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SL Green (SLG) Sees Solid Leasing Activity Through February

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SL Green Realty Corp. (SLG - Free Report) continues to make solid strides on its leasing front. This office REIT signed 26 leases aggregating 452,433 square feet during the first two months of 2022.

SL Green has been witnessing strong demand for its office properties in New York and recently inked two new leases covering 16,395 square feet at One Vanderbilt Avenue, increasing the leased occupancy at the property to 96.4%.

Notable SL Green leases at other properties include a global information services company’s signing of a new 10-year, 236,026-square-foot headquarters lease encompassing floors 9-14 at 100 Park Avenue. The other one is the UN Women’s signing of a 10-year, 85,522-square-foot renewal lease covering floors 17-20 at 220 East 42nd Street, also referred to as the News Building.

Moreover, two new leases were signed at 885 Third Avenue, also known as the Lipstick Building. Particularly, a 10-year, 13,884-square-foot lease comprising the entire 34th floor was signed by EC Mergers & Acquisitions, an independent, globally active, investment banking firm, while a 7-year, 13,884-square-foot lease encompassing the entire 29th floor was signed by Aurora Health Network, LLC.

Per SL Green’s management, “Leasing momentum has maintained a healthy pace coming off a robust fourth quarter with tenant demand focused on buildings that have been ungraded, amenitized and are located near mass transit.”

With encouraging leases executed over the past few quarters, several new names have been added to SLG’s tenant roster. This, along with the gradual return of the workforce to offices, is likely to drive the company's occupancy and rental revenues over the upcoming years. Moreover, a robust balance sheet position acts as a tailwind.

However, the rising supply of office properties remains a major concern for the company. Further, the dilutive impact on earnings in the near term due to asset sales is a headwind.

Additionally, the estimate revisions trend for 2022 funds from operations (FFO) per share does not indicate a favorable outlook for SL Green as the same has been revised marginally downward in the past month.

Shares of this Zacks Rank #4 (Sell) company have rallied 12.7% over the past six months against the industry's decline of 3%.

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You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Some key picks from the REIT sector include Prologis, Inc. (PLD - Free Report) , Iron Mountain Incorporated (IRM - Free Report) and Public Storage (PSA - Free Report) .

Prologis holds a Zacks Rank of 2 (Buy) at present. Prologis’ 2022 revenues are expected to increase 8.7% year over year.

The Zacks Consensus Estimate for PLD’s 2022 FFO per share has been revised 8.7% upward in the past two months to $5.02.

The Zacks Consensus Estimate for Iron Mountain’s 2022 FFO per share has moved 5.5% north to $3.09 in the past month.

Iron Mountain's 2022 revenues are expected to increase 15.5% year over year. Currently, IRM carries a Zacks Rank of 2.

The Zacks Consensus Estimate for Public Storage’s 2022 FFO per share has moved 0.8% north to $14.98 over the past week.

Currently, Public Storage carries a Zacks Rank of 2. PSA's long-term growth rate is projected at 6.1%.

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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