Markets
SLG

SL Green (SLG) Signs Lease Extension, Ups Credit Facility

An image of a stock chart on a display
Credit: Shutterstock photo

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 REALTY Price | SL GREEN REALTY Quote

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 .

Also, investors can consider other better-ranked stocks like DuPont Fabros Technology, Inc. DFT and HCP Inc. HCP that carry a Zacks Rank #2 (Buy).

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

HCP INC (HCP): Free Stock Analysis Report

SL GREEN REALTY (SLG): Free Stock Analysis Report

DUPONT FABROS (DFT): Free Stock Analysis Report

INFRAREIT INC (HIFR): Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research

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


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

In This Story

SLG HCP

Other Topics

Stocks