The real estate business in the corporate world – Part 3

In 2006, the Malkins assumed day to day control of the Empire State Building and embarked on a $500 million renovation, which will continue past the public offering. The trust expects the Empire State Building makeover to “substantially” finish by 2016, after a further investment of $55 to $65 million funded by cash flow and borrowing.

The renovation to the Empire State Building has been extensive: new lobbies, elevators, bathrooms, and windows—even sprucing up the facade. Malkin also condensed smaller offices into larger blocks to lure new clients. Before renovation, the tower was 69% full. Now it’s 99%, according to the SEC filings.

“It’s a huge number of tenants. Can you imagine managing that?” says Peter Slatin, who writes a real estate market newsletter. “There are many, many different tenants. It’s not like Citi taking 50 floors and then renting out the other 20 floors.”

For the nine months ended Sept. 30, the trust booked $156.7 million in revenue from the Empire State Building.

All told though, profit and revenue declined year over year. Net income fell from $84.6 million to $71 million. Revenue dropped from $474.6 million to $382.2 million.

“The renovation has been aggressive,” Slatin says. “Malkin has definitely poured money into it. He’s aggressively tried to upgrade.”

As mentioned in the filing for the IPO filing to the SEC, Empire State Realty has jotted down Merrill Lynch as the main underwriters of their stocks with Pierce, Fenner & Smith, and Goldman Sachs among other contenders.

Short URL: https://www.newspakistan.pk/?p=13165

Posted by Usman Khalid on Feb 18 2012. Filed under Business. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.