Fancy owning a piece of the Empire State Building?

People who have always wondered what it might be like to dabble in a little New York real estate may soon be able to dabble in a lot of it – by buying a piece of its most famous skyscraper, the Empire State Building.

The Malkin family, which controls the 102-storey Art Deco tower at Fifth Avenue and 34th Street, is planning to create a publicly traded real estate company featuring the building, according to three executives who had been briefed on the plans but spoke on the condition of anonymity because they were not authorised to discuss the matter.

The skyscraper draws tens of thousands of tourists from across the globe every year to its 86th-floor observatory, 1,050 feet above the city streets.

If the Malkin plan is successful, New Yorkers, and anyone else for that matter, will be able to buy stock in the company that owns the Empire State Building, much as Wisconsin residents bought stock in the Green Bay Packers.

The new company, the executives said, may include a number of other office buildings controlled by Anthony E Malkin and his father, Peter L Malkin, including 1 Grand Central, a 55-storey, 1.3 million- square-foot building across 42nd Street from Grand Central Terminal, and a 26-storey building at 250 West 57th Street, as well as six buildings in Westchester County and lower Connecticut.

Mr Anthony Malkin declined to comment, but he, his father, and their partners are hoping to cash in on the Empire State Building’s international cachet and a commercial real estate market here that is once again attracting buyers from around the world.

‘Investors the world over are clamouring to invest in Manhattan office properties, both debt and equity,’ said Michael Knott, a managing director of Green Street Advisors.

Date: 14 April 2011 | For the full report, please visit http://www.businesstimes.com.sg

Blackstone Said to Target CalWest Warehouse Properties After Buying Debt

Blackstone Group LP has acquired about $600 million of debt on a group of industrial properties, aiming to gain control of the buildings as it expands in the warehouse sector, three people with knowledge of the deal said.

Blackstone bought the mezzanine debt on the U.S. portfolio, known as CalWest, at discounted prices from several financial institutions, including Barclays Plc (BCS), according to the people, who asked not to be named because the transaction is private. The purchase positions the New York-based firm to take control of the properties, totaling 23 million square feet (2.1 million square meters), the people said.

The world’s largest private-equity firm is increasing its stake in warehouses and distribution centers while the industry “remains a cheap sector,” said Steven Frankel, an analyst covering industrial real estate investment trusts at Green Street Advisors in Newport Beach, California. Blackstone bought 40 million square feet from ProLogis and Eaton Vance Corp. in separate transactions last year, putting the firm among the top holders of warehouse space, he said.

“Blackstone has acquired a national industrial portfolio with a concentration in major hubs, and they’ve done it at prices that look appealing,” Frankel said in a telephone interview. “The size is rivaling that of public REITs.”

U.S. industrial rents will accelerate as the unemployment rate decreases, Deutsche Bank AG’s RREEF unit said in a March 24 report. Warehouse rents will advance 5.9 percent in 2013, 7.3 percent in 2014 and 6.3 percent in 2015, according to the forecast.

Date: 13 April 2011 | For the full report, please visit http://www.bloomberg.com

Blackstone in US$2b bet on industrial property

Blackstone Group LP is making a US$2 billion bet on one of the hardest hit areas of commercial real estate, buying properties and assembling a management team in a sign that it might take its warehouse business public.

The latest real estate wager by the owner of Hilton Hotels is on warehouse and distribution centres, an unglamorous corner of the property market known by an equally dull name: ‘industrial real estate’.

In six months, the private equity firm’s real estate arm, Blackstone Real Estate Advisors, has amassed a portfolio of 275 industrial properties, spanning about 45 million square feet.

It might more than triple its holdings to about 150 million square feet, according to an industry source with knowledge of the plans, but who is not authorised to talk about them.

These warehouses and distribution facilities – sometimes as large as 17 US football fields – sit beside highways, near airports, and shipping ports throughout the United States.

‘Industrial real estate in the private market has been cheaper than other property sectors,’ said Green Street Advisors analyst Steven Frankel.

‘Industrial last year had not recovered at nearly that same pace as apartments, or hotels or the majority of other sectors. Pricing looked very attractive on a relative basis.’

Blackstone’s Real Estate Advisors group has about US$24.3 billion under management.

In 2007, it completed the largest US commercial real estate deal in history, buying Equity Office Properties for about US$37.7 billion. Today it is the world’s largest hotel owner, with Hilton and other brands.

In November, Blackstone bought 180 properties, totalling 23 million square feet, from ProLogis for US$1.01 billion.

Earlier in the year, it paid US$900 million for industrial real estate from Eaton Vance. It also paid US$191 million in December for real estate from Exeter Property Group.

Blackstone’s industrial property portfolio is larger than that of EastGroup Properties Inc, and is closing in on First Industrial Realty Trust Inc.

Date: 27 January 2011 | For the full report, please visit http://www.businesstimes.com.sg

American Assets Raises $564 Million in First IPO of U.S. REIT in 17 Months

American Assets Trust Inc. raised $564 million, more than originally sought, in the largest initial public offering of a U.S. real estate investment trust in more than a year.

The owner of properties from San Francisco to Honolulu sold 27.5 million shares at $20.50 each yesterday after offering 25 million for $19 to $21 apiece, according to data compiled by Bloomberg. The sale was the biggest for a U.S. REIT since Starwood Property Trust Inc. raised $932 million in August 2009. The San Diego-based investment trust will begin trading on the New York Stock Exchange today under the ticker AAT.

American Assets completed the first U.S. initial offering of 2011 after more than half the IPOs by REITs last year left buyers with losses, data compiled by Bloomberg show. Barclays Plc of London estimates U.S. initial sales will raise $50 billion this year, an increase of 34 percent, after the Standard & Poor’s 500 Index recovered all of its losses spurred by the collapse of Lehman Brothers Holdings Inc. in September 2008.

“Investors are adjusting their risk profile,” said Daniel Genter, president of RNC Genter Capital Management in Los Angeles, which oversees about $3.7 billion. “People are becoming less concerned about the bottom falling out from under them.”

Bank of America Corp. of Charlotte, North Carolina, Wells Fargo & Co. in San Francisco and New York-based Morgan Stanley led the offering. American Assets owns office, retail and hotel properties in California, Hawaii and Texas valued at about $2 billion, according to Green Street Advisors, which has specialized in real estate research for more than two decades.

Proceeds from the IPO will be used to pay debt. At the original midpoint price, American Assets would have had a market capitalization of $1.01 billion, or a 5.9 percent discount to its net asset value of about $1.08 billion, its prospectus and data compiled by Bloomberg show. Non-mortgage REITs trade at an average premium of 17 percent, according to Green Street.

The eight REITs that completed U.S. IPOs in 2010 advanced an average of 1.9 percent, trailing the 13 percent climb by the S&P 500, according to data compiled by Bloomberg. Ten property trusts postponed or withdrew their initial sales, the data show.

Date: 13 January 2011 | For the full report, please visit http://www.bloomberg.com