Why Is SL Green (SLG) Down 11.7% Since Last Earnings Report?

Core Viewpoint - SL Green's recent performance has been underwhelming, with shares declining approximately 11.7% since the last earnings report, lagging behind the S&P 500 index. The upcoming earnings release may determine whether this negative trend will persist or if a recovery is on the horizon [1]. Financial Performance - In Q4 2025, SL Green reported FFO per share of $1.13, exceeding the Zacks Consensus Estimate of $1.10, but down from $1.81 per share in the same quarter last year [2]. - Net rental revenues reached $159.8 million, surpassing the Zacks Consensus Estimate of $147 million, and reflecting a year-over-year increase of 14.5% [3]. Leasing Activity - The company signed 56 office leases in Manhattan, totaling 0.8 million square feet, with an average rental rate of $98.26 per rentable square foot, up from $92.81 in the previous quarter [4]. - The average lease term for signed leases was 8.5 years, with tenant concessions averaging 8.8 months of free rent and a tenant improvement allowance of $97.54 per rentable square foot. The mark-to-market on signed leases increased by 6.4% compared to previous rents [5]. Occupancy and Operating Income - Same-store cash net operating income (NOI) decreased by 3.4% year over year to $152.6 million, excluding lease termination income. As of December 31, 2025, Manhattan's same-store office occupancy was 93%, an increase from 92.4% in the prior quarter [6]. Interest Expenses - Interest expenses (net of interest income) rose by 29.5% year over year to $49.4 million [7]. Portfolio Activity - In January 2026, SL Green acquired Park Avenue Tower for $730 million. In December 2025, the company sold a 49% joint venture stake in 100 Park Avenue, valued at $425 million [8]. - In October 2025, SL Green acquired a 39.5% stake in 800 Third Avenue for $5.1 million and purchased 346 Madison Avenue and an adjacent site for $160 million [9]. Liquidity Position - As of the end of Q4 2025, SL Green had cash and cash equivalents of $155.7 million, down from $187 million at the end of Q3 2025. The net carrying value of the company's debt and preferred equity portfolio decreased to $168.4 million from $171.4 million [10]. Market Outlook - The stock currently holds a Zacks Rank 3 (Hold), indicating an expectation of an in-line return in the coming months [13]. - SL Green's overall VGM Score is D, with a poor Growth Score of F, a Momentum Score of C, and a Value Score of C, placing it in the middle 20% for value investors [12].