ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
SL Green Realty Corp., which is referred to as SL Green or the Company, a Maryland corporation, and SL Green Operating Partnership, L.P., which is referred to as SLGOP or the Operating Partnership, a Delaware limited partnership, were formed in June 1997 for the purpose of combining the commercial real estate business of S.L. Green Properties, Inc. and its affiliated partnerships and entities. The Company is a self-managed real estate investment trust, or REIT, engaged in the ownership, management, operation, acquisition, development, redevelopment, repositioning and financing of commercial real estate properties, principally office properties, located in the New York metropolitan area, principally Manhattan. Unless the context requires otherwise, all references to "we," "our" and "us" means the Company and all entities owned or controlled by the Company, including the Operating Partnership.
The following discussion related to our consolidated financial statements should be read in conjunction with the financial statements appearing in Item 8 of this Annual Report on Form 10-K. A discussion of our results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023 is included in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 18, 2025, together with the amendment to such report filed with the SEC on April 17, 2025, and is incorporated by reference into this Annual Report on Form 10-K.
For descriptions of significant leasing, investing and financing activities in 2025, refer to "Part I, Item 1. Business - Highlights from 2025."
Critical Accounting Estimates
Our discussion and analysis of financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and contingencies as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our assumptions and estimates on an ongoing basis. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting estimates affect our more significant judgments and estimates used in the preparation of our consolidated financial statements.
Investment in Commercial Real Estate Properties
Real estate properties are presented at cost less accumulated depreciation and amortization. Costs directly related to the development or redevelopment of properties are capitalized. Ordinary repairs and maintenance are expensed as incurred; major investments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.
We recognize the assets acquired, liabilities assumed (including contingencies) and any noncontrolling interests in an acquired entity by allocating the purchase price, including transaction costs, at their respective fair values on the acquisition date.
We allocate the purchase price of real estate to land and building (inclusive of tenant improvements) and, if determined to be material, intangibles, such as the value of above- and below-market leases and origination costs associated with the in-place leases.
The allocation of the purchase price to the tangible and intangible assets acquired and liabilities assumed involves subjectivity as the allocations are based on an analysis of the respective fair values. In determining the fair value of the real estate acquired, the Company will use a third-party valuation which primarily utilizes cash flow projections that apply, among other things, estimated revenue and expense growth rates, future market rents, discount rates and capitalization rates, as well as sales comparison approach, which utilizes comparable sales, listings and sales contracts. We assess fair value of the acquired leases based on estimated cash flow projections that utilize appropriate discount rates and available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions that may affect the property. The determined and allocated fair values to the real estate acquired will affect the amount of depreciation and amortization we record over the respective estimated useful lives or term of the lease.
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The Company classifies those leases under which the Company is the lessee at lease commencement as finance or operating leases. Leases qualify as finance leases if i) the lease transfers ownership of the asset at the end of the lease term, ii) the lease grants an option to purchase the asset that we are reasonably certain to exercise, iii) the lease term is for a major part of the remaining economic life of the asset, iv) the present value of the lease payments exceeds substantially all of the fair value of the asset, or v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Leases that do not qualify as finance leases are deemed to be operating leases. On the consolidated statements of operations, operating leases are expensed through operating lease rent while financing leases are expensed through amortization and interest expense.
We incur a variety of costs in the development and leasing of our properties. After the determination is made to capitalize a cost, it is allocated to the specific component of a project that is benefited. Determining when a development project is substantially complete and capitalization must cease involves a degree of judgment. The costs of land and building under development include specifically identifiable costs. The capitalized costs include, but are not limited to, pre-construction costs essential to the development of the property, development costs, construction costs, interest costs, real estate taxes, salaries and related costs and other costs incurred during the period of development. We consider a construction project as substantially complete and held available for occupancy upon the completion of tenant improvements, but no later than one year after major construction activity ceases. We cease capitalization on the portions substantially completed and occupied or held available for occupancy and capitalize only those costs associated with the portions under construction.
Properties are individually evaluated for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. A consolidated property's value is considered impaired if management's estimate of the aggregate future cash flows (undiscounted) to be generated by the property is less than the carrying value of the property taking into account the appropriate capitalization rate in determining the future terminal value. To the extent impairment has occurred, the loss will be measured as the excess of the carrying amount of the property over the fair value of the property as calculated in accordance with ASC 820. We assess for impairment indicators based on factors such as, among other things, market conditions, occupancy rates, collections, and the overall operating performance of the asset. If indicators of impairment are present, we evaluate real estate investments for potential impairment primarily utilizing estimated fair value based on discounted future cash flows utilizing appropriate discount and capitalization rates, in addition to sales comparison approach, which utilizes comparable sales, listings and sales contracts.
We also evaluate our real estate properties for impairment when a property has been classified as held for sale. Real estate assets held for sale are valued at the lower of their carrying value or fair value less costs to sell and depreciation expense is no longer recorded. See Note 4, "Properties Held for Sale and Property Dispositions."
Investments in Unconsolidated Joint Ventures
We account for our investments in unconsolidated joint ventures under the equity method of accounting in cases where we exercise significant influence over, but do not control, these entities and are not considered to be the primary beneficiary. We consolidate those joint ventures that we control or which are variable interest entities (each, a "VIE") and where we are considered to be the primary beneficiary. In all these joint ventures, the rights of the joint venture partner are both protective as well as participating. Unless we are determined to be the primary beneficiary in a VIE, these participating rights preclude us from consolidating these VIE entities. Determining control of the entities can be subjective in assessing which activities of the joint venture most significantly impact the economic performance and whether the rights of the joint venture partner are protective or participating. In making this determination, any new or amended joint venture agreement is assessed by the Company for the activities that most significantly impact the joint venture's economic performance based on the business purpose and design of the venture. We assess the rights that are conveyed to us in the agreement and evaluate whether we are provided with participating or protective rights over the activities that most significantly impact the entity's economic performance. We also assess the rights of our joint venture partner. Such participating rights include, among other things, the right to approve/amend the annual budget, leasing of the property to a significant tenant, and approval of tax returns and auditors. If our joint venture partner has substantive participating rights and we are determined not to be the primary beneficiary, we do not consolidate the entity.
