Analyst Note| Yousuf Hafuda |
SL Green reported solid fourth-quarter results while the coronavirus crisis continues unabated, limiting physical office utilization in New York City. The firm reported fourth-quarter funds from operations, or FFO, of $1.56 per share, significantly lower than the $1.75 in FFO during the fourth quarter of 2019. Fourth-quarter FFO was negatively impacted by a one-time $0.11 per share loss on the sale of debt and preferred equity investments. Meanwhile, full-year 2020 FFO came in at $7.11 per share, slightly higher as compared with $7.00 for the full year of 2019. These results are impressive considering the length of the COVID-19 crisis that has rendered most office buildings temporarily useless. With a period of weakness already incorporated into our forecast, we are maintaining our $80 per share fair value estimate for no-moat-rated SL Green.