Looking ahead, we have a straightforward strategic plan for 2026. Our primary focus remains office leasing, including retenanting Studio Plaza. Our first quarter always has somewhat higher seasonal move-outs, but our overall lease expirations during 2026 are relatively low. We will continue to refinance and extend maturities at advantageous rates. Construction of our new high-end residential units at the Landmark Residences and 10900 Wilshire will, of course, be a key focus. We have begun planning additiona ...

Financial Data and Key Metrics Changes - For the full year 2025, the company reported FFO per share of $2.00, which is approximately 3% above initial expectations [3] - Fourth quarter FFO per share was $0.47, a decrease of approximately $0.02 compared to Q3 2025, primarily due to non-recurrence of termination fees recognized in Q3 [20][21] - Same-store cash NOI for the full year increased by 0.5% compared to 2024, with office segment increasing by 2.3% and retail by 1.2%, while multifamily declined by 3.2% [21][22] Business Line Data and Key Metrics Changes - The office segment showed continued progress with same-store office NOI increasing just over 1% for the quarter and nearly 2.5% for the full year [8][21] - Retail segment ended the year at 98% leased, with fourth quarter leasing totaling 43,000 sq ft and positive cash and GAAP leasing spreads [11] - Multifamily segment ended the year 95.5% leased, achieving approximately 1% net effective rent growth year over year, despite competitive leasing conditions [12][13] Market Data and Key Metrics Changes - In West Coast office markets, signs of stabilization and gradual improvement in leasing activity were noted, particularly in San Diego and San Francisco [5][6] - The overall office portfolio ended the quarter 83% leased, with same-store office portfolio at 86%, up about 150 basis points from Q3 [7][11] - Retail availability is expected to remain near record lows nationally, supporting asking rents [12] Company Strategy and Development Direction - The company aims to drive office leasing by converting prospect activity into signed leases and maintaining retail momentum by managing expirations and focusing on tenant quality [18] - The strategy includes managing through the multifamily supply cycle with disciplined revenue management and cost control [18] - The company is focused on maintaining a strong balance sheet and improving valuation over time [17][18] Management's Comments on Operating Environment and Future Outlook - Management acknowledged macro uncertainty but believes coastal infill locations and high-quality real estate position the company to capture demand as it materializes [5] - The outlook for 2026 includes a FFO guidance range of $1.96-$2.10 per share, with a midpoint of $2.03, reflecting a conservative approach to leasing velocity and market conditions [25][32] - Management expressed frustration with the current share price, indicating that the public market valuation does not reflect the intrinsic value of the company's assets [16] Other Important Information - The company declared a quarterly dividend of $0.34 per share for the first quarter, with expectations to maintain the dividend at current levels [17] - Liquidity at the end of the fourth quarter was approximately $529 million, with a leverage ratio of 6.9x on a trailing twelve-month basis [23][24] Q&A Session Summary Question: Inquiry about elevated TIs for renewals and demand environment - Management acknowledged that higher capital burdens for office leasing are expected to moderate as occupancy improves and availability tightens [36] Question: Timeline to achieve target leverage of 5.5x - Management indicated that leasing up La Jolla Commons 3 and One Beach would help achieve the target leverage [40] Question: Potential strategic asset sales to improve stock valuation - Management stated they would consider asset sales at favorable prices but would not sell at a discount just to check a box [42][43] Question: Guidance assumptions for office segment lease rates - Management reported that 68,000 sq ft has been signed in 11 deals year-to-date, with a significant pipeline of additional leasing activity [48] Question: Credit reserves and tenant health - Management clarified that the credit reserves are a conservative measure and not indicative of specific tenant concerns [84]

SL Green Realty Corp. is a self-managed real estate investment trust, or REIT, with in-house capabilities in property management, acquisitions and dispositions, debt investing, financing, development, redevelopment, construction and leasing. As of December 31, 2025, the Company held interests in 56 buildings totaling 31.4 million square feet. This included ownership interests in 28.0 million square feet in Manhattan buildings and 2.7 million square feet securing debt and preferred equity investments, exclud ...

Financial Data and Key Metrics Changes - The company has signed over 1.9 million square feet of leases in 2025, with expectations to exceed 2 million square feet by year-end [3][4] - Occupancy increased to above 92% as of September 30, with a target of 93.2% by year-end [4] - A $1.4 billion refinancing was completed at 11 Madison Avenue at a rate of approximately 5.6% [9] Business Line Data and Key Metrics Changes - The company reported strong leasing activity, particularly in the Midtown Manhattan market, with significant demand from tech firms, especially in AI [15][16] - The acquisition of Park Avenue Tower for $730 million is expected to yield significant near-term upside due to under-market rents [5][6] - The occupancy of Park Avenue Tower is currently at 95%, with in-place rents around $125 per square foot, indicating potential for appreciation [39] Market Data and Key Metrics Changes - The New York office market is experiencing a resurgence, with rising tenant demand and rents, particularly in high-end spaces [5][12] - There is a scarcity of new quality office inventory expected in Midtown over the next five years, which is anticipated to drive vacancy rates lower and net effective rents higher [5][7] Company Strategy and Development Direction - The company is focusing on office-to-residential conversions and acquiring well-leased assets in targeted markets [5][6] - Plans for a new development at 346 Madison Avenue are underway, with expectations to deliver by 2030 [7][8] - The company aims to capitalize on the lack of supply and strong demand in the market to drive future growth [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong pace of leasing continuing into Q4 and beyond, driven by demand from tech and financial services [4][11] - The company remains committed to exploring all options for its asset at 1515 Broadway, including potential entertainment and hospitality uses [10][28] - Management highlighted the importance of maintaining flexibility in their operations and capitalizing on market opportunities [28][29] Other Important Information - The company is planning additional fundraising strategies for 2026 and has commenced deployments from its opportunistic debt fund, amounting to about $220 million [8] - Management expressed disappointment over not advancing in the gaming license process but remains proud of the efforts put into the Caesars Palace Times Square proposal [9][10] Q&A Session Summary Question: What is the activity level from big tech firms? - Management noted that tech demand is strong, particularly driven by AI, with significant leasing activity from tech firms [15][16] Question: Can you comment on cash lease spreads? - Management explained that the mark-to-market calculation was slightly negative due to anomalies in two leases, which skewed the results [23][26] Question: Is the vision for obtaining a casino at 1515 Broadway completely dead? - Management indicated that the process is still ongoing, and they are evaluating all options for the property [28][29] Question: How do you plan to finance Park Avenue Tower? - Management stated that they are receiving interest from lenders and equity investors, with plans to finance through bank execution or CMBS [35][36] Question: What is the depth of the market at the rental price point for 346 Madison Avenue? - Management expressed confidence in the demand for the new development, noting a significant number of tenants looking for space [30][32] Question: How is the company addressing profitability concerns in office real estate? - Management emphasized their focus on high net effective rents and the profitability of their business model, which includes monetizing stabilized assets [70][71]

Summary of SL Green Realty Conference Call Company Overview - **Company**: SL Green Realty Corp (NYSE:SLG) - **Industry**: Real Estate, specifically focused on office leasing in Manhattan - **Key Projects**: One Vanderbilt, 346 Madison Avenue development site - **Market Position**: Largest office owner in Manhattan, public since 1997 [2][5] Core Points and Arguments Leasing Activity - **Leasing Volume**: Over 1.5 million square feet leased to date, with an expectation of 500,000 square feet in Q3 [5] - **Pipeline**: More than 1.1 million square feet in the pipeline, with 700,000 square feet in active negotiations [5] - **Market Recovery**: Notable recovery in the Midtown South market, particularly driven by tech and AI tenant requirements [5][6] - **Rising Rents**: Increased demand leading to rising rents, especially in upper mid-price point buildings [6][15] Investment and Transactions - **Investment Strategy**: Focused on acquiring stakes in key buildings and new development sites, including 346 Madison Avenue [7][9] - **Transaction Market**: Recovery in the CMBS market and increased investor interest, driven by fundamentals rather than speculative capital [8][21] - **Debt Fund Opportunities**: Identifying opportunities in purchasing loans and portfolios, with a focus on newly capitalized deals [27][31] Market Dynamics - **Availability Rates**: Decreasing availability rates across Manhattan, with Park Avenue at approximately 5% and total Midtown at 11% [49][50] - **Tenant Demand**: Significant increase in tenant searches, with 5 million square feet more than the previous year [51] - **Concessions**: Some ability to reduce tenant incentives (TIs) and free rent in select cases, indicating a tightening market [12][82] Future Outlook - **Rent Increases**: Anticipation of material rent increases due to supply-demand dynamics, with a potential spike expected [15][50] - **Development Timeline**: New development at 346 Madison Avenue expected to follow a similar timeline to One Vanderbilt, approximately two years before moving forward [11][9] - **Occupancy Goals**: Targeting over 93% leased occupancy by year-end, currently at 91.7% [68] Additional Important Insights - **International Capital Return**: Notable return of international capital to the office market, particularly from Asian investors [19][20] - **Impact of Conversions**: Ongoing office-to-residential conversions could remove up to 40-50 million square feet from the office market [17][50] - **Market Sentiment**: General bullish sentiment regarding the Manhattan office market, with confidence in rising rents and decreasing vacancies [48][56] Conclusion SL Green Realty Corp is experiencing a robust recovery in the Manhattan office market, characterized by strong leasing activity, rising rents, and a favorable investment environment. The company is strategically positioned to capitalize on these trends through targeted acquisitions and developments.

Financial Data and Key Metrics Changes - The company's core FFO was negative $7,200,000, and overall net operating income decreased to $9,800,000 from $11,800,000 in the prior quarter [12][21] - The overall segment NOI was $9,800,000 in Q2 2025, compared to $16,200,000 in the prior year, a decrease of $6,400,000 [21] - FFO was negative $7,900,000 or negative $10.42 per diluted share compared to negative $3,300,000 or negative $33.46 per diluted share in the prior year [23] Business Line Data and Key Metrics Changes - The office segment NOI for Q2 2025 was $5,500,000, down from $8,900,000 in Q2 2024, primarily due to decreased rental revenue and occupancy [21][22] - Multifamily segment NOI was $189,000 in Q2 2025, compared to $2,300,000 in the prior year, driven by unrealized losses and decreased revenues [22] - Hotel segment NOI for Q2 2025 was $4,200,000, slightly down from $4,300,000 in the prior year, attributed to decreased food and beverage sales [22] Market Data and Key Metrics Changes - The company executed approximately 140,000 square feet of leases through July 2025, representing over a 55% increase from the prior year [5][6] - The office lease percentage was approximately 70% at the end of Q2 2025, and approximately 80% when excluding the Oakland office building [18] Company Strategy and Development Direction - The company is focused on improving its balance sheet and liquidity, enhancing property-level performance, and evaluating asset sales as part of its broader strategic plan [7][9] - Key areas of focus include growing the multifamily portion of the portfolio and executing renovations to improve asset performance [10][19] Management's Comments on Operating Environment and Future Outlook - Management believes there is a meaningful opportunity to grow NOI in 2026, supported by improved office leasing activity and completed renovations [14] - The company is encouraged by market improvements in the adjacent San Francisco market, which historically influences Oakland [6][11] Other Important Information - The company has successfully secured property-level financing on seven assets, allowing for the repayment of a recourse credit facility with a balance of approximately $169,000,000 at the end of 2024 [7][8] - A $20,000,000 revolving credit facility was closed to support lending division originations [8] Q&A Session Summary - No questions were raised during the Q&A session, and the call concluded without any inquiries [26]

Core Insights - SL Green Realty reported a GAAP net loss per share of $0.16 for Q2 2025, which was better than analysts' expectations of a loss of $0.17, while revenue exceeded consensus estimates [1][5] - Funds from operations (FFO) per share decreased by 20.5% year-over-year to $1.63, reflecting operational challenges despite increased revenue [2][5] - The company raised its full-year FFO guidance to a range of $5.65 to $5.95, driven by anticipated income from debt and preferred equity investments [16] Financial Performance - Revenue for Q2 2025 was $241.9 million, an increase of 8.6% from $222.8 million in Q2 2024, and above the estimate of $160.41 million [2][5] - Same-store cash net operating income (NOI) decreased by 1.0% year-over-year to $153.3 million [2][6] - Manhattan same-store office occupancy was reported at 91.4%, showing slight decline but remaining stable [2][6] Leasing Activity - The company signed 46 new office leases totaling over 541,000 square feet during the quarter, with an average lease length of 7.8 years and an average annual rental rate of $90.03 per square foot [6][12] - Mark-to-market rents increased by 2.4% for the quarter, although there was a slight decline of 0.4% over the first half of the year [6][12] - Management aims to achieve 93.2% occupancy in Manhattan properties by year-end, supported by leases already signed [13][16] Investment Strategy - SL Green acquired a 49.9% interest in 100 Park Avenue for $14.9 million and sold its 85 Fifth Avenue property for $3.2 million in net proceeds [7] - The debt and preferred equity portfolio increased to $525.4 million, with a weighted average yield of 7.0% [9] - The company is focusing on alternative revenue sources, including the SUMMIT One Vanderbilt observation deck and special servicing/debt businesses, which have seen increased activity [14] Financial Management - Net debt rose to $3.64 billion, reflecting ongoing capital recycling and refinancing activities [10] - The company maintained its regular dividend payout to shareholders without any increase or cut during the quarter [11] - Cash and available investments exceeded $180 million, providing additional liquidity [10] Future Outlook - Management expects continued leasing success and stability in income from both property and investment portfolios to meet its financial targets [16] - Key metrics to monitor include new lease activity, rent growth on renewals, and the performance of debt and preferred equity investments [17]

Investment Rating - The report assigns a "Sell" rating to Vornado Realty Trust (VNO) with a 12-month price target of $33.00, indicating a downside potential of 13.1% from the current price of $37.97 [14]. Core Insights - Management believes it is in a landlord's market, with strong tenant demand for Class A office space in Manhattan and constrained new supply due to high replacement costs and interest rates [3]. - VNO's occupancy in New York decreased from 88.8% at the end of 4Q24 to 84.4% in 1Q25 but is expected to recover to the low 90% range within 12 months due to leasing activity [3]. - The company completed significant leasing transactions, including a 337k SF lease by Universal Music Group at PENN 2 and a 222k SF lease at 555 California Street in San Francisco [3][11]. - VNO's 2025 comparable FFO is expected to be flat compared to 2024, with meaningful growth anticipated by 2027 driven by the lease-up of PENN 1 and PENN 2 [4]. Financial Performance - VNO's NTM FFO is currently trading at 17.9x, below its historical average of 22.3x, while trading at a 6.0% premium relative to the REIT sector [10]. - On an AFFO basis, VNO is trading at 37.9x NTM AFFO, significantly higher than its pre-pandemic average of 32.0x, reflecting an 88% premium compared to the REITs average [10]. - The report updates estimates for VNO, with 2025 NAREIT FFO projected at $2.20, reflecting a slight decrease from previous estimates, while 2026 and 2027 show growth [12]. Valuation Trends - The report notes that VNO's premium versus the REIT sector is approaching historical average levels, indicating a potential normalization in valuation [6]. - The updated price target reflects a revised AFFO multiple of 27.0x, up from 26.2x, based on recent leasing strength and market movements [12].