SL Green Realty Corp. (NYSE:SLG) Q3 2019 Earnings Conference Call Transcript

Oct 17, 2019 • 02:00 pm ET

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SL Green Realty Corp. (NYSE:SLG) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Thank you, everybody for joining us and welcome to SL Green Realty Corp.'s Third Quarter 2019 Earnings Results Conference Call. [Operator Instructions]

At this time, the Company would like to remind listeners that during the call management may make forward-looking statements. Actual results may differ from the forward-looking statements that management may make today. Additional information regarding the factors that could cause such differences appear in the MD&A section of the Company's Form 10-K and other reports filed by the Company with the Securities and Exchange Commission.

Also, during today's conference call, the Company may discuss non-GAAP financial measures as defined by SEC Regulation G. The GAAP financial measure most directly comparable to each non-GAAP financial measure discussed and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measure can be found on the Company's website at www.slgreen.com by selecting the press release regarding the Company's third quarter 2019 earnings.

Before turning the call over to Marc Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp., I ask that those of you participating in the Q&A portion of the call, please limit your questions to two per person. Thank you.

I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Executive
Marc Holliday

Okay. Thank you. Good afternoon, everyone and thank you for joining our call today. The third quarter ended up being very much in line with our expectations and puts us on a very good guide path to meet many of our full year goals and objectives. We've made great headway on a number of strategic fronts and we believe, as the Company continues to shrink, simplify, develop and lease that shareholders will benefit from these actions that are focusing all of our resources on creating significant value within the remaining portfolio.

It appears based on stock performance that this value creation is neither appreciated nor understood by the public markets, the time and time again through sale of non-core and mature assets, we are realizing prices and profits that routinely and dramatically outpace the values implied by our stock price. The recent sale of The News Building, 220 East 42nd Street for $815 million is another such example of this having generated substantial gains over an 18 year hold period. In fact, the unlevered IRR was 11% compounded over that period of time, a true champion of investments. This sale comes on top of the $9.1 billion gross asset value of other product we have sold just since 2016 which has generated $3.4 billion of net proceeds to the Company, and we have no intention of stopping there. We are already at work on lining of additional sales of assets that don't meet our long-term plan and we will provide more detail on these planned dispositions at our upcoming December investor meeting.

These assets will largely be in the $500 million and under range to take advantage of a still active and healthy market for leverageable midtown assets that