After a decade of consistent payouts, SL Green shareholders could see prospects dim next year.
The prominent office landlord may be forced to slash its dividend next year, Crain’s reported. Dividend distributions are expected to surpass adjusted funds from operations — a cash flow metric — according to analysts.
“Lower-than-expected (property) sales volumes in 2025 may elevate the risk of a dividend right-sizing,” Evercore ISI analyst Steve Sakwa said in a client note, adding that he saw the landlord as a “net seller” next year.
SL Green did not respond to the publication’s request for comment.
Since 2016, stockholders could count on an annual payout of around $3 per share. It even held steady as competitors such as Vornado Realty Trust, Empire State Realty Trust and BXP slashed their dividends.
But there are headwinds facing Marc Holliday’s company, which is still smarting from its failed bid for a casino in Times Square. The company stock is down 30 percent year-to-date and lagging behind other office landlords. SL Green also targeted $1 billion in property sales this year, according to Sakwa, but sold less than half of that number.
Still, SL Green is seeing success alongside its rivals on the Manhattan office leasing front. The company’s portfolio is 92 percent occupied, paced by the success of the redeveloped One Madison Avenue.
In October, the firm agreed to buy the Park Avenue Tower in the Plaza District for $730 million from the Blackstone Group. The price tag is a discount from the roughly $925 million Blackstone put into acquiring and renovating the building since 2014.
SL Green recently went into contract to buy the former Brooks Brothers building on Madison Avenue, where it aims to build its next ground-up office tower. It has also positioned itself in the running for new additions with an unsuccessful bid for Paramount Group and expressed interest in acquiring the Chrysler Building.
— Holden Walter-Warner
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