SL Green extends gains as analysts praise Park Ave JV sale
27/06/2023 16:38
** SL Green Realty Corp's SLG.N shares rising 7.2% to
$30.24 on Tues, adding to big gain in prior session
** SLG surged 19.7% on Mon after office REIT said it sold
about 50% stake in building at 245 Park Avenue to Japan's Mori
Trust Co at $2 bln valuation
** Barclays, which rates SLG "underweight", said in research
note on Tues deal is an "unambiguously positive signal for well
located, high quality office assets like 245 Park"
** BTIG on Tues reiterates "buy", saying transaction is a
significant milestone for SLG as it addresses nearly half the
asset sales planned for 2023, more than covers co's share of
redevelopment costs at 245 Park, and highlights management's
ability to execute on its strategy regardless of market
conditions
** Scotiabank in note issued on Mon said its take on the
deal is "positive" and raised its PT on the stock
** However, Scotiabank, which rates SLG "sector
underperform", warned with likely limited cash infusion for SLG
(an unknown based on limited detail disclosure), it still sees a
"difficult free cash flow situation" for the REIT and continues
to model a 50% dividend cut in Q1 2024
** Avg rating among 16 analysts covering SLG is "hold" with
median PT of $25, per Refinitiv
** SLG is top performer in S&P 1500 Office REITs index
.SPCOMORE , which is up 1.8% on Tues
** Alexandria Real Estate ARE.N up 0.9%, Boston Properties
BXP.N up 1.3% and Vornado Realty VNO.N up 3.3%, providing
biggest boost to the index
(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))