QIA invests $622m in Empire State Building’s owner

This is the Middle Eastern sovereign wealth fund’s third major international property deal this year after the Asia Square property buy in Singapore and an office portfolio acquisition in Los Angeles.

Qatar Investment Authority (QIA), the Middle Eastern sovereign wealth fund, has invested $622 million into the Empire State Realty Trust (ESRT), the owner of New York's iconic Empire State Building.

According to a statement from the New York-headquartered real estate investment trust, an affiliate of QIA purchased a 9.9 percent stake in the company at $21.00 per share.

ESRT has a portfolio currently covering 10.1 million square feet of rentable space across 14 properties majorly in Manhattan. Additionally the trust also owns around 720,000 square feet of rentable retail space.

“We welcome QIA as an ESRT shareholder and see their investment as an endorsement of ESRT’s strategy, team and portfolio of irreplaceable assets,” said John B. Kessler, president and chief operating officer of Empire State Realty Trust. “We continue to plan for the future, now with more capital and one of the most sophisticated and reliable real estate investors in the world as our partner.”

“With the recent expansion of the company’s unsecured revolving credit facility to $1.1 billion and now this addition of QIA’s equity investment, our ability to drive long-term value for all ESRT shareholders is further enhanced,” added David A. Karp, executive vice president and chief financial officer of the group.

The entity-level deal is a continuation of QIA’s aggressive expansion plans in global property markets. Earlier this year it acquired the landmark Asia Square Tower 1 office property in Singapore from BlackRock for S$3.4 billion, becoming the biggest Middle Eastern state investor in the country’s real estate market. This was preceded by another billion-dollar deal in the US when it acquired an office portfolio in Los Angeles via a joint venture partnership with Douglas Emmett in March. The $1.34 billion investment in total made for the 1.7 million square foot portfolio marked QIA’s first purchase on the West Coast.

According to PERE research QIA has $304.4 billion in assets under management, of which around $97.4 billion, representing 32 percent of the total portfolio, has been allocated to real estate investments.