SL Green Realty Corp. SLG has a portfolio of high-quality and well-amenitized office properties in New York City, which positions it well for growth. The improving job environment and return to office mandates, though slowly pacing, augur well. A diverse tenant base assures stable rental revenues. Focus on an opportunistic investment policy to enhance its portfolio quality is encouraging.

In early March, SL Green inked a 15-year, 144,418-square-foot renewal and expansion lease with Newmark & Company Real Estate, Inc. at 125 Park Avenue.

Shares of this Zacks Rank #2 (Buy) company have gained 15.5% over the past year, outperforming its industry's growth of 4.5%. Given the strength of its fundamentals, there seems to be additional room for growth of this stock.

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Factors That Make SL Green a Solid Pick

Healthy Leasing Activities: SL Green is well-positioned to benefit from its strategically located properties and the ability to offer top-notch amenities at recently developed office buildings.

Despite the negative effects of the remote-working dynamics hindering the U.S. office real estate sector, SL Green signed 188 office leases for its Manhattan office portfolio, comprising 3.6 million square feet of space in 2024, which is the third highest yearly lease achieved by the company.

Last January, SL Green announced that IBM had expanded its lease by around 92,663 square feet at One Madison Avenue. This brings the tech giant’s total occupied space in the building to around 362,092 square feet. IBM will occupy the entire seventh floor of the building for 15 years. The building is now 72% leased.

Since the beginning of the year through March 3, 2025, SL Green has signed Manhattan office leases totaling 455,008 square feet while maintaining a current pipeline of approximately 975,000 square feet.

Strong Tenant Base: This office REIT enjoys a diversified tenant base to hedge the risk associated with dependency on single-industry tenants. Its largest tenants include renowned firms from different industries. Moreover, with tenants’ long-term leases with a strong credit profile, it is well-poised to generate stable rental revenues over the long term.

Opportunistic Investment Policy: To improve the overall quality of its portfolio, SL Green has been following an opportunistic investment policy. This entails divesting its mature and non-core assets, including residential properties, in a tax-efficient manner and using the proceeds to fund development projects and share buybacks. These match-funding initiatives will ease the strain on the company's balance sheet and demonstrate its prudent capital-management practices.

In November 2024, SL Green closed the sale of an 11% interest in One Vanderbilt Avenue, generating net proceeds of $189.5 million. In December, the company completed the sale of three Giorgio Armani Residences at 760 Madison Avenue, generating net proceeds of $61.5 million.

Over the years, the large-scale suburban asset sale has helped the company narrow its focus on the Manhattan market and retain premium and highest-growth assets in the portfolio.

FFO Growth: Analysts seem bullish regarding SLG’s funds from operations (FFO) per share growth prospects. The Zacks Consensus Estimate for the company's 2025 FFO has been revised 1.5% upward over the past week to $5.52. SL Green issued guidance for 2025 FFO per share of $5.25-$5.55.

Other Stocks to Consider

Some other top-ranked stocks from the broader REIT sector are Welltower WELL and Ventas VTR, each carrying a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Welltower’s 2025 FFO per share has moved marginally northward over the past week to $4.89.

The Zacks Consensus Estimate for Ventas’ current-year FFO per share has been raised marginally northward over the past week to $3.41.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.

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This article originally published on Zacks Investment Research (zacks.com).

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