Core Viewpoint - SL Green Realty Corp. (SLG) is well-positioned to benefit from growth in the New York City office market due to its high-quality properties and opportunistic investment strategy, although challenges such as elevated office supply and high interest rates pose risks [1]. Group 1: Positive Factors - SLG is experiencing strong leasing demand, signing 60 office leases in Manhattan for approximately 633,660 square feet in the first quarter, driven by tenants seeking premium office spaces [2]. - The company has a diversified tenant base with long-term leases, which mitigates risks associated with reliance on single-industry tenants and ensures stable rental revenues [3]. - SLG follows an opportunistic investment policy, divesting non-core assets to fund development projects and share buybacks, enhancing portfolio quality and relieving balance sheet pressure [4]. - In January 2024, SLG sold a retail condominium for $963 million, generating net proceeds of $27 million for corporate debt repayment, allowing a focus on the Manhattan market and retention of premium assets [5]. - Analysts are optimistic about SLG, with the Zacks Consensus Estimate for 2024 funds from operations (FFO) per share rising 20.8% to $7.33, and the company's shares gaining 14.4% over the past three months [6]. Group 2: Negative Factors - Competition from industry peers may hinder SLG's ability to retain tenants, as higher rents could impact pricing power, while elevated office supply may lead to increased vacancies [8]. - The high interest rate environment poses challenges for SLG in acquiring or developing real estate with borrowed funds, with estimated net interest expenses expected to rise 10.3% in 2024 [9].

Company Overview - SL Green Realty Corp. is Manhattan's largest office landlord and operates as a fully integrated real estate investment trust (REIT) focused on acquiring, managing, and maximizing the value of Manhattan commercial properties [2] - As of March 31, 2024, SL Green held interests in 57 buildings totaling 32.4 million square feet, including ownership interests in 28.7 million square feet of Manhattan buildings and 2.8 million square feet securing debt and preferred equity investments [2] Dividend Announcement - The board of directors of SL Green Realty Corp. has declared a monthly ordinary dividend of $0.25 per share of common stock, which translates to an annualized dividend of $3.00 per share [1] - This dividend is payable in cash on June 17, 2024, to shareholders of record at the close of business on May 31, 2024 [1]

NEW YORK, May 20, 2024 (GLOBE NEWSWIRE) -- SL Green Realty Corp. (NYSE:SLG), Manhattan's largest office landlord, today announced that its board of directors has declared a monthly ordinary dividend of $0.25 per share of common stock, which is the equivalent of an annualized dividend of $3.00 per share. The dividend is payable in cash on June 17, 2024 to shareholders of record at the close of business on May 31, 2024. About SL Green Realty Corp. SL Green Realty Corp., Manhattan's largest office landlord, is ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ______________________________________________________________________ FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 1-13199 (SL Green Realty Corp.) Commission File Number: 33-167793-02 (S ...

Financial Data and Key Metrics Changes - The company reported earnings of $0.98 per share for the first quarter, which was ahead of internal expectations but perceived as a miss by some analysts due to their models [34][60][99] - The company maintains its full-year guidance, indicating confidence in achieving its financial targets despite the first quarter's performance [42][101] Business Line Data and Key Metrics Changes - SL Green leased over 630,000 square feet of space in Q1 2024 at an average starting rate of $93 per square foot, with one-third being renewals and two-thirds new leases [9][24] - The leasing pipeline has grown to over 1.6 million square feet, with 840,000 square feet currently in negotiation, indicating strong demand [65][128] Market Data and Key Metrics Changes - The tech sector is showing a resurgence, with over 5 million square feet of active tech tenant requirements in the market, a 53% increase from the previous year [47] - The company anticipates that between 25 million to 40 million square feet of office space will convert to residential use under new legislation, which could significantly reduce available office space [18][13] Company Strategy and Development Direction - The company is focusing on strategic debt investments and has launched a $1 billion opportunistic debt fund to capitalize on market dislocations [9][22] - SL Green is actively involved in the office-to-residential conversion program, planning to convert 750 Third Avenue as part of its strategy to address New York City's housing crisis [10][4] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the trajectory of the business, citing a solid foundation of positive economic momentum among tenants despite a higher interest rate environment [17][21] - The company believes that the current market fundamentals are shifting to become tailwinds, with a strong demand for well-located office spaces [17][12] Other Important Information - The company has made significant progress in its partnership with Caesars Entertainment and Roc Nation regarding the development of Caesars Palace Times Square [23] - SL Green has received accreditation as a special servicer from multiple agencies, enhancing its ability to create new client relationships [95] Q&A Session Summary Question: Can you discuss the office-to-residential conversion plans? - Management noted that the new legislation encourages expedited conversions, with a focus on addressing the housing crisis immediately rather than in the distant future [31][57] Question: How does the leasing pipeline compare to previous quarters? - The current leasing pipeline has grown despite strong leasing activity in Q1, indicating ongoing demand [65][128] Question: What is the outlook for the tech sector's impact on leasing? - The tech sector is showing increased activity, with many large tenants actively searching for space, which bodes well for future leasing [47][128] Question: How does the company plan to manage its debt and asset sales? - The company remains committed to its business plan, which includes selling or joint venturing certain identified buildings while continuing to pursue debt modifications and restructurings [39][87] Question: Can you provide insight into the earnings trajectory for the rest of the year? - Management indicated that while the first quarter was lower, they expect an acceleration in earnings driven by increased occupancy and leasing activity throughout the year [102][101]

[Introduction and Company Overview](index=1&type=section&id=Introduction) [Company Profile and Report Scope](index=2&type=section&id=Company%20Profile) SL Green Realty Corp, a self-managed REIT specializing in Manhattan properties, held interests in 57 buildings totaling 32.4 million square feet as of March 31, 2024 - SL Green Realty Corp is a self-managed REIT with in-house capabilities in property management, acquisitions, dispositions, financing, development, redevelopment, construction, and leasing[23](index=23&type=chunk) - As of March 31, 2024, the Company held interests in **57 buildings totaling 32.4 million square feet**, including 28.7 million square feet in Manhattan buildings[23](index=23&type=chunk) - The financial data presented in this supplemental reporting package is unaudited and should be read in conjunction with the Company's official regulatory filings[23](index=23&type=chunk) [Forward-looking Statements Disclaimer](index=2&type=section&id=Forward-looking%20Statements) This section provides a standard disclaimer that forward-looking statements are not guarantees of future performance and actual results may differ materially - The supplemental reporting package includes 'forward-looking statements' subject to risks and uncertainties that may cause actual results to differ materially from expectations[24](index=24&type=chunk) - Forward-looking statements are generally identifiable by words such as 'may,' 'will,' 'should,' 'expect,' 'anticipate,' 'estimate,' 'believe,' 'intend,' 'project,' or 'continue'[24](index=24&type=chunk) - The Company undertakes no obligation to publicly update or revise any forward-looking statements, except as required by law[24](index=24&type=chunk) [Definitions of Key Financial Terms](index=4&type=section&id=Definitions) [Key Financial Metrics Definitions](index=4&type=section&id=Key%20Financial%20Metrics%20Definitions) This section defines critical non-GAAP financial measures and real estate specific terms used in the report, such as FFO, FAD, EBITDAre, and NOI - **Funds from Operations (FFO)** is a non-GAAP measure defined by NAREIT as net income excluding property sales gains/losses, impairment charges, plus real estate depreciation[29](index=29&type=chunk) - **Funds Available for Distribution (FAD)** is a non-GAAP measure calculated from FFO with adjustments for non-cash items, leasing costs, and capital expenditures[28](index=28&type=chunk) - **Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre)** is a non-GAAP measure defined by NAREIT to show performance before leverage and certain non-cash items[28](index=28&type=chunk) - **Net Operating Income (NOI)** is a non-GAAP measure calculated as operating income before transaction costs, G&A expenses, and non-real estate revenue[29](index=29&type=chunk) [First Quarter 2024 Highlights](index=6&type=section&id=Highlights) [Financial Performance Highlights](index=6&type=section&id=Financial%20Performance%20Highlights) SL Green Realty Corp reported a significant turnaround in net income and FFO for Q1 2024, driven by a substantial gain on discounted debt extinguishment Q1 2024 vs Q1 2023 Financial Performance (in Millions) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Income Attributable to Common Stockholders | 13.1 | (39.7) | 52.8 | N/A | | EPS (diluted) | 0.20 | (0.63) | 0.83 | N/A | | FFO | 215.4 | 105.5 | 109.9 | 104.2% | | FFO per share | 3.07 | 1.53 | 1.54 | 100.7% | | *Gain on discounted debt extinguishment* | 141.7 | N/A | | | | *Non-cash fair value adjustments* | 5.1 | N/A | | | | *Net share of holdover rent (Q1 2023)* | N/A | 20.3 | | | - Same-store cash NOI, including the share from unconsolidated joint ventures, **increased by 1.2%** for Q1 2024 compared to Q1 2023, outperforming company projections[38](index=38&type=chunk) [Operating and Leasing Activity](index=6&type=section&id=Operating%20and%20Leasing%20Activity) The company demonstrated strong leasing activity in its Manhattan office portfolio during Q1 2024, signing 60 leases totaling over 633,000 square feet - During the first quarter of 2024, the Company signed **60 office leases** in its Manhattan office portfolio totaling **633,660 square feet**[38](index=38&type=chunk) - The average rent on Manhattan office leases signed in Q1 2024 was **$72.38 per rentable square foot**, with an average lease term of 6.4 years[38](index=38&type=chunk) - Replacement leases saw average starting rents of $77.90 per rentable square foot, representing a **5.5% decrease** over previous fully escalated rents[38](index=38&type=chunk) - Occupancy in the Manhattan same-store office portfolio was **89.2%** as of March 31, 2024, and is expected to increase to more than **91.5% by year-end**[39](index=39&type=chunk) [Investment Activity](index=7&type=section&id=Investment%20Activity) Q1 2024 saw strategic investment activities including acquiring a partner's interest in 10 East 53rd Street and selling a retail condominium at 717 Fifth Avenue - Entered into a contract to acquire a partner's 45% interest in **10 East 53rd Street** for $7.2 million net of debt[40](index=40&type=chunk) - Entered into a contract to sell the **Palisades Premier Conference Center** for $26.3 million, expected to generate $20.0 million in net proceeds[40](index=40&type=chunk) - Closed on the sale of the retail condominium at **717 Fifth Avenue** for $963.0 million, generating $27.0 million in net proceeds for corporate debt repayment[40](index=40&type=chunk) - Launched fundraising for a **$1.0 billion opportunistic debt fund** to capitalize on capital markets dislocations[40](index=40&type=chunk) [Debt and Preferred Equity Investment Activity](index=7&type=section&id=Debt%20and%20Preferred%20Equity%20Investment%20Activity) The company's debt and preferred equity (DPE) portfolio maintained a carrying value of $352.3 million with a strong weighted average current yield - The carrying value of the Company's debt and preferred equity (DPE) portfolio was **$352.3 million** at March 31, 2024[41](index=41&type=chunk) - The DPE portfolio had a weighted average current yield of **8.0%**, or 9.6% excluding a $50.0 million investment on non-accrual[41](index=41&type=chunk) - **No DPE investments** were sold, repaid, originated, or acquired during the first quarter[41](index=41&type=chunk) [Financing Activity](index=7&type=section&id=Financing%20Activity) SL Green successfully modified and extended mortgages on several key properties, improving maturity profiles and maintaining favorable interest rates - Closed