A huge New York landlord has seen its share price plunge. It’s turning that into a big buyback opportunity — and selling a $1.1 billion Amazon-anchored building to fund it.

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SL Green is testing New York’s moribund market for commercial real-estate by offering 410 Tenth Avenue for sale for $1.1 billion.
The building is anchored by Amazon, a high-credit tenant that could make the property more attractive to investors wary of an uncertain office market. 
SL Green has busily sought to raise capital and buy back its shares, which have plunged amid the coronavirus pandemic.

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SL Green is testing the shaky market for major commercial real-estate sales in an aggressive push by the large New York City landlord to continue to raise cash as its share price has been pummeled by the coronavirus crisis.

The $3.6 billion owner, which like other REITs and public real-estate companies has seen its market cap plunge amid the pandemic, is offering the Hudson Yards office property 410 Tenth Avenue to potential buyers for around $1.1 billion, two people with direct knowledge of the sale told Business Insider.

Separately, SL Green has hired Cushman & Wakefield to market and sell a roughly $62 million mortgage loan it holds against the Long Island City office tower One Court Square, according to marketing materials viewed by Business Insider.

SL Green did not immediately respond to a request for comment. 

Read More: IBM is on the hunt for a massive Manhattan space, showing that worries about the death of the big-city office may be overblown.

The deals are the latest steps SL Green has taken to raise cash to buy back shares and gird itself financially against the pandemic, which has sapped leasing demand and clouded the future utility of the workplace as companies embrace working from home long term.

In a recent earnings call to discuss its second-quarter results, SL Green executives said it raised a billion dollars and had recommenced buying its stock at what it believes is a discount.

SL Green shares were trading at $46.94 on Thursday, down more than 50% from a 52-week high of $96.39. BMO Capital Markets analyst John Kim said Wall Street’s consensus valuation of the company’s nearly 50 million square foot portfolio of space equates to about $100 per share.

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“They’re going full throttle on this buyback program and capitalizing on the gap between where the real estate assets are valued and where the stock is trading,” Kim said.

Read More: WeWork is embracing big brokerage firms to help it fill space it gobbled up in NYC and Los Angeles. It’s a key pivot for the coworking giant as leasing demand slows.

In its recent earnings, SL Green disclosed it has purchased 6.2 million of its shares in 2020 for nearly $400 million. The company has said it has spent nearly $2.6 billion of a total of $3 billion it has previously stated it will spend repurchasing shares.

The company reported second-quarter earnings of 74 cents per share, a dramatic drop from $1.94 during the same period a year ago.

Selling 410 Tenth Avenue for a 10-figure sum would yield a major profit for SL Green, giving the company’s image and …read more

Source:: Business Insider – Finance

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