Why Real Estate REIT SL Green Realty Shares Are Higher Today

SL Green Realty Corp SLG shares are trading higher by around 7% after it reported a deal to sell its fee ownership stake in 625 Madison Avenue.

The real estate REIT is divesting its interest for a gross sale price of $632.5 million, or $1,123 per square foot, to a global real estate investor. 625 Madison Avenue, a 17-story, 563,000-square-foot office building with ground-floor retail space, is located between 58th and 59th Street.

In connection with the sale, SL Green and its partners will originate a $234.5 million preferred equity investment in the property. 

The net proceeds from the sale are projected to be used to repay corporate debt.

Brett Herschenfeld, Executive Vice President, Retail and Opportunistic Investments, said, "This deal, and our recent capitalization of 245 Park, reaffirm that well-located office real estate in New York is still among the most sought-after asset classes in the world." 

"Whether properties are upgraded to state-of-the-art office or are converted into a multitude of other uses that are in high demand, the appetite for Class-A office properties in prime Manhattan locations remains strong and growing."

Also, Truist Securities maintained a Buy rating on the stock and raised its price target to $42 from $41.

Price Action: SLG shares are up 7.15% at $43.08 on the last check Monday.