on a modification and extension of the mortgage on **10 East 53rd Street**, extending it three years to May 2028 with the interest rate fixed at 5.36% from May 2025[42](index=42&type=chunk) - Closed on a modification and extension of the **$360.0 million mortgage on 100 Park Avenue**, extending the maturity date by two years to December 2025[42](index=42&type=chunk) - Closed on a modification and extension of the mortgage on **15 Beekman Street**, extending it four years to January 2028 with the interest rate fixed at 5.99% through January 2026[42](index=42&type=chunk) [Earnings Guidance and ESG Recognition](index=8&type=section&id=Earnings%20Guidance%20and%20ESG) The company increased its 2024 FFO guidance due to gains on debt extinguishments and received multiple prestigious ESG awards - Increased 2024 FFO guidance range to **$7.35 to $7.65 per share** (previously $5.90 to $6.20), reflecting gains on discounted debt extinguishments[43](index=43&type=chunk) - Maintained 2024 net income guidance range of **$2.73 to $3.03 per share**[43](index=43&type=chunk) - Received **ENERGY STAR Partner of the Year Sustained Excellence Award** in 2024 for the seventh consecutive year[43](index=43&type=chunk) - Featured on the **Sustainalytics 2024 ESG Top-Rated Companies List** for the second consecutive year[43](index=43&type=chunk) [Dividends Declared](index=8&type=section&id=Dividends) In Q1 2024, the company declared ordinary monthly dividends for common stock and a quarterly dividend for its Series I Preferred Stock - Declared three monthly ordinary dividends on common stock of **$0.25 per share**, equating to an annualized dividend of $3.00 per share[44](index=44&type=chunk) - Declared a quarterly dividend on 6.50% Series I Cumulative Redeemable Preferred Stock of **$0.40625 per share**, equivalent to an annualized dividend of $1.625 per share[44](index=44&type=chunk) [Key Financial Data Summary](index=9&type=section&id=Key%20Financial%20Data%20Summary) This section provides a snapshot of key financial metrics, including earnings per share, market capitalization, debt, and operating data for recent quarters Key Financial Data (in Thousands, Except Per Share) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Net income (loss) available to common stockholders (EPS) - diluted | $0.20 | $(2.45) | $(0.38) | $(5.63) | $(0.63) | | Closing price at the end of the period | $55.13 | $45.17 | $37.30 | $30.05 | $23.52 | | Total common shares and units outstanding | 69,223 | 68,675 | 68,537 | 68,625 | 68,612 | | Market value of common equity | $3,816,264 | $3,102,050 | $2,556,430 | $2,062,181 | $1,613,754 | | Total consolidated debt, net | $3,785,503 | $3,490,747 | $3,350,532 | $3,804,919 | $5,577,214 | | Total debt, including SLG share of unconsolidated JV debt | $10,888,726 | $10,859,661 | $10,714,612 | $10,938,594 | $11,795,663 | | Property operating revenues | $141,504 | $151,357 | $150,991 | $185,945 | $195,042 | | Same-Store office occupancy inclusive of leases signed not yet commenced | 89.2% | 89.8% | 89.9% | 89.8% | 90.2% | [Comparative Balance Sheets](index=12&type=section&id=Comparative%20Balance%20Sheets) [Balance Sheet Overview](index=12&type=section&id=Balance%20Sheet%20Overview) The balance sheets show a slight increase in total assets quarter-over-quarter but a significant decrease year-over-year, with a substantial reduction in debt Comparative Balance Sheet Data (in Thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total Assets | $9,764,292 | $9,531,181 | $9,690,582 | $10,041,288 | $12,342,119 | | Mortgages and other loans payable | $1,701,378 | $1,497,386 | $1,518,872 | $1,520,313 | $3,234,489 | | Total Liabilities | $5,960,644 | $5,675,256 | $5,583,296 | $5,881,455 | $7,812,945 | | SL Green stockholders' equity | $3,803,648 | $3,855,925 | $4,107,243 | $4,159,833 | $4,529,174 | [Comparative Statements of Operations](index=14&type=section&id=Comparative%20Statements%20of%20Operations) [Statement of Operations Overview](index=14&type=section&id=Statement%20of%20Operations%20Overview) The company reported a net income of $13.1 million in Q1 2024, a significant improvement from a $39.7 million net loss in Q1 2023 Comparative Statement of Operations (in Thousands, Except Per Share) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total Revenues | 187,882 | 245,764 | (57,882) | (23.6%) | | Total Operating Expenses | 124,806 | 151,495 | (26,689) | (17.6%) | | Equity in net income (loss) from unconsolidated joint ventures | 111,160 | (7,412) | 118,572 | N/A | | Operating Income | 174,236 | 86,857 | 87,379 | 100.6% | | Interest expense, net of interest income | 31,173 | 41,653 | (10,480) | (25.2%) | | Depreciation and amortization | 48,584 | 78,782 | (30,198) | (38.3%) | | Net Income (Loss) | 18,389 | (38,357) | 56,746 | N/A | | Net Income (Loss) attributable to SL Green common stockholders | 13,141 | (39,731) | 52,872 | N/A | | Diluted earnings (loss) per share | 0.20 | (0.63) | 0.83 | N/A | [Comparative Computation of FFO and FAD](index=15&type=section&id=Comparative%20Computation%20of%20FFO%20and%20FAD) [FFO and FAD Performance](index=15&type=section&id=FFO%20and%20FAD%20Performance) The company reported a substantial increase in Funds From Operations (FFO) and Funds Available for Distribution (FAD) for Q1 2024 compared to Q1 2023 Comparative FFO and FAD (in Thousands, Except Per Share) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) attributable to SL Green common stockholders | 13,141 | (39,731) | 52,872 | N/A | | Depreciation and amortization | 48,584 | 78,782 | (30,198) | (38.3%) | | Funds From Operations (FFO) | 215,443 | 105,485 | 109,958 | 104.2% | | Funds From Operations - Diluted per Share | 3.07 | 1.53 | 1.54 | 100.7% | | Reported Funds Available for Distribution (FAD) | 189,947 | 73,561 | 116,386 | 158.2% | [Consolidated Statement of Equity](index=16&type=section&id=Consolidated%20Statement%20of%20Equity) [Equity Changes and Share Count](index=16&type=section&id=Equity%20Changes%20and%20Share%20Count) The consolidated statement of equity shows a decrease in total equity from the previous quarter, primarily influenced by cash distributions declared Key Equity Data (in Thousands) | Metric | 3/31/2024 | 12/31/2023 | | :--- | :--- | :--- | | Total Equity | $3,803,648 | $3,855,925 | | Cash distributions declared | $(48,356) | N/A | | Weighted Average Share Count at March 31, 2024 - Diluted | 70,094,571 | 68,675,701 | [Joint Venture Statements](index=17&type=section&id=Joint%20Venture%20Statements) [Balance Sheet for Unconsolidated Joint Ventures](index=17&type=section&id=Balance%20Sheet%20for%20Unconsolidated%20Joint%20Ventures) The balance sheet for unconsolidated joint ventures shows SL Green's share of total assets at $11.16 billion and total liabilities at $7.04 billion Unconsolidated JV Balance Sheet (SLG Share, in Thousands) | Metric | 3/31/2024 ($) | 12/31/2023 ($) | 9/30/2023 ($) | | :--- | :--- | :--- | :--- | | Total Assets | 11,161,011 | 11,149,052 | 11,321,591 | | Total Liabilities | 7,036,750 | 7,297,410 | 7,286,949 | [Statement of Operations for Unconsolidated Joint Ventures](index=18&type=section&id=Statement%20of%20Operations%20for%20Unconsolidated%20Joint%20Ventures) The statement of operations for unconsolidated joint ventures indicates a significant increase in rental revenue and FFO contribution for Q1 2024 Unconsolidated JV Statement of Operations (SLG Share, in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Rental revenue, net | 300,675 | 159,279 | 141,396 | 88.8% | | FFO Contribution | 231,519 | 118,035 | 113,484 | 96.1% | [Selected Financial Data](index=19&type=section&id=Selected%20Financial%20Data) [Net Operating Income (NOI)](index=19&type=section&id=Net%20Operating%20Income) The company's share of Net Operating Income (NOI) and Cash NOI decreased year-over-year, with Manhattan Office contributing the largest portion NOI and Cash NOI - SLG Share (in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | NOI - SLG share | 181,416 | 235,572 | (54,156) | (23.0%) | | Cash NOI - SLG share | 172,116 | 205,498 | (33,382) | (16.2%) | NOI and Cash NOI by Property Type (Q1 2024, in Thousands) | Property Type | NOI ($) | Cash NOI ($) | | :--- | :--- | :--- | | Manhattan Office | 163,435 | 151,417 | | Development / Redevelopment | 2,256 | 2,027 | | High Street Retail | 240 | 174 | | Suburban & Residential | 3,315 | 3,590 | | Alternative Strategy Portfolio | 11,432 | 13,811 | | Property Dispositions | 223 | 223 | | Other | 515 | 874 | | **Total** | **181,416** | **172,116** | [Same Store Net Operating Income - Wholly Owned and Consolidated JVs](index=20&type=section&id=Same%20Store%20Net%20Operating%20Income%20-%20Wholly%20Owned%20and%20Consolidated%20JVs) For wholly-owned and consolidated joint ventures, same-store rental revenue, NOI, and Cash NOI all experienced year-over-year decreases in Q1 2024 Same Store NOI - Wholly Owned and Consolidated JVs (in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Rental revenue, net | 121,303 | 125,880 | (4,577) | (3.6%) | | NOI | 65,336 | 71,109 | (5,773) | (8.1%) | | Cash NOI | 62,402 | 66,292 | (3,890) | (5.9%) | | Cash NOI excluding lease termination income | 61,239 | 65,781 | (4,542) | (6.9%) | [Same Store Net Operating Income - Unconsolidated JVs](index=21&type=section&id=Same%20Store%20Net%20Operating%20Income%20-%20Unconsolidated%20JVs) SL Green's share of same-store cash NOI from unconsolidated joint ventures increased by 7.1% year-over-year in Q1 2024 Same Store NOI - Unconsolidated JVs (SLG Share, in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Rental revenue, net | 120,279 | 123,512 | (3,233) | (2.6%) | | NOI | 92,280 | 93,585 | (1,305) | (1.4%) | | Cash NOI | 86,136 | 80,453 | 5,683 | 7.1% | | Cash NOI excluding lease termination income | 82,850 | 80,010 | 2,840 | 3.5% | - Overall Same-Store Cash NOI, including SLG share of unconsolidated JVs, **increased by 1.2%** year-over-year to $148,538 thousand[79](index=79&type=chunk) [Debt Summary Schedule](index=23&type=section&id=Debt%20Summary%20Schedule) [Consolidated Debt](index=23&type=section&id=Consolidated%20Debt) The consolidated debt schedule details the company's secured, unsecured, and floating rate debt, totaling $3.69 billion with a weighted average interest rate of 5.18% Consolidated Debt (March 31, 2024, in Thousands) | Type of Debt | Amount ($) | Interest Rate | | :--- | :--- | :--- | | Secured fixed rate debt | 2,930,392 | 4.99% | | Unsecured fixed rate debt | 100,000 | 5.27% | | Floating rate debt | 760,493 | 6.74% | | **Total Consolidated Debt** | **3,690,885** | **5.18%** | - Total Debt - Consolidated, net was **$3,785,503 thousand** with a 5.21% interest rate[75](index=75&type=chunk) [Unconsolidated JVs Debt](index=24&type=section&id=Unconsolidated%20JVs%20Debt) SL Green's share of unconsolidated joint venture debt totaled $7.04 billion with a weighted average interest rate of 4.64% Unconsolidated JV Debt (SLG Share, March 31, 2024, in Thousands) | Type of Debt | Amount ($) | Interest Rate | | :--- | :--- | :--- | | Fixed rate debt | 4,905,871 | 3.69% | | Floating rate debt | 1,182,168 | 8.07% | | **Total Unconsolidated JV Debt** | **6,157,039** | **4.29%** | - Total Debt - Unconsolidated JV, net was **$7,036,750 thousand** with a 4.64% interest rate[88](index=88&type=chunk) - A modification and extension of the **$1.075 billion loan for One Vanderbilt Avenue** was closed in April, extending maturity to September 2026[88](index=88&type=chunk) [Debt Composition and Corporate Debt Covenants](index=25&type=section&id=Debt%20Composition%20and%20Corporate%20Debt%20Covenants) The company's total debt was $10.89 billion, with 82.2% being fixed rate, and it maintains strong compliance with its corporate debt covenants Total Debt Composition (March 31, 2024, in Thousands) | Debt Type | Consolidated ($) | SLG Share of JV ($) | Total ($) | % of Total | | :--- | :--- | :--- | :--- | :--- | | Fixed Rate Debt | 3,040,885 | 5,277,399 | 8,318,284 | 76.4% | | Floating Rate Debt | 760,493 | 1,182,168 | 1,942,661 | 17.8% | | **Total Debt** | **3,801,378** | **6,459,567** | **10,260,945** | **94.2%** | Corporate Debt Covenants (March 31, 2024) | Covenant | Actual | Required | | :--- | :--- | :--- | | Revolving Credit Facility: | | | | Total Debt / Total Assets | 37.0% | Less than 60% | | Consolidated Fixed Charge Coverage | 1.46x | Greater than 1.40x | | Maximum Secured Indebtedness | 18.4% | Less than 50% | | Maximum Unencumbered Leverage Ratio | 39.4% | Less than 60% | | Unsecured Notes: | | | | Total Debt / Total Assets | 36.6% | Less than 60% | | Secured Debt / Total Assets | 20.8% | Less than 40% | | Debt Service Coverage | 2.04x | Greater than 1.50x | | Unencumbered Assets / Unsecured Debt | 327.7% | Greater than 150% | [Derivative Summary Schedule](index=26&type=section&id=Derivative%20Summary%20Schedule) [Interest Rate Derivatives](index=26&type=section&id=Interest%20Rate%20Derivatives) This schedule outlines the company's interest rate derivatives, including caps and swaps, for both consolidated and unconsolidated joint venture debt Consolidated Interest Rate Derivatives (March 31, 2024, in Thousands) | Debt Type | Instrument | Notional Value ($) | Fair Value ($) | Strike Rate/Swap Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | :--- | | Secured | Cap | 220,000 | 1,789 | 4.00% | Feb 2025 | | Unsecured | Swap | 150,000 | 4,915 | 2.62% | Jan 2026 | | Forward-starting (Unsecured) | Swap | 300,000 | (5,113) | 4.49% | Nov 2027 | Unconsolidated JV Interest Rate Derivatives (SLG Share, March 31, 2024, in Thousands) | Debt Type | Instrument | Notional Value ($) | Fair Value ($) | Strike Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | :--- | | Forward-starting | Cap | 278,161 | 1,624 | 4.00% | Nov 2024 | [Lease Liability Schedule](index=27&type=section&id=Lease%20Liability%20Schedule) [Operating and Financing Lease Liabilities](index=27&type=section&id=Operating%20and%20Financing%20Lease%20Liabilities) This schedule details the company's operating and financing lease liabilities for various properties, including annual payments and maturity dates Operating Lease Liabilities (in Thousands) | Property | Annual Payment (2024) ($) | Maturity | | :--- | :--- | :--- | | 1185 Avenue of the Americas | 5,182 | 2043 | | Equinox Studio City (SLG Share) | 460 | 2029 | | 650 Fifth Avenue (Floors 4-6, SLG Share) | 1,343 | 2053 | Financing Lease Liabilities (in Thousands) | Property | Annual Payment (2024) ($) | Maturity | | :--- | :--- | :--- | | 15 Beekman | 2,388 | 2119 | | One Vanderbilt Avenue Garage (SLG Share) | 157 | 2069 | | 650 Fifth Avenue (Floors b-3, SLG Share) | 5,523 | 2062 | - The Company has an option to purchase the ground lease for **15 Beekman** for a fixed price on a specific date, which is not reflected in the scheduled cash payments[98](index=98&type=chunk) [Debt and Preferred Equity Investments](index=28&type=section&id=Debt%20and%20Preferred%20Equity%20Investments) [DPE Portfolio Summary](index=28&type=section&id=DPE%20Portfolio%20Summary) The company's Debt and Preferred Equity (DPE) investment portfolio had a book value of $352.3 million with a weighted average yield of 7.95% at quarter-end DPE Portfolio Book Value and Yield (in Thousands) | Metric | 3/31/2024 ($) | 12/31/2023 ($) | 9/30/2023 ($) | | :--- | :--- | :--- | :--- | | Book Value | 352,347 | 346,745 | 334,327 | | Weighted Average Yield During Quarter | 7.82% | 7.79% | 6.15% | | Weighted Average Yield At End Of Quarter | 7.95% | 7.92% | 8.21% | DPE Investment Type Breakdown (March 31, 2024, in Thousands) | Investment Type | Book Value ($) | Weighted Average Yield At End Of Quarter | | :--- | :--- | :--- | | Mezzanine Debt | 222,232 | 8.72% | | Preferred Equity | 130,115 | 6.55% | | **Total** | **352,347** | **7.95%** | DPE Maturity Profile (in Thousands) | Year | Floating Rate ($) | Fixed Rate ($) | | :--- | :--- | :--- | | 2024 | 122,713 | — | | 2025 | — | 30,000 | | 2026 | 49,519 | — | | 2027 | — | 130,115 | | 2028 & Thereafter | — | 20,000 | [Detailed DPE Investments](index=30&type=section&id=Detailed%20DPE%20Investments) This section provides a detailed breakdown of individual mezzanine loan and preferred equity investments, with one mezzanine loan remaining on non-accrual Selected DPE Investments (March 31, 2024, in Thousands) | Investment Type | Book Value ($) | Property Type | Location | Senior Financing ($) | Yield At End Of Quarter | | :--- | :--- | :--- | :--- | :--- | :--- | | Preferred Equity | 130,115 | Multi-Family Rental | Manhattan | 250,000 | 6.55% | | Mezzanine Loan | 64,624 | Multi-Family Rental | Brooklyn | 284,173 | 15.05% | | Mezzanine Loan | 49,846 | Office | Manhattan | 275,000 | (Non-accrual) | | Mezzanine Loan | 49,519 | Office | Manhattan | 186,084 | 10.42% | | Mezzanine Loan | 30,000 | Office | Manhattan | 95,000 | 8.52% | - One mezzanine loan of **$49,846 thousand** was put on non-accrual in Q1 2023 and remains on non-accrual as of March 31, 2024[103](index=103&type=chunk) [Selected Property Data](index=31&type=section&id=Selected%20Property%20Data) [Manhattan Operating Properties](index=31&type=section&id=Manhattan%20Operating%20Properties) This section provides an overview of Manhattan operating properties, detailing ownership, square footage, occupancy rates, and annualized contractual cash rent Manhattan Operating Properties - Consolidated 'Same Store' (March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 8,753,441 | | % of Total Sq. Feet | 40.2% | | % Occupied | 85.3% | | % Leased (incl. signed but not commenced) | 87.5% | | Annualized Contractual Cash Rent (SLG Share) | $533,683 | Manhattan Operating Properties - Unconsolidated 'Same Store' (March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 11,226,356 | | % of Total Sq. Feet | 51.6% | | % Occupied | 88.5% | | % Leased (incl. signed but not commenced) | 90.6% | | Annualized Contractual Cash Rent (SLG Share) | $555,419 | [Retail, Residential and Suburban Operating Properties](index=32&type=section&id=Retail%2C%20Residential%20and%20Suburban%20Operating%20Properties) This section details the performance of the company's retail, residential, and suburban operating properties, providing key metrics for each category Retail Properties (Total, March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 35,596 | | % Occupied | 100.0% | | % Leased | 100.0% | | Annualized Contractual Cash Rent (SLG Share) | $19,269 | Residential Properties (Total, March 31, 2024) | Metric | Value | | :--- | :--- | | Total Units | 682 | | % Occupied | 99.2% | | % Leased | 90.6% | | Annualized Contractual Cash Rent (SLG Share) | $14,557 | Suburban Properties (Total, March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 862,800 | | % Occupied | 72.0% | | % Leased | 72.8% | | Annualized Contractual Cash Rent (SLG Share) | $10,582 | [Development / Redevelopment, Alternative Strategy Portfolio & Construction in Progress Properties](index=33&type=section&id=Development%20%2F%20Redevelopment%2C%20Alternative%20Strategy%20Portfolio%20%26%20Construction%20in%20Progress%20Properties) This section provides data on properties under development, those within the alternative strategy portfolio, and lists properties under construction Development / Redevelopment Properties (Total, March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 1,407,845 | | % Occupied | 9.2% | | % Leased | 9.2% | | Annualized Contractual Cash Rent (SLG Share) | $14,239 | | Real Estate Book Value, Net | $980,239 | Alternative Strategy Portfolio Properties (Total, March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 3,712,844 | | % Occupied | 66.1% | | % Leased | 66.1% | | Annualized Contractual Cash Rent (SLG Share) | $104,744 | | Carrying Value, Net | $264,324 | [Retail Leases Within Operating, Development / Redevelopment and Alternative Strategy Portfolio Properties](index=34&type=section&id=Retail%20Leases%20Within%20Operating%2C%20Development%20%2F%20Redevelopment%20and%20Alternative%20Strategy%20Portfolio%20Properties) This section provides detailed data on retail leases across various property categories, highlighting ownership, occupancy, and annualized cash rent High Street Retail - Consolidated Properties (March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 22,648 | | % Occupied | 100.0% | | % Leased | 100.0% | | Annualized Contractual Cash Rent (SLG Share) | $18,362 | Other Retail - Consolidated Properties (March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 509,296 | | % Occupied | 90.7% | | % Leased | 91.3% | | Annualized Contractual Cash Rent (SLG Share) | $53,451 | Alternative Strategy Portfolio - Unconsolidated Properties (March 31, 2024) | Metric | Value | | :--- | :--- | | Total Square Feet | 297,357 | | % Occupied | 72.1% | | % Leased | 72.1% | | Annualized Contractual Cash Rent (SLG Share) | $50,084 | [Largest Tenants by SLG Share of Annualized Cash Rent](index=36&type=section&id=Largest%20Tenants) [Top Tenants Overview](index=36&type=section&id=Top%20Tenants%20Overview) This section identifies the largest tenants based on SL Green's share of annualized contractual cash rent, providing details on their property and lease terms Largest Tenants by SLG Share of Annualized Contractual Cash Rent (March 31, 2024, in Thousands) | Tenant Name | Property | SLG Share of Annualized Contractual Cash Rent ($) | % of SLG Share of Annualized Contractual Cash Rent | Investment Grade Credit Rating | | :--- | :--- | :--- | :--- | :--- | | Sony Corporation | 11 Madison Avenue | 30,721 | 2.3% | A | | AABloomberg L.P. | 919 Third Avenue | 25,753 | 1.9% | | | Societe Generale | 245 Park Avenue | 25,300 | 1.9% | A | | Carlyle Investment Management LLC | One Vanderbilt Avenue | 23,407 | 1.8% | | | The City of New York | 100 Church Street | 21,127 | 1.6% | Aa2 | | King & Spalding | 1185 Avenue of the Americas | 21,111 | 1.6% | | | Nike Retail Services, Inc. | 650 Fifth Avenue | 20,596 | 1.6% | | | Metro-North Commuter Railroad Company | 420 Lexington Avenue | 20,349 | 1.5% | A3 | | WME IMG, LLC | 304 Park Avenue | 19,903 | 1.5% | | | Giorgio Armani Corporation | 760 Madison Avenue | 18,362 | 1.4% | | | McDermott Will & Emery LLP | One Vanderbilt Avenue | 18,273 | 1.4% | | | The Toronto Dominion Bank | One Vanderbilt Avenue | 18,110 | 1.4% | | | Cravath, Swaine & Moore LLP | Worldwide Plaza | 17,481 | 1.3% | | | Stone Ridge Holdings Group LP | One Vanderbilt Avenue | 15,632 | 1.2% | | | Hess Corp | 1185 Avenue of the Americas | 15,524 | 1.2% | | | BBBBMW of Manhattan, Inc. | 555 West 57th Street | 12,841 | 1.0% | A | [Manhattan Tenant Diversification](index=37&type=section&id=Tenant%20Diversification) [Industry Diversification](index=37&type=section&id=Industry%20Diversification) SL Green's Manhattan tenant base is diversified across various industries, with Financial Services and TAMI sectors representing the largest portions of rent - **Financial Services** accounts for **39%** of SLG's share of annualized contractual cash rent, a slight decrease from 40%[2](index=2&type=chunk) - **TAMI** (Technology, Advertising, Media, Information) accounts for **16%** of SLG's share of annualized contractual cash rent, a decrease from 22%[2](index=2&type=chunk) - **Legal services** represent **11%** of the annualized contractual cash rent, remaining stable[2](index=2&type=chunk) - Other significant sectors include Professional Services (6%), Arts, Entertainment & Recreation (5%), Retail (3%), and Government/Non Profit (3%)[2](index=2&type=chunk) [Leasing Activity - Manhattan Operating Properties](index=38&type=section&id=Leasing%20Activity) [Commenced Leasing Activity](index=38&type=section&id=Commenced%20Leasing%20Activity) In Q1 2024, the company commenced 32 leases across its Manhattan operating properties, totaling 543,550 square feet Commenced Leasing Activity (Q1 2024) | Type | of Leases | Square Feet | Rentable SF | Escalated Rent/Rentable SF ($/SF) | | :--- | :--- | :--- | :--- | :--- | | Office | 28 | 541,719 | 596,777 | $91.69 | | Storage | 4 | 1,831 | 1,677 | $21.38 | | **Total** | **32** | **543,550** | **598,454** | **$91.49** | [Leased Space and Renewals](index=39&type=section&id=Leased%20Space%20and%20Renewals) The company executed new leases and renewals for office, retail, and storage spaces in Q1 2024 with varying terms, rents, and concessions Leased Space Activity (Q1 2024) | Activity Type | of Leases | Term (Yrs) | Rentable SF | New Cash Rent / Rentable SF ($/SF) | Prev. Escalated Rent / Rentable SF ($/SF) | TI / Rentable SF ($/SF) | Free Rent of Months | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Leased Office | 35 | 9.2 | 198,310 | $59.22 | $66.56 | $90.38 | 9.4 | | Leased Retail | 1 | 15.7 | 1,751 | $188.46 | $491.97 | $199.89 | 8.0 | | Leased Storage | 1 | 1.0 | 994 | $15.00 | $15.00 | $— | — | | Early Renewals Office | 16 | 4.7 | 192,403 | $79.81 | $80.33 | $13.34 | 5.1 | - Average starting office rent for office space (leased and early renewals) was **$75.11/rsf** for 280,879 rentable SF[124](index=124&type=chunk) [Lease Expirations - Manhattan Operating Properties](index=40&type=section&id=Lease%20Expirations) [Wholly-Owned and Consolidated JV Lease Expirations](index=40&type=section&id=Wholly-Owned%20and%20Consolidated%20JV%20Lease%20Expirations) For wholly-owned and consolidated JVs, 59 leases are set to expire in 2024, covering 470,705 square feet with an annualized cash rent of $28.16 million Office, Retail and Storage Leases - Wholly-Owned and Consolidated (Total 2024) | Metric | Value | | :--- | :--- | | Number of Expiring Leases | 59 | | Rentable Square Footage of Expiring Leases | 470,705 | | SLG Share Rentable Square Footage | 458,046 | | Percentage of Total Sq. Ft. | 5.9% | | Annualized Contractual Cash Rent | $28,158,773 | | SLG Share Annualized Contractual Cash Rent | $26,944,725 | | Annualized Contractual Cash Rent Per Square Foot | $59.82 | | Current Weighted Average Asking Rent | $55.25 | Other Retail Leases - Wholly-Owned and Consolidated JVs (Total 2024) | Metric | Value | | :--- | :--- | | Number of Expiring Leases | 2 | | Rentable Square Footage of Expiring Leases | 4,660 | | SLG Share Rentable Square Footage | 4,660 | | Percentage of Total Sq. Ft. | 1.0% | | Annualized Contractual Cash Rent | $1,180,288 | | SLG Share Annualized Contractual Cash Rent | $1,180,288 | | Annualized Contractual Cash Rent Per Square Foot | $253.28 | | Current Weighted Average Asking Rent | $119.00 | [Unconsolidated JV Lease Expirations](index=41&type=section&id=Unconsolidated%20JV%20Lease%20Expirations) For unconsolidated JVs, 12 leases are set to expire in 2024, covering 70,034 square feet with an annualized cash