NEW YORK - SL Green Realty Corp. (NYSE: NYSE:SLG), a major commercial real estate owner in Manhattan, has announced the completion of a significant debt restructuring effort, totaling $2.1 billion. This move is part of the company's broader strategy to refinance, modify, or extend at least $5.0 billion of its existing debt.
The restructuring includes a mix of loan modifications and extensions across several properties in SL Green's portfolio. Notably, the $1.075 billion mortgage on 280 Park Avenue, held jointly with a partner, has been modified and extended to September 2026, with an option to further extend to September 2028. The interest rate on this loan remains at 1.78% over the Term SOFR, fixed at 5.91%.
Additionally, the company has modified and extended the mortgage on 10 East 53rd Street, which involved a principal paydown of $15.0 million, bringing the new balance to $205.0 million. The maturity of this loan has been extended by three years to May 2028, with a maintained interest rate of 1.45% over Term SOFR.
The mortgage on 100 Park Avenue also saw an extension of two years to December 2025, with an unchanged interest rate of 2.36% over Term SOFR. Furthermore, the loan on 15 Beekman Street has been adjusted, with a principal reduction of $4.6 million and an extension of four years to January 2028, at an interest rate of 1.50% over Term SOFR.
In a completed transaction, SL Green has also modified and extended the mortgage on 185 Broadway, which included a principal paydown and a conversion to a fixed rate of 6.65%.
The company is also in the process of selling two properties. The sale of 719 Seventh Avenue in Times Square is expected to close in the third quarter of 2024, with the company anticipating net proceeds of $4.5 million after mortgage repayment.
The Palisades Premier Conference Center is also under contract for sale, with a forecasted closing in the second quarter of 2024 and expected net proceeds of $20.0 million.
Harrison Sitomer, Chief Investment Officer of SL Green, highlighted the company's diligence in executing its ambitious 2024 business plan, which includes strategic asset sales and debt maturity profile extension. Sitomer emphasized the company's reputation and strong balance sheet as enabling factors in these transactions, despite a challenging credit market.
SL Green Realty Corp. is known for its significant presence in Manhattan, holding interests in 57 buildings totaling 32.4 million square feet as of March 31, 2024. This comprises ownership interests in 28.7 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments.
This article is based on a press release statement from SL Green Realty Corp. and does not include any promotional content.
InvestingPro Insights
In light of SL Green Realty Corp.'s recent debt restructuring endeavors, investors may find the following real-time data and InvestingPro Tips from InvestingPro particularly relevant. The company's market capitalization stands at $3.44 billion, which reflects its substantial presence in the commercial real estate market of Manhattan.
Despite a challenging year, SL Green has maintained its dividend payments for 28 consecutive years, indicating a commitment to shareholder returns. This is noteworthy considering the company's current dividend yield of 6.21% as of the last dividend ex-date on March 27, 2024.
Analyzing the company's performance metrics, SL Green's revenue for the last twelve months as of Q4 2023 was $837.2 million, with a gross profit margin of 56.9%. However, the company experienced a slight revenue decline of 2.82% over the last twelve months and a more pronounced quarterly revenue decline of 9.31% in Q4 2023.
Furthermore, the company's P/E ratio is reported at -5.59, and the adjusted P/E ratio for the last twelve months is -21.18, suggesting that analysts are cautious about the company's profitability in the near term.
InvestingPro Tips highlight that SL Green's stock price movements have been quite volatile, yet the company has seen a strong return over the last three months, with a price total return of 14.13%. Moreover, there has been a large price uptick over the last six months, culminating in a 38.34% price total return. These metrics suggest that investors have been responding positively to the company's strategic moves, despite the broader challenges in the real estate market.
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Investors looking for more information can visit the dedicated page for SL Green Realty Corp. on InvestingPro: https://www.investing.com/pro/SLG.
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