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These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for equity in net income (loss) and cash contributions and distributions. Equity in net income (loss) from unconsolidated joint ventures is allocated based on our ownership or economic interest in each joint venture and includes adjustments related to basis differences in accounting for the investment. When a capital event (as defined in each joint venture agreement) such as a refinancing occurs, if return thresholds are met, future equity income will be allocated at our increased economic interest. We recognize incentive income from unconsolidated real estate joint ventures as income to the extent it is earned and not subject to a clawback feature. Distributions we receive from unconsolidated real estate joint ventures in excess of our basis in the investment are recorded as offsets to our investment balance if we remain liable for future obligations of the joint venture or may otherwise be committed to provide future additional financial support. We generally finance our joint ventures with non-recourse debt. In certain cases we may provide guarantees or master leases for tenant space, which terminate upon the satisfaction of specified circumstances or repayment of the underlying loans.
We assess our investments in unconsolidated joint ventures for recoverability, and if it is determined that a loss in value of the investment is other than temporary, we write down the investment to its fair value. We evaluate our equity investments for impairment based on each joint ventures' actual and projected cash flows. Aside from charges noted in Note 6, "Investment in Unconsolidated Joint Ventures," we do not believe that the values of any of our equity investments were impaired as of December 31, 2025.
We may originate loans for real estate acquisition, development and construction ("ADC loans") where we expect to receive some of the residual profit from such projects. When the risk and rewards of these arrangements are essentially the same as an investor or joint venture partner, we account for these arrangements as real estate investments under the equity method of accounting for investments. Otherwise, we account for these arrangements consistent with the accounting for our debt and preferred equity investments.
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Results of Operations
Comparison of the year ended December 31, 2025 to the year ended December 31, 2024
The following comparison for the year ended December 31, 2025, or 2025, to the year ended December 31, 2024, or 2024, makes reference to the effect of the following:
i. “Same-Store Properties,” which represents properties in service and operating during both the current and prior year reporting periods (Same-Store Properties totaled 21 of our 33 consolidated operating buildings),
ii. “Acquisition Properties,” which represents all properties or interests in properties acquired in 2025 and 2024 and all non-Same-Store Properties, including properties that are under development or redevelopment,
iii. "Disposed Properties," which represents all properties or interests in properties sold in 2025 and 2024,
iv. "Alternative Strategy Portfolio," which represents non-core assets, and
v. “Other,” which represents properties where we sold an interest resulting in deconsolidation and corporate level items not allocable to specific properties, as well as the Service Corporation and eEmerge Inc.
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Same-Store
Disposed
Other
Consolidated
(in millions)
Change
Change
Change
Change
Rental revenue
SUMMIT Operator revenue
Investment income
Interest income from real estate loans held by consolidated securitization vehicles
Other income
Total revenues
Property operating expenses
SUMMIT Operator expenses
SUMMIT Operator tax expense
Transaction related costs
Marketing, general and administrative
Operating income before equity in net income from unconsolidated joint ventures
Other income (expenses):
Interest expense and amortization of deferred financing costs, net of interest income
Interest expense on senior obligations of consolidated securitization vehicles
Depreciation and amortization
Equity in net loss from unconsolidated joint ventures
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate
Loss from debt fund investments, net
Purchase price and other fair value adjustments
(Loss) gain on sale of real estate, net
Depreciable real estate reserves and impairments
Gain on sale of marketable securities
Gain (loss) on early extinguishment of debt
Loan loss and other investment reserves, net of recoveries
Income from continuing operation
Net income from discontinued operations
Gain on sale of discontinued operations
Net (loss) income
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Rental revenue
Rental revenues increased due primarily to the consolidation of 100 Park Avenue ($25.5 million) during the fourth quarter of 2024, 10 East 53rd Street ($1.7 million) at the end of the first quarter of 2024, 315 West 33rd Street ($4.2 million) at the end of the third quarter of 2025 and 800 Third Avenue ($2.0 million) during the fourth quarter 2025 and the acquisition of 500 Park Avenue ($5.5 million) during the first quarter 2025. The increase is partially offset by lower occupancy at 485 Lexington Avenue ($6.6 million) and 750 Third Avenue ($6.1 million).
The following table presents a summary of the commenced leasing activity for the year ended December 31, 2025 in our Manhattan portfolio:
Usable
Rentable
New
Cash
Rent (per
rentable
Prev.
Escalated
Rent (per
rentable
per
rentable
Free
Rent (in
months)
Average
Lease
Term (in
years)
Manhattan
Space available at beginning of the year
Space which became available during the year (4)
• Office
• Retail
• Storage
Total space available
Leased space commenced during the year:
• Office (5)
• Retail
• Storage
Total leased space commenced
Total available space at end of year
Early renewals
• Office
• Retail
• Storage
Total early renewals
Total commenced leases, including replaced previous vacancy
• Office
• Retail
• Storage
Total commenced leases
(1) Represents the rentable square footage at the time the property was acquired.
(2) Annual initial base rent.
(3) Escalated rent includes base rent plus all additional amounts paid by the tenant in the form of real estate taxes, operating expenses, porters wage or a consumer price index (CPI) adjustment.
