We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
SL Green (SLG) Q3 FFO Misses Estimates, Revenues Decline
Read MoreHide Full Article
SL Green Realty Corp. (SLG - Free Report) reported third-quarter 2017 funds from operations (FFO) of $1.49 per share, missing the Zacks Consensus Estimate of $1.57. The figure also came in lower than the year-ago FFO per share of $1.63.
Notably, third-quarter 2016 FFO per share figure included 20 cents per share of net non-recurring income, 39 cents per share of additional income associated with the recapitalization of a debt investment and 19 cents per share of accounting write-offs and lost income related to the space at 1515 Broadway previously leased to Aeropostale.
Rental revenues of $274.8 million in the reported quarter missed the Zacks Consensus Estimate of $280 million. In addition, the figure declined 2.4% on a year-over-year basis. Results also reflect a year-over-year drop in investment income.
Quarter in Detail
For the quarter, same-store cash net operating income (NOI), including the share of same-store cash NOI from unconsolidated joint ventures, inched up 1.4% year over year. Notably, consolidated property same-store cash NOI increased 0.2%.
In the Manhattan portfolio, SL Green signed 56 office leases for 489,160 square feet of space during the quarter. As of Sep 30, 2017, Manhattan same-store occupancy, inclusive of leases signed but not yet commenced, was 95.3%, up 40 basis points (bps) from the end of the prior quarter. Importantly, in the third quarter, the mark-to-market on signed Manhattan office leases was 4% higher over the previous fully-escalated rents on the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 20 office lease deals for 120,034 square feet of space. Same-store occupancy for the Suburban portfolio, inclusive of leases signed but not yet commenced, was 86.8% as of Sep30, 2017, up 130 bps from the end of the prior quarter. Moreover, in the quarter under review, mark-to-market on signed suburban office leases was 3.7% lower than the previously fully-escalated rents on the same spaces.
Liquidity
SL Green exited the quarter with cash and cash equivalents of nearly $241.5 million, down from $279.4 million recorded at the end of 2016.
Investment Activity
During the third quarter, SL Green repurchased 1 million shares of common stock under its previously announced $1.0 billion share repurchase plan. The shares were bought back at an average price of $101.67 per share.
Additionally, the company originated new debt and preferred equity investments aggregating $63.4 million in the quarter, all of which wereretained at a yield of 9.2%.
Our Take
Although SL Green has high-quality office properties and a diverse tenant base, the prevalent office-space efficiency trends have been limitingany robust recovery in the office sector fundamentals. This restricts the company’s ability to attract and retain tenants at relatively higher rents, and hence limits growth in rental revenues.
We now look forward to the earnings releases of other REITs like Equity Residential (EQR - Free Report) , Liberty Property Trust and PS Business Parks, Inc. . All of them have scheduledtheir earnings releases for Oct 25.
Note: All EPS numbers presented in this article 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.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
Image: Bigstock
SL Green (SLG) Q3 FFO Misses Estimates, Revenues Decline
SL Green Realty Corp. (SLG - Free Report) reported third-quarter 2017 funds from operations (FFO) of $1.49 per share, missing the Zacks Consensus Estimate of $1.57. The figure also came in lower than the year-ago FFO per share of $1.63.
Notably, third-quarter 2016 FFO per share figure included 20 cents per share of net non-recurring income, 39 cents per share of additional income associated with the recapitalization of a debt investment and 19 cents per share of accounting write-offs and lost income related to the space at 1515 Broadway previously leased to Aeropostale.
Rental revenues of $274.8 million in the reported quarter missed the Zacks Consensus Estimate of $280 million. In addition, the figure declined 2.4% on a year-over-year basis. Results also reflect a year-over-year drop in investment income.
Quarter in Detail
For the quarter, same-store cash net operating income (NOI), including the share of same-store cash NOI from unconsolidated joint ventures, inched up 1.4% year over year. Notably, consolidated property same-store cash NOI increased 0.2%.
In the Manhattan portfolio, SL Green signed 56 office leases for 489,160 square feet of space during the quarter. As of Sep 30, 2017, Manhattan same-store occupancy, inclusive of leases signed but not yet commenced, was 95.3%, up 40 basis points (bps) from the end of the prior quarter. Importantly, in the third quarter, the mark-to-market on signed Manhattan office leases was 4% higher over the previous fully-escalated rents on the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 20 office lease deals for 120,034 square feet of space. Same-store occupancy for the Suburban portfolio, inclusive of leases signed but not yet commenced, was 86.8% as of Sep30, 2017, up 130 bps from the end of the prior quarter. Moreover, in the quarter under review, mark-to-market on signed suburban office leases was 3.7% lower than the previously fully-escalated rents on the same spaces.
Liquidity
SL Green exited the quarter with cash and cash equivalents of nearly $241.5 million, down from $279.4 million recorded at the end of 2016.
Investment Activity
During the third quarter, SL Green repurchased 1 million shares of common stock under its previously announced $1.0 billion share repurchase plan. The shares were bought back at an average price of $101.67 per share.
Additionally, the company originated new debt and preferred equity investments aggregating $63.4 million in the quarter, all of which wereretained at a yield of 9.2%.
Our Take
Although SL Green has high-quality office properties and a diverse tenant base, the prevalent office-space efficiency trends have been limitingany robust recovery in the office sector fundamentals. This restricts the company’s ability to attract and retain tenants at relatively higher rents, and hence limits growth in rental revenues.
SL Green currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SL Green Realty Corporation Price, Consensus and EPS Surprise
SL Green Realty Corporation Price, Consensus and EPS Surprise | SL Green Realty Corporation Quote
We now look forward to the earnings releases of other REITs like Equity Residential (EQR - Free Report) , Liberty Property Trust and PS Business Parks, Inc. . All of them have scheduledtheir earnings releases for Oct 25.
Note: All EPS numbers presented in this article 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.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +18.8% from 2016 - Q1 2017, our top stock-picking screens have returned +157.0%, +128.0%, +97.8%, +94.7%, and +90.2% respectively.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - Q1 2017, the composite yearly average gain for these strategies has beaten the market more than 11X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>