Empire State Building Set For Share Offering

The public could soon have the opportunity to buy a piece of New York's landmark Empire State Building after a plan to fold it into a publicly traded company cleared a major hurdle.

Holders of more than 80% of the units that own the iconic skyscraper have now approved the plan to fold the building into a real estate investment trust called Empire State Realty Trust Inc.

The vote was disclosed in a US Securities and Exchange Commission filing on Wednesday.

The approval comes after more than a year of lawsuits and fighting between Malkin Holdings, which has spearheaded the plan, and a small group of investors that opposed it.

The Empire State Building will be one of more than 18 properties in the trust, which is estimated to be valued at $4.2bn (£2.78bn).

The Empire State Building, completed in 1931, is one of the most recognisable features of the New York City skyline. It is in the middle of a major renovation, and last autumn was nearly 70% leased.

Having 80% support is a critical threshold because it allows Malkin to use a forced buyout provision to get the full support of the investors.

Malkin has estimated that each of the 3,300 units - first sold in the early 1960s for $10,000 (£6,615) each - could be worth more than $320,000 (£212,000), according to SEC filings.

The ultimate value will be determined by the public market after the initial public offering.

At the end of 2012, the units were held by 2,824 investors, according to SEC filings. The new trust is estimated to be valued at about $4.2bn (£2.78bn).

The Leona Helmsley estate, a major investor in the company that sublets and manages several of the properties proposed for the trust, could see its stake valued at about $1.03bn (£680m), according to an SEC filing.

In an IPO it could reap some $672m (£445m) of that total in cash.