SL Green slumps after Wall Street downgrades, drags office REIT peers
06/12/2022 17:27
(Updates, recasts throughout)
** Shares of SL Green Realty Corp SLG.N falling for 4th
straight session after analysts downgrade Manhattan-based office
REIT following its investor conference
** SLG shares on Tues fall as much 6.4% to $35.62, lowest
since May 2020
** On Mon, stock dropped ~6% after co cut its annual
dividend by 13% to $3.25/sh and 2023 FFO/sh forecast of
$5.30-$5.60 was well below Street consensus of $6.26
** Scotiabank downgraded SLG to "sector underperform" from
"sector perform", citing increasingly stressed balance sheet
with risks for more future dividend cuts
** NYC operating outlook more challenged into year-end,
Scotiabank analyst Nicholas Yulico said, adding occupancy
guidance for 2023 may prove optimistic
** BMO downgraded SLG to "market perform" from "outperform"
** Dividend cut "prudent move", according to BMO analyst
John Kim, but he said SLG needs to execute on leasing and
dispositions in an uncertain demand environment
** Baird analyst David Rodgers trimmed his PT, noting SLG's
update took office REIT shares lower on Mon, saying it "should
keep the group from rallying near term"
** Office REIT stocks continue to lose ground on Tues:
Vornado Realty Trust VNO.N 3%, Boston Properties Inc BXP.N
3%, Office Properties Income Trust OPI.O 1%, Paramount Group
Inc PGRE.N 2%, Alexandria Real Estate ARE.N 2%
** BTIG analyst Thomas Catherwood points out that SLG stated
WeWork WE.N expected to terminate its 184k square-foot lease
at 2 Herald Square, and space will likely be converted to either
residential, extended stay, or dormitory use
** Shares of workspace provider WE down ~6% on Tues, adding
to over 12% drop on Mon
** Including move on Tues, SLG shares off ~52% YTD vs S&P
1500 Office REIT index's .SPCOMREIO 40% decline
(Lance Tupper is a Reuters market analyst. The views expressed
are his own)
((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-332-219-1430))