SL Green Realty Corp. SLG reported fourth-quarter 2024 funds from operations (FFO) per share of $1.45, which missed the Zacks Consensus Estimate of $1.53. The company had reported an FFO of 72 cents per share in the previous year.
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The results reflected lower-than-anticipated revenues despite decent leasing activity in its Manhattan portfolio. Also, higher interest expenses and lower same-store NOI acted as dampeners.
Net rental revenues of $139.6 million marginally missed the Zacks Consensus Estimate of $140 million. The figure improved 5.8% year over year.
For 2024, the company reported an FFO per share of $5.03, up 1.8% from the previous year. The figure missed the Zacks Consensus Estimate of $7.78. Rental revenues of $543 million decreased 10.1% year over year. It also missed the consensus mark of $543.4 million marginally.
SL Green Realty Corporation Price, Consensus and EPS Surprise
SL Green Realty Corporation price-consensus-eps-surprise-chart | SL Green Realty Corporation Quote
SLG’s Q4 in Detail
During the fourth quarter, same-store cash net operating income (NOI), including the company's share of same-store cash NOI from unconsolidated joint ventures, decreased 2.7% year over year to $145.5 million, excluding lease termination income.
For its Manhattan portfolio, SL Green signed 48 office leases encompassing 1.8 million square feet of space in the reported quarter. The mark-to-market on signed Manhattan office leases increased 9% from the previous fully escalated rents on the same spaces in the quarter.
The average lease term for the Manhattan office leases signed was 10.6 years, while the average tenant concessions were 12.5 months of free rent, with a tenant improvement allowance of $116.36 per rentable square foot.
As of Dec. 31, 2024, Manhattan’s same-store office occupancy, inclusive of 946,927 square feet of leases signed but not yet commenced, was 92.5%, up from 90.1% at the end of the prior quarter.
SL Green's interest expenses (net of interest income) increased 39.2% from the year-ago quarter to $38.2 million.
SLG’s Portfolio Activity
In November 2024, SL Green closed the sale of 11% interest in One Vanderbilt Avenue, generating net proceeds of $189.5 million. In December, the company completed the sale of three Giorgio Armani Residences at 760 Madison Avenue, generating net proceeds of $61.5 million.
In December 2024, SL Green closed the acquisition of its partner's 45% interest in 10 East 53rd Street for $7.2 million. In January 2025, SL Green closed the acquisition of 500 Park Avenue for $130 million.
SLG’s Liquidity
SL Green exited the fourth quarter with cash and cash equivalents of $184.3 million, down from $188.2 million recorded as of Sept. 30, 2024.
As of the same date, the net carrying value of the company’s debt and preferred equity portfolio was $303.7 million, which increased 3.3% from the previous quarter.
SLG’s Dividend
On Jan. 21, 2025, the company declared a monthly ordinary dividend of 25.75 cents per share on its common stock. The dividend will be paid out on Feb. 18 to shareholders of record on Jan. 31.
SL Green currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Earnings Releases
We now look forward to the earnings releases of other REITs, such as Alexandria Real Estate Equities ARE and BXP, Inc. BXP, slated to report on Jan. 27 and Jan. 28, respectively.
The Zacks Consensus Estimate for Alexandria’s fourth-quarter 2024 FFO per share is pegged at $2.39, implying a 4.8% year-over-year increase. ARE currently carries a Zacks Rank #3 (Hold).
The Zacks Consensus Estimate for BXP’s fourth-quarter 2024 FFO per share is pegged at $1.79, calling for a 1.7% year-over-year decrease. BXP currently carries a Zacks Rank #3.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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