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TheStreet Open House

SL Green Realty Corp. Reports First Quarter 2014 FFO Of $1.54 Per Share Before Transaction Costs; And EPS Of $1.53 Per Share

SL Green Realty Corp. (NYSE:SLG):

Financial and Operating Highlights

  • First quarter FFO of $1.54 per share before transaction related costs of $0.02 per share compared to $1.17 per share before transaction related costs of $0.01 per share in the prior year.
  • Raising 2014 FFO guidance range by $0.26 per share, or 4.6 percent at the midpoint, to a range of $5.90 to $5.96 per share, reflecting additional earnings from real estate investment activity and debt and preferred equity originations.
  • First quarter net income attributable to common stockholders of $1.53 per share, inclusive of $1.06 per share of gains recognized on the sale of real estate, compares with $0.21 per share in the prior year.
  • Combined same-store cash NOI increased 1.0 percent for the first quarter compared to the prior year, in-line with expectations. The Company is currently projecting combined same-store cash NOI to increase by 3 to 4 percent for the full year.
  • Signed 75 Manhattan office leases covering 548,062 square feet during the first quarter. The mark-to-market on replacement office leases was 15.1 percent higher in the first quarter than the previously fully escalated rents on the same spaces. Based on the leasing achieved in the first quarter and the outlook for the remainder of the year, the Company is increasing its Manhattan mark-to-market expectations for 2014 to a range of 7 to 10 percent.
  • Executed a new lease for 21,802 square feet with Infor, Inc. at 635 Sixth Avenue, with a starting rent in excess of $100 per square foot for the penthouse floor. The new lease expands Infor’s commitment at 635-641 Sixth Avenue to 114,048 square feet.
  • Signed 33 Suburban office leases covering 159,134 square feet during the first quarter. The mark-to-market on signed Suburban office leases was 0.8 percent higher in the first quarter than the previously fully escalated rents on the same spaces.

Investing Highlights

  • Closed on the sale of the Company’s joint venture interest in 21-25 West 34 th Street for a sales price of $114.9 million and recognized a gain on sale of $20.9 million.
  • Entered into an agreement to acquire the Company’s joint venture partner’s interest in 388-390 Greenwich Street at a valuation for the consolidated investment of $1.585 billion.
  • Closed on the sale of the Company’s joint venture interest in the West Coast Office portfolio for $100.0 million, reflecting a capitalization rate of 5.3 percent, and recognized a gain on sale of $85.5 million.
  • Entered into two separate agreements to acquire prime retail condominiums at 115 Spring Street and 121 Greene Street, located along two of SoHo’s most popular shopping corridors.
  • Entered into a contract to acquire the fee interest at 635 Madison Avenue for $145.0 million. The improvements to the fee interest include a 19-story 176,530 square foot office tower.
  • Announced an agreement to sell the Company’s leasehold interest in 673 First Avenue for $145.0 million, reflecting a capitalization rate based on in-place net operating income of 4.7 percent.
  • Originated and retained debt and preferred equity investments totaling $160.4 million in the first quarter at a weighted average current yield of 9.0 percent.

Financing Highlights

  • Expanded the term loan portion of the Company’s unsecured corporate credit facility by $383.0 million to $783.0 million while reducing the borrowing cost of the facility by 25 basis points and extending the maturity date to June 2019.
  • Closed on a $360.0 million mortgage refinancing of 100 Park Avenue. The new seven-year, floating rate loan replaces the previous $209.4 million mortgage.
  • Closed on a $275.0 million refinancing of 724 Fifth Avenue. The new three-year, floating rate loan replaces the previous $119.8 million loan.

Summary

SL Green Realty Corp. (NYSE:SLG) today reported funds from operations, or FFO, of $150.0 million, or $1.52 per share, after giving consideration to transaction costs of $2.5 million, or $0.02 per share, for the quarter ended March 31, 2014, compared to $109.2 million, or $1.16 per share, after giving consideration to transaction costs of $1.4 million, or $0.01 per share for the same quarter in 2013.

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