Malkins Reject Offers, Push Forward with Empire State Building REIT
Al Barbarino Sept. 10, 2013, 7:30 a.m.
Anthony Malkin and Malkin Holdings plan to move ahead with plans for a public REIT that would include the Empire State Building as an asset, according to a letter filed with the Securities and Exchange Commission and sent to investors on Friday.
The announcement comes despite a string of unsolicited offers made over the course of the last several months to buy the Empire State Building, as well as separate offer for the second largest building in the proposed REIT.
“After review of indications of interest received with respect to purchase of the fee and/or operating lease positions of the Empire State Building and One Grand Central Place (60 East 42nd Street), [we] will proceed with the consolidation and IPO approved by a supermajority of the company’s participants,” the letter states.
A group of investors opposed to the REIT battled with the Malkins in New York Supreme Court earlier this year to prevent the plans for its launch, but months of wrangling with the dissenters finally earned Malkin Holdings the number of votes necessary to launch the REIT.
Despite the latest letter to investors, Jason Meister, a vice president at Avison Young who is representing both Joe Sitt and Rubin Schron in two separate bids to buy the Empire State Building, hasn’t lost hope.
“We’re still pursuing the Empire State Building,” he said. “I think we offer the investors a unique opportunity at a time when there’s a lot of uncertainty, with the Mideast turmoil and a potential conflict in Syria looming, and no one knows where the stock is going to trade,” he said.
Mr. Meister noted that the bids would allow investors to stay on as part owners of the building rather than receiving the cash from a hypothetical sale.
In July, Reuven Kahane and a group of investors made a $2.25 billion offer for the Empire State Building, marking the fourth bid after Mr. Schron kicked things off with a $2.1 billion offer in June. Mr. Sitt was among others to bid, offering just north of $2.1 billion for the property.
Also in July, Malkin Holdings received an unsolicited $710 million offer for One Grand Central Place, reportedly from real estate investor Andrew Penson, which marked yet another twist in the Malkin’s quest to launch the REIT (the 1.3-million-square-foot, 55-story building at 60 East 42nd Street is the second largest building in the proposed Empire State Realty Trust).
Mr. Meister’s father, Stephen Meister, is an attorney who represented the investors opposed to the REIT in the court proceedings earlier this year.
Anthony Malkin and Malkin Holdings were unavailable for further comment.