SL Green launches $400 million stock offering

NEW YORK - SL Green Realty Corp. (NYSE: NYSE:SLG), Manhattan's largest office landlord, has initiated a public offering of $400 million of its common stock, the company announced today. The real estate investment trust also plans to offer underwriters a 30-day option to purchase up to an additional $60 million of shares.

The proceeds from the stock offering are earmarked for general corporate purposes, which may include investment opportunities and repayment of some of the company's outstanding debt. Wells Fargo (NYSE:WFC) Securities, J.P. Morgan, TD Securities, BMO Capital Markets, and Deutsche Bank (ETR:DBKGn) Securities are the joint bookrunning managers for the transaction.

This offering is part of an effective shelf registration statement filed with the Securities and Exchange Commission on November 21, 2024. Prospective investors can access the prospectus for free via the SEC's website or obtain copies from the joint bookrunners through specified contact methods.

SL Green's portfolio as of September 30, 2024, includes interests in 55 buildings, totaling 31.8 million square feet across Manhattan. This includes 28.1 million square feet of owned Manhattan buildings and 2.8 million square feet in debt and preferred equity investments.

The company's press release contains forward-looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from those projected. These statements are based on management's current expectations and assumptions about future real estate industry trends and the New York metropolitan area market conditions.

Investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. SL Green does not undertake any obligation to update these statements in light of new information or future events. This announcement is based on a press release statement and does not serve as an offer to sell or a solicitation of an offer to buy shares.

In other recent news, SL Green Realty has been the focus of several analysts. Barclays (LON:BARC) raised its price target for the company from $66.00 to $78.00, citing stronger leasing activity. The company signed leases for 2.8 million square feet this year, surpassing its 2024 target of 2 million square feet. Truist Securities also increased its price target for SL Green Realty from $55.00 to $72.00, noting robust leasing activity in Manhattan.

BMO Capital Markets, Piper Sandler, and Compass Point also updated their stance on the company. BMO raised its price target from $72.00 to $87.00, while Piper Sandler raised its target from $75.00 to $90.00. Compass Point maintained a neutral rating but increased the price target from $60.00 to $65.00.

Despite the positive leasing activity, SL Green Realty's funds from operations (FFO) per share guidance for 2024 remains unchanged at $7.45 to $7.75. The company also reported a third-quarter headline FFO of $1.13 per share, falling short of consensus estimates, while Core FFO surpassed expectations at $1.55 per share.

SL Green Realty is planning to launch a debt fund in the fourth quarter of 2024, after investing nearly $110 million in the debt securities business. The company is also proceeding with the sale of a joint venture stake in the prestigious One Vanderbilt development, expected to close in the fourth quarter of 2024. These are the recent developments in the company's ongoing operations.

InvestingPro Insights

SL Green Realty Corp.'s recent stock offering announcement comes at a time when the company's financial metrics paint an intriguing picture. According to InvestingPro data, SLG's market capitalization stands at $5.23 billion, reflecting its significant presence in the Manhattan real estate market.

Despite the challenging environment for office real estate, SLG has shown resilience. An InvestingPro Tip highlights that the company has maintained dividend payments for 28 consecutive years, demonstrating a commitment to shareholder returns even in turbulent times. This could be particularly appealing to investors looking for income stability in the current market.

The stock's performance has been notably strong, with InvestingPro data showing a remarkable 147.41% price total return over the past year. This aligns with another InvestingPro Tip indicating a high return over the last year, which may have contributed to the company's decision to capitalize on its stock's momentum through this offering.

However, it's important to note that analysts anticipate a sales decline in the current year, according to an InvestingPro Tip. This could explain the company's move to raise capital, possibly to strengthen its financial position or pursue strategic investments in a challenging market.

For investors seeking a more comprehensive analysis, InvestingPro offers additional tips and insights. There are 11 more InvestingPro Tips available for SLG, providing a deeper understanding of the company's financial health and market position.

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