LONDON, UK / ACCESSWIRE / July 23, 2018 /
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Earnings Highlights and Summary
For the quarter ended June 30, 2018, SL Green recorded revenues of $301.1 million compared to $398.2 million in Q2 2017. The Company's rental revenues totaled $211.4 million in the reported quarter, which were lower than analysts' estimates of $215.4 million.
During Q2 2018, SL Green reported an operating income of $301.1 million compared to $237.2 million in Q2 2017.
SL Green reported a net income attributable to common stockholders of $103.6 million, or $1.19 per share, in Q2 2018 compared to $8.2 million, or $0.08 per share, in Q2 2017. The Company's net income attributable to common stockholders for the reported quarter included $57.2 million, or $0.62 per share, of net gains recognized from the sale of real estate.
SL Green reported funds from operations (FFO) of $155.6 million, or $1.69 per share, compared to $186.8 million, or $1.78 per share, in Q2 2017. For Q2 2017, the Company's FFO included $9.4 million, or $0.09 per share, of previously unrecognized income on the Company's preferred equity investment in 885 Third Avenue; and $10.3 million, or $0.10 per share, of net fees related to the closing of the One Vanderbilt joint venture. SL Green's earnings surpassed Wall Street's estimates of $1.68 per share.
Operating and Leasing Activity
SL Green's same-store cash net operating income (NOI) increased by 8.0% on a y-o-y basis. For the reported quarter, the Company's consolidated property same-store cash NOI increased 4.0% to $128.0 million, while its unconsolidated joint venture property same-store cash NOI increased 17.8% to $58.7 million.
During Q2 2018, SL Green signed 58 office leases in its Manhattan portfolio totaling 565,914 square feet. The Company stated that forty-two leases comprising 322,937 square feet, representing office leases on space that had been occupied within the prior twelve months, are considered replacement leases on which mark-to-market is calculated. Those replacement leases had average starting rents of $66.90 per rentable square foot, representing a 5.2% increase over the previously fully escalated rents on the same office spaces.
The average lease term on the Manhattan office leases signed was 8.4 years in Q2 2018; and average tenant concessions were 3.2 months of free rent with a tenant improvement allowance of $64.63 per rentable square foot. SL Green's occupancy in the Manhattan same-store portfolio was 95.9% as of June 30, 2018, inclusive of 557,637 square feet of leases signed but not yet commenced, compared to 95.5% at March 31, 2018, and 94.7% at June 30, 2017.
During Q2 2018, SL Green signed 13 office leases in its Suburban portfolio totaling 45,224 square feet. The Company noted that 10 leases comprising 35,832 square feet, representing office leases on space that had been occupied within the prior twelve months, were considered replacement leases on which mark-to-market is calculated. Those replacement leases had average starting rents of $38.13 per rentable square foot, representing a 4.9% decrease over the previously fully escalated rents on the same office spaces.
The average lease term on the Suburban office leases signed was 6.0 years in Q2 2018; and average tenant concessions were 5.5 months of free rent with a tenant improvement allowance of $10.95 per rentable square foot. As of June 30, 2018, SL Green's occupancy in Suburban same-store portfolio was 87.2%, inclusive of 5,732 square feet of leases signed but not yet commenced, compared to 87.6% at March 31, 2018.
During Q2 2018, SL Green announced that its Board of Directors had authorized a $500 million increase to the size of its share repurchase program, bringing the program total to $2.0 billion.
The carrying value of the Company's debt and preferred equity investment portfolio increased to $2.36 billion at June 30, 2018, including $2.17 billion of investments at a weighted average current yield of 8.8%, and investments aggregating $0.19 billion at a weighted average current yield of 10.6%. During Q2 2018, SL Green originated or acquired new debt and preferred equity investments totaling $541.0 million, all of which was retained and $477.9 million of which was funded.
Stock Performance Snapshot
July 20, 2018 - At Friday's closing bell, SL Green Realty's stock declined 2.31%, ending the trading session at $99.31.
Volume traded for the day: 944.13 thousand shares, which was above the 3-month average volume of 928.22 thousand shares.
Stock performance in the previous three-month period – up 3.45%; and past six-month period – up 5.75%
After last Friday's close, SL Green Realty's market cap was at $8.90 billion.
Price to Earnings (P/E) ratio was at 33.80.
The stock has a dividend yield of 3.27%.
The stock is part of the Financial sector, categorized under the REIT - Retail industry. This sector was up 0.4% at the end of the session.
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