Empire State Realty Trust Inc. will be one of the biggest initial public offerings of a U.S. real estate investment trust. The REITshares will be priced at $13 to $15 each, according to a regulatory filing, and trade on Oct. 1 on the New York Stock Exchange under the symbol ESRT.
The decision to IPO the building ended a dispute between two groups of owners of the iconic 102-story tower. One group wanted to keep the building's ownership just as it had been since 1961, when the Empire State Building was purchased by a syndicate of some 2,800 owners created by Malkin Properties. The other group wanted to roll up the Empire State landmark with 18 other New York area properties into a real estate investment trust, or REIT, and sell shares of it to the public.
So, will these public shares be any different from those of any other REIT?
No, said Lawrence Longua, a professor at New York University's Schack Institute of Real Estate. "It's a plain vanilla REIT," he said, "with a big, famous building attached."
Buyers, as with any REIT, won't be able to claim depreciation, as they would if they'd bought the real estate itself. They will, however, as with other REITs, get a dividend. Management, explained Longua, is required to pay a dividend of at least 90 percent of the taxable income.
