Yahoo Finance SL Green (SLG) Inks Long-Term Lease at One Madison Avenue
SL Green Realty Corp. SLG bagged a lease for 347,474 square feet of space at One Madison Avenue in New York with investment management firm — Franklin Templeton. With this, the tenant will occupy the entire 11th through 22nd floors in the tower portion of the building for 15 years.
SL Green is witnessing healthy demand for One Madison and the latest lease follows the 328,000-square-foot lease with International Business Machines Corporation (IBM) and the 56,000-square-foot lease with Chelsea Piers Fitness at the property. With these leasing activities, this development that is on schedule for completion in November 2023, is now 55% leased.
Per Marc Holliday, chairman and CEO of SL Green, “This lease and the earlier IBM transaction are the second and third largest new leases signed in Manhattan in 2022 and are validation as to the exceptional quality of the building design.”
One Madison Avenue is a 1.4-million-square-foot Midtown South office tower adjacent to Madison Square Park. Along with Chelsea Piers, the property’s amenities are presently expected to include a 13,000-square-foot upscale restaurant, 10,000-square-foot artisanal dining market and 7,000-square-foot tenant-exclusive lounge with direct elevator access to a 10,000-square-foot rooftop deck. With an advantageous location, this well-amenetized property is poised to lure tenants.
Office-space demand in the upcoming period is likely to be driven by de-densification to allow higher square footage per office worker and the need for high-quality, well-amenetized office properties. SL Green is well-positioned to benefit from the emerging trend, given its well-located properties and the ability to offer top-notch amenities at recently-developed office buildings.
In fact, despite the negative effects of the pandemic-borne job losses and the remote-working dynamics that have been hindering the U.S. office real estate sector, SL Green signed 76 office leases for its Manhattan office portfolio spanning 1,009,811 square feet during the first half of 2022. The average lease term was 8.8 years for the Manhattan office leases signed during this period.
Nevertheless, the continuation of remote working, the rising supply of office properties and interest rate hikes are concerns.
Shares of this Zacks Rank #3 (Hold) have declined 11.4% over the past month compared with the industry’s fall of 15.3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Stocks to Consider
Some key picks from the REIT sector include Extra Space Storage Inc. EXR and Terreno Realty Corporation TRNO.
Extra Space Storage presently carries a Zacks Rank of 2 (Buy). The Zacks Consensus Estimate for EXR’s 2022 FFO per share has moved marginally upward in the past week to $8.49. Extra Space Storage’s long-term growth rate is projected at 8.7%.
The Zacks Consensus Estimate for Terreno Realty’s 2022 FFO per share has moved marginally upward in the past two months to $1.93. TRNO presently carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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SL Green Realty Corporation (SLG) : Free Stock Analysis Report
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