Soon investors can, like King Kong, grab a piece of the Empire State Building.
The company that runs the Great Depression-era skyscraper, the tallest building in New York, is planning to go public in a stock offering that could raise $1 billion, according to documents filed with regulators Monday.
That means that even if you can’t afford to buy a home, you can buy a stake in perhaps the nation’s most iconic office building - at least until the government sells shares in the Pentagon.
The planned IPO comes about 10 years after real estate investor Peter Malkin bought the 102-story Art Deco landmark from Donald Trump and a business partner for $57.5 million.
It’s the latest chapter in a saga that dates to 1931, when the building was completed, establishing it as the city’s highest skyscraper. It regained that standing after the collapse of the World Trade Center twin towers in the Sept. 11, 2001, terrorist attack.
Millions of tourists visiting New York ascend its heights to gape at the city from its observation deck, made famous in films such as “Sleepless in Seattle.” It was 1933’s “King Kong” that showed a giant ape clutching actress Fay Wray and fending off airplanes atop the tower.
“You have a trophy property that is irreplaceable,” said Hessam Nadji, managing director for research and advisory services at Marcus & Millichap, a commercial real estate services firm.
In its regulatory filing Monday, Empire State Realty Trust Inc. didn’t say how many shares might be involved in the IPO or what price they might fetch. The $1 billion figure is subject to investor demand.
Empire State Realty, which owns and operates 12 properties in Manhattan and greater New York, expects to trade on the New York Stock Exchange under the stock ticker symbol ESB.
By going public, Empire State Realty will be able to tap the equity markets for capital, something real estate investment trusts have had a lot of success doing, even in a wobbly economy. Marcus & Millichap’s index of REITs has doubled since the bottom of the recession.
The Empire State Building’s owners have sought to modernize the 80-year-old tower. In 2009, they embarked on a $550 million renovation to make it more environmentally friendly and energy efficient. The owners said they need $55 million to $65 million beyond 2013 to finish upgrades.
Apart from the novelty factor, will investors see the Empire State Building as a good real estate investment?
John Fitzgibbon, founder of IPOScoop.com, which tracks IPOs, said investors won’t get a good sense of the value of the IPO until the company provides more complete information about the offering. But he added that IPOs by real estate investment trusts generally don’t make much of a splash.
“REITs seem fairly valued when they’re priced. You don’t see any moon shots in the crowd,” he said. “I wouldn’t expect it to behave as people were talking about Facebook.”
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