Bid for Empire State
October 4, 2001: 7:33 a.m. ET

Real estate mogul said to offer $57.5M for lease to landmark building
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NEW YORK (CNNfn) - A New York-based real estate mogul entered a bid for as much as $57.5 million to buy the Empire State Building, New York's tallest structure since the Sept. 11 terrorist attacks flattened the two World Trade Center towers, according to a published report Thursday.

Peter Malkin sent a letter to investors in the partnership that owns the lease to the Empire State Building, set to expire in 2076, asking for permission to make the $57.5 million bid, according to the Wall Street Journal, citing filings with the U.S. Securities and Exchange Commission.

Empire State Building
Malkin currently controls Empire State Associates, which leases the building from Trump State Partners, a group led by Donald Trump and the family of Japanese tycoon Hideki Yokoi, the paper reported. Under his partnership, if the building sells for more than $45 million, Trump is entitled to half of the amount above that price, according to the paper.

In the proposal to his partnership, Malkin said the acquisition is "an intelligent decision" because it would bring the owner of the lease and building together, despite a low annual return of 3.4 percent under the current lease and bidding price, according to the Journal.

The owner of the building is entitled to collect $1.97 million per year in rent until 2013, when the rent drops to $1.72 million.

Peter Malkin
Many of the Empire State Building's occupants have expressed reservations about staying since the Sept. 11 attacks, with two already saying they will leave, according to the paper. To deter any more defections, the building's managers installed metal detectors and x-ray scanning machines in the lobby and will only open the observatory on the 86th floor during weekends, the Journal reported.

Malkin told the paper that investigators have not found any evidence that the Empire State Building had been a target of the recent attacks.

A potential sticking point for the purchase is Leona Helmsley, who owns the sub-lease to the building due to an inheritance from her late husband. In an interview, Hemsley said ownership of the building is "worthless" due to the long-term lease. In addition, she told the paper, "My husband didn't put his will together for Malkin to get [the building]." graphic


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