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<\/p>\nNew York City’s largest office landlord is generating more cash than expected as companies clamor for a dwindling supply of premier Manhattan office space.<\/p>\n
<\/p>\n
\n One Vanderbilt in Midtown Manhattan is SL Green’s most profitable building.\n <\/p>\n
On the strength of rapidly increasing rents and profits generated by the supertall One Vanderbilt<\/a>, SL Green Realty Corp. raised its\u00a02026 guidance for funds from operations\u00a0\u2014 a key metric of cash flow for REITs \u2014 by 26% when it reported its second-quarter earnings on Wednesday.<\/p>\n SL Green<\/a>‘s executives have been touting the market’s turnaround, and the REIT’s position to benefit from it, for more than a year. But the speed at which demand has risen took even\u00a0them by surprise.<\/p>\n \u201cThis should not be a big surprise since we forecasted this positive momentum back in December,\u201d\u00a0CEO Marc Holliday<\/a> said Thursday on a call with analysts. \u201cMaybe the magnitude is even more than we expected, but it’s obviously a pleasant result.\u201d<\/p>\n Shares in SL Green rose 7% Thursday to $53.61,\u00a0their highest price since October, and especially notable considering how lukewarm Wall Street has been<\/a> on office real estate even during the recovery.<\/p>\n Occupancy across the company’s\u00a0Manhattan portfolio hit 94.7% in the quarter, up from 90.4% a year prior. The company\u2019s rents for new leases averaged\u00a0$98.42 per SF, 18% higher than the tenants being replaced, and SL Green expects to keep pushing prices.<\/p>\n \u201cAnything on Park Avenue, we\u2019ve raised rents dramatically,\u201d said Steve Durels<\/a>, SL Green’s executive vice president and director of leasing.\u00a0\u201cAcross the portfolio, we\u2019ve been consistently raising asking rents throughout the year.\u201d<\/p>\n The city is by far the strongest office market in the country, with\u00a023M SF leased in the first six months of 2026, the most since 2002, and average rents up 6% over the past year<\/a>, according to Colliers<\/a>. Availability has fallen from 18% in June 2023 to 13% last month.<\/p>\n SL Green has filled up some of its biggest properties, including the 2.3M SF 11 Madison Ave.<\/a>, which this week landed\u00a0artificial intelligence firm Legora Systems\u00a0for its final available space, the 98K SF 11th floor.<\/p>\n Also 100% leased is One Vanderbilt, the 1,401-foot tower atop Grand Central Terminal<\/a> that, at $4.7B, is the most valuable office tower in the country \u2014 and its cash cow status is only growing. Of the $1.20 per share of additional FFO that SL Green now projects to bring in, 80 cents\u00a0was attributed\u00a0to\u00a0One Vanderbilt, which\u00a0signed the first $320-per-SF lease<\/a> in the city during the first quarter.<\/p>\n \u201cThis property has generated so much cash flow that we repatriated all of our equity long ago,\u201d SL Green Chief Financial Officer Matthew DiLiberto<\/a> said on the call.\u00a0<\/p>\n The REIT is not quite halfway through its goal to sell $2.5B of assets this year, having sold four of the 11 properties it\u00a0has earmarked\u00a0to offload. It\u00a0is under contract<\/a> to trade\u00a010 E. 53rd St. to Meadow Partners<\/a> for $312M and\u00a0sold a 49% stake<\/a> in its next office development, 346 Madison Ave.<\/a>, at a $175M valuation to Mori Building Co.<\/a><\/p>\n Next up to be sold is 245 Park Ave., which Chief Investment Officer Harrison Sitomer<\/a> said is in \u201cadvanced stages.\u201d<\/p>\n Institutional investors are back hunting for trophies<\/a>, with $3.5B of Manhattan office properties\u00a0selling in the first half of the year, up 31% from 2025, according to Ariel Property Advisors<\/a>.\u00a0<\/p>\n \u201cThis is one of the better investment sales backdrops we’ve seen in quite some time with respect to our program,\u201d\u00a0Sitomer said.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"New York City’s largest office landlord is generating more cash than expected as companies clamor for a dwindling…\n","protected":false},"author":3,"featured_media":956934,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[5122],"tags":[132760,200567,5229,130138,405,403,5226,5225,5228,5227,145965,26490,111757,263161,67,586,132,5230,68,2969],"class_list":["post-956933","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-york","tag-11-madison-ave","tag-346-madison-ave","tag-america","tag-marc-holliday","tag-new-york","tag-new-york-city","tag-newyork","tag-newyorkcity","tag-ny","tag-nyc","tag-one-vanderbilt","tag-sl-green","tag-sl-green-realty","tag-steven-durels","tag-united-states","tag-united-states-of-america","tag-unitedstates","tag-unitedstatesofamerica","tag-us","tag-usa"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/116976874211277668","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/956933","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=956933"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/956933\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/956934"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=956933"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=956933"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=956933"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}