Jefferies Maintains a 'Hold' on SL Green Realty (SLG); Post 1Q11 Review: Gains Drive Guidance Raise; Improving NYC Leasing Spreads

Jefferies maintains a 'Hold' on SL Green Realty (NYSE: SLG), raises PT from $69 to $75.

Jefferies analyst says, "SLG's 1Q11 FFO per share beat and 2011 guidance raise was largely driven by gains on the sale of its debt investments. However, perhaps more importantly, SLG's 1Q11 leasing spreads in Manhattan were strong at positive 10.6%, so management raised its 2011 expectations to flat to positive 10.0% from negative 5% to positive 5%. Nevertheless, the challenge from an earnings perspective will be reinvestment risk given the 40% ($384.5M) decline in SLG's debt and preferred equity investments to $579.3M in 1Q11 due to the sale of its investment in 280 Park Avenue to a 50/50 JV between SL Green and Vornado Realty (NYSE: VNO)(NotCovered) and the early repayment of its investment in 666 Fifth Avenue."

"We are raising our 2011 and 2012 FFO per share estimates to $4.75 and $4.40 from $4.15 and $4.37, respectively."

For more ratings news on SL Green Realty click here and for the rating history of SL Green Realty click here.

Shares of SL Green Realty closed at $82.84 yesterday.

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