SL Green Aims to Raise $95M with Sharp Dividend Cut

SL Green Realty Corp. has slashed a planned dividend payment in efforts to pay down debt and conserve funds for future investments. The company set the new dividend payment at $0.375 per common share for the fourth quarter of 2008. The third quarter dividend was $0.7875 per share. The move follows a third quarter decline in net income of 66 percent, from $1.66 per share in the third quarter of 2007 to $0.58 per share for the third quarter this year. In a prepared statement, Marc Holliday, SL Green’s CEO, explained the dividend reset as a way of generating $95 million in cash during 2009. The money will be used to pay down near term obligations and to take advantage of investment opportunities should they appear. SL Green, a real estate investment trust the focuses on Manhattan office properties, has been plagued this year by the chaos in the financial industry, a major SL Green tenant. The company’s 52- week high stock price of $101.07 has plunged.As layoffs rise in the financial industry, SL Green is expected to continue to suffer. According to a report in Crain’s in late November, for example, the company’s shares plummeted to $11.36 on rumors of a Citigroup bankruptcy. On the day the federal government bailed Citi out, SL Green shares rose 40 percent. The Crain’s report noted that Citi leases around 20 percent of SL Green’s total Manhattan square footage.