SL Green Acquisitions
Thoughts on joining SL Green acquisitions now? Would office acq experience be looked down upon moving forward? Potential to exit to a Megafund?
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They’re falling apart
Sure, they’re stock price has taken a big hit, but I’d think it’s a solid place to get acq experience since they’re probably one of the few owners that can secure financing rn for office . Practically no liquidity in the office lending marketplace
I think office acquisitions are the last thing in their mind right now.....they are more concerned about the precarious position of their mezz book and potentially trying to configure a way how to effectively launch a stock repurchase program.
Check out the stock's 1-yr performance.
Are they even hiring right now? I'd think they have much bigger issues.
Believe they had someone leave recently and that may have led to an opening. Any thoughts?
If you have options, I wouldn’t recommend going to an office-heavy shop. I’m overall still bearish on office but I think it’s still good to have some experience in it because there’s going to be, if not already, great deals to be had in office.
SLG isn't a typical office reit. Those guys think differently. They aren't going away any time soon - there are no redemptions for public reits. If anything, they will take the company private. Maybe this whole multi-year leverage and buyback plan was a scam to take the company private at a lower basis. Who knows. Unless you have better options, they are one of the few places doing interesting things. They don't have a mandate from the market to do them, but they could care less and just do what they want. I'd say take it.
Would you say the same for Vornado ?
And… how exactly would they take the company private? Nobody with that kind of money wants to touch office. Groups will look selectively at really well-located, best in-class office, but no one wants to buy all of SL green
I’m hijacking this thread. At first glance Vornado has a market cap of 2.8bn, and is trading around $15 bucks a share. They own roughly 26 million SF of real estate, prime real estate. At that price it would be investing in prime real estate for a little over $100 PSF basis. Why are we not buying all of their stock? I personally would love to buy blocks of shares in the REIT. Convince me otherwise
Been running through my mind as well...
Feels like a peak fear env.
At $100 PSF blended across holdings equates to what kind of cap rate? Must be double digit.... feels ok
Are you implying that the $9bn worth of debt currently outstanding just goes away?
Im implying that the parts are worth more, from a PSF and NOI basis. I'm saying that even at $55 a share gets you to $400 PSF. And that is your office to resi conversion PSF in NYC. Plus office isn't going to die entirely. They own a lot of performing office.
I wrote a longer response that didn't make it through, but I will give you 3 problems I have with VNO. I say this as someone who's been stuck in that value trap for too long. Keep in mind people were buying at $65 a share in 2017 with the idea that it was a 6.5% cap...
1) Simplification strategy hasn't worked - did urban edge and JBGS spins, but it still isn't a straight NYC office story with the Mart, 555 California, and all the high st retail. Still complicated and they don't provide guidance
2) After years of pumping up the Penn Station dev project, they announce it - calling it PENN15 - and then say they are going to put the dev in a tracking stock. While investors still would get shares of the tracking stock, the idea of separating your highest upside project and leaving the rest of the assets in VNO was questionable, at best.
3) They just stopped paying their dividend
Most questionable thing about that project should have been the name. Management team that let penn15 moniker make it off interns desk shouldn't be trusted with shareholder capital.
Total SF Owned: 26mm * ($454psf Implied Value of RE) = 11.8bn valuation of current real estate holdings.
11.8bn less net debt of $9bn is $2.8bn NAV / 186mm Outstanding Shares brings you to current share price of $15 / share.
In no way is the current share price implying a "$100 PSF basis" and this post should be edited as it's currently marked most helpful but ignores all debt the company holds. No idea who's upvoting this.
Idk too much about the mechanics of a reit, but given that they distribute much of their net income as dividends, they have to constantly issue debt and equity to raise capital . Given how low their stock prices are right now, how would they then fund acquisitions? Are they also private capital like funds do?
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