SL Green Realty Corp.SLG , together with partner Ivanhoé Cambridge, announced signing of a 603,650-square-foot lease extension with Penguin Random House at 1745 Broadway. The lease now runs for additional 15 years through Jun 2033 and reflects the robust demand for space at the company's properties.
In fact, this is an early renewal of the international publisher's lease and covers floors 2-19 and 21-23 at 1745 Broadway. The initial lease was slated to expire in 2018.
Notably, the Manhattan market fundamentals are becoming strong, with leasing velocity getting solid. Demand for spaces has been arising from tenants belonging to sectors like legal, TAMI, financial service and healthcare sectors. This is encouraging for SL Green which is focused mainly on acquiring, managing and maximizing value of the Manhattan commercial properties. The company held interests in 119 Manhattan buildings totaling 44.7 million square feet as of Jun 30, 2016.
In a separate press release, SL Green also declared an expansion of its unsecured corporate credit facility by $250 million, to $2.783 billion. This came with the addition of two new banking relationships, Bank of Montreal and Mizuho Bank, Ltd. Particularly, the term loan part of the facility, maturing in Jun 2019, has been raised to $1.183 billion from $933 million. The other part - the revolving line of the credit portion of the facility - maturing in Mar 2020, stays at $1.6 billion.
The move, which boosts the company's financial flexibility for debt reduction and future investment activities, marked the third expansion of its credit facility in less than two years and reflects lenders' confidence in the company.
SL Green's substantial high-quality office properties, diverse tenant base, opportunistic investments and decent balance sheet augur well for growth. Consistent demand for the company's properties and credit expansion on efficient terms are encouraging as well. However, intense competition from developers, owners and operators and any rise in interest rate pose concerns for SL Green.
SL GREEN REALTY Price
SL Green currently has a Zacks Rank #3 (Hold). A better-ranked stock in this industry is InfraREIT, Inc. HIFR , sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here .
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