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's (SLG) Q4 FFO and Revenues Fall Shy of Estimates
Read MoreHide Full Article
SL Green Realty Corp. (SLG - Free Report) reported fourth-quarter 2022 funds from operations (FFO) per share of $1.46, lagging the Zacks Consensus Estimate of $1.48. The figure fell 3.9% from the year-ago quarter’s $1.52.
The results reflect lower-than-anticipated revenues and a fall in occupancy. However, same-store cash net operating income (NOI) improved year over year.
SLG clocked in net rental revenues of $172.89 million in the fourth quarter, which missed the Zacks Consensus Estimate of $173.06 million. However, on a year-over-year basis, the net rental revenues improved 27.8% from the prior-year quarter’s $135.21 million.
In 2022, SLG’s FFO per share of $6.64 missed the Zacks Consensus Estimate of $6.67. However, the figure compared favorably with the prior year’s $6.63. Net revenues of $588.8 million dipped 2.6% from the prior year’s $604.6 million. The reported figure also missed the Zacks Consensus Estimate of $588.9 million.
Concurrent with the earnings release, SL Green unveiled that it signed leases totaling 343,186 square feet in the early weeks of 2023. The company’s new leases include a 15-year lease with 777 Partners, an alternative investment platform encompassing 18,476 square feet at One Madison Avenue’s entire 27th floor. With these leases, SLG’s leased occupancy is expected to increase to 56.6% approximately 10 months prior to the anticipated project completion date.
Quarter in Detail
During the fourth quarter, the same-store NOI, including SL Green’s share of same-store cash NOI from unconsolidated joint ventures, increased 3.3% year over year to $138.9 million. This excludes the lease termination income.
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 fell 4.7% from the previous fully-escalated rents on the same spaces for the quarter.
The average lease term for the Manhattan office leases signed was eight years, while average tenant concessions were 7.4 months of free rent with a tenant improvement allowance of $59.58 per rentable square foot. This excludes the leases signed at One Vanderbilt Avenue.
As of Dec 31, 2022, Manhattan’s same-store office occupancy, inclusive of 58,143 square feet of leases signed but not yet commenced, was 91.2%, decreasing 90 basis points from the prior quarter’s level.
As of the same date, the carrying value of the company’s debt and preferred equity portfolio was $623.3 million.
Liquidity
SL Green exited fourth-quarter 2022 with cash and cash equivalents of $203.3 million, up from $201.3 million recorded as of Sep 30, 2022.
Investment Activity
In December, SLG completed the earlier announced disposition of 414,317 square feet of office leasehold condominium units at 885 Third Avenue, popularly known as “The Lipstick Building”, to Memorial Sloan Kettering Cancer Center for $300.4 million. Net cash proceeds generated from the transaction were $281 million. Further, SLG retained the remaining 218,796 square feet of the building.
In the same month, the company entered into an agreement to sell the retail condominiums at 121 Greene Street, together with its joint venture partner, for $14 million. The transaction is expected to be completed in first-quarter 2023, subject to customary closing conditions.
Dividends
During the December quarter, SL Green announced two monthly dividends of 31.08 cents per share on its common stock, paid out in November and December. For January, it paid out a dividend of 27.08 cents per share, equating to an annualized dividend of $3.25 per share. This marked a 12.9% cut in SLG’s ordinary dividend.
SL Green currently carries a Zacks Rank #5 (Strong Sell).
We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Equity Residential (EQR - Free Report) , slated to report on Jan 30 and Feb 9, respectively. Equinix (EQIX - Free Report) is scheduled on Feb 15.
The Zacks Consensus Estimate for Alexandria’s fourth-quarter 2022 FFO per share is pegged at $2.13, implying a year-over-year increase of 8.1%. ARE currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Equity Residential’s fourth-quarter 2022 FFO per share stands at 94 cents, indicating a year-over-year increase of 14.6%. EQR currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Equinix’s fourth-quarter 2022 FFO per share is pegged at $6.84, suggesting a year-over-year increase of 9.9%. EQIX currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
SL Green's (SLG) Q4 FFO and Revenues Fall Shy of Estimates
SL Green Realty Corp. (SLG - Free Report) reported fourth-quarter 2022 funds from operations (FFO) per share of $1.46, lagging the Zacks Consensus Estimate of $1.48. The figure fell 3.9% from the year-ago quarter’s $1.52.