(4) Includes expiring space, relocating tenants and move-outs where tenants vacated. Excludes lease expirations where tenants held over.
(5) Average starting office rent excluding new tenants replacing vacancies was $88.79 per rentable square feet for 703,481 rentable square feet. Average starting office rent for office space (leased and early renewals, excluding new tenants replacing vacancies) was $86.50 per rentable square feet for 1,246,548 rentable square feet.
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SUMMIT Operator revenue
SUMMIT Operator revenues were lower for the year ended December 31, 2025, compared to the same period in 2024 due primarily to taking offline the Ascent experience, which requires a premium ticket that generates incremental revenue, for maintenance during most of the year ended December 31, 2025, .
Investment income
Investment income increased due primarily to interest payments received on one CMBS investment ($10 million) for the year ended December 31, 2025. This was partially offset by lower weighted average debt and preferred equity investment balance for the period ended December 31, 2025 as compared to the same period in 2024. For the years ended December 31, 2025 and 2024, the weighted average balance of our debt and preferred equity investment portfolio and the weighted average yield were $273.6 million and 5.8%, respectively, compared to $328.9 million and 6.9%, respectively.
Interest income from real estate loans held by consolidated securitization vehicles
During the years December 31, 2024 and December 31, 2025, we acquired securities in CMBS securitization trusts that resulted in consolidation of the trusts on our financial statements. The amounts recorded include our interest income as well as the interest income associated with CMBS positions owned by third parties, which is offset by the amounts recorded in Interest expense on senior obligations of consolidated securitization vehicles. As a result, the net impact is limited to the interest income on the CMBS securities we own directly and not the consolidated interest income and interest expense.
Other income
Other income increased due primarily to management fees earned from the Fund ($8.4 million) and an increase in special servicing income ($7.3 million). This increase was offset by a decrease in fee income recognized during the year ended December 31, 2024 related to the sale of 625 Madison Avenue ($11.5 million).
Property operating expenses
Property operating expenses increased due primarily to the consolidation of 100 Park Avenue ($27.8 million) during the fourth quarter of 2024, 10 East 53rd Street ($4.7 million) at the end of the first quarter of 2024, 315 West 33rd Street ($6.1 million) at the end of the third quarter of 2025 and 800 Third Avenue ($4.1 million) during the fourth quarter of 2025 and the acquisition of 500 Park Avenue ($9.5 million) in the first quarter of 2025. Operating expenses also increased at our Same-Store Properties ($11.7 million) due primarily to higher real estate taxes.
SUMMIT Operator expenses
SUMMIT Operator expenses were higher for the year ended December 31, 2025, compared to the same period in 2024, due primarily to increased variable expenses as a result of additional operating days and expanded hours.
SUMMIT Operator tax expense
The increase in SUMMIT Operator tax expense for the year ended December 31, 2025 as compared to the same period in 2024 was the result of an adjustment made in the third quarter of 2024 related to 2023 projected tax expense being more than 2023 actual tax expense.
Transaction related costs
Transaction related costs increased for the year ended December 31, 2025 as compared to the same period in 2024 due primarily to the write off of expenses related to the Company's pursuit of a gaming license ($11.9 million).
Marketing, General, and Administrative Expenses
Marketing, general, and administrative expenses increased for the year ended December 31, 2025 as compared to the same period in 2024 due primarily to higher compensation expense.
Interest Expense and Amortization of Deferred Financing Costs, Net of Interest Income
Interest expense and amortization of deferred financing costs, net of interest income, increased due primarily to a higher weighted average consolidated debt balance and higher weighted average interest rate as well as the consolidation of 100 Park Avenue ($25.5 million) during the fourth quarter of 2024, 10 East 53rd Street ($1.7 million) at the end of the first quarter of 2024, 315 West 33rd Street ($4.2 million) at the end of the third quarter of 2025 and 800 Third Avenue ($2.0 million) during the fourth quarter 2025 and the acquisition of 500 Park Avenue ($5.5 million) during the first quarter 2025. The weighted average consolidated debt balance outstanding was $3.9 billion for the year ended December 31, 2025 as compared to $3.7 billion for the year ended December 31, 2024. The consolidated weighted average interest rate was 5.34% for the year ended December 31, 2025 as compared to 5.17% for the year ended December 31, 2024.
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Interest expense on senior obligations of consolidated securitization vehicles
During the years ended December 31, 2025 and December 31, 2024 we acquired securities in CMBS securitization trusts that resulted in consolidation of the trusts on our financial statements. The amounts include the interest expense associated with CMBS positions owned by third parties, which is an offset to the third party interest income recognized in Interest income from real estate loans held by consolidated securitization vehicles. As a result, the impact is limited to interest income on the CMBS securities we own directly and not the consolidated interest income and interest expense.
Depreciation and Amortization
Depreciation and amortization increased due primarily to the consolidation of 100 Park Avenue ($20.1 million) during the fourth quarter of 2024, 10 East 53rd Street ($4.0 million) at the end of the first quarter of 2024, 315 West 33rd Street ($7.4 million) at the end of the third quarter of 2025 and 800 Third Avenue ($2.0 million) during the fourth quarter of 2025 and the acquisition of 500 Park Avenue ($5.1 million) in the first quarter of 2025 and an increase at our Same-Store Properties ($7.9 million).
Equity in net loss from unconsolidated joint ventures
Equity in net loss from unconsolidated joint ventures increased primarily due to impairments recognized during the year ended December 31, 2024 at 5 Times Square ($146.4 million), Worldwide Plaza ($72.6 million), 2 Herald Square ($20.4 million), 85 Fifth Avenue ($12.0 million) and 115 Spring Street ($11.7 million). These impairments were partially offset by gains on discounted debt extinguishment at 2 Herald Square ($141.7 million) and 280 Park Avenue ($30.7 million). During the year ended December 31, 2025 we recognized impairments at World Wide Plaza ($4.4 million) and 2 Herald Square ($8.4 million).
