SL Green raises 2026 FFO guidance to $6.50-$6.70 as Manhattan office occupancy reaches 95%

SL Green Realty (NYSE: SLG), New York's largest office landlord, raised its 2026 earnings guidance and said Manhattan office occupancy rose to 95.0%, according to its third-quarter earnings release.

What happened

Net income attributable to common stockholders was $72.2 million, or $1.01 per share, compared with $24.9 million, or $0.34, a year earlier. Funds from operations (FFO), a measure real estate investment trusts use in place of earnings, were $1.59 per share, compared with $1.58.

SL Green raised its 2026 FFO guidance to $6.50-$6.70 per share from $5.60-$5.90. It said the increase "reflects $1.10 per share of incremental income" from the sale of a 20% joint-venture interest in an entity related to its food and beverage hospitality operations, "offset by $0.25 per share attributable to the higher interest rate environment." It also raised its net income guidance to $0.40-$0.60 per share from $0.20-$0.50. The joint-venture sale closed in October at a gross valuation of $200.0 million and generated $40.0 million in proceeds.

The $1.10 per share gain less the $0.25 per share interest-rate effect is $0.85, which equals the rise in the guidance midpoint, from $5.75 to $6.60 (computed).

Leasing

SL Green signed 38 Manhattan office leases totaling 591,108 square feet in the third quarter and 142 leases totaling 1,965,533 square feet in the first nine months. The mark-to-market on signed leases, meaning the new rent compared with the previous fully escalated rent on the same space, was 13.6% higher for the quarter and 15.7% higher for the nine months. Manhattan same-store cash net operating income rose 5.0% in the quarter and 4.2% for nine months, excluding lease termination income.

Financing and sales

In October the company and its joint venture partner closed a $2.0 billion refinancing of 245 Park Avenue. The five-year, fixed-rate financing was priced at 147 basis points above the US Treasury index, an interest rate of 6.52%. SL Green hedged its share to an effective rate of 6.37%.

The company also contracted to sell 110 Greene Street for $226.0 million, expected to close in the fourth quarter, and closed the sale of 10 East 53rd Street for $312.2 million, which produced net cash proceeds of $99.0 million.

What to watch

The refinancing rate of 6.52% shows what lenders charge for a large Manhattan office loan at current Treasury yields. The 10-year Treasury yield closed at 4.96% on October 22, according to the Treasury Department.