ESRT Secures $622M Investment From Qatar Investment Authority

Empire State Building.
Empire State Building.


Qatar Investment Authority has scooped up a 9.9 percent stake in Empire State Realty Trust for $622 million.

The Doha, Qatar-based investor, which was introduced to ESRT by CBRE’s Darcy Stacom, now owns roughly 29.6 million Class A common shares of the real estate investment trust at $21 per share. That mass of shares accounts for 19.4 percent of ESRT’s Class A stock. QIA also secured voting interest in the company only equivalent to 9.9 percent on a “fully diluted basis,” according to a press release from ESRT.

ESRT lined up Goldman Sachs and Eastdil Secured as financial advisers on the deal, while QIA used QInvest as its financial adviser.

David Karp, ESRT’s executive vice president and chief financial officer, said in prepared remarks that QIA’s investment, along with the company’s recently expanded credit facility of $1.1 billion, is in line with ESRT’s commitment to driving “long-term value” and “flexibility for the future.”

The company received a total of $621.8 million in gross proceeds from the transaction, and will use that capital to pay outstanding debts, including its revolving credit facility, and to fund future purchases and capital improvements, according to a filing today with the U.S. Securities and Exchange Commission.

“We welcome QIA as an ESRT shareholder and see their investment as an endorsement of ESRT’s strategy, team and portfolio of irreplaceable assets,” John Kessler, the REIT’s president and chief operating officer, said in the release. “We continue to plan for the future, now with more capital and one of the most sophisticated and reliable real estate investors in the world as our partner. As we continue our internal growth strategy execution, added strength and flexibility in our balance sheet expand our capacity to take advantage of opportunities through external growth.”

Father-and-son Peter and Anthony Malkin took the Empire State Building, along with their other properties, public in 2013, and stocks first traded around $13.

Stacom did not immediately reply to a request for comment.

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