4 groups bid on Empire State Building

Trump selling landmark for about $60 million

September 15, 2001|By BLOOMBERG NEWS

WASHINGTON - Developer and casino operator Donald Trump, preparing to sell the Empire State Building for about $60 million, says four investment groups have expressed interest in the New York landmark.

One of the suitors is Empire State Building Associates, an investment company organized and managed by Wien & Malkin LLP, whose principals include Peter Malkin.

The investment company already holds a 115-year master lease on the tower and wants to acquire the building and the underlying land, according to a proxy statement filed with the Securities and Exchange Commission.

"It's a natural" for Malkin's group, Trump said, "but it's also a natural for other people who want to have a piece of that great building. I will make a determination over the next couple of months over who I will sell it to."

Trump said he received a 50 percent stake in the Empire State Building in 1995 in return for helping the owners obtain financing.

Now, Trump is seeking to maximize the return that he and his partners will receive by negotiating with several potential buyers. Trump said his partners paid $39 million to acquire the 102-story building in 1992.

The partners include the family of the late Japanese tycoon Hideki Yokoi, according to The Wall Street Journal.

Last year, Trump sought at least $65 million for the Empire State Building, according to the Journal. The price for the building in midtown Manhattan has been depressed by the lease held by Malkin's group, according to one expert.

The investment company pays an annual fee of $1.9 million for the right to rent out the building, the SEC filing said. This master-lease payment will drop to $1.72 million after Jan. 5, 2013.

The investment company subleases the property to Empire State Building Co., controlled by Malkin and Leona Helmsley, in return for an annual fee plus a percentage of profits. Those profits exceed the $1.9 million that Trump and his partners are getting.

Acquiring the building would be a coup for Malkin and Helmsley. Selling the building with the lease rights could generate a cash windfall.

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