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SL Green (SLG) Q3 FFO & Revenues Beat Estimates, Fall Y/Y
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SL Green Realty Corp.SLG reported third-quarter 2016 adjusted funds from operations (“FFO”) of $1.63 per share, exceeding the Zacks Consensus Estimate of $1.51. In the prior-year quarter, the company reported adjusted FFO of $1.65 per share.
Total revenue for the third quarter declined 3.6% year over year to around $416.7 million. However, it surpassed the Zacks Consensus Estimate of $320 million.
Quarter in Detail
For the quarter, combined same-store cash net operating income rose 1.6% year over year to $177.4 million.
In the Manhattan portfolio, SL Green inked 41 office leases for 1,282,518 square feet of space. As of Sep 30, 2016, Manhattan same-store occupancy increased 20 basis points (bps) year over year to 97.5%. Importantly, in the third quarter, the mark-to-market on signed Manhattan office leases was 28.6% higher than the previously fully escalated rents of the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 22 office lease deals for 156,002 square feet of space. Same-store occupancy for the Suburban portfolio was 85.4%, up 110 bps year over year. Moreover, in the third quarter, mark-to-market on signed Suburban office leases was 4.4% higher than the previously fully escalated rents of the same spaces.
SL Green exited the quarter with cash and cash equivalents of $405.9 million, up from $255.4 million at the end of 2015.
Notable Investment Activities
In July, SL Green closed the sale of 121,500-square-foot office property in Greenwich, CT, for $41 million.
In July, the company sold 40% interest in Eleven Madison Avenue to PGIM Real Estate, the real estate investment business of PGIM, Inc., for $2.6 billion.
Finally, in the quarter, the company originated new debt and preferred equity investments of $472.0 million in total, of which $434.5 million was retained.
Our Take
We are encouraged by SL Green’s earnings beat this quarter. The company has been actively pursuing portfolio enhancement initiatives through investment in opportunistic assets, and debt and preferred equities. Yet, stiff competition and interest rate issues remain concerns.
We now look forward to the results of other REITs such as Avalonbay Communities Inc. (AVB - Free Report) , Public Storage (PSA - Free Report) and Simon Property Group Inc. (SPG - Free Report) , which are scheduled to report their earnings next week.
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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SL Green (SLG) Q3 FFO & Revenues Beat Estimates, Fall Y/Y
SL Green Realty Corp. SLG reported third-quarter 2016 adjusted funds from operations (“FFO”) of $1.63 per share, exceeding the Zacks Consensus Estimate of $1.51. In the prior-year quarter, the company reported adjusted FFO of $1.65 per share.
Total revenue for the third quarter declined 3.6% year over year to around $416.7 million. However, it surpassed the Zacks Consensus Estimate of $320 million.
Quarter in Detail
For the quarter, combined same-store cash net operating income rose 1.6% year over year to $177.4 million.
In the Manhattan portfolio, SL Green inked 41 office leases for 1,282,518 square feet of space. As of Sep 30, 2016, Manhattan same-store occupancy increased 20 basis points (bps) year over year to 97.5%. Importantly, in the third quarter, the mark-to-market on signed Manhattan office leases was 28.6% higher than the previously fully escalated rents of the same spaces.
On the other hand, in the Suburban portfolio, SL Green signed 22 office lease deals for 156,002 square feet of space. Same-store occupancy for the Suburban portfolio was 85.4%, up 110 bps year over year. Moreover, in the third quarter, mark-to-market on signed Suburban office leases was 4.4% higher than the previously fully escalated rents of the same spaces.
SL Green exited the quarter with cash and cash equivalents of $405.9 million, up from $255.4 million at the end of 2015.
Notable Investment Activities
In July, SL Green closed the sale of 121,500-square-foot office property in Greenwich, CT, for $41 million.
In July, the company sold 40% interest in Eleven Madison Avenue to PGIM Real Estate, the real estate investment business of PGIM, Inc., for $2.6 billion.
Finally, in the quarter, the company originated new debt and preferred equity investments of $472.0 million in total, of which $434.5 million was retained.
Our Take
We are encouraged by SL Green’s earnings beat this quarter. The company has been actively pursuing portfolio enhancement initiatives through investment in opportunistic assets, and debt and preferred equities. Yet, stiff competition and interest rate issues remain concerns.
SL Green currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SL GREEN REALTY Price, Consensus and EPS Surprise
SL GREEN REALTY Price, Consensus and EPS Surprise | SL GREEN REALTY Quote
We now look forward to the results of other REITs such as Avalonbay Communities Inc. (AVB - Free Report) , Public Storage (PSA - Free Report) and Simon Property Group Inc. (SPG - Free Report) , which are scheduled to report their earnings next week.
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.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>