As a kid, I grew up in a single-parent home with a mother in real estate. That’s probably where my fascination with real estate began. And as a kid, the most impressive buildings were skyscrapers.
I pored over every encyclopedia I could get my hand, searching for information on skyscrapers. And not surprisingly, none captured my attention like the Empire State Building.
Decades later, walking into this great behemoth of a building with my family and my mother, I got to share the childhood obsession that launched me into real estate investing.
A few weeks ago, we were all in New York for my oldest daughter’s wedding. For those who may not know, I have five children. So it was quite the celebration.
(Only one of my daughters was not able to make it because she had to stay home with my new grandson.)
Brad and his family at his oldest daughter’s wedding this year
It was a beautiful ceremony, and the next day, I decided to take everyone to the Empire State Building.
My mother admitted she hadn’t been back to New York City since the World Fair in 1964. But when we entered the building, she said she’d wait in the lobby. I knew she was afraid of elevators because she was stuck on one when she was a child.
I assured her it would take only a minute to get to the 101st floor of the building and she would really enjoy the video from the observatory.
As you can see below, my mom was happy she was able to conquer her fears.
Brad’s mom conquering her fears at the top of the Empire State Building
It was such a gift to have my mother on that field trip with us. She worked so hard to raise my brother and I all on her own.
And it was even more special because my real estate dream – that she helped spark – came full circle…
A Childhood Dream Come True
To this day, the Empire State Building is one of the most famous skyscrapers and is a quintessential symbol of New York City.
And I can proudly say I was once a shareholder in Empire State Realty Trust (ESRT), which owns the iconic tower today.
In 1928, the glamorous Waldorf Astoria – the largest hotel in the world at the time – was purchased as a tear down.
Three years later, a new 102-story building already stood in its place.
A year after that, people were lining up money just to climb to the top.
And by 1946, several major corporate clients were forking over huge rent checks to have more than 15,000 workers conducting business inside.
Within 14 short years, the Empire State Building had not only become the most famous building in the world – it had also become one of the most profitable.
After generating untold amounts of income for its owners, it was eventually sold for $65 million in 1961 not including the land, the highest price ever paid for a single building at the time.
Of course, all those gains went to people who were already wealthy before the project had even begun.
Which is why right around that same time, a new law was going into place – one that allowed regular Americans to begin investing in commercial real estate just like the Astors and Waldorfs had been doing for more than a century… and earning a share of the income they produced.
That new law, of course, was the Real Estate Investment Trust (REIT) Act of 1960.
Today, you can use that little-known law to invest in the Empire State Building itself. A building that is now worth roughly $4 billion. And continues to generate a couple hundred million dollars in income every single year.
The Empire State Realty Trust (ESRT) bought the Empire State Building and then went public in 2013.
During the COVID-19 lockdowns, my team purchased shares of ESRT for one of our portfolios. It returned around 50% in just seven months.
Over the same period, the Vanguard Real Estate Index Fund ETF (VNQ) returned around 8.5%.
The Real Estate Legacy Lives On
It’s amazing to think a blue-eyed little boy poring over skyscrapers in encyclopedias would later grow up to profit from the very building he idealized.
But when I look at the Empire State Building now, I don’t just see a well-known landmark, I see age-old proof that real estate is the very best way to get rich.
More than that, the Empire State Building is proof that the wealth-building power of prime real estate is no longer the exclusive domain of the ultra-rich.
It’s now available to all Americans even if they only have a couple hundred bucks to invest.
Today, I invest in many different types of stocks after transitioning from a real estate developer to a real estate investor.
Although I don’t recommend buying ESRT at this moment, the Empire State building Observatory is still TripAdvisor’s No. 1 attraction in the U.S. and No. 3 in the world. And what it represents for me is a timeless treasure with a lifelong lesson.
Real estate is the most important asset class that supports businesses across all verticals. As I tell my kids now, you can touch it, feel it, and collect rent from it. It’s the best wealth-building machine on the planet!
We are so lucky to live in this time. At no other time in human history has such an opportunity been open to those outside the upper class. And I’m a product of that opportunity.
I’m so grateful I get to share this opportunity with you through the lens of my 30-plus years of real estate experience and my childhood obsession with skyscrapers.
This Thanksgiving, I would love to know about the real estate, landmarks, and or investing sectors that inspired you to start investing. Please share with us here.
Happy Thanksgiving,
Brad Thomas
Editor, Intelligent Income Daily