Yahoo Finance SL Green (SLG) Starts 2023 With Leases Covering 343K Sq. Ft
SL Green Realty Corp. SLG has kicked off the current year by signing leases aggregating 343,000 square feet of space. Despite a choppy environment in the office real estate market, these signings reflect the decent demand for SLG’s high-quality properties.
Among these deals is a new lease for 15 years with 777 Partners, an alternative investment platform, at One Madison Avenue encompassing 18,476 square feet on the entire 27th floor. This comes after the prior disclosed new leases with Franklin Templeton, IBM and Chelsea Piers Fitness.
SL Green is witnessing the healthy demand for One Madison. With these deals, the property’s leased occupancy reached 56.6% roughly 10 months prior to the anticipated project completion date.
Among the other deals is an 11-year expansion lease signed by TD Securities covering 25,171 square feet on the whole 23rd floor at 125 Park Avenue. With this, TD Securities’ total occupancy reached more than 247,000 square feet within the SL Green portfolio.
Moreover, CBS Broadcasting signed a five-year renewal lease encompassing 186,882 square feet of space, while Greater New York Hospital Association signed a 10-year renewal lease covering 58,017 square feet at 555 West 57th Street. These deals reflect decent demand from existing tenants for SLG’s properties.
Per management “These transactions create significant leasing momentum as we start the new year and reaffirm the growing corporate sentiment that there is no substitute for the importance of in-office occupancy to support employee collaboration and company culture.”
However, the office real estate market is still facing choppiness. Recently, SL Green reported fourth-quarter 2022 funds from operations (FFO) per share of $1.46, lagging the Zacks Consensus Estimate of $1.48. SLG clocked in net rental revenues of $172.89 million in the fourth quarter, which missed the Zacks Consensus Estimate of $173.06 million.
For its Manhattan portfolio, SL Green signed 33 office leases encompassing 196,421 square feet of space in the reported quarter. The mark-to-market on signed Manhattan office leases was 4.7% lower than the previous fully escalated rents on the same spaces for the quarter.
Shares of this Zacks Rank #5 (Strong Sell) company have underperformed the industry it belongs to in the past three months. The company’s shares have declined 5.5%, while the industry has risen 5.3% over this period.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are VICI Properties Inc. VICI and STAG Industrial, Inc. STAG, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks Rank #1 (Strong Buy) stocks here.
The Zacks Consensus Estimate for VICI Properties’ 2022 FFO per share has moved 4.9% north to $1.92 over the past two months.
The Zacks Consensus Estimate for STAG Industrial’s 2022 FFO per share has been raised marginally over the past month to $2.21.
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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