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Qatar Investment Authority makes $622m investment in Empire State Realty Trust

Qatar Investment Authority makes $622m investment in Empire State Realty Trust

DOHA: The Qataris are betting on the Empire State Building. An affiliate of the Qatar Investment Authority bought a 9.9% stake in Empire State Realty Trust, the landlord that owns the 1,250-foot skyscraper, the company said Tuesday. The $622 million investment marks the latest injection of foreign money into New York real estate.

While Empire State Realty Trust owns properties in Manhattan, Westchester County and Connecticut, the Empire State Building is its most valuable building, generating more than 30% of its revenue last year. The Qatar Investment Authority, which manages investments for the natural gas-rich Middle Eastern country, didn’t immediately respond to a request for comment. John Kessler, Empire State Realty Trust’s president, said in a statement the company welcomed “one of the most sophisticated and reliable real-estate investors in the world as our partner.”

Foreign money has flooded the Manhattan commercial real-estate market in the past few years as foreign governments and investment funds looked for riskier investments that produce more income than government bonds. Deep-pocketed buyers from China, Southeast Asia and the Middle East are putting billions into the highest profile developments, including Hudson Yards on the far West Side and a series of slim condominiums rising south of Central Park.

Other iconic buildings have sold outright: Chinese insurer Anbang Insurance Group, for example, bought the Waldorf Astoria Hotel for nearly $2 billion early last year. The steady stream of foreign cash, in turn, has helped push Manhattan commercial property prices to all-time highs. The market is so heated that many of the city’s largest local landlords have stopped acquiring properties waiting for the cycle to turn.

The Qataris have made a notable push of late, committing more than $5 billion to Manhattan real estate over the past two years, according to data tracker Real Capital Analytics Inc. The bulk of that sum is an investment in Brookfield Property Partners’ giant Manhattan West development just west of Penn Station, where the developer is building two office towers and an apartment building.

Despite its prominence, the Empire State Building rents for substantially less than skyscrapers in more prime locations by Central Park. But it has attracted some of the biggest names in real estate to fight over its control, including Leona Helmsley and Donald Trump.

Empire State Realty Trust is a company that was taken public in 2013 by New York’s Malkin family, which at the time controlled the trophy tower and the 18 other properties that were included in the company. Anthony Malkin remains the company’s chairman and chief executive. His family’s ties to the building date back to 1961, when his grandfather Lawrence Wien and Harry Helmsley took control.