The results reflect lower-than-anticipated revenues and a fall in occupancy. However, same-store cash net operating income (NOI) improved year over year.
SLG clocked in net rental revenues of $172.89 million in the fourth quarter, which missed the Zacks Consensus Estimate of $173.06 million. However, on a year-over-year basis, the net rental revenues improved 27.8% from the prior-year quarter’s $135.21 million.
In 2022, SLG’s FFO per share of $6.64 missed the Zacks Consensus Estimate of $6.67. However, the figure compared favorably with the prior year’s $6.63. Net revenues of $588.8 million dipped 2.6% from the prior year’s $604.6 million. The reported figure also missed the Zacks Consensus Estimate of $588.9 million.
Concurrent with the earnings release, SL Green unveiled that it signed leases totaling 343,186 square feet in the early weeks of 2023. The company’s new leases include a 15-year lease with 777 Partners, an alternative investment platform encompassing 18,476 square feet at One Madison Avenue’s entire 27th floor. With these leases, SLG’s leased occupancy is expected to increase to 56.6% approximately 10 months prior to the anticipated project completion date.
Quarter in Detail
During the fourth quarter, the same-store NOI, including SL Green’s share of same-store cash NOI from unconsolidated joint ventures, increased 3.3% year over year to $138.9 million. This excludes the lease termination income.
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 fell 4.7% from the previous fully-escalated rents on the same spaces for the quarter.
The average lease term for the Manhattan office leases signed was eight years, while average tenant concessions were 7.4 months of free rent with a tenant improvement allowance of $59.58 per rentable square foot. This excludes the leases signed at One Vanderbilt Avenue.
As of Dec 31, 2022, Manhattan’s same-store office occupancy, inclusive of 58,143 square feet of leases signed but not yet commenced, was 91.2%, decreasing 90 basis points from the prior quarter’s level.
As of the same date, the carrying value of the company’s debt and preferred equity portfolio was $623.3 million.
Liquidity
SL Green exited fourth-quarter 2022 with cash and cash equivalents of $203.3 million, up from $201.3 million recorded as of Sep 30, 2022.
Investment Activity
In December, SLG completed the earlier announced disposition of 414,317 square feet of office leasehold condominium units at 885 Third Avenue, popularly known as “The Lipstick Building”, to Memorial Sloan Kettering Cancer Center for $300.4 million. Net cash proceeds generated from the transaction were $281 million. Further, SLG retained the remaining 218,796 square feet of the building.
In the same month, the company entered into an agreement to sell the retail condominiums at 121 Greene Street, together with its joint venture partner, for $14 million. The transaction is expected to be completed in first-quarter 2023, subject to customary closing conditions.
Dividends
During the December quarter, SL Green announced two monthly dividends of 31.08 cents per share on its common stock, paid out in November and December. For January, it paid out a dividend of 27.08 cents per share, equating to an annualized dividend of $3.25 per share. This marked a 12.9% cut in SLG’s ordinary dividend.
SL Green currently carries a Zacks Rank #5 (Strong 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-eps-surprise-chart | SL Green Realty Corporation Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs like Alexandria Real Estate Equities, Inc. (ARE - Free Report) and Equity Residential (EQR - Free Report) , slated to report on Jan 30 and Feb 9, respectively. Equinix (EQIX - Free Report) is scheduled on Feb 15.
The Zacks Consensus Estimate for Alexandria’s fourth-quarter 2022 FFO per share is pegged at $2.13, implying a year-over-year increase of 8.1%. ARE currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Equity Residential’s fourth-quarter 2022 FFO per share stands at 94 cents, indicating a year-over-year increase of 14.6%. EQR currently has a Zacks Rank #3.
The Zacks Consensus Estimate for Equinix’s fourth-quarter 2022 FFO per share is pegged at $6.84, suggesting a year-over-year increase of 9.9%. EQIX currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.