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate
During the year ended December 31, 2025, we recognized gains on the sale of an 5% interest in One Vanderbilt ($88.1 million), partially offset by a loss on the sale of our interest in 85 Fifth Avenue ($2.0 million). During the year ended December 31, 2024, we recognized gains on the sale of an 11% interest in One Vanderbilt ($187.6 million) and our interest in 717 Fifth Avenue ($26.4 million), partially offset by a loss on the sale of our interests in 625 Madison Avenue ($7.2 million).
Purchase price and other fair value adjustments
During the year ended December 31, 2025, we recorded negative fair value adjustments related to the initial valuation of Palisades Conference Center ($13.0 million), the consolidation of 800 Third Avenue ($20.2 million), and derivatives that are not designated as hedges for accounting purposes ($3.9 million). These negative adjustments were partially offset by positive fair value adjustment for the secured borrowing related to the previous sale of an interest at One Madison Avenue ($6.2 million). During the year ended December 31, 2024, we recorded positive fair value adjustments relating to the consolidation of 100 Park Avenue ($117.8 million) and for the secured borrowing related to the previous sale of an interest at One Madison Avenue ($19.6 million). Additionally, we recorded a positive fair value adjustment related to derivatives that are not designated as hedges for accounting purposes ($5.5 million). These positive adjustments were partially offset by a negative fair value adjustment relating to the consolidation of 10 East 53rd Street ($55.7 million).
(Loss) gain on sale of real estate, net
During the year ended December 31, 2024, we recognized a gain on the sale of Palisades Conference Center ($7.3 million) and losses on the sales of 719 Seventh Avenue ($2.1 million) and the Giorgio Armani Residences at 760 Madison Avenue ($1.5 million).
Depreciable Real Estate Reserves and Impairments
During the year ended December 31, 2025, we recognized depreciable real estate reserves and impairments at 100 Park Avenue ($23.5 million) and 760 Madison Avenue ($8.5 million). During the year ended December 31, 2024, we recognized depreciable real estate reserves and impairments at 719 Seventh Avenue ($46.3 million), 690 Madison Avenue ($34.3 million) and 760 Madison Avenue ($17.6 million), reflective of $15.1 million of capitalized interest for 760 Madison Avenue, to reduce the carrying value of our investments based on the sales contracts that the Company entered into for these properties. In addition, we recognized depreciable real estate reserves and impairments related to our investment in 625 Madison Avenue ($5.9 million), which remained under contract for sale as of March 31, 2024 prior to the sale closing in the second quarter of 2024.
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Gain on sale of marketable securities
During the year ended December 31, 2025, we recognized a gain on marketable securities sold during the period ($10.2 million). During the year ended December 31, 2024 we did not recognize a gain on marketable securities sold during the period.
Gain (loss) on early extinguishment of debt
During the year ended December 31, 2025, we did not recognize any consolidated gain or loss on early extinguishment of debt. During the year ended December 31, 2024, we recognized gains on discounted debt extinguishment at 690 Madison Avenue ($26.0 million) and 719 Seventh Avenue ($17.8 million).
Loan loss and other investment reserves, net of recoveries
During the year ended December 31, 2025, we recognized a loan loss recovery of $71.6 million related to the repayment of the mortgage investment at 522 Fifth Avenue. During the year ended December 31, 2024, we did not recognize any loan loss and other investment reserves.
Comparison of the year ended December 31, 2024 to the year ended December 31, 2023
For a comparison of the year ended December 31, 2024 to the year ended December 31, 2023, see "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Part II, Item 7 of our Form 10-K for the year ended December 31, 2024, which was filed with the SEC on February 18, 2025, together with the amendment to such Form 10-K filed with the SEC on April 17, 2025.
Liquidity and Capital Resources
We currently expect that the principal sources of funds to meet our short-term and long-term liquidity requirements for working capital, acquisitions, development or redevelopment of properties, tenant improvements, leasing costs, dividends to shareholders, distributions to unitholders, repurchases or repayments of outstanding indebtedness or other investments will include:
(1) Cash flow from operations;
(2) Cash on hand;
(3) Net proceeds from divestitures of properties and redemptions, participations, dispositions and repayments of debt and preferred equity investments;
(4) Borrowings under the revolving credit facility;
(5) Other forms of secured or unsecured financing; and
(6) Proceeds from common or preferred equity or debt offerings by the Company or the Operating Partnership (including issuances of units of limited partnership interest in the Operating Partnership and Trust preferred securities).
Cash flow from operations is primarily dependent upon the collectability of rent, the occupancy level of our portfolio, the net effective rental rates achieved on our leases, the collectability of rent, operating escalations and recoveries from our tenants and the level of operating and other costs.
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The combined aggregate principal maturities of mortgages and other loans payable, the 2021 credit facility, senior unsecured notes (net of discount), trust preferred securities, our share of joint venture debt, including as-of-right extension options, estimated interest expense, and our obligations under our financing and operating leases, as of December 31, 2025 are as follows (in thousands):
Thereafter
Total
Property mortgages and other loans
Revolving credit facility
Unsecured term loans
Trust preferred securities
Financing leases
Operating leases
Estimated interest expense
Company's share of joint
venture debt
Total
We estimate that for the year ending December 31, 2026, we expect to incur $99.6 million of leasing capital expenditures and $33.8 million of recurring capital expenditures on existing consolidated properties, of which $25.6 million will be funded by construction financing facilities or loan reserves. In addition, we expect to incur $39.8 million of development or redevelopment expenditures on existing consolidated properties, of which none will be funded by construction financing facilities or loan reserves. We expect our share of capital expenditures at our joint venture properties will be $172.4 million, of which $28.8 million will be funded by construction financing facilities or loan reserves. Future property acquisitions may require substantial capital investments for refurbishment and leasing costs.
