SL Green Realty Corp. Announces Proposed Offering of Common Stock

Rhea-AI Summary

SL Green Realty Corp (NYSE: SLG) has announced a $400 million public offering of common stock, with an additional 30-day option for underwriters to purchase up to $60 million more shares. The company plans to use the proceeds for general corporate purposes, including new debt and equity investments and debt repayment. Wells Fargo Securities, J.P. Morgan, TD Securities, BMO Capital Markets, and Deutsche Bank Securities are acting as joint bookrunning managers. As Manhattan's largest office landlord, SLG holds interests in 55 buildings totaling 31.8 million square feet, including 28.1 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments.

Positive

• Access to significant capital with $400 million offering
• Option for additional $60 million through underwriter's option
• Strong backing from major financial institutions as bookrunners
• Substantial real estate portfolio with 31.8 million square feet under management

Negative

• Potential dilution of existing shareholders' value
• Increase in outstanding shares may pressure stock price
• Additional debt repayment indicates existing leverage concerns

Insights

Financial Analyst

This $400 million common stock offering with an additional $60 million option represents a significant capital raise for SL Green. The timing is strategic, as REITs face challenges in the commercial office market, particularly in Manhattan. The offering will dilute existing shareholders but strengthens the balance sheet, providing flexibility for debt management and new investments.

The company's portfolio of 31.8 million square feet across 55 buildings makes it Manhattan's largest office landlord. The capital raise could help address near-term debt maturities and potentially take advantage of distressed opportunities in the market. However, investors should monitor the pricing and market reception of this offering, as it will impact the stock's valuation and trading dynamics.

Real Estate Market Analyst

The timing of this equity raise reflects the broader challenges in the commercial office sector. Manhattan's office market continues to grapple with high vacancy rates and shifting workplace dynamics post-pandemic. SL Green's move to strengthen its capital structure suggests a defensive strategy while maintaining flexibility for opportunistic investments.

With 28.1 million square feet of owned Manhattan properties and 2.8 million square feet securing debt investments, the company's concentrated exposure to Manhattan office space presents both risks and opportunities. This capital raise could provide a buffer against market uncertainties while positioning the company to capitalize on potential market dislocations.

NEW YORK, Nov. 21, 2024 (GLOBE NEWSWIRE) -- SL Green Realty Corp. (the “Company”) (NYSE: SLG) announced today the commencement of an underwritten public offering of $400,000,000.00 of shares of its common stock, par value $0.01 per share (the “Common Stock”). In connection with the offering, the Company intends to grant the underwriters an option for 30 days to purchase up to an additional $60,000,000.00 of shares of Common Stock.

The Company intends to use net proceeds from the offering for general corporate purposes, which may include new debt and equity investment opportunities and the repayment of a portion of its outstanding indebtedness.

Wells Fargo Securities, J.P. Morgan, TD Securities, BMO Capital Markets, and Deutsche Bank Securities are serving as joint bookrunning managers for the offering.

This offering is being made pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (the “SEC”) on November 21, 2024 and only by means of a prospectus. You may obtain these documents for free by visiting EDGAR on the SEC’s website at www.sec.gov. Alternatively, copies of the prospectus supplement and the prospectus may be obtained from Wells Fargo Securities at Wells Fargo Securities, 90 South 7th Street, 5th Floor, Minneapolis, MN 55402, at 800-645-3751 (option #5) or email a request to WFScustomerservice@wellsfargo.com; J.P. Morgan at J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717 or by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com; TD Securities at TD Securities (USA) LLC, 1 Vanderbilt Avenue, New York, New York 10017, by telephone at (855) 495-9846, or by email at TD.ECM_Prospectus@tdsecurities.com; BMO Capital Markets at BMO Capital Markets Corp., Attn: Equity Syndicate Department, 151 W 42nd Street, 32nd Floor, New York, NY 10036, email: bmoprospectus@bmo.com; or Deutsche Bank Securities at Deutsche Bank Securities Inc., Attention: Prospectus Department, at 1 Columbus Circle, New York, NY 10019, by telephone at (800) 503-4611 or by email at Prospectus.Ops@db.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy shares of Common Stock, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About SL Green Realty Corp.

SL Green Realty Corp., Manhattan's largest office landlord, is a fully integrated real estate investment trust, or REIT, that is focused primarily on acquiring, managing and maximizing value of Manhattan commercial properties. As of September 30, 2024, SL Green held interests in 55 buildings totaling 31.8 million square feet. This included ownership interests in 28.1 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments.

Forward-looking Statements

This press release includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York metropolitan area markets, occupancy, business strategies, expansion and growth of our operations and other similar matters, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.

Forward-looking statements contained in this press release are subject to a number of risks and uncertainties, many of which are beyond our control, that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. Factors and risks to our business that could cause actual results to differ from those contained in the forward-looking statements include risks and uncertainties described in our filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

PRESS CONTACT
slgreen@berlinrosen.com

SLG-FIN

FAQ

What is the size of SL Green's (SLG) November 2024 common stock offering?

SL Green announced a $400 million public offering of common stock, with an additional option for underwriters to purchase up to $60 million more shares within 30 days.

How will SL Green (SLG) use the proceeds from its 2024 stock offering?

SL Green plans to use the net proceeds for general corporate purposes, including new debt and equity investment opportunities and the repayment of outstanding indebtedness.

Which investment banks are managing SL Green's (SLG) 2024 stock offering?

Wells Fargo Securities, J.P. Morgan, TD Securities, BMO Capital Markets, and Deutsche Bank Securities are serving as joint bookrunning managers for the offering.

What is SL Green's (SLG) current real estate portfolio size as of September 2024?

SL Green holds interests in 55 buildings totaling 31.8 million square feet, including 28.1 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments.