S&P Global Ratings revised its outlook for SL Green Realty Corp. to positive from stable and affirmed its BBB- ratings for the company, including its corporate credit rating.
The outlook revision comes as the rating agency believes the company can better manage the development risk it faces, aided by the closing deal it inked Jan. 26 with South Korea's National Pension Service and Hines Interest LP for the construction of the One Vanderbilt Ave. skyscraper in New York.
"Given its sizable development exposure, we expect SL Green to maintain its financial discipline through its use of strategic joint ventures and application of asset sale proceeds to reduce debt," S&P Global Ratings Credit Analyst Anita Ogbara said.
For 2016, SL Green reported a 6% year-over-year increase in same-property cash net operating income, and occupancy in its Manhattan office portfolio leveled at 97.1%, according to the rating agency.
S&P Global Ratings added that SL Green can improve its debt and fixed-charge coverage in the next 12 to 18 months through high occupancy levels, quality tenants and positive demand drivers in its New York office portfolio.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.