SL Green Reports Q4 Net Loss as Interest Costs Offset Robust Manhattan Leasing and Asset Activity

SL Green Realty Corp. (NYSE: SLG), Manhattan’s largest office landlord, reported a net loss for the fourth quarter of 2025 as elevated interest expenses and a contraction in same-store net operating income (NOI) weighed on the bottom line. Despite the GAAP loss, the Real Estate Investment Trust (REIT) surpassed analyst expectations for operating cash flow and recorded its highest occupancy levels of the year, signaling resilient demand for premium Midtown office space. Shares of SL Green ended the following trading session down 3.01% at $43.56, as the market balanced robust leasing velocity against a net interest expense that rose nearly 30% year-over-year.

Financial and Dividend Performance

For the quarter ended December 31, 2025, SL Green reported a net loss attributable to common stockholders of $104.6 million, or $1.49 per share. This compares to a net income of $9.4 million, or $0.13 per share, in the fourth quarter of 2024. For the full year, the company recorded a net loss of $111.9 million, or $1.61 per share.

Key financial metrics for the quarter included:

• Funds from Operations (FFO): Totaled $86.2 million, or $1.13 per share, exceeding the Zacks Consensus Estimate of $1.10.
• Year-over-Year Comparison: FFO declined from $1.81 per share in Q4 2024, a period aided by $26.0 million in debt extinguishment gains.
• Net Interest Expense: Increased 29.5% year-over-year to $49.4 million.
• Dividend Shift: The board declared a final 2025 monthly dividend of $0.2575 per share (annualized at $3.09) before transitioning to a quarterly distribution schedule in 2026.
• Preferred Distribution: A quarterly dividend of $0.40625 per share was paid for the 6.50% Series I Cumulative Redeemable Preferred Stock.

Operating and Leasing Activity

Operational performance remained strong, characterized by high leasing volume and sequential occupancy gains. In the fourth quarter, SL Green signed 56 office leases in its Manhattan portfolio totaling 766,783 square feet, bringing the full-year 2025 total to 199 leases covering approximately 2.57 million square feet.

Leasing and occupancy highlights included:

• Portfolio Occupancy: Manhattan same-store office occupancy rose to 93.0%, up from 92.4% in Q3 and 92.5% at year-end 2024.
• Rental Rates: Average rent for new Manhattan leases reached $98.26 per rentable square foot, with a positive mark-to-market of 6.4%.
• Lease Terms: The average term was 8.5 years, featuring 8.8 months of free rent and a tenant improvement allowance of $97.54 per square foot.
• Major Transactions: Notable deals included a 92,663-square-foot expansion at One Madison Avenue and a 68,965-square-foot lease at 1185 Avenue of the Americas.

Investment and Asset Management Activity

The quarter was marked by active portfolio reshuffling and the expansion of the firm’s fee-based business. SL Green continued to execute its strategy of recycling capital from stabilized assets into strategic growth opportunities.

Investment and management milestones included:

• Asset Sales: Closed the sale of a 49.0% joint venture interest in 100 Park Avenue at a $425.0 million valuation, yielding $34.9 million in cash.
• Acquisitions: Purchased 346 Madison Avenue for $160.0 million and increased the stake in 800 Third Avenue to 100% for $5.1 million.
• Post-Quarter Activity: Finalized the $730.0 million acquisition of Park Avenue Tower in early January 2026.
• Special Servicing: Active assignments grew by $0.7 billion to a total of $8.4 billion, with another $9.9 billion in the pipeline for future servicing.

Financing and Strategic Outlook

Financing activity focused on mitigating interest rate exposure and addressing near-term debt maturities. The company successfully modified and extended the mortgage on 100 Park Avenue to January 2029 at a floating rate of 2.42% over Term SOFR, hedged to a fixed rate of 5.73%. Additionally, the firm secured a $480.0 million five-year mortgage at a 5.25% fixed rate for the Park Avenue Tower acquisition.

Looking toward 2026, management provided a constructive outlook despite the current net loss:

• NOI Guidance: Projected same-store cash NOI growth of 3.5% to 4.5%.
• Occupancy Target: Aiming for 94.8% portfolio occupancy by December 31, 2026.
• Market Context: The “flight to quality” remains a dominant driver, as Class A properties in Midtown continue to outperform the broader market despite a significantly higher cost of capital across the industry.