As of December 31, 2025, we had liquidity of $781.9 million, comprised of $602.5 million of availability under our revolving credit facility and $179.4 million of consolidated cash on hand, inclusive of $23.7 million of available-for-sale marketable securities. This liquidity excludes $124.0 million representing our share of cash at unconsolidated joint venture properties. We may seek to divest of properties, interests in properties, or access private and public debt and equity capital when the opportunity presents itself, although there is no guarantee that this capital will be made available to us at efficient levels or at all. Management believes that these sources of liquidity, if we are able to access them, along with potential refinancing opportunities for secured and unsecured debt, will allow us to satisfy our debt and other obligations, as described above, upon maturity, if not before.
We have investments in several real estate joint ventures with various partners, that are generally considered to be financially stable, and most are financed with non-recourse debt. We believe that property level cash flows along with unfunded committed indebtedness and proceeds from the refinancing of outstanding secured indebtedness will be sufficient to fund the capital needs of our joint venture properties.
Cash Flows
The following summary discussion of our cash flows is based on our consolidated statements of cash flows in "Item 1. Financial Statements" and is not meant to be an all-inclusive discussion of the changes in our cash flows for the years presented below.
Cash, restricted cash, and cash equivalents were $336.5 million and $331.6 million as of December 31, 2025 and 2024, respectively, representing a increase of $4.9 million. The increase was a result of the following changes in cash flows (in thousands):
Year Ended December 31,
(Decrease)
Increase
Net cash provided by operating activities
Net cash (used in) provided by investing activities
Net cash provided by (used in) financing activities
Our principal sources of operating cash flow are the properties in our consolidated and joint venture portfolios, third party fees and our debt and preferred equity portfolio. These sources generate a relatively consistent stream of cash flow that provides us with resources to pay operating expenses, debt service, and fund dividend and distribution requirements.
Cash is used in investing activities to fund acquisitions, development or redevelopment projects and recurring and nonrecurring capital expenditures. We selectively invest in new projects that enable us to take advantage of our development,
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leasing, financing and property management skills, and invest in existing buildings that meet our investment criteria. During the year ended December 31, 2025, when compared to the year ended December 31, 2024, we used cash primarily for the following investing activities (in thousands):
Acquisitions of real estate
Capital expenditures and capitalized interest
Acquisition deposits and deferred purchase price
Joint venture investments
Distributions from joint ventures
Proceeds from sales of real estate/partial interest in property
Cash and restricted cash assumed from consolidation of real estate investment
Cash and restricted cash derecognized from disposition and deconsolidation of real estate investment
Debt and preferred equity and other investments
Decrease in net cash provided by investing activities
Funds spent on capital expenditures, which are comprised of building and tenant improvements, increased from $211.9 million for the year ended December 31, 2024 to $255.6 million for the year ended December 31, 2025 due to increased spending on leasing related costs.
We generally fund our investment activity through the sale of real estate, the sale or repayment of debt and preferred equity investments, property-level financing, corporate credit facilities, or construction loan facilities. From time to time, the Company may issue common or preferred stock or equity-linked securities, or the Operating Partnership may issue common or preferred units of limited partnership interest.
During the year ended December 31, 2025, when compared to the year ended December 31, 2024, we used cash primarily for the following financing activities (in thousands):
Proceeds from our debt obligations
Repayments of our debt obligations
Net distribution to noncontrolling interests
Other financing activities
Proceeds from stock options exercised and DRSPP issuance
Payment of debt extinguishment costs
Proceeds from issuance of common stock
Repurchase of common stock
Redemption of preferred stock
Acquisition of subsidiary interest from noncontrolling interest
Dividends and distributions paid
Increase in net cash provided by financing activities
Share Repurchase Program
The Company has in place a share repurchase program of $3.5 billion under which we can buy shares of our common stock.
As of December 31, 2025, 36,107,719 shares have been repurchased under the program. This amount excludes the redemption of OP units. We did not repurchase any shares under the program during the year ended December 31, 2025.
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Indebtedness
The table below summarizes our consolidated mortgages and other loans payable, 2021 credit facility, 2022 term loan, senior unsecured notes and trust preferred securities outstanding as of December 31, 2025 and 2024, (amounts in thousands).
Debt Summary:
December 31, 2025
December 31, 2024
Balance
Fixed rate
Variable rate—hedged
Total fixed rate
Total variable rate
Total debt
Debt, preferred equity, and other investments subject to variable rate
Net exposure to variable rate debt
Percent of Total Debt :
Fixed rate
Variable rate (1)
Total
Effective Interest Rate for the Year:
Fixed rate
Variable rate
Effective interest rate
(1) Inclusive of the mitigating effect of our debt, preferred equity, and other investments subject to variable rates, the percent of total debt of our net exposure to variable rate debt was 6.1% and 7.0% as of December 31, 2025 and December 31, 2024, respectively.
The variable rate debt shown above generally bears interest at an interest rate based on adjusted Term SOFR (3.69% and 4.33% as of December 31, 2025 and 2024, respectively). Our consolidated debt as of December 31, 2025 had a weighted average term to maturity of 2.34 years.
Certain of our debt and equity investments and other investments, with carrying values of $128.6 million as of December 31, 2025 and $117.0 million as of December 31, 2024, are variable rate investments which mitigate our exposure to interest rate changes on our unhedged variable rate debt. Inclusive of the mitigating effect of these investments, the net ratio of our consolidated variable rate debt to total debt was 6.1% and 7.0% as of December 31, 2025 and 2024, respectively.
