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SL Green Realty Corp. SLG delivered fourth-quarter 2021 funds from operations (FFO) per share of $1.52, lagging the Zacks Consensus Estimate of $1.57. Further, the reported figure compares unfavorably with the year-ago quarter’s $1.56.

SLG’s fourth-quarter performance reflects growth in same-store cash net operating income (NOI), offset by a drop in occupancy.

Moreover, the net rental revenues of $135.2 million in the fourth quarter lagged the Zacks Consensus Estimate of $142.4 million. The top line also declined 18.2% from the prior-year quarter’s $165.2 million.

For 2021, SLG’s FFO per share of $6.63 lagged the Zacks Consensus Estimate of $6.83. Moreover, the figure dipped 3.9% from the prior year’s $7.11. The net revenues of $604.6 million declined 14.6% from the prior year’s $708.4 million. Moreover, the reported figure missed the Zacks Consensus Estimate of $611.9 million.

Concurrent with the earnings release, SL Green announced that it signed leases totaling 573,806 square feet during the fourth quarter of 2021. SLG inked two new leases with Tennor Holding B.V. and Cipher Mining at its development, One Vanderbilt. In addition, the REIT signed a 10-year, 81,693 square foot lease at 1185 Avenue of the Americas with Northeast Series of Lockton Companies, LLC.

Quarter in Detail

During the fourth quarter, the same-store cash NOI, including SL Green’s share of same-store cash NOI from unconsolidated joint ventures, increased 2.9% year over year. This excludes the lease termination income.

In its Manhattan portfolio, SLG signed 52 office leases for 573,806 square feet in the reported quarter. For the same period, the mark-to-market on signed Manhattan office leases dipped 3.9% from the previous fully-escalated rents on the same spaces.

For the Manhattan office leases signed in fourth-quarter 2021, the average lease term was 5.9 years, while the average tenant concessions were 7 months of free rent with a tenant improvement allowance of $56.17 per rentable square foot. This excludes the leases signed at One Vanderbilt Avenue.

As of Dec 31, 2021, Manhattan’s same-store office occupancy, inclusive of 183,000 square feet of leases signed but not yet commenced, was 93%, having shrunk 20 basis points from the prior quarter’s level.

The carrying value of its debt and preferred equity portfolio was $1.09 billion as of Dec 31, 2021.

Liquidity

SL Green exited fourth-quarter 2021 with cash and cash equivalents of $251.4 million, down from $257.9 million recorded at the end of the third quarter.

Investment Activity

During 2021 and year to date in 2022, SL Green has repurchased 5.1 million shares of its common stock.