SL Green raises funds from operations outlook to $6.50–$6.70 a share
Key Facts
SL Green Realty raised its 2026 funds from operations outlook to $6.50 to $6.70 a share, according to its third-quarter earnings statement. The company's previous outlook was $5.60 to $5.90 a share for the same year. The results were announced after the market close on October 21, 2026, in line with the company's scheduled quarterly disclosure. The results showed diluted net income per share rose to $1.01 in the third quarter of this year. Diluted net income in the corresponding period of 2025 was about $0.34 a share, with the increase in the annual outlook coinciding with a year-on-year rise in that measure.
The company linked the revised outlook to additional income from the sale of a stake in an entity associated with food, beverage and hospitality operations, alongside an offsetting impact from interest costs. The stake sold represents 20% of the entity, according to details in the earnings statement. The company included an additional contribution of $1.10 a share from the transaction in its outlook calculations for the current year. It estimated the negative impact of higher interest rates at about $0.25 a share in the same outlook. The company's revised calculations thus combine transaction income and pressure from the interest-rate environment, the two drivers it identified in explaining the increase in its 2026 funds from operations range.
For the quarter, funds from operations were $1.59 a share, compared with FactSet estimates of $1.65, MT Newswires reported. The company had recorded funds from operations of $1.43 a share in the second quarter of 2026. The same measure was $1.63 a share in the corresponding period of 2025, according to the second-quarter earnings statement. When announcing those results, the company raised its annual outlook from a range of $4.40–$4.70 a share. The range then became $5.60–$5.90 a share, before the latest increase announced with the third-quarter results. In market coverage of that earlier announcement, Investing.com reported in July that the company's shares rose 6.9% following the presentation of its second-quarter results. The share price reached $53.58 in that coverage, a move tied to the second-quarter announcement.
In its office business, occupancy in the company's Manhattan same-store property portfolio stood at 95.0% at the end of September 2026, according to the earnings statement. That compares with occupancy of 92.9% at the end of 2025 for the same portfolio. The reported occupancy rate includes signed leases that have yet to commence, alongside leases already in effect. Steven Durels, the executive responsible for leasing and real estate, said in the company's September update that "strong leasing momentum continues unabated, with many tenants expanding and making significant capital investments." Durels said those investments aim to improve work environments to attract and retain employees, linking tenant activity to expansion and spending on workplaces.
On financing, SL Green and its partner announced the refinancing of 245 Park Avenue ahead of the quarterly results. The refinancing totaled $2.0 billion, according to the company's statement on the transaction. The statement put the interest rate on the new financing at 6.52%. For SL Green's share, hedging reduced the effective interest rate to 6.37%. The latter rate applies to the company's share after hedging, while the stated rate for the financing as a whole remains the pre-hedging rate, according to the company's breakdown of the transaction's terms.
Among pending transactions, the company agreed in September to sell 110 Greene Street in SoHo to Natura Group. The agreed sale price was $226.0 million, according to its announcement on the property. The company expects the transaction to close in the fourth quarter of 2026. It also expects the transaction to generate net proceeds of about $216.0 million at closing. It said the proceeds would be used to repay unsecured corporate debt, specifying the intended use of the funds expected from the sale. For its next meeting with institutional investors, SL Green scheduled its annual conference for December 7, 2026, according to the third-quarter earnings statement.