Mortgage Financing
As of December 31, 2025, our total mortgage debt (excluding our share of joint venture mortgage debt of $5.9 billion) consisted of $2.1 billion of fixed rate debt, including swapped variable rate debt, with an effective weighted average interest rate of 5.40% and $0.1 billion of variable rate debt with an effective weighted average interest rate of 6.17%.
Corporate Indebtedness
2021 Credit Facility
In December 2021, we entered into an amended and restated credit facility, referred to as the 2021 credit facility, that was previously amended by the Company in November 2017, and was originally entered into by the Company in November 2012. As of December 31, 2025, the 2021 credit facility consisted of a $1.25 billion revolving credit facility, a $1.05 billion term loan (or "Term Loan A"), and a $100.0 million term loan (or "Term Loan B") with maturity dates of May 15, 2026, May 15, 2027, and May 19, 2026, respectively. Term Loan B has one six-month, as-of-right extension option to November 19, 2026. The revolving credit facility has two six-month, as-of-right extension options to May 15, 2027. We also have an option, subject to customary conditions, to increase the capacity of the credit facility to $4.5 billion at any time prior to the maturity dates for the revolving credit facility and term loans without the consent of existing lenders, by obtaining additional commitments from our existing lenders and other financial institutions.
As of December 31, 2025, the 2021 credit facility bore interest at a spread over adjusted Term SOFR plus 10 basis points with an interest period of one or three months, as we may elect, ranging from (i) 72.5 basis points to 140 basis points for loans under the revolving credit facility, (ii) 80 basis points to 160 basis points for loans under Term Loan A, and (iii) 85 basis points to 165 basis points for loans under Term Loan B, in each case based on the credit rating assigned to the senior unsecured long
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term indebtedness of the Company. In instances where there are either only two ratings available or where there are more than two and the difference between them is one rating category, the applicable rating shall be the highest rating. In instances where there are more than two ratings and the difference between the highest and the lowest is two or more rating categories, then the applicable rating used is the average of the highest two, rounded down if the average is not a recognized category.
As of December 31, 2025, the applicable spread over adjusted Term SOFR plus 10 basis points for the 2021 credit facility was 140 basis points for the revolving credit facility, 160 basis points for Term Loan A, and 180 basis points for Term Loan B. We are required to pay quarterly in arrears a 12.5 to 30 basis point facility fee on the total commitments under the revolving credit facility based on the credit rating assigned to the senior unsecured long-term indebtedness of the Company. As of December 31, 2025, the facility fee was 30 basis points.
As of December 31, 2025, we had $7.5 million of outstanding letters of credit, $640.0 million drawn under the revolving credit facility and $1.15 billion of outstanding term loans, with total undrawn capacity of $602.5 million under the 2021 credit facility. As of December 31, 2025 and December 31, 2024, the revolving credit facility had a carrying value of $637.8 million and $316.2 million, respectively, net of deferred financing costs. As of December 31, 2025 and December 31, 2024, the term loans had a carrying value of $1.1 billion and $1.1 billion, respectively, net of deferred financing costs. The Company and the Operating Partnership are borrowers jointly and severally obligated under the 2021 credit facility. The 2021 credit facility includes certain restrictions and covenants (see Restrictive Covenants below).
CMBS Repurchase Facility
In December 2024, the Company entered into a repurchase facility for CMBS (CMBS Repurchase Facility), which provides us with the ability to sell certain CMBS investments with a simultaneous agreement to repurchase the same at a certain date or on demand. We seek to mitigate risks associated with our repurchase facility by managing the credit quality of our assets, early repayments, interest rate volatility, liquidity, and market value. The margin call provisions under our repurchase facility permit valuation adjustments based on capital markets activity and are not limited to collateral-specific credit marks. To monitor credit risk associated with our CMBS investments, our asset management team regularly reviews our investment portfolio and is in contact with our borrowers in order to monitor the collateral and enforce our rights as necessary. The risk associated with potential margin calls is further mitigated by our ability to collateralize the facility with additional assets from our portfolio of investments, our ability to satisfy margin calls with cash or cash equivalents and our access to additional liquidity. As of December 31, 2025, there have been no margin calls on the CMBS Repurchase Facility. At December 31, 2025, there was no outstanding balance of on the facility.
Senior Unsecured Notes
The following table sets forth our senior unsecured notes and other related disclosures as of December 31, 2025 and 2024, respectively, by scheduled maturity date (dollars in thousands):
December 31, 2025
December 31, 2024
Issuance
Unpaid Principal Balance
Accreted
Balance
Accreted
Balance
Interest Rate (1)
Initial Term
(in Years)
Maturity Date
December 17, 2015 (2)
December 2025
Deferred financing costs, net
(1) Interest rate as of December 31, 2024. The notes were repaid upon maturity in December 2025.
(2) Issued by the Company and the Operating Partnership as co-obligors.
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Restrictive Covenants
The terms of the 2021 credit facility and our senior unsecured notes include certain restrictions and covenants which may limit, among other things, our ability to pay dividends, make certain types of investments, incur additional indebtedness, incur liens and enter into negative pledge agreements and dispose of assets, and which require compliance with financial ratios relating to the maximum ratio of total indebtedness to total asset value, a minimum ratio of EBITDA to fixed charges, a maximum ratio of secured indebtedness to total asset value and a maximum ratio of unsecured indebtedness to unencumbered asset value. The dividend restriction referred to above provides that, we will not during any time when a default is continuing, make distributions with respect to common stock or other equity interests, except to enable the Company to continue to qualify as a REIT for Federal income tax purposes. As of December 31, 2025 and 2024, we were in compliance with all such covenants.
