SLG - SL Green Realty Corp

[thepupil]

https://slgreen.gcs-web.com/node/25666/pdf

 

SL Green selling 410 Tenth Avenue (pre-leased to AMZN / First Republic, new building ) for $950 million. While this is $1500 / foot, it actually represents a discount to the rumored price of $1.1 billion put out by realdeal a little bit ago. Obviously this asset is brand new and leased to 2 HQCWT's (that's high quality credit worthy tenants for those of you who don't wast their time reading CMBS ratings agency docs) for term. this is not the market. then again, that's kind of the point. within these REITs there are assets that are just fine and assets that are problems. they are not "the office market".

 

Total development budget was $650 million.

 

SL Green owns 70% of the equity has contributed $40mm of equity (partners contributed $17mm); finacning outstanding is $435mm w/ $135mm available. I'm not sure what the final cap stack looks like, but it's safe to say that this is a multi-bagger that will reduce debt increase cash/liquidity substantially.

 

 

SL Green has done a spectacular job raising liquidity in this crisis through grossing down their D&PE book and through select asset sales / JV's. VNO has done so through scheduled 220 CPS  closings, but I must say SLG has outperformed my expectations given their balance sheet going into this

 

EDIT: Apparently this is a 4.9% cap rate. I consider that slightly BEARISH as this is the best of the best..

[BG2008]

https://slgreen.gcs-web.com/node/25666/pdf

 

SL Green selling 410 Tenth Avenue (pre-leased to AMZN / First Republic, new building ) for $950 million. While this is $1500 / foot, it actually represents a discount to the rumored price of $1.1 billion put out by realdeal a little bit ago. Obviously this asset is brand new and leased to 2 HQCWT's (that's high quality credit worthy tenants for those of you who don't wast their time reading CMBS ratings agency docs) for term. this is not the market. then again, that's kind of the point. within these REITs there are assets that are just fine and assets that are problems. they are not "the office market".

 

Total development budget was $650 million.

 

SL Green owns 70% of the equity has contributed $40mm of equity (partners contributed $17mm); finacning outstanding is $435mm w/ $135mm available. I'm not sure what the final cap stack looks like, but it's safe to say that this is a multi-bagger that will reduce debt increase cash/liquidity substantially.

 

 

SL Green has done a spectacular job raising liquidity in this crisis through grossing down their D&PE book and through select asset sales / JV's. VNO has done so through scheduled 220 CPS  closings, but I must say SLG has outperformed my expectations given their balance sheet going into this

 

EDIT: Apparently this is a 4.9% cap rate. I consider that slightly BEARISH as this is the best of the best..

 

I find SL Green is always the forced seller during times of distress.  They tend to lever their balance sheet more and play a little looser.  They also have a mezz book that seems to always get smoked during a crisis. 

[CorpRaider]

Yeah it's a bit of a different animal to me. The loans/paper are more liquid, like a bank/merchant bank.  Had to take a ~15% discount from list to move the property in frozen market (and to put $$$ where mouth is, rather than simply bitching about discounts). It seems like market has discounted more than 15%...(granted have credit tenants).  Proximity to Hudson Yards is probably not a positive for residual value.  This is a good but not a trophy level asset, right?

 

No Chanos tweet yet...so he STFU?

[thepupil]

SL Green with the nice de-risking of the development funding (they'd already syndicated 1/2 the equity check).

 

of course, the looming glut of super tee duper nice space such as this is part of the office bear case. $2.3B cost for 1.4mm sf ($1,600 / foot).

 

 

 

SL Green Scores $1.3 Billion Loan to Build Manhattan Skyscraper

Banks including Wells Fargo, Goldman will provide loan

The 1.4 million square foot project has no anchor tenant yetBy Natalie Wong

(Bloomberg) -- SL Green Realty Corp. obtained a $1.25 billion loan to redevelop a skyscraper in Manhattan, pushing forward with investment even as New York offices remain largely empty and the city braces for a second wave of coronavirus.

The construction financing deal for One Madison Avenue, in the city’s Flatiron district, is being led by Wells Fargo & Co., SL Green president Andrew Mathias said in an interview. The 1.4 million square foot project has already begun internal demolition, thought it hasn’t yet secured an anchor tenant.

Bank of America Corp., Toronto-Dominion Bank, Deutsche Bank AG, Goldman Sachs Group Inc. and Axos Bank are also in the lending group, Mathias said.

“The building delivers in 2023, so we have confidence in getting through this period,” Mathias said. “Our position as developers with this kind of vision and certainty generally gets rewarded in New York City.”

The deal for One Madison comes just weeks after SL Green opened One Vanderbilt to the north, near Grand Central Terminal. This is one of the first notable office construction starts in Manhattan since March, when the pandemic brought most commercial-property activity to a halt.

The loan terms are up to six years with interest at a floating rate of 3.35% over Libor, with the option to reduce the spread to 2.50% upon reaching leasing and completion milestones, the firm said. Some of the same banks were also lenders for One Vanderbilt, Mathias said.

Lenders have been cautious to make new loans given the uncertainty about the market, especially struggling retail and hotel properties. But as real estate debt investors stockpile cash, competition is building for higher-quality developments.

“We’re concerned about the current status of things more so with respect to our existing properties,” Mathias said. “For a longer-term development, that’s a generational-type development, you can never pick a right or wrong time to start it.”

SL Green said it sold a 49.5% interest in One Madison to the National Pension Service of Korea and Hines Interest LP in May. The entire project will cost roughly $2.3 billion.

[CorpRaider]

Was looking for something else, but noticed that Holiday (CEO) and SLG pres filed Forms 4 wherein (according to the forms) they elected units in lieu of their cash bonuses for last year.  Holiday added upside for like 150K units and pres added about 28K.