Jim Cramer Says He Likes “SL Green’s Long-Term Opportunities”

SL Green Realty Corp. (NYSE:SLG) is one of the stocks that Jim Cramer weighed in on. During the episode, Cramer mentioned that the stock will benefit when the Fed starts cutting rates, as he said:

“What went wrong here? Alright, look, this is an office real estate play, and anything real estate right now is hostage to interest rates… The quarter really wasn’t as strong as it looked… Let me say two things. First, I don’t think it makes sense to write off that savvy trade SL Green made with its Fifth Avenue investment, and that’s part of the business, isn’t it? SL Green’s knowledge of the Manhattan real estate market and its ability to make smart bets on properties in its focus areas, it’s a real positive.

Frankly, look, in a way it’s what you buy the stock for. But second, even if you’re inclined to dismiss that one-time item, I’m not too torn up about the fact that the second quarter would’ve been a disappointment without it. As CFO Matt DiLiberto reminded us on the conference call, this is a lumpy business, which is why they try to track things on an annual basis rather than going quarter to quarter…

All seems well with SL Green’s core business. Finally, I like SL Green’s long-term opportunities… I’m just talking structural factors here, like the fact that there’s minimal new supply of office buildings in New York these days, and SL Green dominates in class A office properties, which remains the strongest part of the market.

So here’s the bottom line: In the short term, SL Green’s stock will remain hostage to factors outside of the company’s control, like the direction of interest rates. But after this quarter, I really believe that the core business is in good shape, the 5.1% dividend yield is safe, and the stock could be a winner once the Fed starts cutting rates again.”

Photo by Chris Liverani on Unsplash

SL Green (NYSE:SLG) is a real estate investment trust focused on acquiring, managing, and improving the value of commercial properties in Manhattan.

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Disclosure: None. This article is originally published at Insider Monkey.