NEW YORK – SL Green Realty (NYSE:SLG) Corp, a leading real estate investment trust (REIT), has completed an underwritten public offering of 5,063,291 shares of common stock, raising approximately $386.3 million in net proceeds. The offering, which closed today, was conducted at a public offering price of $79.00 per share.
The company, which is headquartered at One Vanderbilt Avenue in New York, entered into an underwriting agreement on November 21, 2024, with Wells Fargo (NYSE:WFC) Securities, LLC, J.P. Morgan Securities LLC, TD Securities (USA) LLC, BMO Capital Markets Corp., and Deutsche Bank (ETR:DBKGn) Securities Inc. These underwriters have also been granted a 30-day option to purchase up to an additional 759,493 shares of common stock.
SL Green Realty Corp. plans to use the net proceeds from the offering to contribute to its operating partnership, SL Green Operating Partnership, L.P., in exchange for additional partnership units. These funds are expected to be used for general corporate purposes, which may include investment opportunities and repayment of a portion of the company's outstanding indebtedness.
The shares were offered under the company's existing shelf registration statement. The underwriters and their affiliates have provided various financial advisory and investment banking services to SL Green Realty Corp. in the past and may do so in the future, for which they have received customary fees.
This offering and the related transactions were detailed in a Form 8-K filed with the Securities and Exchange Commission. The issuance of partnership units by SL Green Operating Partnership, L.P. is exempt from registration under Section 4(2) of the Securities Act of 1933, as amended, due to its private nature.
In other recent news, SL Green Realty has been the center of several crucial developments. The company's earnings and revenue have been highlighted by several analysts, including Jefferies, Barclays (LON:BARC), Truist Securities, and BMO Capital Markets. Jefferies has raised SL Green Realty's target to $72, maintaining a hold rating, following the company's transaction involving the sale of an 11% stake in One Vanderbilt Avenue and a potential equity issuance valued at up to $460 million.
Barclays has increased the company's target to $78, emphasizing strong leasing activity, with SL Green Realty signing leases for 2.8 million square feet this year, surpassing its 2024 target of 2 million square feet. Similarly, Truist Securities has revised its price target for the company from $55.00 to $72.00, also noting robust leasing activity. BMO Capital Markets has updated its stance on SL Green Realty shares, increasing its price target on the stock to $87.00 from the previous target of $72.00, maintaining an Outperform rating.
SL Green Realty has also announced a public offering of $400 million of its common stock, with the proceeds intended for general corporate purposes, including potential investment opportunities and repayment of existing debt. The company is also planning to launch a debt fund in the fourth quarter of 2024, after investing nearly $110 million in the debt securities business.
InvestingPro Insights
SL Green Realty Corp's recent public offering aligns with its financial position and market performance, as highlighted by InvestingPro data. The company's market capitalization stands at $5.19 billion, reflecting its significant presence in the Manhattan real estate market. Despite a revenue decline of 2.98% over the last twelve months, SLG has shown resilience with a strong 60.89% price total return over the past six months.
InvestingPro Tips indicate that SLG has maintained dividend payments for 28 consecutive years, demonstrating a commitment to shareholder returns even as it raises capital through this offering. The company's stock price movements have been quite volatile, which is consistent with the recent offering and broader market dynamics in the REIT sector.
Investors should note that while SLG's net income is expected to grow this year, analysts do not anticipate the company will be profitable in the current year. This context provides insight into why the company might be seeking additional capital through the public offering.
For readers interested in a more comprehensive analysis, InvestingPro offers 11 additional tips for SL Green Realty Corp, providing a deeper understanding of the company's financial health and market position.
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