SL Green Realty Corp. (NYSE:SLG) and its operating partnership, SL Green Operating Partnership, L.P., announced the completion of a public offering of common stock, raising approximately $386.3 million in net proceeds.
The offering involved the sale of 5,063,291 shares at a public offering price of $79.00 per share.
The underwriting agreement, dated Monday, November 21, 2024, was with a consortium of banks including Wells Fargo (NYSE:WFC) Securities, J.P. Morgan Securities, TD (TSX:TD) Securities (USA), BMO (TSX:BMO) Capital Markets, and Deutsche Bank (ETR:DBKGn) Securities, acting as the representatives of the underwriters. Additionally, the underwriters have been granted a 30-day option to purchase up to 759,493 additional shares of common stock.
The company has stated that the net proceeds will be used for general corporate purposes, which may include investment opportunities and the repayment of existing debt. Specifically, SL Green Realty Corp. plans to contribute the net proceeds to its operating partnership in exchange for partnership units that are economically similar to the common stock. The operating partnership is expected to use the funds for its corporate needs.
In other recent news, Jefferies raised SL Green Realty's target to $72, maintaining a hold rating. Barclays (LON:BARC) increased the company's target to $78, citing strong leasing activity, with SL Green Realty signing leases for 2.8 million square feet this year. Truist Securities also revised its price target for the company from $55.00 to $72.00, acknowledging robust leasing activity. BMO Capital Markets increased its price target on the stock to $87.00, maintaining an Outperform rating.
InvestingPro Insights
SL Green Realty Corp.'s recent stock offering aligns with several key financial metrics and trends highlighted by InvestingPro. The company's market capitalization stands at $5.19 billion, reflecting its significant presence in the real estate sector. Despite a challenging year with revenue declining by 2.98% over the last twelve months, SLG has shown resilience, with its stock price experiencing a remarkable 149.92% total return over the past year.
InvestingPro Tips suggest that while analysts anticipate a sales decline in the current year, net income is expected to grow. This could explain the company's decision to raise capital through a stock offering, potentially positioning itself for future growth opportunities or debt reduction as mentioned in their plans for the proceeds.
The company's financial health is further underscored by its ability to maintain dividend payments for 28 consecutive years, with a current dividend yield of 3.77%. This consistency in shareholder returns, coupled with the recent stock performance trading near its 52-week high, indicates investor confidence in SLG's long-term prospects.
For investors seeking a deeper understanding of SL Green Realty Corp.'s financial position and future outlook, InvestingPro offers 11 additional tips, providing a comprehensive analysis to inform investment decisions.
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