SL Green Realty (NYSE:SLG) executives used the company’s fourth-quarter 2025 earnings call to outline an upbeat view of New York City office fundamentals and to reiterate major 2026 capital markets objectives, while also discussing fourth-quarter operating results that management said exceeded expectations set at its December investor conference.
Management’s outlook for New York City and office demand
Chairman and CEO Marc Holliday opened with commentary on New York City’s political and fiscal environment, saying the new Mamdani administration was still in the early stages of governing but had handled an early test—a major snowstorm—effectively. Holliday also addressed discussion around potential budget deficits, noting that tax collections were up 8.5% in 2025 and that he expected new revenue forecasts in coming weeks could show “significant additional revenue increases” that help defray the projected gap. He pointed to New York City’s double-A credit rating and said he remained confident in the city’s fiscal stability.
During Q&A, SL Green’s leasing leadership said it had not seen tenants downsizing space as a result of AI. Instead, management described the majority of active deals as having “some element of growth.” The company also cited market-level data points it said were indicative of expanding tech and AI requirements, including 80 tech tenants actively searching for more than 8 million square feet and 13 known AI requirements totaling more than 1.2 million square feet.
Capital markets: refinancing plan, dispositions, and private market interest
Chief Investment Officer Harrison Sitomer described 2026 as “off to a busy start” and said the company was seeing continued tightening in senior loan markets. He highlighted a Park Avenue Tower financing that he said priced at a 1.58% spread, with AAA bonds representing more than half the transaction selling as tight as 112 basis points over Treasuries. Sitomer said there is “still a substantial amount of room for further rate tightening,” comparing current levels to 2018–2019 trading levels.
Management reiterated its plans for a $7 billion financing strategy and a $2.5 billion disposition plan. Sitomer said the company expects to benefit from tightening senior borrowing markets as it executes on refinancings of One Madison Avenue, 245 Park Avenue, and the corporate credit facility—transactions he said total approximately $5 billion of the $7 billion plan. He also said investors and capital sources have been increasingly proactive since the company’s December investor conference, describing inbound interest from across Asia as well as Canada, Europe, and the Middle East.
On equity and transactions, Sitomer referenced the company’s partnership with Rockpoint at 100 Park Avenue, saying the joint venture closed on New Year’s Eve and that SL Green “quickly realized” a substantial premium from the acquisition 11 months earlier. He said the building is now 100% leased and that the partners will fund remaining project costs. Sitomer also said the company was negotiating contracts and term sheets for four additional transactions as part of the $2.5 billion plan.
When asked about disposition timing and pricing, management said the planned sales would be “mostly back half” of the year, though some transactions could close earlier given ongoing term sheet and contract negotiations. Executives said the disposition pool spans stabilized office, development sites, residential, and retail assets, and declined to provide a blanket cap rate, in part for competitive reasons.
Fourth-quarter results: FFO beat, leasing volumes, and occupancy
Chief Financial Officer Matt DiLiberto said many fourth-quarter operating metrics came in better than the company expected at its investor conference. He said the company posted an FFO beat of $0.02 per share, driven by higher net operating income due to lower expenses net of reimbursements. DiLiberto also cited improved contributions from hospitality and lower general and administrative expense, which he described as already low relative to assets under management and peers.
Those positives were partially offset by lower operating profit from Summit, which management said reflected a later-than-expected mid-November opening for the Ascent premium experience and additional maintenance costs related to that launch. Later on the call, management said there was no change to the 2026 outlook for Summit due to the fourth-quarter items.
DiLiberto also highlighted outperformance in FAD versus initial guidance given in December 2024, saying the company exceeded that initial guidance by $65 million, with nearly $20 million of the beat occurring in the fourth quarter. In response to questions, he attributed the outperformance to a combination of earnings strength and the timing and pace of tenant capital spending, emphasizing the company does not guide to FAD because it is influenced by tenant decisions on buildouts.
On leasing, DiLiberto said the company completed nearly 800,000 square feet of Manhattan office leasing in the quarter, bringing the full-year total to 2.6 million square feet and a three-year total to nearly 8 million square feet. He said the leasing volume helped the company exceed its mark-to-market expectations for both the quarter and the full year.
SL Green ended the year at 93% same-store lease occupancy, which management said was sector-leading and represented an improvement of nearly 400 basis points from the end of the first quarter of 2024. DiLiberto said the company’s 93.2% target would have been achieved based on deals that signed shortly after year-end, and he characterized the shortfall as timing rather than a demand issue. He said SL Green had signed 142,000 square feet in January and had a pipeline exceeding 1 million square feet.
Economic occupancy, dividend discussion, and fee income
Management discussed a newer disclosure around “economic occupancy” and the gap versus physical occupancy. DiLiberto said the company provides annual guidance and does not give a quarterly breakdown for when revenue will be recognized, noting recognition depends on when tenants complete space and move in. He reiterated a same-store NOI growth outlook of 3.5% to 4.5% for 2026.
Executives also addressed dividend-related questions, emphasizing that FAD is not the metric the board uses to set the dividend. DiLiberto said the dividend is tied to taxable income items. Holliday said dividend policy is evaluated holistically and not quarter-to-quarter, adding that the company expects earnings strength in later periods as leases commence and recurring cash flows build. Holliday also stressed that SL Green views itself as an active manager that develops, stabilizes, and monetizes assets, and he said cash flow considerations include both operating cash flow and gains from asset sales.
On fee-related income, DiLiberto said “other income” can be lumpy because it often depends on transaction closings. He cited items such as 100 Park Avenue, 800 Third Avenue, and special servicing fees as drivers of higher other income in the quarter. Sitomer separately noted growth in the company’s fund and servicing businesses, including plans to raise a new fund focused on senior credit lending and an update that Green Loan Services is now the largest active special servicer of SASB loans in the U.S., servicing five of the top 10 largest specially serviced loans.
Development and market commentary
Management also discussed early interest in its 346 Madison Avenue development site, which Holliday said was formally unveiled recently. Leasing leadership said it wished the project were already built, arguing demand for high-quality large blocks is constrained. The company cited market tracking showing 250 tenants representing 26 million square feet of demand, including 32 tenants seeking more than 250,000 square feet.
In response to questions about submarkets, management described Park Avenue as “the tightest market submarket in the country,” and said Sixth Avenue rents were rising amid tightening supply. Executives also provided a case study at 1185 Sixth Avenue, detailing progress leasing space following significant tenant rollovers.
SL Green concluded the call without additional closing remarks, with Holliday thanking participants and indicating the company would speak again in three months.
About SL Green Realty (NYSE:SLG)
SL Green Realty Corp. (NYSE: SLG) is a publicly traded real estate investment trust (REIT) focused primarily on the acquisition, management and development of commercial office properties in Manhattan. As one of New York City’s largest office landlords, the company’s portfolio includes Class A office buildings and mixed-use projects located in prime Midtown and Downtown submarkets. SL Green generates revenue through leasing office space to a diverse mix of tenants spanning financial services, technology, media and professional services firms.
Founded in 1980 by real estate investor Stephen L.
