SL Green Realty Corp. widened its 2026 outlook after a second quarter that showed a larger loss but stronger leasing, occupancy and cash flow trends.
The New York office landlord reported a second-quarter net loss attributable to common stockholders of $26.5 million, or $0.38 a share, compared with a loss of $11.1 million, or $0.16 a share, a year earlier. For the first half, the loss widened to $110.9 million, or $1.58 a share, from $32.2 million, or $0.47 a share.
Funds from operations fell to $109.6 million, or $1.43 a share, from $124.5 million, or $1.63 a share in the prior-year quarter. For the first six months, FFO dropped to $174.2 million, or $2.26 a share, from $231.1 million, or $3.03 a share.
The company raised its full-year 2026 FFO guidance to $5.60-$5.90 a share from $4.40-$4.70, a midpoint increase of $1.20 a share. It also lifted net income guidance to $0.20-$0.50 a share from a prior range of a loss of $0.27 a share to a profit of $0.03 a share.
Leasing activity remained active. SL Green signed 53 Manhattan office leases covering 445,161 square feet in the second quarter, bringing first-half signings to 104 leases and 1.37 million square feet. Replacement leases signed in the quarter carried starting rents of $98.42 a square foot, 18.0% above prior fully escalated rents. For the first half, replacement leases started at $109.59 a square foot, 16.6% higher than prior rents.
Average rent on second-quarter leases was $93.17 a square foot, with an average term of 5.8 years. In the first half, average rent climbed to $101.25 a square foot and average term stretched to 8.5 years.
Manhattan same-store cash NOI rose 4.3% in the second quarter and 3.4% in the first half, excluding lease termination income. Same-store office occupancy increased to 94.7% at June 30 from 94.4% at the end of the prior quarter and 93.0% at year-end 2025. The company said it expects occupancy to reach 95.0% by year-end.
On the investment side, SL Green closed the sale of the residential and retail components of 7 Dey Street for $222.6 million, generating $23.7 million in net cash proceeds. It also sold a 49.0% joint venture interest in 346 Madison Avenue at a gross valuation of $175.0 million, bringing in $94.9 million in net proceeds.
The company also entered into a contract to sell 10 East 53rd Street for $312.2 million, with expected net cash proceeds of about $100 million. In addition, it deployed $94.7 million from its $1.3 billion opportunistic debt fund in the quarter and $306.4 million year to date, bringing total deployment to $590.5 million. Of that total, $517.5 million has been funded and $18.9 million has since been repaid.
SL Green repurchased $14.1 million of common stock in the quarter at an average price of $49.67 a share.
The company declared a quarterly common dividend of $0.6175 a share and a preferred dividend of $0.40625 a share. Today the company's shares have moved 7.34% to a price of $53.80. If you want to know more, read the company's complete 8-K report here.
