The majority owners of the iconic 102-story Empire State Building in midtown Manhattan and 18 other properties including office buildings and a development site that is in the mix has filed papers with the Securities and Exchange Commission to become a REIT (Real Estate Investment Trust) known as Empire State Realty Trust. Since the 2007 death of Leona Helmsley, her hairs want improved access to capital and liquidate some of its holdings. In order to form a REIT, the heirs need 80 percent approval from more than 3,300 units held by investors. The problem is that some of the smaller owners are already balking at the proposal and want to keep the current income stream coming from operations.
The Empire State Building Association (ESBA) owns the building and lease it out to the Empire State Building Co. (ESBC), a separate entity. The Helmsley estate owns 63.8 of the ESBA. The skyscraper alone valued at $2.5 billion. The ESBA and ESBC appears to own one half each of the building. If the REIT moves forward some of the smaller investors are expected to lose half of their current value of the investment and therefore, they are working hard to stop the proposed REIT.