SL Green Realty Corp. BofA NY Global Real Estate Conference 2026

Thank you all for joining us today. It's an exciting time in the market for us. We put out a few announcements over the past few weeks. Most recently on the sale side or disposition side, recently announcing the sale of 110 Green Street in furtherance of our capital plan for 2026. On the leasing side, making big strides, actually surpassing our goal for the year through less than three quarters of the year, with substantial amount of leasing in the pipeline. So excited to answer some questions today, take you through the business plan for the rest of the year and what we see in store for 2027 in a very exciting market backdrop for New York City.

Yeah, I'll hit that. Excuse me. It's Matt. Harrison touched on the leasing strength in New York just continues to get stronger. When we came into the year, we had actually budgeted for about 1.5 million sq ft of leasing for the year. We set an objective of 1.7 to stretch Steve, and we've exceeded that. We're at 1.8 now through the first eight and a half months of the year with a 1 million sq ft pipeline. That feeds through to occupancy and also on a mark-to-market basis, we're about 16% year to date with a pipeline that is in that same ZIP code. So squarely ahead of where we expect it to be or our stretch goals from a leasing perspective. I'm sure we'll go through more on our acquisition, disposition, and refinancing strategy.

That becomes a matter of us testing the market with assets and often choosing to sell certain assets that we didn't have in our original plan and holding others that we might have originally, excuse me, intended to sell. From a financing perspective, the $7 billion plan, we are much of the way through it with the financing of 245 Park in the CMBS market, the next big execution, a $2 billion execution that we expect here in the coming weeks. As it relates to development, we are well underway vacating the 346 Madison site and commencing demolition there while continuing our office to residential conversion at 750 Third Avenue. From a financial performance perspective, same store in keeping with the leasing strength we're seeing, our same store NOI growth has exceeded our expectations.

If we execute the rest of our business plan, we should get through the rest of our financial objectives as well. By and large, doing really well on what we always set up outside of guidance as stretch goals.

Yeah, sure. On the mayoral side, the best and clearest referendum of the city's performance right now is the businesses that are locating here and the businesses that are making long-term commitments to New York City. Throughout this year, since the mayor's been elected, we've seen firms like American Express make a significant commitment downtown. In Midtown, we've seen JP Morgan and Citadel both make substantial commitments to Midtown East. On the AI side, we obviously will talk more about that topic, but everyone recently saw the announcement of Anthropic taking over 400,000 square feet, making New York a leader of the AI and tech initiatives of the next generation. Even on the legal side, where we saw Simpson Thacher make a big commitment to Fifth Avenue just about a month ago. For us, we always believe that leasing is the biggest indicator.

We try to read through the news, we try to read through all the talk and rumors out there and try to just look to what are the big tenants doing in this market and what type of commitments are they making. I think New York City's on track this year for its biggest office leasing year since 2000. That's a great indicator for us as the type of businesses that want to be here and their employees that want to be here. We've been working actively with the city and the city administration over the past year, whether that be at the mayoral level, whether that be at the deputy mayoral level or with the city council and the newly elected city council speaker. I don't know if there's a way to shut that door, may be helpful.

Julie Menin, and we've been very pleased with the responsiveness and feedback that we've gotten from the city on initiatives that we've brought to them. It's been very positive signals from the mayoral administration and some of the recent hires that they've done, including Anthony Shorris from McKinsey & Company, who came over to lead EDC. That's a great initiative that the city put forward. We share the mayor's focus on affordability. One of the projects, 750 Third Avenue, that we're putting forward fits right within those initiatives or goals of the mayor to try to create more affordable housing in this city. It's our job to work with the city to try to further their goals and make the city a better place for our businesses and our tenants.

Sure. We've had very strong velocity. The overall market has had, as Harry said, has been super strong this year, setting what will be a record year. Rents are rising, and I think the bigger message is that rents are rising across the board. They're not limited to just the high-end part of the market. You're seeing sort of the more affordable price point buildings starting to get some lift in rents as well. The office to residential conversion phenomenon is something that has had meaningful positive impact on the leasing environment, particularly for the more mid price point buildings. If you look at Third Avenue in particular, where there's been a number of buildings that have been taken out of inventory and therefore reduced availability. You're hard pressed to find a good quality block of 100,000 square feet or more, even on the Third Avenue corridor.

Face rents are rising both at the high end and the mid price point across the board. Therefore, by definition, net effective rents are up substantially. You need to bifurcate between what price point building you are talking about to really understand net effectives. At the high end of the market, rents are probably up 30%. At the mid part of the market, rents are probably up 5%-10%. Concessions have been leveled off more than a year ago, and we are starting to see some contraction on TI and free rent. By example, if the high water mark for TI was $150-$165 a foot a year or two ago, today it is more like $145-$150. Free rent that was in the 16-18 month range is now 14-16 months.

Concessions tightening, face rents rising, and then depending on which part of the market you are talking about, face rents rising dramatically.