SL Green's (SLG) Unit Reckson Signs Leases at The Summit
SL Green Realty Corp.’s SLG division – Reckson – declared signing of two deals aggregating 81,441 square feet at The Summit, a class A office complex in Vahalla, New York. This reflects a decent demand for the office property, which boasts four Fortune 500 companies as tenants at present and is 93% leased.
Particularly, an 11-year lease has been signed with Ascensia Diabetes Care US Inc., which is a global diabetes health management company. This lease involved 65,000-square-foot of space. Ascensia is slated to move into the building in fourth-quarter 2017 and enjoy occupancy on the top two floors of 100 Summit.
The other lease involved 16,442-square-foot of space and the deal has been signed with Exelon Generation Company, an American Fortune 100 energy company. Exelon will occupy space on the first floor of 500 Summit and is expected to move-in by Jul 2017.
Notably, Reckson, which is a division of SL Green Realty Corp., is the largest owner of Class A properties in Connecticut, Westchester County, and Long Island, New York, and New Jersey. The tri-state portfolio comprises 27 properties, encompassing more than 4.7 million square feet of commercial and retail space in urban and suburban sites. SL Green had acquired Reckson Associates Realty Corp. in 2007.
SL Green’s substantial high-quality office properties in key locations, diverse tenant base, opportunistic investments and modest balance sheet are key growth drivers. However, intense competition from developers, owners and operators and any rise in interest rate remain risks.
Last month, SL Green reported in-line first-quarter 2017 funds from operations (“FFO”) per share of $1.57. However, the figure came below the prior-year quarter’s tally. Results indicate a fall in net rental revenues.
SL Green currently carries a Zacks Rank #3 (Hold).
Over the past one month, shares of SL Green underperformed the Zacks categorized REIT and Equity Trust – Other industry. During this time frame, shares of SL Green descended 2.4%, whereas the industry gained 0.6%.
Stocks to Consider
Investors can also consider better-ranked stocks in the REIT space like Equity LifeStyle Properties, Inc. ELS, Prologis, Inc. PLD and PS Business Parks, Inc. PSB. All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Equity LifeStyle Properties currently has a long-term growth rate of 4.7%.
Prologis’ estimates for 2017 FFO per share moved north nearly 3.8% to $2.76, over the past 60 days.
PS Business Parks’ estimates for 2017 FFO per share increased 3.7% to $6.09, over the past 30 days.
Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
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