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SL Green's (SLG) Credit Facility Refinancing Aids Flexibility (Revised)

·4 min read

SL Green Realty Corp. SLG recently refinanced its corporate credit facility. With this, SLG extended the maturity date as well as reduced the borrowing cost and the overall size of its unsecured corporate credit facility.

The revolving line of credit component of the facility was lowered by $250 million to $1.25 billion and the maturity date extended from March 2023 to May 2027. The current borrowing cost for the same is lowered to 85 basis points (bps) over adjusted secured overnight financing rate (SOFR).

The 5-year funded term-loan component of the facility diminished by $250 million to $1.25 billion while the current borrowing cost shrank to 95 bps over adjusted SOFR. The maturity date for the same was deferred to May 2027 from March 2023.

However, the facility’s $200-million, 7-year funded term loan component remains unchanged and will mature in November 2024. Its current borrowing cost is 100 bps over adjusted SOFR.

The new facility will enhance the liquidity position of SL Green. Moreover, it is in line with the long-term unsecured borrowing strategy of SLG.

SL Green is poised to bank on the improving office real-estate market in the New York City, backed by its high-quality office properties in key locations. Recently, it signed a 191,207-square-foot expansion lease with Bloomberg at 919 Third Avenue.

In addition, SL Green signed a new 19,522-square-foot lease with Flexpoint Ford and a 6,554-square-foot expansion lease with Stone Point Capital LLC at One Vanderbilt Avenue. With these, One Vanderbilt is now 92.7% leased.

Moreover, SL Green continues to sell non-core assets and redeploy the proceeds to the development pipeline, share buybacks and debt repayment. In line with this, SLG sold a 25 percent interest in One Madison Avenue to an international investor.

SL Green also announced the sale of its ownership interest in the office and garage condominiums at 110 East 42nd Street to Meadow Partners for a gross sale price of $117.1 million. Together with its joint-venture partner Stonehenge, SL Green announced the sale of its leasehold interest in 1080 Amsterdam Avenue for a gross sale price of $42.5 million.

SL Green currently carries a Zacks Rank #3 (Hold). The stock has gained 8% over the past three months, outperforming the industry’s rally of 1.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Stocks to Consider

Some stocks worth considering from the REIT sector are OUTFRONT Media OUT, Cedar Realty Trust CDR and Alpine Income Property Trust Inc. PINE.

The Zacks Consensus Estimate for OUTFRONT Media’s 2021 fund from operations (FFO) per share has been raised 13.8% over the past two months. OUT’s 2021 FFO per share is expected to increase 45.71% from the year-ago reported figure.

OUTFRONT Media flaunts a Zacks Rank of 1 at present. Shares of OUT have rallied 5.9% in the past six months.

The Zacks Consensus Estimate for Cedar Realty’s current-year FFO per share has been raised 2.6% to $2.36 in the past month. This suggests an increase of 16.9% from the year-ago reported figure.

Currently, CDR sports a Zacks Rank of 1. Shares of Cedar Realty have appreciated 46.7% in the past six months.

Alpine Income carries a Zacks Rank #2 (Buy) at present. Over the last four quarters, PINE’s FFO per share surpassed the consensus mark thrice and missed the same once, the average surprise being 2.71%.

The Zacks Consensus Estimate for Alpine Income’s 2021 FFO per share has been revised 2.8% upward in two months month to $1.49. Shares of PINE have inched up 1.3% in the past three months.

Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

(We are reissuing this article to correct a mistake. The original article, issued on December 8, 2021, should no longer be relied upon.)

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SL Green Realty Corporation (SLG) : Free Stock Analysis Report

Cedar Realty Trust, Inc. (CDR) : Free Stock Analysis Report

OUTFRONT Media Inc. (OUT) : Free Stock Analysis Report

Alpine Income Property Trust, Inc. (PINE) : Free Stock Analysis Report

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