Empire State Realty Trust has exercised its options to purchase the ground and operating leases at 112 West 34th Street and the ground lease at 1400 Broadway for a total of approximately USD734 million.
The acquisitions are expected to close within 90 days, subject to customary closing conditions.
The company will acquire the leaseholds under the terms of the option agreements 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 will be acquired for approximately USD423.6 million, or approximately USD570 per square foot, consisting of USD87.7 million by assumption of existing mortgage debt, USD115.5 million in cash and USD220.4 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 will be acquired for USD310.0 million, or approximately USD346 per square foot, consisting of USD80.0 million by assumption of existing mortgage debt, USD85.5 million in cash, and USD144.5 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.
Both Anthony E Malkin, the company’s chairman and CEO, and Peter L 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.