Barclays analyst Ross Smotrich upgraded his sector rating on U.S. Real Estate Investment Trusts to Positive from Neutral. Late cycle concerns around slowing growth, rising interest rates and full asset values are overdone, Smotrich tells investors in a research note. The analyst believes that real estate fundamentals "have a good runway for continued strength, particularly compared to the slowing broader market." In Multifamily, the analyst upgraded the sub-sector to Positive, reiterates Overweight ratings on Essex Property Trust (ESS) and MAA (MAA), upgraded Camden Property Trust (CPT) to Overweight from Equal Weight for exposure to "18 hour cities" and downgraded Aimco (AIV) to Equal Weight from Overweight on slowing growth. In Office, Smotrich keeps a Neutral sub-sector rating "with a Positive tilt." His outlook for the sector is improving given "healthy underlying fundamentals and attractive valuations." He upgraded both SL Green Realty (SLG) and Brandywine Realty (BDN) to Overweight from Equal Weight, and Douglas Emmett (DEI) to Equal Weight from Underweight. The analyst maintain Overweight ratings on Alexandria Real Estate (ARE), Boston Properties (BXP) and Hudson Pacific (HPP). In Retail, the analyst tells investors to stay selective. He prefers larger companies with "better-quality assets, balance sheet flexibility, the ability to take share and grow earnings even as retailers evolve and rationalization store counts." Smotrich upgraded Regency Centers (REG) to Overweight from Equal Weight, reaffirmed Overweights on both Kimco Realty (KIM) and Simon Property (SPG), and downgraded Kite Realty Group (KRG) to Equal Weight from Overweight.

BMO Capital upgraded SL Green Realty to Outperform from Market Perform with a price target of $58, up from $56. New York City office is one of the few real estate investment trust subsectors seeing improved demand and SL Green continues to exhibit strong leasing momentum, which will lead to improved occupancy, the analyst tells investors in a research note. The firm sees positive leading indicators for New York City office, including higher utilization and increasing market share for relocating tech workers and college grads. SL Green's biggest risk is its high leverage and debt maturities, which the company has been addressing effectively, says BMO.

Consensus $6.06. The company said, "The Company is increasing its 2024 FFO guidance range for the year ending December 31, 2024 to FFO per share of $7.35 to $7.65, as compared to the previous guidance range of FFO per share of $5.90 to $6.20, primarily to reflect incremental gains on discounted debt extinguishments at 2 Herald Square as well as at 280 Park Avenue and 719 Seventh Avenue, as announced today, while maintaining its 2024 net income guidance range of $2.73 to $3.03 per share."

Reports Q1 revenue $187.88M, consensus $132.38M. Funds from operations, or FFO, of $3.07 per share for the first quarter of 2024, inclusive of $141.7M, or $2.02 per share, of gain on discounted debt extinguishment at 2 Herald Square and $5.1M, or 7c per share, of positive non-cash fair value adjustments on a mark-to-market derivative.

Reports Q1 revenue $126.48M, consensus $126.12M. "During the first quarter, we made excellent progress on our 2024 business plan highlighted by achieving 98% of our speculative revenue target based on the midpoint of our guidance," stated Jerry Sweeney, President and Chief Executive Officer of Brandywine Realty Trust. "We continue to experience positive mark-to-market rental rate increases of 16.9% and 3.3% on an accrual and cash basis as well. In early April, we further strengthened our balance sheet and liquidity position by issuing a $400 million five-year unsecured bond at 8.875%. The bond proceeds are being used to retire the $335 million outstanding balance on our unsecured bond maturing in October 2024 and the outstanding balance on our line of credit. Once these bonds are retired, we have no bond maturities until November 2027 and no outstanding balance on our $600 million line of credit. With the bond issuance occurring earlier than anticipated in our 2024 business plan, we are narrowing our FFO range from $0.90 to $1.00 per share to $0.90 to $0.97 per share."

Pre-earnings options volume in SL Green Realty is 2.9x normal with puts leading calls 11:2. Implied volatility suggests the market is anticipating a move near 6.0%, or $3.01, after results are released. Median move over the past eight quarters is 2.3%.