SL Green expands share buybacks by $500M

REIT reports uptick in leasing activities in the fourth quarter

New York /
Dec.December 07, 2020 06:45 PM
SL Green Marc Holliday (Getty, iStock)

SL Green Marc Holliday (Getty, iStock)

SL Green Realty’s board has authorized another $500 million in share buybacks, bringing the real estate investment trust’s repurchase program to $3.5 billion.

For the past three years, Manhattan’s biggest commercial landlord has been aggressively buying back its own stock, while shedding properties.

Most recently, the company reached an agreement to sell its Amazon-anchored building at 410 10th Avenue to the 601W Companies for $952.5 million, the most expensive office sale since the start of the pandemic. The buyer will assume a $600 million construction loan on the property.

Through the buybacks, SL Green has reduced its number of outstanding shares by about 25 percent since 2017. The company says its rationale is that the stock is undervalued.

“We believe the stock price continues to significantly lag behind the real financial value of the platform,” said Marc Holliday, SL Green’s chairman and CEO, in a statement. “So we intend to continue to invest in a strategic share repurchase program with the proceeds from asset sales as we believe strongly that using incremental capital to buy our stock provides our shareholders the highest return on investment.”

Critics of stock buybacks argue that they are used to temporarily boost the stock price and earnings per share — which can trigger huge compensation for executives — by reducing the number of shares.

SL Green declined to comment on whether its executives have any such incentives.

The share prices of office real estate investment trusts, including SL Green, plunged at the onset of the health crisis, and leasing activities are down sharply from their pre-pandemic level.

But SL Green said the market regained some energy in the fourth quarter. For example, Heidrick & Struggles International, an executive search firm, has signed a new 12-year lease for 36,000 square feet on the 25th floor at One Vanderbilt, SL Green’s newly opened Midtown East skyscraper. RSC Insurance Brokerage has signed a new 16-year lease for 24,500 square feet on the 15th floor at the REIT’s 750 Third Avenue, a few blocks northeast of there.

Travelers Indemnity Company also signed a five-year lease renewal for its 133,500-square-foot office at 485 Lexington Avenue, another SL Green property.





    Related Articles

    arrow_forward_ios
    The Daily News Building at 220 East 42nd Street and SL Green CEO Marc Holliday (Credit: Getty Images)
    SL Green puts Daily News building up for sale
    SL Green puts Daily News building up for sale
    SL Green snags private-equity firm at One Vanderbilt
    SL Green snags private-equity firm at One Vanderbilt
    SL Green snags private-equity firm at One Vanderbilt
    SL Green’s locks in big bank lease at Hudson Yards redevelopment site
    SL Green’s locks in big bank lease at
    Hudson Yards redevelopment site
    SL Green’s locks in big bank lease at
    Hudson Yards redevelopment site
    CMBS issuance is set to break Great Financial Crisis record, report
    CMBS set to break Financial Crisis record
    CMBS set to break Financial Crisis record
    Aby Rosen dodges liability at Gramercy Park Hotel
    Aby Rosen dodges liability at Gramercy Park Hotel
    Aby Rosen dodges liability at Gramercy Park Hotel
    NYCB CEO Thomas Cangemi (Getty, Cangemi)
    NYCB says multifamily loans in good shape, not endangered by rent law
    NYCB says multifamily loans in good shape, not endangered by rent law
    2 N Lasalle Street & 200 W Jackson Boulevard in Chicago (us.jll.com, hearncompany.com)
    NY’s Foundation Capital, Nightingale aim to buy Loop office towers
    NY’s Foundation Capital, Nightingale aim to buy Loop office towers
    Padel (it’s a sport!) club to open in Brooklyn warehouse
    Padel (it’s a sport!) club to open in Brooklyn warehouse
    Padel (it’s a sport!) club to open in Brooklyn warehouse
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...