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Empire State Building gets billion offer to sell

June 19, 2013

NEW YORK:  A New York City real estate company offered to buy the Empire State Building for $2 billion, a written offer showed, significantly below the skyscraper’s appraisal price and about three weeks after investors in the iconic building approved a plan to take the tower public in a real-estate investment trust.

On Tuesday, Cammeby’s International Group, a privately held company headed by real-estate mogul Rubin Schron, offered to buy the building for cash from the Malkin family which controls the Empire State Building and allow the current investors to remain stakeholders if they chose. Schron was not available for comment late Tuesday.

The Malkin family’s law firm has received the offer but a representative had no comment when contacted by Reuters. Both the Malkins and the Helmsely Trust, which majority-owns a sublease, would have to approve the proposed deal. It also would have to be endorsed by the other investors.

The offer, described as “out-of-left field” by the Wall St Journal, was set in motion by attorney Steven Meister, who represents a group of investors who are not in favor of Malkin’s plan to roll up the Empire State Building and more than 17 other properties into a real estate investment trust called Empire State Realty Trust Inc which will become publicly traded.

Meister’s son Jason Meister, a vice president with real estate brokerage Avison Young, brokered the deal. The letter containing the offer and sent to Malkin Holdings’ attorneys. The offer was made public by Meister’s firm Meister, Seelig & Fein LLC.

An appraisal conducted last summer valued the 102-story building at $2.33 billion, after debt, while the REIT, which will also have other properties, is estimated to be valued at about $4.15 billion, after debt, according a filing with the U.S. Securities and Exchange Commission.

The offer is contingent on buying both the building and the operating lease, according to the bid. The offer is valid for 60 days and has a closing period of 90 days .

Reuters


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