Empire State Building Gains Broad Support for IPO; Small Group of Investors Still Opposing

New York's legendary Empire State Building is reportedly inching closer to its proposed IPO. Malkin Holdings LLC, the company that controls the building declared that they won three quarters of favorable votes from the building's shareholders who had voted so far. However, a small group of investors has been opposing the plan.

Malkin Holdings LLC is planning to roll the building into a public Real Estate Investment Fund (REIT) called the Empire State Realty Trust Inc., which will give the REIT participants half the value of the building's appraised $2.53 billion. The other half of the value will go to the investors in Empire State Building Company LLC, reports Commercial Observer.

The REIT will comprise of 12 properties including the Empire State Building. Of the 12 properties, seven are located in midtown Manhattan while the others are in Westchester County, Connecticut and Fairfield County.

The proposition has received large support from the building's shareholders. The support is even higher from unit holders of two other buildings who are chipping in to contribute to the $1 billion REIT. Around 95 percent of the holders of 1 Grand Central Place Building have voted in favor of the IPO filing while 97 percent of the investors at 250 West 57^th Street Building have given the nod.

However, for the IPO to proceed, the plan needs 80 percent favorable votes from the 3300 unit-holders of the Empire State Building Associates LLC. A small group of investors has voted against the plan, which is holding back the venture.

"This remarkable level of participation in such a short period has exceeded our hopes. We encourage the very small percentage of participants who have voted against any proposal to consider now changing their votes to be for all the proposals," Malkin Holdings chairman Peter Malkin and president Anthony Malkin, said in a letter to Bloomberg.

Richard Edelmen, one of the investors who is opposing the IPO plan has been running a website critical of the proposition. Edelman asserted that the Malkins were conjuring up the numbers in their own interest.

"We've polled our investors and it's over a 40 percent 'no' vote," Edelman said to Yahoo.

"Not sending in a ballot is the same as voting 'no.' Most 'no' voters have told us that is how they are expressing their disapproval of the REIT plan," he added.