UPDATE 1-SL Green prices new share offering

NEW YORK, May 12 (Reuters) - SL Green Realty Corp (SLG.N) on Tuesday joined the growing number of real estate investment trusts issuing stock to raise capital and increased the number of shares it plans to offer because the appetite for REIT shares remained strong.

The Manhattan office building owner said it would sell 19.55 million shares, including 2.55 million to cover over allotments at $20.75 per share. That is up from the 14.5 million shares, which included 2.175 million for over allotments, the company announced on Monday.

SL Green shares closed up more than 6 percent, or $1.38 at $23.40, on a down day that saw the benchmark MSCI U.S. REIT Index .RMZ off about 1 percent.

The total offering would expand the number of shares outstanding by about a third.

SL Green expects to net $336.8 million, excluding the over allotments, from the offering and use it for general corporate purposes, including new investment opportunities, repurchasing its debt and repaying debt.

SL Green also said it would slash its quarterly dividend to 10 cents per quarter, or 40 cents per year, from 37.5 cents per quarter, or $1.50 a year.

The new equity and dividend cut should help address its liquidity and leverage concerns, Green Street Advisors analyst Michael Knott wrote in a research note.

"However, the REIT's overall financial leverage remains high ... about 75 percent ... demonstrating that this offering is not, by itself, a cure-all, and that further steps will be needed in the future if SL Green is to be more than a mere survivor," he wrote.

Since the end of January, REITs, such as Simon Property Group Inc (SPG.N), AMB Property Corp (AMB.N), ProLogis (PLD.N) and Kimco Realty Corp (KIM.N) have raised about $9.5 billion issuing stock, according to Fitch Ratings. (Reporting by Ilaina Jonas; Editing by Andre Grenon)