, “the sooner we complete the solicitation process, the sooner the expenses and disruption to all participants may be brought to an end, and the benefits can be achieved.”
The plan would give unit-holders half of the skyscraper’s appraised $2.53 billion value in REIT shares. Critics have claimed that no documentation exists supporting the idea that the investors should get only half the value and they contend that the planned REIT would rob them of a predictable income stream from the building’s rents.
“In a lot of cases the current owners are the children of original owners—these are family heirlooms,” Richard Edelman, the heir of an investor, told The Financial Times last month. “Well over half of these owners are in their 80s and have no interest in going into something akin to the stock market.”
But, after the previous update, filed by the Malkins with the SEC on March 15, Anthony Malkin told The Commercial Observer the following: “I feel very comfortable… We’re working hard on behalf of our investors as far as moving this process along.”
Mr. Malkin could not be reached for comment regarding the latest vote.