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SL Green (SLG) Q2 FFO Surpasses Estimates, Revenues Miss
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SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 funds from operations (FFO) per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
The reported figure includes 4 cents per share of loss related to the sale of certain debt and preferred equity ("DPE") investments, and 4 cents per share of reserves against the retained DPE portfolio.
Net rental revenues of $174.14 million in the second quarter missed the Zacks Consensus Estimate of $184.26 million. The revenue figure also declined around 20% from the prior-year number of $216.48 million.
As of Jul 22, the company’s gross tenant billings collection for the April-June period was 90.7%. This consisted of 95.7% for office and 69.6% for retail. As of Jul 21, the company’s gross tenant billing receipts for July were 87%, consisting of 91.7% for office and 61.5% for retail. It expects additional collections in the upcoming period.
Quarter in Detail
During the June-end quarter, same-store cash net operating income (NOI), including SL Green’s share of same-store cash NOI from unconsolidated joint ventures, improved 2.1% year over year. This excludes lease termination and free rent income given to Viacom for space at 1515 Broadway.
In the Manhattan portfolio, SL Green signed 35 office leases for 280,002 square feet during the reported period. The average lease term on these leases was 4.3 years, while average tenant concessions were 4.5 months of free rent, along with a tenant improvement allowance of $8.42 per rentable square foot.
The mark-to-market on signed Manhattan office replacement leases was 0.8% lower than the previous fully-escalated rents in the same spaces during the second quarter. As of Jun 30, 2020, Manhattan’s same-store occupancy, inclusive of leases signed but not yet commenced, was 95.2%, down 40 basis points from the prior quarter.
The carrying value of its debt and preferred equity investment portfolio decreased to $1.25 billion.
Liquidity
SL Green exited second-quarter 2020 with cash and cash equivalents of $1.01 billion, up from $166.1 million recorded at the end of 2019.
Investment Activity
Under the $3-billion share-repurchase program, the company has repurchased 6.2 million shares year to date, at an average price of $64.28 per share.
In May, it sold a 49.5% stake in One Madison Avenue to Hines Interest LP and the National Pension Service of Korea ("NPS"). Particularly, NPS and Hines’ committed total equity to the project aggregates no less than $492.2 million. The $2.3-billion project will be developed by SL Green and Hines and will span 1.4 million rentable square feet upon the completion.
We now look forward to the earnings releases of other REITs like SBA Communications Corporation (SBAC - Free Report) , Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Boston Properties, Inc. (BXP - Free Report) . While SBA Communications is slated to report second-quarter earnings on Aug 3, Alexandria Real Estate Equities and Boston Properties have earnings release scheduled for Jul 27 and 28, respectively.
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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Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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SL Green (SLG) Q2 FFO Surpasses Estimates, Revenues Miss
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2020 funds from operations (FFO) per share of $1.70, surpassing the Zacks Consensus Estimate of $1.55. The figure, however, compares unfavorably with the year-ago quarter’s $1.82.
The reported figure includes 4 cents per share of loss related to the sale of certain debt and preferred equity ("DPE") investments, and 4 cents per share of reserves against the retained DPE portfolio.
Net rental revenues of $174.14 million in the second quarter missed the Zacks Consensus Estimate of $184.26 million. The revenue figure also declined around 20% from the prior-year number of $216.48 million.
As of Jul 22, the company’s gross tenant billings collection for the April-June period was 90.7%. This consisted of 95.7% for office and 69.6% for retail. As of Jul 21, the company’s gross tenant billing receipts for July were 87%, consisting of 91.7% for office and 61.5% for retail. It expects additional collections in the upcoming period.
Quarter in Detail
During the June-end quarter, same-store cash net operating income (NOI), including SL Green’s share of same-store cash NOI from unconsolidated joint ventures, improved 2.1% year over year. This excludes lease termination and free rent income given to Viacom for space at 1515 Broadway.
In the Manhattan portfolio, SL Green signed 35 office leases for 280,002 square feet during the reported period. The average lease term on these leases was 4.3 years, while average tenant concessions were 4.5 months of free rent, along with a tenant improvement allowance of $8.42 per rentable square foot.
The mark-to-market on signed Manhattan office replacement leases was 0.8% lower than the previous fully-escalated rents in the same spaces during the second quarter. As of Jun 30, 2020, Manhattan’s same-store occupancy, inclusive of leases signed but not yet commenced, was 95.2%, down 40 basis points from the prior quarter.
The carrying value of its debt and preferred equity investment portfolio decreased to $1.25 billion.
Liquidity
SL Green exited second-quarter 2020 with cash and cash equivalents of $1.01 billion, up from $166.1 million recorded at the end of 2019.
Investment Activity
Under the $3-billion share-repurchase program, the company has repurchased 6.2 million shares year to date, at an average price of $64.28 per share.
In May, it sold a 49.5% stake in One Madison Avenue to Hines Interest LP and the National Pension Service of Korea ("NPS"). Particularly, NPS and Hines’ committed total equity to the project aggregates no less than $492.2 million. The $2.3-billion project will be developed by SL Green and Hines and will span 1.4 million rentable square feet upon the completion.
SL Green currently carries a Zacks Rank of 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SL Green Realty Corporation Price and EPS Surprise
SL Green Realty Corporation price-eps-surprise | SL Green Realty Corporation Quote
We now look forward to the earnings releases of other REITs like SBA Communications Corporation (SBAC - Free Report) , Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Boston Properties, Inc. (BXP - Free Report) . While SBA Communications is slated to report second-quarter earnings on Aug 3, Alexandria Real Estate Equities and Boston Properties have earnings release scheduled for Jul 27 and 28, respectively.
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.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>