rent of $7.38 million Office, Retail and Storage Leases - Unconsolidated JVs (Total 2024) | Metric | Value | | :--- | :--- | | Number of Expiring Leases | 12 | | Rentable Square Footage of Expiring Leases | 70,034 | | SLG Share Rentable Square Footage | 30,906 | | Percentage of Total Sq. Ft. | 0.6% | | Annualized Contractual Cash Rent | $7,380,789 | | SLG Share Annualized Contractual Cash Rent | $2,988,126 | | Annualized Contractual Cash Rent Per Square Foot | $105.39 | | Current Weighted Average Asking Rent | $87.55 | Alternative Strategy Portfolio Retail Leases - Unconsolidated JVs (Total 2024) | Metric | Value | | :--- | :--- | | Number of Expiring Leases | 3 | | Rentable Square Footage of Expiring Leases | 25,551 | | SLG Share Rentable Square Footage | 9,415 | | Percentage of Total Sq. Ft. | 12.4% | | Annualized Contractual Cash Rent | $7,769,406 | | SLG Share Annualized Contractual Cash Rent | $3,511,580 | | Annualized Contractual Cash Rent Per Square Foot | $304.07 | | Current Weighted Average Asking Rent | $416.53 | [Summary of Real Estate Acquisition/Disposition Activity](index=43&type=section&id=Summary%20of%20Real%20Estate%20Acquisition%2FDisposition%20Activity) [Manhattan Office Acquisitions](index=43&type=section&id=Manhattan%20Office%20Acquisitions) This section summarizes Manhattan office acquisitions from 2001 to 2024, highlighting key properties, ownership interests, and total acquisition costs Manhattan Office Acquisitions (2001-2024, in Thousands) | Date | Property | Ownership % | Interest Type | Square Feet | Total Cost ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Jun-01 | 317 Madison Avenue | 100.0% | Fee Interest | 450,000 | $105,600 | | Sep-22 | 245 Park Avenue | 100.0% | Fee Interest | 1,782,793 | $1,960,000 | [Retail, Residential, Development / Redevelopment and Land Acquisitions](index=45&type=section&id=Retail%2C%20Residential%2C%20Development%20%2F%20Redevelopment%20and%20Land%20Acquisitions) This section details acquisitions of retail, residential, development, and land properties from 2005 to 2024, including recent Q1 2024 transactions Retail, Residential, Development/Redevelopment and Land Acquisitions (2005-2024, in Thousands) | Date | Property | Property Type | Ownership % | Interest Type | Total Cost ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Jul-05 | 1551-1555 Broadway | Retail | 10.0% | Fee Interest | $85,000 | | Sep-23 | 625 Madison Avenue | Land | 90.4% | Fee Interest | $620,245 | | Jan-24 | 2 Herald Square | Redevelopment | 44.0% | Leasehold Interest | $120,000 | | Mar-24 | 719 Seventh Avenue | Retail | 25.0% | Fee Interest | $76,500 | [Manhattan Office Dispositions](index=44&type=section&id=Manhattan%20Office%20Dispositions) This section summarizes Manhattan office dispositions from 2001 to 2024, including key properties, ownership interests, and total sales prices Manhattan Office Dispositions (2001-2024, in Thousands) | Date | Property | Ownership % | Interest Type | Square Feet | Total Sales Price ($) | | :--- | :--- | :--- | :--- | :--- | :--- | | Jan-01 | 633 Third Ave | 100.0% | Fee Interest | 40,623 | $13,250 | | Jun-23 | 245 Park Avenue | 49.9% | Fee Interest | 1,782,793 | $1,995,000 | [Retail, Residential, Development / Redevelopment, Land and Alternative Strategy Portfolio Dispositions](index=46&type=section&id=Retail%2C%20Residential%2C%20Development%20%2F%20Redevelopment%2C%20Land%20and%20Alternative%20Strategy%20Portfolio%20Dispositions) This section details dispositions of various property types from 2011 to 2024, including the recent Q1 2024 sale of 717 Fifth Avenue Retail, Residential, Development/Redevelopment, Land and Alternative Strategy Portfolio Dispositions (2011-2024, in Thousands) | Date | Property | Property Type | Ownership % | Interest Type | Square Feet | Total Sales Price ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Sep-11 | 1551-1555 Broadway | Retail | 10.0% | Fee Interest | 25,600 | $276,757 | | Oct-18 | 72nd Street Assemblage & 1231 Third Avenue | Residential | Various | Fee Interest | — | $143,800 | | Dec-23 | 21 East 66th Street | Retail | 32.3% | Fee Interest | 13,069 | $40,575 | | Jan-24 | 717 Fifth Avenue | Retail | 10.9% | Fee Interest | 119,550 | $963,000 | [Suburban Office Acquisition/Disposition Activity](index=47&type=section&id=Suburban%20Office%20Acquisition%2FDisposition%20Activity) This section provides a summary of suburban office acquisition and disposition activities from 2007 to 2024, detailing properties and transaction values Suburban Office Acquisitions (2007-2024, in Thousands) | Date | Property | Location | Ownership % | Interest Type | Square Feet | Total Cost ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Jan-07 | 300 Main Street | Stamford, Connecticut | 100.0% | Fee Interest | 130,000 | $15,000 | | Apr-13 | 16 Court Street | Brooklyn, New York | 49.0% | Fee Interest | 317,600 | $96,200 | Suburban Office Dispositions (2008-2024, in Thousands) | Date | Property | Location | Ownership % | Interest Type | Square Feet | Total Sales Price ($) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Oct-08 | 100 & 120 White Plains Road | Tarrytown, New York | 100% | Fee Interest | 211,000 | $48,000 | | Jul-12 | One Court Square | Long Island City, New York | 100.0% | Fee Interest | 1,402,000 | $481,100 | | Dec-19 | 360 Hamilton Avenue | White Plains, New York | 100.0% | Fee Interest | 384,000 | $115,452 | [Non-GAAP Disclosures and Reconciliations](index=48&type=section&id=Non-GAAP%20Disclosures%20and%20Reconciliations) [Non-GAAP Measures Explanation](index=48&type=section&id=Non-GAAP%20Measures%20Explanation) This section defines and explains the use of non-GAAP measures like FAD, EBITDAre, and NOI to provide additional insights into performance - **FAD (Funds Available for Distribution)** is presented as a supplemental disclosure for liquidity and the ability to fund dividends[15](index=15&type=chunk)[143](index=143&type=chunk) - **EBITDAre (Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate)** is presented as an indicator of the Company's ability to incur and service debt[15](index=15&type=chunk)[144](index=144&type=chunk) - **NOI (Net Operating Income) and Cash NOI** are presented to provide information regarding the operating performance of properties[144](index=144&type=chunk) - **Fixed charge and debt service coverage ratios** are presented to measure the Company's financial flexibility to service debt and lease obligations[144](index=144&type=chunk) [Reconciliation of Non-GAAP Financial Measures](index=49&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) This section provides detailed reconciliations of FFO, EBITDAre, NOI, and Same-Store Cash NOI to their most directly comparable GAAP measures Funds From Operations (FFO) Reconciliation (Q1 2024 vs Q1 2023, in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | | :--- | :--- | :--- | | Net Income (Loss) attributable to SL Green common stockholders | 13,141 | (39,731) | | Add: Depreciation and amortization | 48,584 | 78,782 | | Less: Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate | 26,764 | (79) | | **FFO attributable to SL Green common stockholders and unit holders** | **215,443** | **105,485** | Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (EBITDAre) (in Thousands) | Date | Amount ($) | | :--- | :--- | | 3/31/2024 | 185,610 | | 12/31/2023 | 175,182 | | 9/30/2023 | 200,325 | | 6/30/2023 | 217,689 | | 3/31/2023 | 226,376 | Operating income and Same-store NOI Reconciliation (Q1 2024 vs Q1 2023, in Thousands) | Metric | Q1 2024 ($) | Q1 2023 ($) | | :--- | :--- | :--- | | Net income (loss) | 18,389 | (38,357) | | Operating income | 174,236 | 86,857 | | Net operating income (NOI) | 68,207 | 110,382 | | NOI including SLG share of unconsolidated JVs | 182,546 | 231,290 | | Same-Store NOI | 157,616 | 164,694 | | Same-store cash NOI | 148,538 | 146,745 | | Same-store cash NOI excluding lease termination income | 144,089 | 145,791 | [Research Analyst Coverage](index=51&type=section&id=Analyst%20Coverage) [Covering Analysts](index=51&type=section&id=Covering%20Analysts) This section lists the research analysts and firms that provide coverage on SL Green Realty Corp, with a disclaimer that their opinions are independent - SL Green Realty Corp is covered by analysts from firms including **B of A Securities, Barclays, BMO Capital Markets, Citi, Deutsche Bank, and Goldman Sachs**[147](index=147&type=chunk) - The Company states that any opinions, estimates, or forecasts made by these analysts are theirs alone and do not represent the views of SL Green or its management[19](index=19&type=chunk) [Executive Management](index=52&type=section&id=Executive%20Management) [Leadership Team](index=52&type=section&id=Leadership%20Team) This section lists the key members of SL Green Realty Corp's executive management team, including their names and titles - **Marc Holliday** serves as Chairman, Chief Executive Officer, and Interim President[148](index=148&type=chunk) - **Matthew J. DiLiberto** is the Chief Financial Officer[148](index=148&type=chunk) - **Andrew S. Levine** is the Chief Legal Officer - General Counsel, EVP[148](index=148&type=chunk) - **Edward V. Piccinich** is the Chief Operating Officer[148](index=148&type=chunk) - **Harrison Sitomer** is the Chief Investment Officer[148](index=148&type=chunk)

PART I [Business](index=4&type=section&id=Item%201.%20Business) SL Green is a self-managed REIT focused on owning, managing, and developing commercial real estate, primarily Manhattan office properties - SL Green is a **self-managed REIT** focused on **commercial real estate**, principally **office properties**, with a primary concentration in **Manhattan**[23](index=23&type=chunk) Portfolio Summary as of December 31, 2023 | Property Type | Number of Properties | Approx. Square Feet | Weighted Avg. Leased Occupancy | | :--- | :--- | :--- | :--- | | **Total Commercial** | 48 | 29,333,575 | 89.0% | | Manhattan Office | 25 | 23,811,315 | 89.4% | | Manhattan Retail | 10 | 322,332 | 91.2% | | Suburban Office | 7 | 862,800 | 77.1% | | **Total Residential** | 2 | 362,266 | 99.0% | | **Total Portfolio** | **50** | **29,695,841** | **89.2%** | - The company's primary objective is to **maximize total stockholder return** through **dividends**, **earnings**, and **asset value appreciation**, employing strategies like **leasing**, **acquisitions/dispositions**, **development/redevelopment**, **debt/preferred equity investments**, and maintaining a **strong balance sheet**[34](index=34&type=chunk)[35](index=35&type=chunk) - The company operates through **three reportable segments**: **real estate**, **debt and preferred equity investments**, and **SUMMIT**, with the latter portfolio having a **book value of $346.7 million** as of year-end 2023[61](index=61&type=chunk)[63](index=63&type=chunk) - In 2023, the company signed **160 Manhattan office leases** covering approximately **1.8 million square feet** and sold a **49.9% joint venture interest** in 245 Park Avenue at a **gross asset valuation of $2.0 billion**[72](index=72&type=chunk)[75](index=75&type=chunk) - The **One Madison Avenue development project** secured its **temporary certificate of occupancy** in **September 2023**, **ahead of schedule** and **under budget**, triggering **$577.4 million in cash payments** used to **repay corporate debt**[78](index=78&type=chunk) [Risk Factors](index=13&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks primarily concentrated in the Manhattan commercial office market, including demand declines and operational, financial, and regulatory challenges - A significant majority of the company's holdings are **commercial office properties** in **midtown Manhattan**, making the business **highly dependent** on the **New York metropolitan area economy**, with **remote/hybrid work schedules** posing a **risk to long-term office space demand**[79](index=79&type=chunk)[80](index=80&type=chunk) - As of December 31, 2023, approximately **44.1% of rentable square feet** at **consolidated properties** and **20.6%** at **unconsolidated joint ventures** are scheduled to **expire by December 31, 2028**, posing a **risk if leases cannot be renewed or relet on favorable terms**[81](index=81&type=chunk) - **Five properties** accounted for **38.9% of the Portfolio's annualized cash rent** as of year-end 2023, **concentrating revenue risk**[85](index=85&type=chunk) - The company is subject to risks from **climate change initiatives**, particularly **New York City's Local Law 97 (LL97)**, which sets **carbon caps for large buildings starting in 2024**; while **no material financial impact is anticipated for the 2024-2029 compliance period**, **future costs or penalties could be significant**[103](index=103&type=chunk) - The company has **significant debt obligations**, including **$3.5 billion in consolidated indebtedness** and a proportionate share of **$7.4 billion in joint venture debt** as of December 31, 2023; a **hypothetical 100 basis point increase in interest rates** would increase **net annual interest costs by $1.0 million** and the **share of JV interest costs by $12.2 million**[104](index=104&type=chunk)[108](index=108&type=chunk) - **Failure to qualify as a REIT** would be **costly**, subjecting the company to **federal income tax at regular