SL Green Pre-Leases Space at One Vanderbilt to TD Bank
SL Green Realty Corp. (SLG) inked a long-term lease deal with TD Bank, a subsidiary of The Toronto-Dominion Bank (TD), for around 200,000 square feet of space at its proposed tower – One Vanderbilt – in New York's Midtown commercial district. The transaction will commence in 2020.
Notably, the leased space includes a flagship retail store on the northeast corner of 42nd Street and Madison Avenue. With the deal, TD Bank became the anchor office and retail tenant at the proposed tower of SL Green.
As a matter of fact, upon completion, One Vanderbilt will comprise Class A office space spanning 1.6 million square feet. Moreover, as a part of the construction, SL Green will spend $210 million for the enhancement of the public transit infrastructure. The proposal is currently under the city's formal public review process.
The transaction is a strategic fit for SL Green as it ensures steady rental revenue from the property, upon completion. Moreover, the public transit improvement will ensure better connectivity and boost footfall at One Vanderbilt.
Last month, SL Green reported third-quarter 2014 results with funds from operations (:FFO), including transaction costs, of $1.52 per share, exceeding the Zacks Consensus Estimate of $1.45 by 7 cents and the prior-year quarter figure of $1.30 by 22 cents. The 16.9% year-over-year growth in FFO per share came on the back of significant top-line improvement and strong ongoing portfolio enhancement activity.
SL Green currently carries a Zacks Rank #3 (Hold). Investors interested in the REIT industry may consider stocks like Cousins Properties Inc. (CUZ) and Duke Realty Corp. (DRE). Both stocks carry a Zacks Rank #2 (Buy).
Note: 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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