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SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2024 funds from operations (FFO) per share of $2.05, which outpaced the Zacks Consensus Estimate of $1.62. The company had reported an FFO of $1.43 per share a year ago.
Results reflect decent leasing activity in its Manhattan portfolio. The company reported gains of 69 cents per share on discounted debt extinguishments at 280 Park Avenue and 719 Seventh Avenue and 2 cents per share of positive non-cash fair value adjustments on mark-to-market derivatives. SL Green also raised its guidance for 2024 FFO per share.
Net rental revenues of $135.6 million surpassed the Zacks Consensus Estimate of $131.2 million. However, the figure slipped 18.2% from the prior-year quarter.
Quarter in Detail
During the second quarter, same-store cash net operating income (NOI), including the company's share of same-store cash NOI from unconsolidated joint ventures, decreased by 1.3% year over year to $151.7 million, excluding lease termination income.
For its Manhattan portfolio, SL Green signed 38 office leases encompassing 420,513 square feet of space in the reported quarter. The mark-to-market on signed Manhattan office leases increased 15.5% from the previous fully escalated rents on the same spaces in the quarter.
The average lease term for the Manhattan office leases signed was 8.8 years, while average tenant concessions were seven months of free rent with a tenant improvement allowance of $77.26 per rentable square foot. This excludes the leases signed at One Vanderbilt and One Madison Avenue.
As of Jun 30, 2024, Manhattan’s same-store office occupancy, inclusive of 436,291 square feet of leases signed but not yet commenced, was 89.6%, up from 89.2% at the end of the prior quarter. However, it declined from 89.8% reported at the end of the year-ago quarter.
As of the same date, the net carrying value of the company’s debt and preferred equity portfolio was $290.5 million, which declined 17.5% from the last quarter.
SL Green's interest expenses (net of interest income) fell 11.8% from the year-ago quarter to $35.8 million.
Liquidity
SL Green exited the second quarter with cash and cash equivalents of $199.5 million, up from $196 million recorded as of Mar 31, 2024.
2024 Guidance Raised
SL Green has increased its 2024 FFO per share outlook and now expects it in the range of $7.45-$7.75 compared with $7.35-$7.65 guided earlier. This marks a 10 cents per share increase at the midpoint and reflects the superior performance of the real estate portfolio and SUMMIT One Vanderbilt, along with additional fee generation. The Zacks Consensus Estimate for the same is currently pegged at $7.51.
We now look forward to the earnings releases of other REITs like Highwoods Properties (HIW - Free Report) and SBA Communications (SBAC - Free Report) , slated to report on Jul 23 and Jul 29, respectively.
The Zacks Consensus Estimate for Highwoods’ second-quarter 2024 FFO per share is pegged at 90 cents, which implies a 4.3% year-over-year decrease. HIW currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for SBA Communications’ second-quarter 2024 FFO per share stands at $3.28, which indicates a 1.2% rise year over year. SBAC currently has a Zacks Rank #3.
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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SL Green's (SLG) Q2 FFO Beats Estimates, '24 FFO View Raised
SL Green Realty Corp. (SLG - Free Report) reported second-quarter 2024 funds from operations (FFO) per share of $2.05, which outpaced the Zacks Consensus Estimate of $1.62. The company had reported an FFO of $1.43 per share a year ago.
Results reflect decent leasing activity in its Manhattan portfolio. The company reported gains of 69 cents per share on discounted debt extinguishments at 280 Park Avenue and 719 Seventh Avenue and 2 cents per share of positive non-cash fair value adjustments on mark-to-market derivatives. SL Green also raised its guidance for 2024 FFO per share.
Net rental revenues of $135.6 million surpassed the Zacks Consensus Estimate of $131.2 million. However, the figure slipped 18.2% from the prior-year quarter.
Quarter in Detail
During the second quarter, same-store cash net operating income (NOI), including the company's share of same-store cash NOI from unconsolidated joint ventures, decreased by 1.3% year over year to $151.7 million, excluding lease termination income.
For its Manhattan portfolio, SL Green signed 38 office leases encompassing 420,513 square feet of space in the reported quarter. The mark-to-market on signed Manhattan office leases increased 15.5% from the previous fully escalated rents on the same spaces in the quarter.
The average lease term for the Manhattan office leases signed was 8.8 years, while average tenant concessions were seven months of free rent with a tenant improvement allowance of $77.26 per rentable square foot. This excludes the leases signed at One Vanderbilt and One Madison Avenue.
As of Jun 30, 2024, Manhattan’s same-store office occupancy, inclusive of 436,291 square feet of leases signed but not yet commenced, was 89.6%, up from 89.2% at the end of the prior quarter. However, it declined from 89.8% reported at the end of the year-ago quarter.
As of the same date, the net carrying value of the company’s debt and preferred equity portfolio was $290.5 million, which declined 17.5% from the last quarter.
SL Green's interest expenses (net of interest income) fell 11.8% from the year-ago quarter to $35.8 million.
Liquidity
SL Green exited the second quarter with cash and cash equivalents of $199.5 million, up from $196 million recorded as of Mar 31, 2024.
2024 Guidance Raised
SL Green has increased its 2024 FFO per share outlook and now expects it in the range of $7.45-$7.75 compared with $7.35-$7.65 guided earlier. This marks a 10 cents per share increase at the midpoint and reflects the superior performance of the real estate portfolio and SUMMIT One Vanderbilt, along with additional fee generation. The Zacks Consensus Estimate for the same is currently pegged at $7.51.
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 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 Highwoods Properties (HIW - Free Report) and SBA Communications (SBAC - Free Report) , slated to report on Jul 23 and Jul 29, respectively.
The Zacks Consensus Estimate for Highwoods’ second-quarter 2024 FFO per share is pegged at 90 cents, which implies a 4.3% year-over-year decrease. HIW currently carries a Zacks Rank #3.
The Zacks Consensus Estimate for SBA Communications’ second-quarter 2024 FFO per share stands at $3.28, which indicates a 1.2% rise year over year. SBAC currently has a Zacks Rank #3.
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.