corporate rates** and eliminating the **deduction for dividends paid**, thereby **substantially reducing funds available for distribution**[133](index=133&type=chunk)[134](index=134&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) As of December 31, 2023, the company reported no unresolved comments with the staff of the SEC - As of December 31, 2023, there were **no unresolved comments** with the SEC staff[150](index=150&type=chunk) [Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, guided by the NIST Cybersecurity Framework, protects information assets and ensures business resiliency through risk-based assessments and oversight - The company's cybersecurity strategy is guided by the **National Institute for Standards and Technology (NIST) Cybersecurity Framework** and includes an **incident response plan** and **monitoring program**[153](index=153&type=chunk) - The **Audit Committee of the Board** provides **oversight** for the company's risk assessment and management policies related to cybersecurity[157](index=157&type=chunk) - The **Senior Director, Information Security & Network Systems**, and the **Senior Vice President, Information Technology**, are **responsible for managing cybersecurity risks** and **report to the Board and Audit Committee** as needed[158](index=158&type=chunk) - The company states that to date, cybersecurity risks have **not materially affected** its business strategy, results of operations, or financial condition[155](index=155&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) SL Green's portfolio, primarily Manhattan office properties, had an 89.4% leased occupancy as of December 31, 2023, with proactive management of lease expirations Manhattan Office Portfolio Summary (as of Dec 31, 2023) | Category | Number of Properties | Square Feet | % Leased | | :--- | :--- | :--- | :--- | | **Consolidated** | 13 | 8,399,141 | 86.4% | | **Unconsolidated** | 12 | 15,412,174 | 91.1% | | **Total** | **25** | **23,811,315** | **89.4%** | Historical Occupancy Rate of Manhattan Operating Portfolio | Date | SLG Portfolio Occupancy | Midtown Class A Market | Midtown Class B Market | | :--- | :--- | :--- | :--- | | Dec 31, 2023 | 89.4% | 78.4% | 75.5% | | Dec 31, 2022 | 90.7% | 78.4% | 76.6% | | Dec 31, 2021 | 92.1% | 80.6% | 77.1% | - The **average annual lease expiration rate** for the five years ending December 31, 2028, is approximately **9.2%** for **Manhattan consolidated properties** and **4.0%** for **unconsolidated properties**[170](index=170&type=chunk) - The company's **20 largest tenants** account for **36.4% of its share of annualized cash rent**, with the single largest tenant, **Paramount Global**, contributing **5.9%**[179](index=179&type=chunk)[181](index=181&type=chunk) [Legal Proceedings](index=31&type=section&id=Item%203.%20Legal%20Proceedings) As of December 31, 2023, the company was not involved in any material litigation, nor was any material litigation threatened - The Company and Operating Partnership were **not involved in any material litigation** as of December 31, 2023[185](index=185&type=chunk) [Mine Safety Disclosures](index=31&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - **Not Applicable**[186](index=186&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=32&type=section&id=Item%205.%20Market%20for%20Registrants'%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) SL Green's common stock trades on the NYSE, with a policy of regular dividends and a $3.5 billion share repurchase program in place - SL Green's common stock (**SLG**) trades on the **New York Stock Exchange**, and the company has a **policy of paying regular dividends** to **maintain its REIT qualification**[188](index=188&type=chunk)[191](index=191&type=chunk) - The company has a **$3.5 billion share repurchase program**; **no shares were repurchased during the three months ended December 31, 2023**, and the **cumulative number of shares repurchased under the plan is 36,107,719**[193](index=193&type=chunk)[194](index=194&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, SL Green reported a net loss of $599.3 million due to impairments, with revenues slightly down and expenses up, while maintaining $0.9 billion liquidity - In 2023, the company signed office leases in Manhattan for approximately **1.8 million square feet**; **same-store Manhattan office occupancy was 90.0%** as of December 31, 2023, **down from 91.2%** a year earlier[199](index=199&type=chunk) - The company continued to **dispose of non-core assets** and **sell joint venture interests**, generating **net proceeds of $176.9 million** in 2023, primarily used for **debt reduction**[201](index=201&type=chunk) Results of Operations Comparison (in millions) | Metric | 2023 | 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Total Revenues** | **$913.7** | **$919.4** | **($5.7)** | **(0.6)%** | | Rental Revenue | $683.3 | $671.5 | $11.8 | 1.8% | | SUMMIT Operator Revenue | $118.3 | $89.0 | $29.3 | 32.9% | | Investment Income | $34.7 | $81.1 | ($46.4) | (57.2)% | | **Total Expenses** | **$990.3** | **$838.8** | **$151.5** | **18.1%** | | Property Operating | $367.5 | $339.2 | $28.3 | 8.3% | | Interest Expense, net | $145.0 | $97.3 | $47.7 | 49.0% | | Depreciable real estate reserves and impairments | $382.4 | $6.3 | $376.1 | 5,969.8% | | **Net Loss** | **($599.3)** | **($76.3)** | **($523.0)** | **685.5%** | Funds from Operations (FFO) (in thousands) | | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net (loss) income attributable to SL Green common stockholders | $(579,509) | $(93,024) | $434,804 | | **FFO attributable to SL Green common stockholders and unit holders** | **$341,341** | **$458,827** | **$481,234** | - As of December 31, 2023, the company had **liquidity of $0.9 billion**, comprising **$688.0 million available under its revolving credit facility** and **$231.4 million of consolidated cash and marketable securities**[262](index=262&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=53&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate volatility on variable rate debt, managed through derivatives, with a 100 basis point increase impacting annual interest costs by $1.0 million consolidated and $12.2 million for JVs - The company's **primary market risk** is from **changes in interest rates** on its **variable rate debt**, which is **managed through derivative instruments** and **mitigated by variable rate investments**[296](index=296&type=chunk) - A **hypothetical 100 basis point increase in interest rates** would **increase consolidated annual net interest cost by $1.0 million** and the **company's share of joint venture annual interest cost by $12.2 million** as of December 31, 2023[296](index=296&type=chunk) Debt and Preferred Equity Investments by Maturity (as of Dec 31, 2023, in thousands) | Year | Long-Term Debt (Fixed & Variable) | Debt & Preferred Equity Investments | | :--- | :--- | :--- | | 2024 | $587,238 | $120,422 | | 2025 | $470,000 | $30,000 | | 2026 | $190,148 | $48,323 | | 2027 | $2,160,000 | $128,000 | | 2028 | $0 | $0 | | Thereafter | $100,000 | $20,000 | | **Total** | **$3,507,386** | **$346,745** | [Financial Statements and Supplementary Data](index=55&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the audited consolidated financial statements for SL Green Realty Corp. and its Operating Partnership, including balance sheets, statements of operations, and cash flows, with total assets of $9.5 billion and a net loss of $579.5 million for 2023 SL Green Realty Corp. Consolidated Balance Sheet Highlights (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Total Assets** | **$9,531,181** | **$12,355,794** | | Commercial real estate properties, net | $5,020,789 | $7,159,245 | | Investments in unconsolidated joint ventures | $2,983,313 | $3,190,137 | | **Total Liabilities** | **$5,270,704** | **$7,260,936** | | Mortgages and other loans payable, net | $1,491,319 | $3,227,563 | | Unsecured term loans, net | $1,244,881 | $1,641,552 | | **Total SL Green stockholders' equity** | **$3,786,315** | **$4,585,033** | SL Green Realty Corp. Consolidated Statement of Operations Highlights (in thousands) | | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Total revenues | $913,710 | $919,454 | | Total expenses | $990,296 | $838,752 | | Depreciable real estate reserves and impairments | ($382,374) | ($6,313) | | **Net (loss) income** | **($599,337)** | **($76,303)** | | Net (loss) income attributable to SL Green common stockholders | ($579,509) | ($93,024) | | Diluted (loss) earnings per share | ($9.12) | ($1.49) | - The financial statements have been **audited by Ernst & Young LLP**, which provided an **unqualified opinion** on the financial statements and the company's internal control over financial reporting as of December 31, 2023[332](index=332&type=chunk)[333](index=333&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=127&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reported no changes in or disagreements with its accountants on accounting and financial disclosure - **None reported**[704](index=704&type=chunk) [Controls and Procedures](index=128&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with an unqualified audit opinion and no significant changes - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[706](index=706&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of December 31, 2023, based on the **COSO framework**[707](index=707&type=chunk) - The effectiveness of internal control over financial reporting was **audited by Ernst & Young LLP**, which issued an **unqualified opinion**[709](index=709&type=chunk)[720](index=720&type=chunk) - There were **no significant changes** in internal control over financial reporting during the year ended December 31, 2023[710](index=710&type=chunk) [Other Information](index=132&type=section&id=Item%209B.%20Other%20Information) The company reported no other information under this item - **None**[738](index=738&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=133&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - **Not applicable**[739](index=739&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=134&type=section&id=Item%2010.%20Directors,%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2024 Proxy Statement - The information required by this item is **incorporated by reference** from the company's 2024 Proxy Statement[741](index=741&type=chunk) [Executive Compensation](index=134&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item is incorporated by reference from the company's 2024 Proxy Statement - The information required by this item is **incorporated by reference** from the company's 2024 Proxy Statement[742](index=742&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=134&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference, detailing 4,692,094 securities for issuance under equity plans and 4,139,076 remaining available as of December 31, 2023 Equity Compensation Plan Information as of December 31, 2023 | Plan Category | Securities to be Issued Upon Exercise (a) | Weighted-Average Exercise Price (b) | Securities Remaining for Future Issuance (c) | | :--- | :--- | :--- | :--- | | Equity compensation plans approved by security holders | 4,692,094 | $103.52 | 4,139,076 | [Certain Relationships and Related Transactions, and Director Independence](index=134&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions,%20and%20Director%20Independence) Information for this item is incorporated by reference from the company's 2024 Proxy Statement - The information required by this item is **incorporated by reference** from the company's 2024 Proxy Statement[748](index=748&type=chunk) [Principal Accountant Fees and Services](index=134&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item is incorporated by reference from the company's 2024 Proxy Statement - The information required by this item is **incorporated by reference** from the company's 2024 Proxy Statement[749](index=749&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=135&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists the financial statements, schedules, and exhibits filed as part of the Form 10-K report, including consolidated financials and a comprehensive index - This section contains the **consolidated financial statements** for SL Green Realty Corp. and SL Green Operating Partnership, L.P[751](index=751&type=chunk) - Includes **Schedule III—Real Estate and Accumulated Depreciation** as of December 31, 2023[751](index=751&type=chunk) - Provides a **detailed index of all exhibits** filed with the report, including **governance documents**, **debt agreements**, **employment contracts**, and **certifications**[755](index=755&type=chunk)[757](index=757&type=chunk)[759](index=759&type=chunk)

SL Green Realty Corporation (NYSE:SLG) Q4 2023 Earnings Conference Call January 25, 2024 2:00 PM ET Company Participants Marc Holliday - Interim President, Chairman & CEO Matthew DiLiberto - CFO Brett Herschenfeld - EVP, Retail & Opportunistic Harrison Sitomer - CIO Steven Durels - EVP & Director, Leasing & Real Property Conference Call Participants Stephen Sakwa - Evercore ISI Alexander Goldfarb - Piper Sandler & Co. William Catherwood - BTIG Anthony Paolone - JPMorgan Chase & Co. John Kim - BMO Capital Ma ...

