SL Green Realty Stock Up 12.7% in Three Months: Will the Trend Last?

SL Green Realty SLG shares have risen 12.7% in the past three months compared to the industry's fall of 0.1%.The company’s high-quality portfolio is well-poised for growth, given tenants’ solid demand for premier office spaces with class-apart amenities. With supply pressures easing and people returning to offices, SL Green is witnessing healthy leasing activity.Moreover, its long-term leases and diverse tenant base assure stable rental revenues. Its focus on an opportunistic investment policy to enhance portfolio quality is encouraging.Image Source: Zacks Investment ResearchFactors Behind SLG's Stock Price Surge: Will This Trend Last?SL Green has a mono-market strategy focus, with an enviable footprint in the large and high-barrier-to-entry New York real estate market. The companyis well-positioned to benefit from the growing demand for high-quality, well-amenitized office properties, given its well-located asset portfolio and the ability to offer top-notch amenities at its recently developed office buildings. In the first quarter of 2025, for its Manhattan portfolio, SL Green signed 45 office leases encompassing 0.6 million square feet of space.Additionally, the company maintains a diversified tenant base to hedge the risk associated with dependency on single-industry tenants. As of March 31, 2025, except for Paramount Global, which accounted for 5.4% of the company’s share of annualized cash rent, no other tenant in the company’s portfolio accounted for more than 5% of its share of annualized cash rent, including its share of joint venture annualized cash rent. Moreover, with long-term leases to tenants with strong credit profiles, the REIT is well-poised to generate stable rental revenues over the long term.SL Green has been following an opportunistic investment policy to enhance its overall portfolio quality. In the first quarter of 2025, the company closed on the sale of six Giorgio Armani Residences at 760 Madison Avenue, generating net proceeds of $93.3 million. Over the years, the large-scale suburban asset sale has helped it narrow its focus on the Manhattan market as well as retain premium and highest-growth assets in the portfolio.Solid dividend payouts are the biggest attraction for REIT investors, and SL Green is committed to boosting shareholder wealth. This office REIT has steadily been paying out monthly dividends. Given the company’s solid operating platform, scope for growth and decent financial position compared to that of the industry, this dividend rate is expected to be sustainable over the long run.Key Risks for SLGAmid macroeconomic uncertainty and high competition from developers, owners and operators of office properties, SL Green is offering free rents and concessions to lure tenants, impacting its revenue growth.Moreover, the majority of the company’s property holdings consist of commercial office properties situated in midtown Manhattan. SLG also has retail properties and multifamily residential assets in New York City. Therefore, the performance of the company is susceptible to the condition of the New York City economy.Analysts seem bearish on this Zacks Rank #3 (Hold) company, with the Zacks Consensus Estimate for its 2025 FFO per share revised southward by 1.3% over the past month to $5.41.Stocks to ConsiderSome better-ranked stocks from the REIT sector are VICI Properties VICI and W.P. Carey WPC,each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.The Zacks Consensus Estimate for VICI Properties’ 2025 FFO per share is pegged at $2.34, up 3.54% year over year.The Zacks Consensus Estimate for W.P. Carey’s2025 FFO per share is pegged at $4.88, up 3.83% year over year.Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.Only $1 to See All Zacks' Buys and SellsWe're not kidding.Several years ago, we shocked our members by offering them 30-day access to all our picks for the total sum of only $1. No obligation to spend another cent.Thousands have taken advantage of this opportunity. Thousands did not - they thought there must be a catch. Yes, we do have a reason. We want you to get acquainted with our portfolio services like Surprise Trader, Stocks Under $10, Technology Innovators,and more, that closed 256 positions with double- and triple-digit gains in 2024 alone.See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report SL Green Realty Corporation (SLG): Free Stock Analysis Report W.P. Carey Inc. (WPC): Free Stock Analysis Report VICI Properties Inc. (VICI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks