Empire State Realty Trust goes public
Anthony Malkin, chairman, CEO and president of Empire State Realty Trust (ESRT), which owns the Empire State Building, rang the opening bell at the New York Stock Exchange yesterday to mark the firm’s IPO.
Trading under the ticker ESRT, the REIT priced 71.5 mn shares at $13 per share – the low end of the projected $13 to $15 range. Stock rose to a high of $13.49 and closed its first day of trading at $13.10, raising some $929.5 mn in total, according to Bloomberg.
The value could increase further if underwriters exercise an option to buy an additional 10.7m shares.
The IPO brings to an end two years of work by ESRT chairman emeritus Peter Malkin, and his son Anthony, to take the iconic skyscraper and a number of other New York-area properties public. The IPO faced opposition from some of the art deco tower’s longtime investors.
Anthony Malkin told Bloomberg he was ‘not at all’ disappointed that the initial shares were priced so low. ‘This is the beginning of a journey, not the end,’ he said in a Bloomberg Television interview. ‘What we did was deliver to folks what they wanted – their optionality, their opportunity for choice.’
Explaining that the low initial price reflected investor concerns about how the REIT will be governed – as well as how competition from the new 1 World Trade Centre observatory, due to open in 2015, would affect tourist numbers at the Empire State Building – Michael Knott, an analyst with Green Street Advisors, said investors were ‘not overly wowed’.
‘So management enters the public market with something to prove,’ he said in a research note.