NEW YORK (Reuters) - Empire State Realty Trust Inc, the real estate investment trust with the iconic New York skyscraper as its centerpiece, plans to launch an initial public offering of 71.5 million shares at $13 to $15 apiece, according to a regulatory filing on Thursday.
The shares are expected to price on October 1, a source familiar with the matter said. The IPO is expected to generate more than $1 billion, making it the third largest REIT debut.
The bankers involved in bringing the REIT to market, led by Bank of America Corp (BAC.N) and Goldman Sachs & Co (GS.N), are launching a roadshow which will attempt to garner interest from large funds to buy the shares. The final price of the shares will be determined by the interest from the roadshow.
The underwriters also would be granted an option to purchase 10.725 million shares more if demand rises, according to a filing with the U.S. Securities and Exchange Commission. The shares are expected to trade under the symbol “ESRT,” the latest filing said.
The road to an IPO for the REIT, which also will include more than 18 other properties, has been exceptionally long. Malkin Holdings LLC, which spearheaded the plan, kicked off the effort to roll up the properties into the REIT at the end of November 2011. It was quickly met with opposition from a small but vocal group of investors and a few court cases.
Once the proposed REIT plan garnered the approval of the investors, several New York developers offered to buy the Empire State Building.
Malkin Holdings rejected the offers, saying that after debt and other costs, the proposals were shy of the value the REIT is expected to generate to investors, according to a regulatory filing.
The 102-story skyscraper and its more than 2,800 investors are managed by Malkin Holdings. The relationship dates back to the early 1960s, when Lawrence Wien, one of the first pioneers of syndicated real estate ownership, sold 3,300 units at $10,000 and created Empire State Building Associates. Simultaneously, he sublet the property for 114 years to Empire State Building Co, owned by Wien and real estate magnet Harry Helmsley.
Over the years, Empire State Building Associates also bought the land. Wien died in 1988, passing control of the Empire State Building and several other New York buildings in the REIT to his son-in-law Peter Malkin, the chairman of Malkin Holdings, and his grandson Anthony Malkin, Malkin Holdings president.
Anthony Malkin is chairman, chief executive officer, and president of the REIT.
(Corrects to 102 stories from 102 years old in eighth paragraph, and corrects when Wien died to 1988 from 1983 in second-to-last paragraph)
Reporting by Ilaina Jonas, editing by G Crosse, Andrew Hay and Eric Beech