Morningstar | SL Green continues to add to its status as a premier Manhattan landlord with its robust pipeline.
SL Green continues to lead the way in the Manhattan commercial real estate market. Its portfolio of Class A and trophy properties will continue to attract the most elite tenants with the deepest pockets, and with the cost of its newest development, One Vanderbilt, exceeding $3 billion, the company certainly needs it. Overall, we think SL Green’s portfolio contains the best properties in the best market. Office space will see about 18 million square feet of incoming supply over the next several years, but demand should remain strong as new and existing tenants grow and seek new locations. While many are pessimistic toward brick-and-mortar retail, we view SL Green's exposure as resistant to many of the competitive forces its lower-quality peers face. The high-street retail within the company’s portfolio is a way for companies to showcase and market their brands, and with over 50 million foreign and domestic tourists annually, we have confidence that companies will continue to seek space in this area. SL Green’s tenant list for both office and retail is financially dependable and those tenants serve as promising candidates to occupy future space given the preexisting relationships the company maintains. The company has leased out a record amount of space in recent years at healthy spreads, so we anticipate this trend will continue but are aware of some potential headwinds in new supply hitting the market. Additionally, the company is contributing to that supply with 1.7 million square feet of office space associated with One Vanderbilt, SL Green’s $3 billion trophy with estimated completion in 2020. Along with joint venture partners, the company will need to lease some of the highest-priced office space in the city over the next several years. Our hope is that this task will be made easier through business-friendly policy changes brought on by the Trump administration.SL Green Realty is a self-managed real estate investment trust. The company is engaged in the acquisition, development, ownership, management and operation of commercial and residential real estate properties, mainly office properties, located in the New York metropolitan area. Substantially all of the company's assets are held by, and all of its operations are conducted through, SL Green Operating Partnership, L.P. (the Operating Partnership). All of the management, leasing and construction services that are provided to the properties that are wholly-owned by the company and that are provided to certain joint ventures are conducted through SL Green Management LLC which is 100% owned by the Operating Partnership.
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