Summary
- The impact of the coronavirus goes far beyond current lockdowns and work from home mandates.
- The real question is not 2020, however, but rather 2021 and beyond.
- From a dividend perspective, SLG is well situated despite its concentration in a currently tough market.
- We’re upgrading from a Hold to a StrongSpec Buy.
- Looking for a portfolio of ideas like this one? Members of iREIT on Alpha get exclusive access to our model portfolio. Get started today »
- This article was coproduced with Williams Equity Research.
Investing contains few absolute truths. And when – no matter what we say out loud in philosophical or academic discussions – we’re all looking for such certainty in what we do and how we do it…
It’s easy for individuals to slide toward one extreme or the other. The middle path is a lonely one.
Take New York City, which is at an unusual (dare we say “unprecedented”) crossroads. Optimists see heavily-discounted real estate. Bears are busying underwriting permanent impairments not yet realized.
If bears are correct, the ripples through the city’s economy have just began. And the city’s already elevated valuations are only now staring their descent.
Bulls, meanwhile, point toward Great Recession-level pricing vs. the relative health of large financial services companies. Their conclusion is to stick with the extremely durable mantra, “This too shall pass.”
But will it? Can it possibly be that easy?
The profitable answer might very well lie somewhere in between.
NYC's Largest Office Landlord
Up until four months ago, every real estate company in modern history would be envious of the title “New York City’s largest office landlord.” And why not?
It was New York City! Enough said.
In which case, “enough said” about the title holder, SL Green Realty (SLG) too. It describes itself like this:
