SL Green to Solidify Retail Presence - Analyst Blog


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Consistent with its efforts to enhance its retail portfolio, SL Green Realty Corp. ( SLG ) announced a lease deal and several other capital market transactions. The expansion move is in line with the company's strategy of boosting the tenant base of industry giants and paving way for rental revenue increment.

Lease Deal

SL Green along with its partner Jeff Sutton penned a new deal with a Europe based top fashion firm for about 2,800 square foot of space at 747 Madison Avenue. With this 15-year lease agreement, the company concluded the repositioning at 747 Madison Avenue and the property now stands fully occupied. 

Other Retail Transactions

This real estate investment trust (REIT) disclosed the handing over of its 33.3% interest in the retail co-op at 747 Madison for asset value worth $160 million. With the closure of this transaction, SL Green plans to craft a preferred equity investment of $30 million in the asset.

Moreover, the company declared the offloading of its 50% interest in 21-29 West 34 th Street based retail properties, which houses renowned companies such as Apple Inc. ( AAPL ), Geox and Aldo as tenants. This entire property was valued at $195 million. As a matter of fact, SL Green will still have its 50% stake of 152,000 square feet of development rights.

Furthermore, in concurrence with Jeff Sutton's joint venture investment at 530-536 Broadway, SL Green is going for a participating structured investment worth $100 million. 530-536 Broadway, which has a retail and office property, is positioned in the affluent submarket of SoHo. The properties are anchored by several well-known tenants such as Club Monaco of Ralph Lauren Corp. ( RL ), Vince Camuto, AT&T, Inc. ( T ) and Eastern Mountain Sports.

In Conclusion

SL Green is seeking to tab opportunities in New York City's premium retail locations with its retail investments complementing its core office and structured finance businesses. In addition, the company's effort to solidify its partnership with Jeff Sutton in the renowned New York City retail corridor is commendable and provides significant growth prospects.

In relation to this, last month the company acquired interest in 650 Fifth Avenue through a joint venture with its partner Jeff Sutton. Moreover, in the same month, the duo penned a deal to buy out the lease of retailer Juicy Couture at 650 Fifth Avenue. 

We believe that the diversification of investments in retail properties would offer this Zacks Rank #2 (Buy) stock sufficient growth prospects.

APPLE INC (AAPL): Free Stock Analysis Report

RALPH LAUREN CP (RL): Free Stock Analysis Report

SL GREEN REALTY (SLG): Free Stock Analysis Report

AT&T INC (T): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
More Headlines for: AAPL , RL , SLG , T

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