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SL Green's (SLG) One Vanderbilt Now 89% Leased With 3 Lease Deals

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SL Green Realty Corp. (SLG - Free Report) recently announced signing three leases, aggregating 124,000 square feet of space, at One Vanderbilt Avenue. With these signings, comprising both new and expansion leases, the skyline-defining tower in the center of East Midtown is now 89% leased.

Specifically, a new 97,652-square-foot, 15-year lease covering floors 63-66 has been inked with one tenant. Moreover, a 24,020-square-foot, 20-year lease expansion has been signed by TD Securities. This covers part of the 11th floor and in fact, the move increases TD Securities’ commitment within the building to 142,892 square feet.

Apart from these, a 2,163-square-foot, 7-year lease expansion, encompassing a portion of the 24th floor, has been signed by InTandem Capital Partners LLC and Sagewind Capital LLC jointly. This expands their presence to 12,328 square feet within the building.

With numerous corporate leaders encouraging employees to return to offices, the outlook for urban office properties looks positive. There has been, in fact, an acceleration in leasing activity in recent months.

Amid the favorable developments in the office leasing market, the company remains on track to surpass its recently-revised year-end leasing target of 90%.

Notably, the 1.7-million-sq-ft skyscraper offers an unparalleled combination of amenities, innovative office design, state-of-the-art technology, best-in-class sustainability and a healthy work environment, together with a direct connection to Grand Central Terminal. This has likely enabled the company to enjoy exponential tenant demand and stellar leasing velocity at the property.

However, amid the pandemic, SL Green is facing downward pressure on rental rates, and offering higher tenant concessions and free-rent period extensions to repopulate its office buildings.

Moreover, the company has been resorting to non-core asset sales to enhance its liquidity to fund development projects and share buybacks. Notably, it aims dispositions of more than $1 billion for 2021. While dispositions are strategic fits for the long term, these will be dilutive for near-term earnings.

Shares of this Zacks Rank #3 (Hold) company have gained 27.3% over the past six months compared with the industry's growth of 20.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
 

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Stocks to Consider

Industrial Logistics Properties Trust’s (ILPT - Free Report) FFO per share estimate for the current year moved up marginally to $1.88 in the past month. The company currently carries a Zacks Rank of 2 (Buy).

OUTFRONT Media Inc.’s (OUT - Free Report) Zacks Consensus Estimate for 2021 FFO per share has moved nearly 6% north to 89 cents in two months’ time. The company carries a Zacks Rank of 2, currently.

Braemar Hotels & Resorts Inc. (BHR - Free Report) holds a Zacks Rank of 2, at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised 37.5% upward to 44 cents over the past month.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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