The controversial move of selling the historic Empire State Building to the public is almost on the verge of gaining majority approval from shareholders as 79.6 percent of unit-holders have voted for the plan, according to The Wall Street Journal.
In a recent announcement, Malkins Holdings, the company that manages the Empire State Building, said that they have almost garnered the required number of votes to proceed with their Initial Public Offering (IPO) plans. The IPO needs 80 percent favorable votes from the 3300 unit-holders of the Empire State Building Associates LLC. Votes have gone up from 75 percent in April to 79.6 percent in May. It now requires only 0.4 percent of favorable votes from its stake holders.
Malkin Holdings LLC plans 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. 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.
A small group of investors have been against the plan stating that making the building public would not really benefit the shareholders. They also started a website critical of the proposal.
The constant opposing has been holding back the venture. Voting deadlines have also been extended several times. To compensate the objecting minority, other shareholders and the Malkins had proposed to pay them $100 for every $10,000 initially invested.
The objecting minority then called it unfair and illegal and took the matter to court. The ruling went in favor of the Malkins.
Voting dates are still open and the majority has urged all opposing members to change their mind. The opposing members have ten more days to change sides even after the 80 percent approval is granted.
"The math is very simple: Far more investors support the transaction than oppose it. We are proceeding with our solicitation to deliver what the vast majority of our investors want. We encourage all investors who have yet to vote in favor of the transaction to do so now," Brandy Bergman, a spokeswoman for Malkin Holdings with Sard Verbinnen & Co., wrote in an e-mail to Bloomberg.
The REIT will probably be approved, given the small number of votes now required. However, nothing can be ascertained as yet.