Investors in Empire State of mind for big IPO
Investors looking to get a piece of the New York skyline's most iconic building bid up the price in early trading Wednesday.
Empire State Realty Trust—the parent company of the eponymous skyscraper—put 71.5 million shares on the block in its initial public offering at a price of $13 each.
The stock quickly moved higher, gaining more than 1.5 percent on the New York Stock Exchange in brisk trading.
The price, however, was at the low end of the previously stated $13 to $15 per-share range. The offering will raise some $930 million in proceeds for the company, which owns and operates 18 buildings in midtown Manhattan and greater New York, including the namesake Empire State Building.
The majority—roughly $650 million—of the proceeds will go to the estate of property mogul Leona Helmsley, who passed away in 2007. In 1961, the Helmsley family distributed investments in the trust to some 2,800 private investors, many of whom have held onto the assets since and preferred not to part with them.
One of them, Cathy Johnson, told CNBC her feelings about the IPO were "at best, mixed." Johnson's grandfather purchased a $1,000 stake in the trust at its inception in 1961, and it's worth multiples of that now. Stephen Meister,an attorney at Meister Seelig & Fein representing dissenting stakeholders like Johnson, said the deal was still "grotesquely unfair" to existing investors.
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Due to that sentiment, the initial public offering faced obstacles since its filing in February 2012. In May, the trust now controlled by father-and-son investors Peter and Anthony Malkin received backing from more than the required 80% of shareholders needed to move forward.
The company is trading under the ticker "ESRT" on the New York Stock Exchange.
-Follow Kayla Tausche on Twitter at @kaylatausche.
- CNBC's Amara Omeokwe contributed to this report. Follow her at @Amara_Omeokwe