Junior Subordinated Deferrable Interest Debentures
In June 2005, the Company and the Operating Partnership issued $100.0 million in unsecured trust preferred securities through a newly formed trust, SL Green Capital Trust I, or the Trust, which is a wholly owned subsidiary of the Operating Partnership. The securities mature in 2035 and bear interest at a floating rate of 26 basis points over the three-month Term SOFR. Interest payments may be deferred for a period of up to eight consecutive quarters if the Operating Partnership exercises its right to defer such payments. The Trust preferred securities are redeemable at the option of the Operating Partnership, in whole or in part, with no prepayment premium. We do not consolidate the Trust even though it is a variable interest entity as we are not the primary beneficiary. Because the Trust is not consolidated, we have recorded the debt on our consolidated balance sheets and the related payments are classified as interest expense.
Interest Rate Risk
We are exposed to changes in interest rates primarily from our variable rate debt. Our exposure to interest rate fluctuations are managed through the use of interest rate derivative instruments and through our variable rate debt and preferred equity investments. Based on the debt outstanding as of December 31, 2025, a hypothetical 100 basis point increase in the applicable floating interest rate curve would increase our consolidated annual interest cost, net of interest income from variable rate debt and preferred equity investments, by $2.3 million and would increase our share of joint venture annual interest cost by $4.5 million. As of December 31, 2025, $127.9 million, or 76.0%, of our $168.4 million debt and preferred equity portfolio was indexed to SOFR.
We recognize most derivatives on the balance sheet at fair value. Derivatives that are not hedges for accounting purposes are adjusted to fair value through income. If a derivative is considered a hedge for accounting purposes, depending on the nature of the hedge, changes in the fair value of the derivative will either be offset against the change in fair value of the hedged asset, liability, or firm commitment through earnings, or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings.
Consolidated long-term debt of $3.7 billion bears interest at fixed rates, and therefore the fair value of these instruments is affected by changes in the market interest rates. Our variable rate debt and variable rate joint venture debt as of December 31, 2025 bore interest based on a spread to LIBOR of 145 basis points and Term SOFR of 148 basis points to 260 basis points.
Off-Balance Sheet Arrangements
We have off-balance sheet investments, including joint ventures and debt and preferred equity investments. These investments all have varying ownership structures. A majority of our joint venture arrangements are accounted for under the equity method of accounting as we have the ability to exercise significant influence over, but not control, the operating and financial decisions of these joint venture arrangements. Our off-balance sheet arrangements are discussed in Note 5, "Debt and Preferred Equity Investments" and Note 6, "Investments in Unconsolidated Joint Ventures" in the accompanying consolidated financial statements.
Dividends/Distributions
We expect to pay dividends to our stockholders based on the distributions we receive from our Operating Partnership.
To maintain our qualification as a REIT, we must pay annual dividends to our stockholders of at least 90% of our REIT taxable income, determined before taking into consideration the dividends paid deduction and net capital gains.
Any dividend we pay may be in the form of cash, stock, or a combination thereof, subject to IRS limitations on the use of stock for dividends. Additionally, if our REIT taxable income in a particular year exceeds the amount of cash dividends we pay in that year, we may pay stock dividends in order to maintain our REIT status and avoid certain REIT-level taxes.
Before we pay any cash dividend, whether for Federal income tax purposes or otherwise, which would only be paid out of available cash to the extent permitted under the 2021 credit facility and senior unsecured notes, we must first meet both our operating requirements and scheduled debt service on our mortgages and loans payable.
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Insurance
We maintain “all-risk” property and rental value coverage (including coverage regarding the perils of flood, earthquake and terrorism, excluding nuclear, biological, chemical, and radiological terrorism ("NBCR")), within two property insurance programs and liability insurance. Separate property and liability coverage may be purchased on a stand-alone basis for certain assets, such as development projects. Additionally, one of our captive insurance companies, Belmont Insurance Company ("Belmont"), provides coverage for NBCR terrorist acts above a specified trigger. Belmont's retention is reinsured by our other captive insurance company, Ticonderoga Insurance Company ("Ticonderoga"). If Belmont or Ticonderoga are required to pay a claim under our insurance policies, we would ultimately record the loss to the extent of required payments. However, there is no assurance that in the future we will be able to procure coverage at a reasonable cost. Further, if we experience losses that are uninsured or that exceed policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. Additionally, our debt instruments contain customary covenants requiring us to maintain insurance and we could under our debt instruments if the cost and/or availability of certain types of insurance make it or to comply with such covenants relating to insurance. Belmont and Ticonderoga provide coverage solely on properties owned by the Company or its affiliates.
Furthermore, with respect to certain of our properties, including properties held by joint ventures or subject to triple net leases, insurance coverage is obtained by a third-party and we do not control the coverage. While we may have agreements with such third parties to maintain adequate coverage and we monitor these policies, such coverage ultimately may not be maintained or adequately cover our risk of loss.
Funds from Operations
Funds from Operations ("FFO") is a widely recognized non-GAAP financial measure of REIT performance. The Company computes FFO in accordance with standards established by Nareit, which may not be comparable to FFO reported by other REITs that do not compute FFO in accordance with the Nareit definition, or that interpret the Nareit definition differently than the Company does. The revised White Paper on FFO approved by the Board of Governors of Nareit in April 2002, and subsequently amended in December 2018, defines FFO as net income (loss) (computed in accordance with GAAP), excluding gains (or losses) from sales of properties and real estate related impairment charges, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.
