Qatar Takes Big Stake In Empire State Building

(RTTNews) - Qatar's sovereign wealth fund has acquired a 9.9 percent stake in the company that owns the iconic Empire State Building, which was once the world's tallest building.

Empire State Realty Trust Inc. (ESRT), which owns the 102 storied, 1,454-foot skyscraper, said Tuesday that an affiliate of Qatar Investment Authority or QIA has acquired a 9.9 percent interest in the company through a $622 million investment.

QIA purchased 29.61 million newly issued Class A common shares of Empire State Realty Trust at $21 per share, equivalent to a 9.9 percent economic and voting interest in Empire State Realty Trust on a fully diluted basis.

QIA's entire 9.9 percent stake is in Class A shares, which represents a 19.4 percent ownership of Class A shares.

However, QIA can only vote shares equivalent to 9.9 percent of all voting securities, with the balance of their shares to be voted by ESRT in accord with the votes of all other voting securities.

John Kessler, Empire State Realty Trust's President and Chief Operating Officer, said, "We welcome QIA as an ESRT shareholder and see their investment as an endorsement of ESRT's strategy, team and portfolio of irreplaceable assets."

Doha-based QIA was founded by the State of Qatar in 2005 to strengthen the Middle Eastern country's economy by diversifying into new asset classes.

QIA has been diversifying away from Europe and increasing its investments in the U.S. and Asia. The Qatari fund is estimated to be worth about $335 billion by the Las Vegas-based Sovereign Wealth Fund Institute.

In September 2015, Qatar announced plans to invest about $35 billion in the U.S. over the next five years. The QIA has a subsidiary in New York called Qatar Investment Authority Advisory (US) Inc.

New York-based Empire State Realty Trust owns and operates retail properties in Manhattan and the greater New York metropolitan area, with the Empire State Building as its most valuable building.

The company's office and retail portfolio covers 10.1 million rentable square feet, as of June 30, 2016, consisting of 9.4 million rentable square feet in 14 office properties, including nine in Manhattan.