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SL Green Realty Corp. SLG reported first-quarter 2025 funds from operations (FFO) per share of $1.40, which surpassed the Zacks Consensus Estimate of $1.27. The company had reported an FFO of $3.07 per share in the year-ago period, including $2.02 per share of gain on discounted debt extinguishment at Herald Square and $0.07 per share of positive non-cash fair value adjustments on mark-to-market derivatives.
The results reflected improved average rental rates on the Manhattan office leases signed in the period and higher same-store cash net operating income (NOI). However, elevated interest expenses undermined the results to some extent.
Net rental revenues of $144.5 million outpaced the Zacks Consensus Estimate of $140.7 million. The figure improved 12.7% year over year.
SLG’s Q1 in Detail
In the first quarter, same-store cash NOI, including the company's share of same-store cash NOI from unconsolidated joint ventures, increased 2.4% year over year to $149.2 million, excluding lease termination income.
For its Manhattan portfolio, SL Green signed 45 office leases encompassing 0.6 million square feet of space in the reported quarter. The average rental rate on the Manhattan office leases signed was $83.75 per rentable square foot, improving from $74.38 in the previous quarter.
The signed leases had an average lease term of 9.8 years. The average tenant concessions were 9.4 months of free rent with a tenant improvement allowance of $94.35 per rentable square foot. The mark-to-market on signed Manhattan office leases decreased 3.1% from the previous fully escalated rents on the same spaces in the quarter.
As of March 31, 2025, Manhattan’s same-store office occupancy, including 791,538 square feet of leases signed but not yet commenced, was 91.8%, down from 92.4% at the end of the prior quarter.
SL Green's interest expenses (net of interest income) increased 46.5% from the year-ago quarter to $45.7 million.
SLG’s Portfolio Activity
In April 2025, SL Green, along with its joint venture partner, closed on the sale of 85 Fifth Avenue, generating net proceeds of $3.2 million. In the first quarter of 2025, the company closed on the sale of six Giorgio Armani Residences at 760 Madison Avenue, generating net proceeds of $93.3 million.
In January 2025, SL Green closed the acquisition of 500 Park Avenue for $130 million.
SLG’s Liquidity
SL Green exited the first quarter with cash and cash equivalents of $180.1 million, down from $184.3 million recorded as of Dec. 31, 2024.
As of the same date, the net carrying value of the company’s debt and preferred equity portfolio was $318.2 million, which increased 4.8% from the last quarter.