Empire State Realty Exercises Options To Buy Stakes In 2 Manhattan Properties

(RTTNews) - Empire State Realty Trust, Inc. (ESRT) has exercised its options to buy the ground and operating leases at 112 West 34th Street and the ground lease at 1400 Broadway for nearly $734 million cash, common stock and operating partnership units. The acquisitions may close within 90 days.

The firm would acquire the leaseholds under the terms of the option deals, which set the consideration to be paid to participants in cash, stock and units. 112 West 34th Street's leaseholds and fee title to a small contiguous property would be bought for about $423.6 million, or approximately $570 per square foot, comprising $87.7 million by assumption of existing mortgage debt, $115.5 million cash and $220.4 million in shares of Class A and Class B common stock and Series PR OP units, based on the average closing price of ESRT Class A shares over a four-week period ending ten days prior to closing. 1400 Broadway's leasehold would be purchased for $310.0 million, or some $346 per square foot, consisting of $80.0 million by assumption of existing mortgage debt, $85.5 million in cash, and $144.5 million in shares of Class A and Class B common stock and Series PR OP units, based on the average closing price of ESRT Class A shares over a four-week period ending ten days prior to closing. According to the option agreements, the prices were determined by an independent appraisal process.

Pursuant to the option agreements, both Anthony Malkin, the company's Chairman and CEO, and Peter Malkin, the company's Chairman Emeritus, recused themselves from acting on behalf of the company in the appraisal process. Given their interests in the option properties, the Malkins additionally recused themselves from any management recommendation and Board vote on the transactions.