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Public REIT pricing 'somewhat divorced from reality,' SL Green exec says from SNL Real Estate Daily Public REIT pricing 'somewhat divorced from reality,' SL Green exec says BYLINE: Tom Yeatts SECTION: Extra Volatility in public real estate investment trust pricing has spooked some investors and pushed them to focus on the private side of the business, SL Green Realty Corp.'s leadership team said July 18. "Fortunately, and I guess unfortunately, everybody wants to own direct real estate," President Andrew Mathias said on the company's second-quarter earnings call. During the conference call's Q&A segment, Mathias, who led the dialogue in Chairman and CEO Marc Holliday's absence, said private real estate investors are not viewing lingering REIT discounts as a leading indicator of the whole commercial market, but rather as a discrete phenomenon. The discounts have not materially impacted private market demand, or private market pricing, in New York City's office market. "The private market players that we speak to don't really look to REIT pricing as any kind of indicator of the market," he said. "They view it as somewhat divorced from reality, or not ... a leading indicator, or even an indicator, of where the spot market stands. They're long-term investors and they're only interested in their own long-term returns." Mathias noted that the REIT discounts have made it "somewhat difficult" to attract new capital into public REITs. But, citing recent property sales, he said demand for New York City office, and even retail, assets is still robust overall. "The private markets have spoken very strongly that there is still enormous demand for New York City real estate," he said. In prepared remarks, Mathias said SL Green will continue to fund share repurchases via asset sales as long as there is weakness in the company's stock price. The company bought back about 1.3 million shares during the second quarter. "With the portfolio performance consistently strong and stock price continuing to trade at a significant discount to [net asset value], we remain staunchly committed to an aggressive share buyback program," he said. |
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Msg # | Subject | Author | Recs | Date Posted |
12176 | Re: Public REIT pricing 'somewhat divorced from reality,' SL Green exec says | Billinor | 0 | 7/23/2019 7:42:18 PM |