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SL Green to Enhance Times Square Portfolio

Zacks Equity Research

Consistent with its efforts to enhance its Times Square retail portfolio, SL Green Realty Corp. (SLG) announced a deal to acquire 719 Seventh Avenue for $41.1 million. The move will essentially help in leveraging on the attractive Times Square that is turning out to be a dynamic retail and commercial destination. In the past, the company has already made strategic investments in the submarket.

The deal is expected to close in the second quarter and is currently conditioned upon customary closing norms. The property in consideration is located on the southeast corner of 48th Street and Seventh Avenue.

A building of up to 28,114 square feet as well as the LED signage towers can be accommodated at the site. Eventually, SL Green plans to knock down the building so as to fully gain from the development rights.  

As a matter of fact, SL Green is seeking to tap opportunities in New York City’s premium retail locations with its retail investments complementing its core office and structured finance businesses.

The company already has notable investments in New York City's chief retail corridors and its investments in the recent years comprise the retail space at 650 Fifth Avenue, 121 Greene Street, 115 Spring Street, and 131-137 Spring Street.

We believe that the diversification of investments in retail properties would offer this Zacks Rank #2 (Buy) stock sufficient growth prospects. Investors interested in the REIT industry may consider stocks like The GEO Group, Inc. (GEO), Parkway Properties Inc. (PKY) and Terreno Realty Corp. (TRNO). All these stocks carry a Zacks Rank #1 (Strong Buy).

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