U.S. regulators have given the green light to the manager of the Empire State Building to ask investors to vote on a plan to fold the iconic building into a new real estate investment trust (REIT) that eventually will be publicly traded.
After months of review, the U.S. Securities and Exchange Commission signed off on the documents allowing Malkin Holdings LLC to solicit investors in the Empire State Building to vote on the plan for the building to be the centerpiece of more than 18 properties in Empire State Realty Trust Inc, according to a filing Wednesday.
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"Malkin Holdings will commence its solicitation of investors in due course," a Malkin Holdings representative said in an email.
The REIT proposal has divided the Empire State investors. Some believe Malkin is getting too much from the split of the ownership at their expense, while others support the plan as a way to cash out of a long-term investment they inherited from parents and grandparents.
The 2,824 investors hold 3,300 units that originally were sold for $10,000 in 1961 in Empire State Building Associates, the company that owns the building. The investors were divided into three groups holding 1,100 units per group. The REIT plan requires the approval of holders of at least 80 percent of the units in each of the three groups.
(Reporting By Ilaina Jonas; Editing by David Gregorio)