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In 2006, the Malkins assumed day to day control of the Empire State Building and embarked on a $500 million renovation, which’ll continue past the public offering.
The trust expects theEmpire State Building makeover to “substantially” finish by 2016, after a further investment of $55 to $65 million funded by cash flow and borrowing.The renovation to the Empire State Building has been extensive: new lobbies, elevators, bathrooms, and windows—even sprucing up the facade. Malkin also condensed smaller offices into larger blocks to lure new clients. Before renovation, the tower was 69% full. Now it’s 99%, according to the SEC fillings.
“It’s a huge number of tenants. Can you imagine managing that?” says Peter Slatin, who writes a real estate market newsletter. “There are many, many different tenants. It’s not like Citi taking 50 floors and then renting out the other 20 floors.”
For the nine months ended Sept. 30, the trust booked $156.7 million in revenue from the Empire State Building.
All told though, profit and revenue declined year over year. Net income fell from $84.6 million to $71 million. Revenue dropped from $474.6 million to $382.2 million.
“The renovation has been aggressive,” Slatin says. “Malkin has definitely poured money into it. He’s aggressively tried to upgrade.”
Merrill Lynch, Pierce, Fenner & Smith, and Goldmand Sachs are the IPO’s underwriters.
source: forbes.com
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Note that ESB will have two classes of shares A & B. The B shares will be held by the Malkin Family and have 50 votes per share. This is outrageous. As a long time investor in REITs I will not invest in or advise my clients to invest in any company that maintains two classes of shareholders. By using two classes the common shareholder is robbed of value and management has used your money without allowing you a say in the business..
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