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SL Green Realty Corp SLG

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SL Green Realty Reports Further Occupancy Declines but Q3 Results are in Line with Expectations

Kevin Brown, CFA Equity Analyst

Analyst Note

| Kevin Brown, CFA |

No-moat-rated SL Green reported decent third-quarter results, with the company reporting funds from operations of $1.78 per share including $0.16 per share of lease termination income compared with $1.75 per share in the third quarter of 2020 which included $0.26 per share of net proceeds derived from a legal settlement. Same-store occupancy sequentially declined in the third quarter 50 basis points to 93.1%, while the Manhattan office re-leasing spread was 1.8% lower for the third quarter compared with the previous fully escalated rents on the same spaces. Nevertheless, SL Green reported a 3.6% increase to same-store cash net operating income excluding lease termination income compared with a year ago. Management believes that the main industries that drive demand for office space in the New York market are all doing quite well and expects occupancy will stabilize and turn into a meaningful positive absorption in 2022. This is in line with our views for the company and as a result, we are maintaining our $82 fair value estimate for SL Green.

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Company Profile

Business Description

SL Green is the largest Manhattan property owner and landlord, with around 46 million square feet of wholly owned and joint venture office space. The company has additional property exposure through its limited portfolio of well-located retail space. It operates as a real estate investment trust.

420 Lexington Avenue
New York, NY, 10170
T +1 212 594-2700
Sector Real Estate
Industry REIT - Office
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Hard Assets
Employees 794