Stifel Turns Bullish On New York's Largest Owner Of Commercial Real Estate
SL Green Realty Corp (NYSE:SLG), New York's largest owner of commercial real estate properties including One Vanderbilt Avenue and 100 Park Avenue, boasts a valuation that's "simply too attractive to ignore."
Stifel's John Guinee upgraded SL Green Realty's stock from Hold to Buy with a price target increased from $105 to $111.
The case for buying shares of SL Green Realty is based more on just controlling the "most significant single building office development in this country," One Vanderbilt, Guinee said in a note. Simply put, multiple valuation metrics are very attractive, including a TEV (total enterprise value) of $720 per square foot for the Manhattan office assets that's a 56 percent discount to the analyst's estimate of $1,621 and a "healthy" discount to net asset value using sovereign wealth fund-driven low 4 percent cap rates.
Moreover, SL Green has grown its net asset value by 15 percent over the past year at a static cap rate of 4.5 percent due to a combination of accretive asset sales and share buybacks, Guinee said. Coupled with a "deep and talented" management team, the analyst is now ready to turn bullish on the stock.
Shares of SL Green Realty were trading higher by 0.8 percent at $97.30 Friday.
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