The Company presents FFO because it considers it an important supplemental measure of the Company's operating performance and believes that it is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, particularly those that own and operate commercial office properties. The Company also uses FFO as one of several criteria to determine performance-based compensation for members of its senior management. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions, and real estate related impairment charges, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, and interest costs, providing perspective not immediately apparent from net income. FFO does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to net income (determined in accordance with GAAP), as an indication of the Company's financial performance or to cash flow from operating activities (determined in accordance with GAAP) as a measure of the Company's liquidity, nor is it indicative of funds available to fund the Company's cash needs, including our ability to make cash distributions.
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FFO for the years ended December 31, 2025, 2024, and 2023 are as follows (in thousands):
Year Ended December 31,
Net (loss) income attributable to SL Green common stockholders
Add:
Depreciation and amortization
Joint venture depreciation and noncontrolling interest adjustments
Net loss attributable to noncontrolling interests
Less:
Equity in net gain (loss) on sale of interest in unconsolidated joint venture/real estate
Purchase price and other fair value adjustments
(Loss) gain on sale of real estate, net
Depreciable real estate reserves and impairments
Depreciable real estate reserves in unconsolidated joint venture
Depreciation on non-rental real estate assets
Funds from Operations attributable to SL Green common stockholders and unit holders
Seasonality
Our business at SUMMIT is subject to, among other things, tourism trends and weather conditions, resulting in seasonal fluctuation. The table below shows SUMMIT's revenue for each quarter during the years ended December 31, 2025 and December 31, 2024. We do not consider any other components of our business to be subject to material seasonal fluctuations.
Year Ended December 31,
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Total
Climate Change
Climate regulation in New York City is among the most stringent and requires building owners to comply with ambitious emissions limits. New York City enacted Local Law 97 (LL97) in 2019 under the Climate Mobilization Act, setting carbon caps for large buildings starting in 2024 as part of a broader commitment to reducing greenhouse gas emissions by 40% by 2030, and by 80% by 2050. We expect to be compliant in the first compliance period through 2029, with no material financial impact on our portfolio.
While SL Green's portfolio has not been substantially affected by climate-related events to New York City real estate, such as Hurricane Sandy in 2012, we have continued to develop our approach to physical climate risk assessment, management, and mitigation in order to minimize the impacts of future events. In 2024, the Company released a revised TCFD report, which expanded the physical and transition risks and opportunities and progress related to TCFD disclosure originally released in 2021.
We consider the successful management and mitigation of climate-related risks across our portfolio as an opportunity to increase the financial value of our buildings and pass on these benefits to our stakeholders, tenants, and investors. We believe our investments over the last 20 years in energy efficiency improvements and greenhouse gas emissions reductions have minimized the impact of climate legislation on our portfolio and our active development pipeline sets the standard for sustainable new construction and responsible community engagement. We leverage years of operational excellence to incorporate innovative design and technological solutions. We also utilize recommendations from our portfolio-wide New York State Energy Research and Development Authority ("NYSERDA") emissions reduction study to help lower emissions from tenant spaces and base building operations. Together, these measures are expected to minimize our vulnerability to the physical risks of climate change, as well as transition risks covering policy and legal, market, technology, and reputational factors.
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Accounting Standards Updates
The Accounting Standards Updates are discussed in Note 2, "Significant Accounting Policies Accounting Standards Updates" in the accompanying consolidated financial statements.
Forward-Looking Information
This report includes certain statements that may be deemed to be "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to be covered by the safe harbor provisions thereof. All statements, other than statements of historical facts, included in this report that address activities, events or developments that we expect, believe or anticipate will or may occur in the future, including such matters as future capital expenditures, dividends and acquisitions (including the amount and nature thereof), development trends of the real estate industry and the New York metropolitan area markets, occupancy, business strategies, expansion and growth of our operations and other similar matters, are forward-looking statements. These forward-looking statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate.
Forward-looking statements are not guarantees of future performance and actual results or developments may differ materially, and we caution you not to place undue reliance on such statements. Forward-looking statements are generally identifiable by the use of the words "may," "will," "should," "expect," "anticipate," "estimate," "believe," "intend," "project," "continue," or the negative of these words, or other similar words or terms.
Forward-looking statements contained in this report are subject to a number of risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by forward-looking statements made by us. These risks and uncertainties include:
• the effect of general economic, geopolitical, business and financial conditions, and their effect on the New York City real estate market in particular;
• dependence upon the New York City real estate market;
• risks of real estate acquisitions, dispositions, development and redevelopment, including the cost of construction delays and cost overruns;
• risks relating to debt and preferred equity investments;
• availability and creditworthiness of prospective tenants and borrowers;
• bankruptcy or insolvency of a major tenant or a significant number of smaller tenants or borrowers;
• adverse changes in the real estate markets, including reduced demand for office space, increasing vacancy, and increasing availability of sublease space;
• availability of debt and equity capital for our operational needs and investment strategy;
• unanticipated increases in financing and other costs, including a rise in interest rates;
• our ability to comply with financial covenants in our debt instruments;
• our ability to maintain our status as a REIT;
• risks of investing through joint venture structures, including the fulfillment by our partners of their financial obligations;
• the threat of terrorist attacks;
• our ability to obtain adequate insurance coverage at a reasonable cost and the potential for losses in excess of our insurance coverage, including as a result of environmental contamination;
• risks related to our asset management business, including our ability to identify suitable investments, manage actual and potential conflicts of interest and comply with regulations on our asset management subsidiary under the Investment Advisers Act of 1940; and
• legislative, regulatory and/or safety requirements adversely affecting REITs and the real estate business including costs of compliance with the Americans with Disabilities Act, the Fair Housing Act and other similar laws and regulations.
Other factors and risks to our business, many of which are beyond our control, are described in other sections of this report and in our other filings with the SEC. Except to the extent required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.
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