NNN Lease Market News
The public may get an opportunity to own a piece of King Kong's favorite skyscraper.
The Malkin family of New York, which currently controls the 102-story landmark, filed papers with the Securities and Exchange Commission Tuesday saying that it has "embarked on a course of action" that could result in the skyscraper being included in a newly formed real- estate investment trust.
Lately the Manhattan office market has been under a cloud due to economic uncertainty and cutbacks in the financial services industry. But the Empire State Building has outperformed comparable properties, thanks in part to a recently completed $550 million upgrade.
The building was valued in the summer at $1.65 billion, when the Malkin family refinanced the property. The building's net annual income is $63 million, according to Commercial Mortgage Alert.
Developed in the early 1930s by group of investors led by tycoon John Raskob, the Empire State Building hit the market during the Depression and sat mostly empty for years. Gradually, though, the building filled up with hundreds of tenants and became a Hollywood darling featured in movies such as "King Kong" and "Sleepless in Seattle."
A real estate investment trust or REIT is a tax designation for a corporate entity investing in real estate. The purpose of this designation is to reduce or eliminate corporate tax. In return, REITs are required to distribute 90% of their taxable income into the hands of investors. The REIT structure was designed to provide a real estate investment structure similar to the structure mutual funds provide for investment in stocks.
REITs can be publicly or privately held. Public REITs may be listed on public stock exchanges.
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