DJ SL Green 4Q FFO Climbs More Than Expected On Higher Rents
.
DOW JONES NEWSWIRES
SL Green Realty Corp. (SLG) swung to a fourth-quarter profit on higher rents, as a key gauge of profitability rose more than analysts were expecting.
The company, one of the largest owners of New York office space, said total rental revenue increased 7.7%, while preferred equity and investment gains were up 32%.
SL Green struggled when New York's commercial real-estate market weakened in the recession and financial crisis, but Chief Executive Marc Holliday last month said the local economy is continuing to experience a recovery, while also noting Manhattan fundamentals didn't deteriorate as much as in past recessions and not as much as was predicted. He said the region was poised for what could be dramatic and rapid growth.
SL Green posted a fourth-quarter profit of $7.2 million, or 9 cents a share, reversing a prior-year loss of $5.1 million, or 7 cents a share.
Funds from operations, a key profitability metric for real estate investment trusts, grew to 93 cents from 87 cents. Before transaction-related costs, FFO was 97 cents. Revenue climbed 10% to $267.2 million.
Analysts surveyed by Thomson Reuters expected FFO of 90 cents on revenue of $233 million.
Occupancy at SL Green's Manhattan buildings was 94.6%, excluding 100 Church St., up from the prior quarter's 94.4% but down from 95% a year earlier. SL Green took control of 100 Church St. last year after its previous owners defaulted on a loan of which SL Green was a major creditor. Average Manhattan starting rents were $46.19 per rentable square foot, sequentially above $41.22 and higher than the prior year's $43.97, which excluded an early renewal of BMW of Manhattan Inc.
SL Green's suburban portfolio was 87.3% full, rising from 87% in the third quarter but down from 88.7% a year earlier. Starting rents rose, coming in at $29.50 per rentable square foot on average versus $29.31 in the third quarter and $28.89 a year earlier.
Earlier this month, SL Green agreed to pay $245.7 million to acquire full ownership in a 39-story boutique office building located on Fifth Avenue and East 43rd Street. The property's most recent leasing agreement was with Urban Outfitters Inc. (URBN).
The company's shares closed up 1% at $71.50 in after-hours trading. The stock hit its highest level in more than two years earlier Monday.
-By John Kell, Dow Jones Newswires; 212-416-2291; john.kell@dowjones.com
--Joan E. Solsman contributed to this article.
Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: djnewsplus.com. You can use this link on the day this article is published and the following day.
(END) Dow Jones Newswires
January 24, 2011 19:18 ET (00:18 GMT)
Copyright (c) 2011 Dow Jones & Company, Inc.- - 07 18 PM EST 01-24-11 |