[Filing Information](index=1&type=section&id=Filing%20Information) - Registrants: **SL Green Realty Corp.** (Maryland, NYSE: SLG) and **SL Green Operating Partnership, L.P.** (Delaware)[3](index=3&type=chunk)[7](index=7&type=chunk) - Filing Type: Quarterly Report on Form **10-Q** for the period ended **September 30, 2023**[2](index=2&type=chunk) - Filer Status: **SL Green Realty Corp.** is a Large accelerated filer; **SL Green Operating Partnership, L.P.** is a Non-accelerated filer[5](index=5&type=chunk)[7](index=7&type=chunk) Outstanding Shares as of November 2, 2023 | Registrant | Shares Outstanding | | :----------------------- | :------------------- | | SL Green Realty Corp. Common Stock | 64,416,699 | [Explanatory Note](index=3&type=section&id=EXPLANATORY%20NOTE) - Combined Report: Integrates **10-Q** filings for **SL Green Realty Corp.** and **SL Green Operating Partnership, L.P.**[9](index=9&type=chunk) - Relationship: **SL Green Realty Corp.** is a **REIT** and the sole managing general partner of the Operating Partnership[10](index=10&type=chunk) - Ownership: As of **September 30, 2023**, **SL Green Realty Corp.** owns **93.96%** of the Operating Partnership's outstanding interests[11](index=11&type=chunk) - Benefits of Combined Report: Enhances investor understanding, eliminates duplicative disclosure, and creates time/cost efficiencies[15](index=15&type=chunk) [PART I. FINANCIAL INFORMATION](index=5&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20FINANCIAL%20STATEMENTS) The section presents unaudited consolidated financial statements for SL Green Realty Corp. and SL Green Operating Partnership, L.P., including balance sheets, statements of operations, comprehensive income, equity/capital, cash flows, and detailed notes [Financial Statements of SL Green Realty Corp.](index=5&type=section&id=FINANCIAL%20STATEMENTS%20OF%20SL%20GREEN%20REALTY%20CORP.) Consolidated Balance Sheet Highlights (SL Green Realty Corp.) | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Total Assets | $9,690,582 | $12,355,794 | | Commercial Real Estate Properties, net | $4,994,297 | $7,159,245 | | Total Liabilities | $5,168,616 | $7,260,936 | | Mortgages and other loans payable, net | $1,512,746 | $3,227,563 | | Total SL Green Stockholders' Equity | $4,039,713 | $4,585,033 | Consolidated Statements of Operations Highlights (SL Green Realty Corp.) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenues | $173,220 | $212,456 | $617,865 | $601,865 | | Net (Loss) Income Attributable to SL Green Common Stockholders | $(23,967) | $7,377 | $(423,892) | $(28,748) | | Interest Expense, net | $27,440 | $21,824 | $109,714 | $51,854 | | Depreciable Real Estate Reserves and Impairment | $389 | — | $(305,527) | — | Consolidated Statements of Comprehensive (Loss) Income Highlights (SL Green Realty Corp.) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Comprehensive (Loss) Income Attributable to SL Green | $(8,382) | $60,094 | $(392,667) | $86,797 | | Increase in unrealized value of derivative instruments | $12,799 | $50,488 | $23,062 | $111,378 | Consolidated Statements of Cash Flows Highlights (SL Green Realty Corp.) | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Net Cash Provided by Operating Activities | $181,338 | $249,628 | | Net Cash Provided by Investing Activities | $271,684 | $273,314 | | Net Cash Used in Financing Activities | $(527,753) | $(474,848) | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(74,731) | $48,094 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $309,323 | $385,078 | [Financial Statements of SL Green Operating Partnership, L.P.](index=14&type=section&id=FINANCIAL%20STATEMENTS%20OF%20SL%20GREEN%20OPERATING%20PARTNERSHIP%2C%20L.P.) Consolidated Balance Sheet Highlights (SL Green Operating Partnership, L.P.) | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Total Assets | $9,690,582 | $12,355,794 | | Commercial Real Estate Properties, net | $4,994,297 | $7,159,245 | | Total Liabilities | $5,168,616 | $7,260,936 | | Mortgages and other loans payable, net | $1,512,746 | $3,227,563 | | Total Capital | $4,107,243 | $4,646,922 | Consolidated Statements of Operations Highlights (SL Green Operating Partnership, L.P.) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Total Revenues | $173,220 | $212,456 | $617,865 | $601,865 | | Net (Loss) Income Attributable to SLGOP Common Unitholders | $(25,541) | $7,868 | $(451,385) | $(30,579) | | Interest Expense, net | $27,440 | $21,824 | $109,714 | $51,854 | | Depreciable Real Estate Reserves and Impairment | $389 | — | $(305,527) | — | Consolidated Statements of Comprehensive (Loss) Income Highlights (SL Green Operating Partnership, L.P.) | Metric (in thousands) | 3 Months Ended Sep 30, 2023 | 3 Months Ended Sep 30, 2022 | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Comprehensive (Loss) Income Attributable to SLGOP | $(8,053) | $62,183 | $(414,808) | $89,810 | | Increase in unrealized value of derivative instruments | $12,799 | $50,488 | $23,062 | $111,378 | Consolidated Statements of Cash Flows Highlights (SL Green Operating Partnership, L.P.) | Metric (in thousands) | 9 Months Ended Sep 30, 2023 | 9 Months Ended Sep 30, 2022 | | :-------------------------------------- | :-------------------------- | :-------------------------- | | Net Cash Provided by Operating Activities | $181,338 | $249,628 | | Net Cash Provided by Investing Activities | $271,684 | $273,314 | | Net Cash Used in Financing Activities | $(527,753) | $(474,848) | | Net (Decrease) Increase in Cash, Cash Equivalents, and Restricted Cash | $(74,731) | $48,094 | | Cash, Cash Equivalents, and Restricted Cash at End of Period | $309,323 | $385,078 | [Notes to Consolidated Financial Statements](index=23&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) [1. Organization and Basis of Presentation](index=23&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) SL Green Realty Corp. operates as a self-administered and self-managed REIT, with substantially all assets and operations conducted through its Operating Partnership, holding **93.96%** of its interests as of **September 30, 2023**, and combining financial statements for both entities - **SL Green Realty Corp.** (Company/SL Green): Maryland corporation, self-administered/self-managed **REIT**[66](index=66&type=chunk) - **SL Green Operating Partnership, L.P.** (Operating Partnership/SLGOP): Delaware limited partnership, substantially all assets and operations[66](index=66&type=chunk)[67](index=67&type=chunk) - Ownership: As of **September 30, 2023**, **SL Green** owns **93.96%** of the Operating Partnership[67](index=67&type=chunk) - Property Portfolio: Primarily office properties in the New York metropolitan area (midtown Manhattan), including **27** consolidated and **24** unconsolidated properties, totaling **29.7 million** square feet[67](index=67&type=chunk) [2. Significant Accounting Policies](index=24&type=section&id=2.%20Significant%20Accounting%20Policies) This note details the company's key accounting policies, including principles of consolidation, real estate valuation, cash, fair value, marketable securities, joint ventures, lease costs, revenue, debt, income taxes, and the adoption of **ASU 2022-02** and evaluation of **ASU 2023-05** - Consolidation: Includes wholly-owned or controlled subsidiaries; Variable Interest Entities (**VIEs**) are consolidated if the Company is the primary beneficiary[74](index=74&type=chunk)[75](index=75&type=chunk) - Real Estate Valuation: Purchase price allocated to land, building, and intangibles; depreciation over estimated useful lives (**3-40 years**); impairment assessed if undiscounted future cash flows are less than carrying value[76](index=76&type=chunk)[79](index=79&type=chunk) - Impairment Charge: A **$305.9 million** charge was recorded in **Q2 2023** for **625 Madison Avenue** due to increased ground rent[80](index=80&type=chunk) - Debt & Preferred Equity Investments: Measured at net amount expected to be collected; allowance for loan losses based on market conditions, historical data, and forecasts; risk ratings (**1-3**) assigned[107](index=107&type=chunk)[108](index=108&type=chunk)[110](index=110&type=chunk) - Income Taxes: **SL Green** is a **REIT**, generally not subject to federal income tax; Taxable REIT Subsidiaries (**TRSs**) generate federal and state income tax liability[115](index=115&type=chunk)[117](index=117&type=chunk) - **ASU Adoption**: Adopted **ASU 2022-02** (Credit Losses) on **Jan 1, 2023**, with no material impact; evaluating **ASU 2023-05** (Joint Venture Formations)[125](index=125&type=chunk)[126](index=126&type=chunk) [3. Property Acquisitions](index=31&type=section&id=3.%20Property%20Acquisitions) During the nine months ended **September 30, 2023**, **SL Green Realty Corp.** did not acquire any properties from a third party - No Acquisitions: No properties acquired from third parties during the nine months ended **September 30, 2023**[128](index=128&type=chunk) [4. Properties Held for Sale and Property Dispositions](index=31&type=section&id=4.%20Properties%20Held%20for%20Sale%20and%20Property%20Dispositions) As of **September 30, 2023**, no properties were classified as held for sale, and the Company disposed of a **49.9%** interest in **245 Park Avenue**, resulting in deconsolidation and a **$28.3 million** loss on sale - Properties Held for Sale: None as of **September 30, 2023**[129](index=129&type=chunk) Property Dispositions (9 months ended Sep 30, 2023) | Property | Disposition Date | Property Type | Approximate Usable Square Feet | Sales Price (in millions) | Loss on Sale (in millions) | | :-------------- | :--------------- | :------------ | :----------------------------- | :------------------------ | :------------------------- | | 245 Park Avenue | June 2023 | Fee Interest | 1,782,793 | $1,995.0 | $(28.3) | [5. Debt and Preferred Equity Investments](index=31&type=section&id=5.%20Debt%20and%20Preferred%20Equity%20Investments) The Company's debt and preferred equity investments decreased significantly from **$623.3 million** at **December 31, 2022**, to **$334.3 million** at **September 30, 2023**, primarily due to redemptions/sales/equity ownership conversions, with the allowance for loan losses increasing to **$13.5 million** and three investments totaling **$88.8 million** not performing Debt and Preferred Equity Investments Balance | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Balance at end of period | $334,327 | $623,280 | Allowance for Loan Losses | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Balance at end of period | $13,520 | $6,630 | - Non-Performing Investments: As of **September 30, 2023**, **three** investments with carrying values totaling **$88.8 million** were not performing[137](index=137&type=chunk) - **625 Madison Avenue**: Mezzanine debt investments converted to a **90.43%** ownership interest in **September 2023** following a **UCC** foreclosure[145](index=145&type=chunk) [6. Investments in Unconsolidated Joint Ventures](index=33&type=section&id=6.%20Investments%20in%20Unconsolidated%20Joint%20Ventures) The book value of investments in unconsolidated joint ventures was **$3.2 billion** as of **September 30, 2023**, with the Company disposing of its **50.0%** interest in **121 Greene Street** for a **$0.3 million** loss, and several joint venture loans are in maturity default or under discussion for extension - Book Value: **$3,152,752 thousand** as of **September 30, 2023**[148](index=148&type=chunk)[167](index=167&type=chunk) - **VIEs**: **800 Third Avenue**, **21 East 66th Street**, and **625 Madison Avenue** are **VIEs** where the Company is not the primary beneficiary[150](index=150&type=chunk) Disposition of Joint Venture Interests (9 months ended Sep 30, 2023) | Property | Ownership Interest Disposed | Disposition Date | Gross Asset Valuation (in millions) | Loss on Sale (in millions) | | :---------------- | :-------------------------- | :--------------- | :---------------------------------- | :------------------------- | | 121 Greene Street | 50.0% | February 2023 | $14.0 | $(0.3) | Joint Venture Mortgages and Other Loans Payable, Net | Metric (in thousands) | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------------- | :----------- | :----------- | | Total joint venture mortgages and other loans payable, net | $14,707,926 | $12,348,954 | - Loan Defaults: Loans for **717 Fifth Avenue** and **11 West 34th Street** were in maturity default as of the filing date[163](index=163&type=chunk) [7. Deferred Costs](index=38&type=section&id=7.%20Deferred%20Costs) Deferred costs, primarily deferred leasing costs, decreased from **$121.2 million** at **December 31, 2022**, to **$108.4 million** at **September 30, 2023**, due to accumulated amortization Deferred Costs, Net (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :----- | :----------- | :----------- | | Net | $108,370 | $121,157 | - Composition: Primarily deferred leasing costs[171](index=171&type=chunk) [8. Mortgages and Other Loans Payable](index=39&type=section&id=8.%20Mortgages%20and%20Other%20Loans%20Payable) Mortgages and other loans payable, net, significantly decreased from **$3.2 billion** at **December 31, 2022**, to **$1.5 billion** at **September 30, 2023**, largely due to the deconsolidation of **245 Park Avenue** Mortgages and Other Loans Payable, Net (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------- | :----------- | :----------- | | Total mortgages and other loans payable, net | $1,512,746 | $3,227,563 | | Fixed Rate Debt | $1,398,724 | $3,115,814 | | Floating Rate Debt | $120,148 | $120,148 | - Impact of **245 Park Avenue**: Deconsolidation of **245 Park Avenue** significantly reduced fixed rate debt by **$1,712,750 thousand**[173](index=173&type=chunk) [9. Corporate Indebtedness](index=39&type=section&id=9.%20Corporate%20Indebtedness) The Company's corporate indebtedness includes a **$1.25 billion** revolving credit facility and **$1.25 billion** in term loans, with the **$425.0 million 2022** term loan fully repaid in **September 2023**, and the Company remains in compliance with all restrictive covenants - **2021 Credit Facility**: Consists of a **$1.25 billion** revolving credit facility and **$1.25 billion** in term loans (Term Loan A: **$1.05B**, Term Loan B: **$200M**)[176](index=176&type=chunk) - Undrawn Capacity: **$850.0 million** under the **2021** credit facility as of **September 30, 2023**[180](index=180&type=chunk) - **2022 Term Loan**: The **$425.0 million** term loan was repaid in full in **September 2023**[182](index=182&type=chunk) - Senior Unsecured Notes: **$100.0 million** outstanding, maturing **December 2025**[185](index=185&type=chunk) - Compliance: The Company was in compliance with all restrictive covenants as of **September 30, 2023**[188](index=188&type=chunk) Combined Aggregate Principal Maturities (in thousands) | Year | Total | | :----------- | :----------- | | Remaining 2023 | $261,635 | | 2024 | $537,237 | | 2025 | $470,000 | | 2026 | $0 | | 2027 | $1,950,000 | | Thereafter | $150,000 | | **Total** | **$3,368,872** | [10. Related Party Transactions](index=42&type=section&id=10.