Empire State Building group moves one step closer to $1 billion IPO
Photographer takes a self-portrait using a mirror in the Empire State Building observatory in 2005. Downtown Manhattan and the Hudson River are in the background. Matt Riggott / Flickr.com
The IPO is essentially a real estate deal. But tourism accounts for a huge chunk of the Empire State Building’s revenue and it could be a beneficiary of the transaction.
If SeaWorld can go the IPO route, then why not the Empire State Building?
The Securities and Exchange Commission this week gave Empire State Building Associates, which owns the Empire State Building and 11 other office properties in New York and Connecticut, permission to poll investors on whether they would agree to place the holdings into a real estate investment trust that would be traded on the New York Stock Exchange. The REIT would be called the Empire State Realty Trust.
Net proceeds of the appoximately $1 billion IPO would increase investors’ liquidity and make various payments to investors, and there would be about $84.2 million left for general corporate purposes, according to an amended S-1 filing.
Empire State Building’s observatory operations took in $68.5 million in revenue in the first nine months of 2012, and that accounted for 40.1% of the building’s total revenue, the company states.
Improvements could help the tourism landmark better compete with the observatory at Rockefeller Center and an observatory being built at One World Trade Center.