NEW YORK (TheStreet) -- Last week Empire State Realty Trust investors commenced voting on the fate of the company's IPO aimed to provide liquidity for the new REIT anchored by the world-famous office tower.The last day for vote counting is March 26, so stakeholders -- for and against -- will not know for around 60 days if the deal is approved (by a minimum 80% approval rate). Sides appear to be split as the 2,800 shareholders attempt to decide whether a new diversified REIT will be traded on a public stock exchange. The Empire State Building is the flagship property and it provides significant and diversified sources of revenue through its office and retail leases, observatory operations and broadcasting licenses and related leased space. However, the entire portfolio consists of 12 total office properties encompassing approximately 7.7 million rentable square feet of office space, most located in the Manhattan area. The major stakeholder, Malkin Holdings, has been pushing hard for the "yes" vote as the company mailed out a DVD aiming to appeal to many legacy investors. As part of the pitch, Malkin vowed to erect a "Wall of Recognition" at the trophy tower with the names of each of the original investors in Empire State Building Associates -- the owner of the property for 50 years. As the letter reads ( filing):
"Each current investor and requesting family members will receive a commemorative certificate suitable for framing featuring a rendering of the Wall of Recognition with the name which appears on the wall documenting participation in ESBA at the time of the consolidation and IPO." It seems that the "yes" voters are seeking a liquidity event, much like several of the recently announced listings such as American Realty Capital Trust ( ARCT, American Realty Capital Trust III, Cole Credit Property Trust II, and Healthcare Trust of America ( HTA - Get Report). The "no" voters appear to be against the conversion due to the dilutive impact of the properties that will be rolled up. Sources say that the Malkin family and other significant owners will reap a considerable profit while the smaller investors will be meres pawns. According to filings, the Malkin family have offered investors an array of options including: class A shares, operating partnership units, or a combination of OP units and class B shares. This includes tax deferred options that gives investors flexibility in tax deferral. In the video released by Malkin, the argument for scale is aimed at broader diversification and better banking terms: "
By putting these properties together, we believe all investors will benefit through ongoing dividends with the potential to increase through property performance, better financing, more efficient operation and beneficial acquisitions. The potential for increased distributions from dividends and stock appreciation over time offers benefit for all investors."