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SL Green Modifies & Extends $1.25B Mortgage on One Madison Avenue

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SL Green Realty (SLG - Free Report) , along with its joint venture partners, recently announced closing on a modification and extension of the $1.25 billion mortgage facility on One Madison Avenue.

The loan modification offers strategies aimed at promoting the stabilization of the property and enhancing the company’s objective to extend its short-term maturities while keeping rates unchanged.

This modification has extended the final maturity date to November 2027 and kept the interest rate fixed at 3.10% over Term SOFR. The modification has a further reduction in spread that is applicable upon exceeding specific leasing thresholds. The facility is backed by 14 global banks, with Wells Fargo Bank, N.A. serving as the lead institution.

One Madison Avenue is recognized as the most ambitious adaptive reuse project in New York City, strategically positioned with a view of Madison Square Park. The demand for the unparalleled office experience at One Madison Avenue has remained high, with both the tower floors and retail spaces fully leased, resulting in an overall leasing rate of more than 65%.

Wrapping Up

Despite the overall choppiness in the office real estate sector, SL Green is well-poised for growth, given tenants’ healthy demand for premier office spaces with class-apart amenities. Also, its long-term leases, with a diverse tenant base, assure stable rental revenues.

Shares of this Zacks Rank #3 (Hold) company have gained 37.3% over the past six months, outperforming the industry’s growth of 14.3%.

 

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Stocks to Consider

Some better-ranked stocks from the broader REIT sector are Welltower (WELL - Free Report) and Cousins Properties (CUZ - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s 2024 FFO per share is pinned at $4.26, suggesting year-over-year growth of 17%.

The Zacks Consensus Estimate for Cousins Properties’ 2024 FFO per share stands at $2.68, indicating an increase of 2.3% from the year-ago reported figure.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.


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