How high are investors on the housing market right now? The most famous building in America is going public.
Stakeholders in a private company that owns the property approved an Empire State Building IPO today. The real-estate company will be called Empire State Realty Trust, and the company hopes to raise $1 billion in its IPO. If successful, that would make it the second-largest initial public offering by a real-estate investment trust (REIT) in U.S. history.
Given the pace of the current housing recovery and the Empire State Building’s iconic status, on the surface $1 billion doesn’t seem that far-fetched – especially not when you consider that Empire State Realty owns 18 other properties in the New York area.
Still, it has taken quite a while for an Empire State Building IPO to come together.
Empire Realty filed papers on the IPO last February, and the offering was supposed to go public in late 2012. However, some infighting among the Malkins, the family that owns the Empire State Building, held up the deal.
Fifteen months later, the deal has finally been approved. Barring any further hiccups, the Empire State Building IPO should price later this year.
Aside from owning a piece of one of the most iconic structures in the world and taking advantage of an improving housing market, there are other factors that make the IPO appealing. Because it’s a REIT, the stock must return 90% of its earnings to shareholders in the form of a dividend.
The company’s earnings are unclear at this point, but its estimated value is $4.2 billion.