%20Related%20Party%20Transactions) Related party transactions include services from **Alliance Building Services**, investments by **Marc Holliday** and **Andrew Mathias** in **One Vanderbilt**, and lease agreements for corporate headquarters and **Summit One Vanderbilt** - **Alliance Building Services**: Income from profit participation was **$0.0 million** for the three months ended **September 30, 2023**, compared to **$1.4 million** for the same period in **2022**[193](index=193&type=chunk) - **One Vanderbilt Investment**: **Marc Holliday** and **Andrew Mathias** exercised rights to tender **50%** of their interests in **2022** for **$17.9 million** and **$11.9 million**, respectively[195](index=195&type=chunk) - **One Vanderbilt Leases**: Rent expense for corporate headquarters was **$0.7 million** (**Q3 2023**); rent expense for **Summit One Vanderbilt** was **$17.0 million** (**Q3 2023**), with **$11.7 million** recognized as income in equity in net loss from unconsolidated joint ventures[198](index=198&type=chunk) [11. Noncontrolling Interests on the Company's Consolidated Financial Statements](index=43&type=section&id=11.%20Noncontrolling%20Interests%20on%20the%20Company%27s%20Consolidated%20Financial%20Statements) Noncontrolling interests in the Operating Partnership decreased from **$269.9 million** at **December 31, 2022**, to **$248.2 million** at **September 30, 2023**, primarily due to net loss and distributions, partially offset by issuance of common units and fair value adjustments Noncontrolling Interests in Operating Partnership (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------- | :----------- | :----------- | | Balance at end of period | $248,222 | $269,993 | - Ownership: Noncontrolling unit holders owned **6.04%** (**4,139,334 units**) of the Operating Partnership as of **September 30, 2023**[201](index=201&type=chunk) - Preferred Units: Various series of preferred units outstanding with stated distribution rates and liquidation preferences[204](index=204&type=chunk) [12. Stockholders' Equity of the Company](index=44&type=section&id=12.%20Stockholders%27%20Equity%20of%20the%20Company) The Company's total stockholders' equity decreased to **$4.0 billion** as of **September 30, 2023**, with no share repurchases occurring during the nine months ended **September 30, 2023**, under the **$3.5 billion** share repurchase program - Total **SL Green** Stockholders' Equity: **$4,039,713 thousand** as of **September 30, 2023**[23](index=23&type=chunk) - Common Stock: **64,397,983 shares** issued and outstanding as of **September 30, 2023**[210](index=210&type=chunk) - Share Repurchase Program: **$3.5 billion** authorized; no repurchases during the nine months ended **September 30, 2023**[213](index=213&type=chunk)[214](index=214&type=chunk) - Perpetual Preferred Stock: **9,200,000 shares** of **6.50% Series I Cumulative Redeemable Preferred Stock** outstanding[215](index=215&type=chunk) DRSPP Activity (9 months ended Sep 30, 2023) | Metric | 9 Months Ended Sep 30, 2023 | | :-------------------------------------- | :-------------------------- | | Shares of common stock issued | 14,736 | | Dividend reinvestments/stock purchases | $439 | - Basic (Loss) Earnings Per Share: **$(6.63)** for the nine months ended **September 30, 2023**[26](index=26&type=chunk) [13. Partners' Capital of the Operating Partnership](index=46&type=section&id=13.%20Partners%27%20Capital%20of%20the%20Operating%20Partnership) The Operating Partnership's total partners' capital decreased to **$4.0 billion** as of **September 30, 2023**, with the Company owning **64,397,983** general and limited partnership interests and **9,200,000 Series I Preferred Units** - Total **SLGOP** Partners' Capital: **$4,039,713 thousand** as of **September 30, 2023**[47](index=47&type=chunk) - Company Ownership: **SL Green** owns **64,397,983** general and limited partnership interests and **9,200,000 Series I Preferred Units**[221](index=221&type=chunk) - Limited Partner Units: Non-**SL Green** limited partners owned **6.04%** (**4,139,334 common units**) as of **September 30, 2023**[224](index=224&type=chunk) - Basic (Loss) Earnings Per Unit: **$(6.63)** for the nine months ended **September 30, 2023**[50](index=50&type=chunk) [14. Share-based Compensation](index=48&type=section&id=14.%20Share-based%20Compensation) The Company has various share-based compensation plans for employees and directors, with no stock options granted in **2023**, and restricted stock and **LTIP** units resulting in **$5.8 million** and **$31.2 million** in compensation expense for the nine months ended **September 30, 2023**, respectively - **2005 Stock Option and Incentive Plan**: **4.0 million** fungible units were available for issuance as of **September 30, 2023**[228](index=228&type=chunk) - Stock Options: **193,480** options outstanding at **September 30, 2023**; no compensation expense recognized for the nine months ended **September 30, 2023**[233](index=233&type=chunk)[234](index=234&type=chunk) - Restricted Shares: **3,769,524 shares** outstanding at **September 30, 2023**; compensation expense of **$5.8 million** for the nine months ended **September 30, 2023**[235](index=235&type=chunk) - **LTIP Units**: **$50.5 million** of total unrecognized compensation expense as of **September 30, 2023**; compensation expense of **$31.2 million** for the nine months ended **September 30, 2023**[236](index=236&type=chunk)[237](index=237&type=chunk) - Deferred Compensation Plan for Directors: Compensation expense of **$2.5 million** for the nine months ended **September 30, 2023**[241](index=241&type=chunk) [15. Accumulated Other Comprehensive Income](index=50&type=section&id=15.%20Accumulated%20Other%20Comprehensive%20Income) Accumulated other comprehensive income increased to **$69.6 million** as of **September 30, 2023**, primarily due to unrealized gains on derivative instruments, partially offset by reclassifications into earnings Accumulated Other Comprehensive Income (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------------------------------------- | :----------- | :----------- | | Balance at end of period | $69,616 | $49,604 | | Net unrealized gain (loss) on derivative instruments | $67,951 | $47,800 | | SL Green's share of joint venture net unrealized gain (loss) on derivative instruments | $3,432 | $2,046 | | Net unrealized loss on marketable securities | $(1,767) | $(242) | - Reclassifications: **$(40,438) thousand** reclassified from accumulated other comprehensive income (**AOCI**) into earnings during the nine months ended **September 30, 2023**[244](index=244&type=chunk) [16. Fair Value Measurements](index=51&type=section&id=16.%20Fair%20Value%20Measurements) The Company measures certain financial assets and liabilities at fair value, primarily using **Level 2** inputs for marketable securities and derivative instruments, and **Level 3** inputs for debt and preferred equity investments and borrowings, with a **$(17.0) million** fair value adjustment for the retained interest in **245 Park Avenue** upon deconsolidation - Fair Value Hierarchy: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs), **Level 3** (unobservable inputs)[247](index=247&type=chunk) Assets Measured at Fair Value (Sep 30, 2023, in thousands) | Asset | Total | Level 1 | Level 2 | Level 3 | | :-------------------------------------- | :------- | :------ | :------- | :------ | | Marketable securities available-for-sale | $9,616 | — | $9,616 | — | | Interest rate cap and swap agreements | $77,921 | — | $77,921 | — | Liabilities Measured at Fair Value (Sep 30, 2023, in thousands) | Liability | Total | Level 1 | Level 2 | Level 3 | | :-------------------------------------- | :------- | :------ | :------- | :------ | | Interest rate cap and swap agreements | $5,968 | — | $5,968 | — | - Non-Recurring Fair Value Adjustment: **$(17.0) million** for retained interest in **245 Park Avenue** in **Q3 2023** upon deconsolidation[249](index=249&type=chunk) - Fair Value of Debt & Preferred Equity Investments: Estimated between **$0.3 billion** and **$0.3 billion** as of **September 30, 2023** (**Level 3**)[255](index=255&type=chunk) [17. Financial Instruments: Derivatives and Hedging](index=53&type=section&id=17.%20Financial%20Instruments%3A%20Derivatives%20and%20Hedging) The Company uses derivative instruments, such as interest rate swaps and caps, to manage interest rate risk, with all designated instruments being effective hedges, and the fair value of consolidated derivative financial instruments was **$71.9 million** as of **September 30, 2023** - Purpose: Manage interest rate risk for variable rate debt[259](index=259&type=chunk) - Fair Value of Consolidated Derivatives (net asset): **$71,953 thousand** as of **September 30, 2023**[261](index=261&type=chunk) - Terminated Hedges: **$(46.8) million** of gains/losses in accumulated other comprehensive income (**AOCI**) expected to be reclassified to interest expense within **12 months**[265](index=265&type=chunk) - Joint Venture Derivatives: Fair value of joint ventures' derivative financial instruments was **$74,912 thousand** as of **September 30, 2023**[269](index=269&type=chunk) [18. Lease Income](index=56&type=section&id=18.%20Lease%20Income) Total rental revenue for operating leases increased for the nine months ended **September 30, 2023**, compared to the prior year, driven by fixed and variable lease payments, with sublease income contributing significantly to total lease payments Total Rental Revenue (Operating Leases, in thousands) | Period | 2023 | 2022 | | :----- | :----------- | :----------- | | 3 months | $150,991 | $162,952 | | 9 months | $531,978 | $474,215 | - Sublease Income: **$49.7 million** (**3 months**) and **$147.4 million** (**9 months**) for **2023**[272](index=272&type=chunk) - Sales-Type Leases Interest Income: **$1,113 thousand** (**3 months**) and **$3,328 thousand** (**9 months**) for **2023**[273](index=273&type=chunk) [19. Commitments and Contingencies](index=56&type=section&id=19.%20Commitments%20and%20Contingencies) As of **September 30, 2023**, the Company and Operating Partnership were not involved in any material litigation or environmental liabilities that would have a material adverse impact on their financial position - Legal Proceedings: No material litigation threatened or ongoing[274](index=274&type=chunk) - Environmental Matters: Properties are in material compliance; no material adverse environmental liability expected[275](index=275&type=chunk) [20. Segment Information](index=57&type=section&id=20.%20Segment%20Information) The Company operates in two reportable segments: real estate and debt and preferred equity investments, with the real estate segment generating the majority of revenues and assets but incurring a significant net loss for the nine months ended **September 30, 2023**, while the debt and preferred equity segment remained profitable - Segments: Real Estate and Debt and Preferred Equity Investments[277](index=277&type=chunk) Selected Segment Results (9 months ended Sep 30, 2023, in thousands) | Metric | Real Estate Segment | Debt and Preferred Equity Segment | | :------------ | :------------------ | :-------------------------------- | | Total Revenues | $590,016 | $27,849 | | Net (Loss) Income | $(446,005) | $6,726 | | Total Assets (Sep 30, 2023) | $9,354,243 | $336,339 | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=58&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, including an overview of its business, critical accounting policies, detailed comparisons of financial performance, and discussions on liquidity, capital resources, indebtedness, market risks, and forward-looking statements [Overview](index=58&type=section&id=Overview) **SL Green Realty Corp.** is a self-managed **REIT** focused on acquiring, developing, and managing commercial real estate, primarily office properties in the New York metropolitan area, with a portfolio of **51** properties totaling **29.7 million** square feet as of **September 30, 2023** - Business Focus: Acquisition, development, and management of commercial real estate, principally office properties in the New York metropolitan area[282](index=282&type=chunk) - Portfolio (as of **Sep 30, 2023**): **27** consolidated properties (**10.9 million sq ft**) and **24** unconsolidated properties (**18.8 million sq ft**), totaling **51** properties (**29.7 million sq ft**)[283](index=283&type=chunk) - Manhattan Office Occupancy: **89.3%** weighted average leased occupancy[283](index=283&type=chunk) - Debt and Preferred Equity Investments: Book value of **$334.3 million**[285](index=285&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) The Company's critical accounting policies and estimates, including those for real estate investments, joint ventures, lease classification, revenue recognition, and debt/preferred equity investments, remain consistent with the **2022 Annual Report on Form 10-K**, with no material changes during the three and nine months ended **September 30, 2023** - No Material Changes: Critical accounting policies and estimates are consistent with the **2022 Annual Report on Form 10-K**, with no material changes during the three and nine months ended **September 30, 2023**[286](index=286&type=chunk) [Results of Operations](index=59&type=section&id=Results%20of%20Operations) [Comparison of the three months ended September 30, 2023 to the three months ended September 30, 2022](index=59&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030%2C%202023%20to%20the%20three%20months%20ended%20September%2030%2C%202022) For the three months ended **September 30, 2023**, **SL Green** reported a net loss of **$(21.7) million**, a significant decline from a net income of **$12.2 million** in the prior year, driven by decreased rental and investment income, increased interest expense, and higher property operating expenses, partially offset by a decrease in equity in net loss from unconsolidated joint ventures Key Financial Changes (3 Months Ended Sep 30, YoY) | Metric (in millions) | 2023 | 2022 | $ Change | % Change | | :------------------- | :------ | :------ | :------- | :------- | | Net (Loss) Income | $(21.7) | $12.2 | $(33.9) | (277.9)% | | Total Revenues | $173.2 | $212.5 | $(39.3) | (18.5)% | | Rental Revenue | $151.0 | $163.0 | $(12.0) | (7.4)% | | Investment Income | $9.7 | $29.5 | $(19.8) | (67.1)% | | Interest Expense, net | $29.6 | $23.9 | $5.7 | 23.8% | | Equity in net loss from unconsolidated joint ventures | $(15.1) | $(22.0) | $6.9 | (31.4)% | - Rental revenue decreased primarily due to the deconsolidation of **245 Park Avenue** (**$9.2 million**)[291](index=291&type=chunk) - Investment income decreased due to a lower weighted average debt and preferred equity investment balance and a lower weighted average yield[294](index=294&type=chunk) - Interest expense increased due to rising **SOFR** rates, higher interest expense from unsecured corporate term loans (**$12.4 million**) and the revolving credit facility (**$6.5 million**)[298](index=298&type=chunk) [Comparison of the nine months ended September 30, 2023 to the nine months ended September 30, 2022](index=62&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030%2C%202023%20to%20the%20nine%20months%20ended%20September%2030%2C%202022) For the nine months ended **September 30, 2023**, **SL Green** reported a substantial net loss of **$(439.3) million**, a significant increase from **$(12.3) million** in the prior year, primarily due to a **$305.5 million** depreciable real estate impairment charge for **625 Madison Avenue**, increased interest expense, and higher property operating expenses, partially offset by increased rental revenue Key Financial Changes (9 Months Ended Sep 30, YoY) | Metric (in millions) | 2023 | 2022 | $ Change | % Change | | :------------------- | :-------- | :-------- | :-------- | :--------- | | Net Loss | $(439.3) | $(12.3) | $(427.0) | 3,471.5% | | Depreciable real estate reserves and impairment | $(305.5) | — | $(305.5) | 100.0% | | Total Revenues | $617.8 | $601.8 | $16.0 | 2.7% | | Rental Revenue | $532.0 | $474.2 | $57.8 | 12.2% | | Investment Income | $27.8 | $69.8 | $(42.0) | (60.2)% | | Interest Expense, net | $(116.0) | $(57.8) | $(58.2) | 100.7% | | Equity in net loss from unconsolidated joint ventures | $(44.5) | $(31.3) | $(13.2) | 42.2% | - Rental revenues increased primarily due to the acquisition of **245 Park Avenue** (**$67.8 million**) during the third quarter of **2022**, prior to its deconsolidation[306](index=306&type=chunk) - Investment income decreased due to a lower weighted average debt and preferred equity investment balance and a lower weighted average yield[310](index=310&type=chunk) - Equity in net loss from unconsolidated joint ventures increased due to increased interest expense across the joint venture portfolio (**$50.7 million**) and a decrease in income from operations at **919 Third Avenue** (**$7.8 million**)[316](index=316&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) **SL Green** expects to meet its liquidity requirements through cash flow from operations, cash on hand, divestitures, credit facilities, and potential debt/equity offerings, with **$1.0 billion** in liquidity as of **September 30, 2023**, including **$850.0 million** available under its revolving credit facility and **$199.4 million** in consolidated cash - Sources of Funds: Cash flow from operations, cash on hand, divestitures, credit facilities, secured/unsecured financing, equity/debt offerings[322](index=322&type=chunk) - Liquidity (as of **Sep 30, 2023**): **$1.0 billion**, comprising **$850.0 million** revolving credit facility availability and **$199.4 million** consolidated cash[324](index=324&type=chunk) Estimated Capital Expenditures (Remaining 2023, in millions) | Category | Consolidated Properties | Joint Venture Properties | | :-------------------------------------- | :---------------------- | :----------------------- | | Recurring Capital Expenditures | $19.5 | — | | Development or Redevelopment Expenditures | $26.5 | $62.9 | Cash Flow Changes (9 Months Ended Sep 30, YoY, in thousands) | Metric | 2023 | 2022 | Change | | :-------------------------------------- | :---------- | :---------- | :---------- | | Net cash provided by operating activities | $181,338 | $249,628 | $(68,290) | | Net cash used in financing activities | $(527,753) | $(474,848) | $(52,905) | [Capitalization](index=67&type=section&id=Capitalization) The Company's authorized capital stock includes common, excess, and preferred shares, with no share repurchases made during the nine months ended **September 30, 2023**, under the **$3.5 billion** share repurchase program - Authorized Capital Stock: **260,000,000 shares** (**$0.01 par value**), including **160,000,000** common, **75,000,000** excess, and **25,000,000** preferred shares[331](index=331&type=chunk) - Common Stock Outstanding (**Sep 30, 2023**): **64,397,983 shares**[331](index=331&type=chunk) - Share Repurchase Program: **$3.5 billion** authorized; no repurchases in the nine months ended **September 30, 2023**[332](index=332&type=chunk)[333](index=333&type=chunk) - **DRSPP**: Issued **14,736** common shares for **$439 thousand** in proceeds (9 months ended **Sep 30, 2023**)[335](index=335&type=chunk) - **2005 Stock Option and Incentive Plan**: **4.0 million** fungible units available for issuance[336](index=336&type=chunk) [Indebtedness](index=69&type=section&id=Indebtedness) Total consolidated debt decreased significantly from **$5.5 billion** at **December 31, 2022**, to **$3.4 billion** at **September 30, 2023**, primarily due to the repayment of the **2022** term loan and deconsolidation of **245 Park Avenue**, with a weighted average term to maturity of **2.82 years** Total Consolidated Debt (in thousands) | Metric | Sep 30, 2023 | Dec 31, 2022 | | :-------- | :----------- | :----------- | | Total debt | $3,368,872 | $5,535,962 | - Fixed Rate Debt: **96.4%** of total debt (**Sep 30, 2023**)[340](index=340&type=chunk) - Variable Rate Debt: **3.6%** of total debt (**Sep 30, 2023**), with a net exposure of **(1.2)%** after mitigating effects of variable rate investments[340](index=340&type=chunk)[342](index=342&type=chunk) - Weighted Average Term to Maturity: **2.82 years** (**Sep 30, 2023**)[341](index=341&type=chunk) - **2021 Credit Facility**: **$400.0 million** drawn on revolving credit facility, **$1.25 billion** outstanding on term loans[346](index=346&type=chunk) - **2022 Term Loan**: The **$425.0 million** term loan was repaid in full in **September 2023**[348](index=348&type=chunk) [Interest Rate Risk](index=70&type=section&id=Interest%20Rate%20Risk) The Company is exposed to interest rate changes from its variable rate debt, managed through derivative instruments and variable rate investments, where a hypothetical **100 basis point** increase in floating rates would reduce consolidated annual interest cost by **$0.4 million** but increase joint venture annual interest cost by **$12.2 million** - Exposure: Primarily from variable rate debt[352](index=352&type=chunk) - Mitigation: Interest rate derivative instruments and variable rate debt/preferred equity investments[352](index=352&type=chunk) - Impact of **100 bps** increase (hypothetical): Consolidated annual interest cost (net) reduced by **$0.4 million**; Joint Venture annual interest cost increased by **$12.2 million**[352](index=352&type=chunk) - Derivative Instruments: Recognized at fair value on the balance sheet; effective hedging instruments[353](index=353&type=chunk) [Off-Balance Sheet Arrangements](index=71&type=section&id=Off-Balance%20Sheet%20Arrangements) The Company has off-balance sheet investments, including joint ventures and debt/preferred equity investments, primarily accounted for under the equity method due to significant influence but not control - Types: Joint ventures and debt/preferred equity investments[355](index=355&type=chunk) - Accounting Method: Primarily equity method for joint ventures where significant influence but not control exists[355](index=355&type=chunk) [Dividends/Distributions](index=71&type=section&id=Dividends%2FDistributions) To maintain **REIT** qualification, the Company must distribute at least **90%** of its **REIT** taxable income, with dividends payable in cash, stock, or a combination, subject to **IRS** limitations and available cash after meeting operating requirements and debt service - **REIT** Qualification: Must distribute at least **90%** of **REIT** taxable income[356](index=356&type=chunk) - Payment Form: Cash, stock, or combination[357](index=357&type=chunk) - Conditions: Subject to **IRS** limitations, available cash, and meeting operating/debt service requirements[357](index=357&type=chunk)[358](index=358&type=chunk) [Insurance](index=71&type=section&id=Insurance) The Company maintains "all-risk" property and rental value coverage, including terrorism, through two property insurance programs and liability insurance, with captive insurance companies (**Belmont** and **Ticonderoga**) providing additional coverage for **NBCR** terrorist acts - Coverage: "All-risk" property, rental value, liability, and terrorism (excluding nuclear, biological, chemical, and radiological terrorism - **NBCR**)[359](index=359&type=chunk) - Captive Insurers: **Belmont Insurance Company** and **Ticonderoga Insurance Company** provide **NBCR** terrorism coverage[359](index=359&type=chunk) - Risks: Potential for uninsured losses or exceeding policy limits; default on debt covenants if insurance is impractical/impossible to maintain[359](index=359&type=chunk)[360](index=360&type=chunk) [Funds from Operations (FFO)](index=71&type=section&id=Funds%20from%20Operations) **FFO**, a non-**GAAP** measure, is used to evaluate **REIT** performance, excluding real estate depreciation, amortization, property sales gains/losses, and impairment charges, providing insight into operational trends but not cash flow or liquidity, and decreased for both the three and nine months ended **September 30, 2023** - Definition: Net income (loss) excluding gains/losses from property sales, real estate impairment, plus real estate depreciation/amortization, and adjustments for unconsolidated partnerships[361](index=361&type=chunk) - Purpose: Supplemental measure of operating performance, reflects trends in occupancy, rental rates, operating costs, and interest costs[363](index=363&type=chunk) - Non-**GAAP**: Not a measure of cash flow or liquidity[363](index=363&type=chunk) Funds from Operations (FFO) Attributable to SL Green Common Stockholders and Unit Holders (in thousands) | Period | 2023 | 2022 | | :------- | :---------- | :---------- | | 3 months | $87,739 | $114,242 | | 9 months | $291,648 | $358,791 | [Inflation](index=72&type=section&id=Inflation) The Company expects inflationary increases to be partially offset by contractual rent increases and expense escalations in its office leases, which include provisions for real estate tax and operating expense adjustments - Mitigation: Contractual rent increases and expense escalations (real estate tax, operating expenses, **CPI**, porters' wage) in office leases[365](index=365&type=chunk) [Accounting Standards Updates](index=72&type=section&id=Accounting%20Standards%20Updates) This section refers to Note **2** for details on recent accounting standards updates, including the adoption of **ASU 2022-02** and the evaluation of **ASU 2023-05** - Refer to Note **2**: For details on **ASU 2022-02** (Credit Losses) and **ASU 2023-05** (Joint Venture Formations)[366](index=366&type=chunk) [Forward-Looking Information](index=73&type=section&id=Forward-Looking%20Information) The report contains forward-looking statements based on assumptions and analyses, which are subject to risks and uncertainties that may cause actual results to differ materially, including economic conditions, real estate market dynamics, capital availability, interest rate changes, and regulatory compliance - Nature: Statements about future events, activities, or developments[368](index=368&type=chunk) - Disclaimer: Not guarantees of future performance; actual results may differ materially[369](index=369&type=chunk) - Key Risks: General economic conditions, New York City real estate market, acquisitions/dispositions/development risks, debt/preferred equity investment risks, tenant/borrower creditworthiness, adverse changes in real estate markets, capital availability, financing costs (interest rates), financial covenant compliance, **REIT** status, joint venture risks, terrorist attacks, insurance adequacy, legislative/regulatory changes[370](index=370&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=73&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section refers to the "Interest Rate Risk" discussion within Management's Discussion and Analysis of Financial Condition and Results of Operations for quantitative and qualitative disclosures about market risk, with no material changes to market risk exposures since **December 31, 2022** - Refer to **MD&A**: For details on interest rate risk[371](index=371&type=chunk) - No Material Changes: Market risk exposures have not materially changed since **December 31, 2022**[371](index=371&type=chunk) [Item 4. Controls and Procedures](index=74&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the evaluation of disclosure controls and procedures for both **SL Green Realty Corp.** and **SL Green Operating Partnership, L.P.**, with management concluding these controls were effective as of **September 30, 2023**, and no significant changes in internal control over financial reporting occurred during the quarter [SL Green Realty Corp.](index=75&type=section&id=SL%20GREEN%20REALTY%20CORP.) **SL Green Realty Corp.'s** management, including the **CEO** and **CFO**, evaluated the effectiveness of its disclosure controls and procedures as of **September 30, 2023**, concluding they were effective, with no significant changes in internal control over financial reporting during the quarter - Disclosure Controls and Procedures: Evaluated as effective as of **September 30, 2023**[374](index=374&type=chunk) - Internal Control Over Financial Reporting: No significant changes during the quarter ended **September 30, 2023**[375](index=375&type=chunk) [SL Green Operating Partnership, L.P.](index=75&type=section&id=SL%20GREEN%20OPERATING%20PARTNERSHIP%2C%20L.P.) **SL Green Operating Partnership, L.P.'s** management, including the **CEO** and **CFO**, evaluated the effectiveness of its disclosure controls and procedures as of **September 30, 2023**, concluding they were effective, with no significant changes in internal control over financial reporting during the quarter - Disclosure Controls and Procedures: Evaluated as effective as of **September 30, 2023**[377](index=377&type=chunk) - Internal Control Over Financial Reporting: No significant changes during the quarter ended **September 30, 2023**[378](index=378&type=chunk) [PART II. OTHER INFORMATION](index=75&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=75&type=section&id=Item%201.%20Legal%20Proceedings) As of **September 30, 2023**, neither **SL Green Realty Corp.** nor **SL Green Operating Partnership, L.P.** were involved in any material litigation that could adversely impact them - No Material Litigation: No material legal proceedings threatened or ongoing[379](index=379&type=chunk) [Item 1A. Risk Factors](index=76&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors disclosed in the Company's Annual Report on Form **10-K** for the year ended **December 31, 2022**, as of **September 30, 2023** - No Material Changes: Risk factors remain consistent with the **2022 Annual Report on Form 10-K**[380](index=380&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=76&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company has a **$3.5 billion** share repurchase program, but no share repurchases were executed during the nine months ended **September 30, 2023** - Share Repurchase Program: **$3.5 billion** authorized[382](index=382&type=chunk) - Repurchases (9 months ended **Sep 30, 2023**): None[383](index=383&type=chunk) [Item 3. Defaults Upon Senior Securities](index=77&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the period - No Defaults: No defaults upon senior securities[385](index=385&type=chunk) [Item 4. Mine Safety Disclosures](index=78&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company - Not Applicable[386](index=386&type=chunk) [Item 5. Other Information](index=79&type=section&id=Item%205.%20Other%20Information) No other information was reported under this item - None[387](index=387&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form **10-Q**, including certifications, financial statements in **Inline XBRL**, and the cover page interactive data file - Exhibits: Includes certifications (**31.1-31.4, 32.1-32.4**), financial statements in **Inline XBRL** (**101**), and Cover Page Interactive Data File (**104**)[388](index=388&type=chunk)[389](index=389&type=chunk) [Signatures](index=81&type=section&id=SIGNATURES) - Signatory: **Matthew J. DiLiberto**, Chief Financial Officer[393](index=393&type=chunk)[395](index=395&type=chunk) - Date: **November 3, 2023**[393](index=393&type=chunk)[395](index=395&type=chunk)

SL Green Realty Corp. (NYSE:SLG) Q3 2023 Earnings Conference Call October 19, 2023 2:00 PM ET Company Participants Marc Holliday - Chairman and CEO Andrew Mathias - President Matthew DiLiberto - CFO Steve Durels - EVP, Director of Leasing and Real Property Harrison Sitomer - Chief Investment Officer Conference Call Participants John Kim - BMO Capital Markets Steve Sakwa - Evercore ISI Alexander Goldfarb - Piper Sandler Camille Bonnel - Bank of America Blaine Heck - Wells Fargo Peter Abramowitz - Jefferies R ...