I like SLG. Don't have a position yet. Looking for $10ish to open a long position. Would love to get an open, respectful dialogue in favor of or against doing so if anyone has interest in opining.
SLG is getting killed now because the CEO said this week that he would do what ever it takes to keep tenants. He also said that they could sell any of their properties if they wanted to (didn't say at what cap rate).
Bear in mind, there have been no sizable commerical real estate transactions in New York since Lehman brothers collapsed. Plus, the dividend can now be paid in stock.
The value of SLG's portfolio is a black hole.
Good luck longs!
Right. You keep tenants at whatever rent you can get because if they blow out it will be much more expensive to release the space ( tenant work, free rent, down time). He has no other choice and that means diminished cash flow. Nice move Marc - I guess that's why you the highest paid REIT CEO in 2007..right..????
The first post was to be respectful. Forgiving that, the more important point you miss is that I/we were trying to figure out the direction of the stock, which is why we discussed the merits of the company in terms of financial performance and its portfolio. So, yes, $1 is important especially if it continues to fall. If it goes up, and I miss the boat, then I am in fact a dipshit.
I see no catalyst for it rocketing north in the immediate future, so I don't see a problem waiting for a more palatable entry point. You are free to enter and exit the stock as you see fit.
Good luck, perhaps you'll do better than I have.
My read of the prospectus is that a cash dividend is required.
Cut and paste from Series D prospectus:
Investors will be entitled to receive cumulative cash dividends on the Series D preferred stock at a rate of 7.875% per year of the $25.00 liquidation preference (equivalent to $1.96875 per year per share). Beginning on July 15, 2004, dividends on the Series D preferred stock will be payable quarterly in arrears on the fifteenth day of each July, October, January and April or, if not a business day, the next succeeding business day. Dividends on the Series D preferred stock will be cumulative from the date of original issuance, which is expected to be May 27, 2004. The first dividend, which will be paid on July 15, 2004, will be for less than a full quarter and will reflect dividends accumulated from the date of original issuance through, and excluding, July 15, 2004. Dividends on the Series D preferred stock will accrue whether or not we have earnings, whether or not there are funds legally available for the payment of such dividends and whether or not such dividends are declared.
SLG has given guidance of 2009 earnings of $5 +
per share which makes a p/e of 2 at $10 PPS.
Believe that was based on $60/sq lease rate.
Recent reports show the lease rates have dropped
to $79. The big question remains how far and long will rates drop?
SLG owns the premier most-desirable space in
The 52 week low PPS has been in the $7 range once. This stock has a high beta and moves in
lock-step with the Dow. The PPS broke below
$10 this week on a down market day and could
probably do that again. If you have the patience to wait for that kind of an entry point, you should do well.
I posted this after last qtr CC. Thought it migtht help some of you understand what is really happening in NYC.
So the moral of the story is --- the curretn reduced rents are still higher then what the tenant was previously paying.
First, don't take my word... read it for yourself. However I will help, the data is located on page 7, for 4Q08
Lease and renewals - 1,521,146 sq. ft
New rents avg $56.34 sq. ft.
Renewals went for and average of 16.65% more then they previously rented for!
Avg term - 5.3 yrs
Concessions - 3.7 months free rent and $8.20 for improvements.
Frankly none of this sounds so bad in the current environment. The fact that they re-signed tenants at a rate <<< above their previous rent >>> is a rent increase anyway you look at it, right?
The fact they have an occupancy rate that <<< inched up >>> is a positive, right? Last week (back in Jan) most shorts were claiming the town was evacuating.... guess not.
Look at page 37 of the report... their top tenants current avg rent is $46.87, well below what new leases signed up for this qtr.... so over time I would assume that as the current tenants renewals, this qrt at 16+% will continue, right?
I don't even have a position in their common stk... However all the miss information and nonsense being bantered around... is hysteria! What an opportunity it presented.
Just the facts..
ps. still don't have a position in the common but I do own the pfd.
Thanks for the thoughts. I agree with your view of the company regarding their portfolio of "fortress" properties and the lack of clarity around market fundamentals in terms of rents and vacancy. These guys seem to be pretty astute operators, not to mention the relative lack of unmitigated debt maturities.
If I were smart and had a stronger spine, I would go short here until $10 and that reverse to a long term long position. Guess it comes down to how certain I am $10 is the next stop before heading north.
In my view, this one is definitely a survivor/thriver.