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SL Green in Agreement with Midtown TDR on One Vanderbilt

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SL Green Realty Corp. (SLG - Free Report) , the New York-based real estate investment trust (“REIT”) has reached an agreement with Midtown TDR Ventures, settling the litigation against SL Green related to the construction of a grand tower just west of New York’s Grand Central Terminal. The settlement removed all uncertainties surrounding the construction of One Vanderbilt, the 1,401-foot (427-meter) iconic office tower, allowing the construction to continue as proposed. The settlement was reached after Dell Inc., the technology, business solutions and services provider, purchased stake in the terminal’s private ownership.

Notably, last year, Midtown TDR Ventures, charged SL Green and New York City, claiming that it was unlawfully deprived of the air rights connected with the terminal. In fact, the Midtown TDR Ventures’ purchase of the terminal in 2006 also gave it the development rights.
 
This legal settlement has paved the way for One Vanderbilt to construct state-of-the-art Class A office space and to invest $220 million in Grand Central’s transit infrastructure.

SL Green mainly acquires, manages, develops and leases commercial office properties in the New York Metropolitan area, especially midtown Manhattan. On Jul 20, the company reported second-quarter 2016 adjusted funds from operations (“FFO”) of $3.41 per share, which exceeded the Zacks Consensus Estimate of $3.18. In the prior-year quarter, the company reported adjusted FFO of $1.65 per share. A rise in combined same-store NOI aided the better-than-expected results in the quarter.

SL Green currently has a Zacks Rank #3 (Hold). Investors interested in the REIT sector can consider stocks like Apple Hospitality REIT, Inc. (APLE - Free Report) , Communications Sales & Leasing, Inc. and CoreSite Realty Corporation (COR - Free Report) . Each of these stocks carries a Zacks Rank #2 (Buy).

Note: All EPS numbers presented in this write-up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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