Empire State Building IPO
One of the most anticipated IPOs of the year is the one that includes the iconic Art Deco building within the new REIT to be launched: The Empire State Realty Trust.
The Malkin family has been controlling the building since 2002. Before the IPO, the family needs to receive approval to proceed from a large number of other small investors who had the opportunity to purchase a piece of the Empire through a syndicate deal in 1961 when Lawrence Wein (father-in-law to Tony Malkin, president of Malkin Holdings) arranged the deal with Harry Helmsley to buy the building for $65 million.
Many of these small investors receive hefty dividends from their shares and are against the IPO. They believe it will dilute their earnings because it will lump the Empire State Building with underperforming suburban properties. Last year a few of them sued the Malkins to stop the deal. The suit was reportedly settled for $55 million.
One of these investors is Richard Edelman, who owns 10 shares that his grandfather, an escalator salesman, bought at the time on a tip from a neighbor. According to data recently released by the Malkins each share is worth around $330,000.
...that’s what I call being in the right place at the right time...