SL Green Reports 91% Occupancy But Lower Cash Flows in Q1 Earnings

The global economy might be slowing, but don’t tell that to SL Green (SLG)’s Marc Holliday — he’s just fine betting the house on the New York City office, even as his real estate investment trust (REIT) reported uneven first-quarter earnings. 

SL Green reported total funds from operations (FFO) of $106.5 million for the first quarter of 2025, compared to an FFO of $215.4 million during the first quarter of 2024. The firm reported a net loss attributable to common stockholders of $21.1 million in the first quarter, compared to net income of $13.1 million in the first quarter of last year. 

The New York City office REIT also reported its same-store cash net operating income increased 2.4 percent, and that its same-store office occupancy in Manhattan ended the quarter at 91.8 percent, while it expects occupancy levels to reach 93.2 percent by December 2025. 

“Given all that’s transpired with global markets since our last call, I was especially happy with our first quarter’s earnings,” said Holliday on Thursday. “The company’s earnings this quarter exceeded the street’s expectations and our own internal projections by a significant margin.” 

Holliday noted that the commercial debt market remains “opportunity rich,” and that SL Green’s originations business, secondary market purchases, distressed opportunities strategy, and new debt fund and a special servicing businesses would take “center stage in 2025.” 

Holiday also noted that recent volatility in the credit markets has enhanced its credit business, as his firm closed nearly $200 million in debt and preferred equity investments for its credit fund and that it is actively negotiating a pipeline of $1.2 billion of new debt investments. 

“Our debt platform is a meaningful component of who we are, and our expertise and track record in this area is well established,” said Holliday. “Given the opportunity set in front of us, I do expect our debt-related business will account for increased profits to our shareholders.” 

In terms of its equity portfolio, in the first quarter SL Green closed on the $130 million acquisition of 500 Park Avenue, an office and condominium tower that opened in 1960, and has brought the building to 100 percent occupancy, according to Holliday. 

The firm also closed a 49.9 percent interest in 100 Park Avenue, a 36-story office built in 1949, for a mere $14.9 million, and closed on the sale of Giorgio Armani Residences at 760 Madison Avenue, six luxury condominiums, which generated $93.3 million in proceeds. 

“In uncertain times, SL Green shines,” said Holliday.   

Harrison Sitomer, chief investment officer of SL Green, pointed out that debt financing markets have been favorable toward New York City commercial real estate, as a result of a weaker U.S. dollar and demand for tangible assets like New York City office buildings. 

“With the credit markets in general, we can certainly expect to see some turbulence as a result of the macro environment across the country, but I expect New York City to be immune from that,” said Sitomer. “There’s a flight to quality in moments like this, and New York City has demonstrated an ability to stand out from every other market.” 

Sitomer noted that, year-to-date, New York City office commercial mortgage-backed securities have secured $6.9 billion in financings compared to zero dollars in 2023 and $300 million in that same period in 2024. 

Holliday noted New York City has “an enormous scarcity” of high-quality office sites that can be delivered over the next four or five years, which has given him confidence in the long-term viability of the market. 

The longtime SL Green leader also shrugged off the recent chaos brought by President Donald Trump’s shoot-from-the-hip tariff policy, which he believes isn’t very connected to leasing New York City office buildings. 

“The issue I have right now is not tariffs. The issue I have is delivering 1.5 million to 2 million  square feet of brand-new, Class A, One Vanderbilt-style office space to the most sophisticated base of tenants in the country that want to grow,” said Holliday. “I’m as committed to that today as I was in December.”

Correction: An earlier verison of this piece incorrectly attributed Harrison Sitomer’s quotes to Matthew DiLiberto.

Brian Pascus can be reached at bpascus@commercialobserver.com