SL Green Q2 FFO Declines Yet Tops Estimate

(RTTNews) - SL Green Realty Corp. (SLG: News ), New York's largest office landlord, said Monday after the markets closed that its second quarter funds from operations declined from last year, hurt by higher depreciation and amortization expenses and transaction-related costs.

The company reported funds from operations for the second quarter of $81.5 million or $1.02 per share, compared to $83.5 million or $1.20 per share for the year-ago quarter.

Excluding transaction related costs, FFO for the latest quarter was $1.08 per share.

On average, 18 analysts polled by Thomson Reuters expected the company to report FFO of $1.01 per share for the second quarter.

Net income attributable to common stockholders for the second quarter was $137.0 million or $1.75 per share, compared to $12.5 million or $0.18 per share in the prior year quarter.

The latest quarter results include $1.59 per share relating to a gain on the sale of the company's interest in 1221 Avenue of the Americas.

Total revenue for the second quarter increased 3% to $259.72 million from $252.01 million in the same quarter last year. Net rental revenue for the quarter was $199.72 million, compared to $191.92 million a year ago. Seven analysts had a consensus revenue estimate of $228.59 million for the second quarter.

Same-store GAAP net operating income on a combined basis increased by 0.1% for the second quarter as compared to the year-ago quarter.

The company ended the quarter with Manhattan occupancy rate of 94.4%, excluding 100 Church Street, on which the company foreclosed in January. Including 100 Church Street, occupancy for the Manhattan portfolio was 91.9% at the end of the second quarter, compared to 96.2% a year earlier.

During the quarter, the company signed or commenced 56 leases in the Manhattan portfolio totaling 513,307 square feet, of which 49 leases and 461,492 square feet represented office leases.

Average starting Manhattan office rents of $40.09 per rentable square foot on the 461,492 square feet of leases signed or commenced during the second quarter represented a 4.4% decrease over the previously fully escalated rents on the same office spaces.

During the second quarter, SL Green agreed to buy 125 Park Avenue, located in Manhattan, for $330 million. In connection with the acquisition, the company will assume $146.25 million of in-place financing.

SL Green shares, which have traded in a range of $22.04 to $68.08 over the past year, closed Monday's regular trading session at $58.57, up $1.62 or 2.84%.

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by RTT Staff Writer

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