SL Green Realty (SLG) Investor Day 2024 summary

Market environment and strategic positioning

• New York City commercial real estate rebounded sharply in 2024, with tenant demand and capital markets activity accelerating, driven by businesses returning to offices and institutional investors recommitting capital.

• Vacancy rates in New York are outperforming other major U.S. cities, with Midtown and Park Avenue corridors experiencing some of the tightest market conditions in decades.

• City of Yes zoning reforms in NYC aim to add 80,000+ homes over 15 years, supporting clean energy, economic growth, and housing affordability, with major citywide and neighborhood plans underway for 2025 and beyond.

• Investment market sentiment is improving, with NYC office and retail sales volume up 44% year-over-year and private investors now comprising over 60% of buyers.

• Loan originations in NYC have rebounded, up 44% over the previous year, and CMBS spreads have tightened back to 2019 and 2021 levels, indicating renewed liquidity and confidence in debt markets.

Strategic initiatives and business plan for 2025

• The company’s portfolio repositioning since 2017, including the sale of non-core assets and a focus on high-quality, amenitized properties, has resulted in significant outperformance.

• Diversification into retail, residential, hospitality, and special servicing has reduced reliance on office income and strengthened the balance sheet.

• Plans to finish raising and deploy a $1 billion New York City-focused credit fund, targeting 16%-18% gross IRRs, with a $250M anchor commitment secured and a robust pipeline of deals.

• Aggressive acquisition strategy for well-located assets, continued redevelopment, and blueprinting office-to-residential conversions, starting with 750 Third Avenue.

• Pursuing one of three New York gaming licenses, aiming to develop a world-class entertainment, gaming, and hotel resort in Times Square.

Portfolio performance, leasing, and development

• Midtown Manhattan leasing activity is at its highest since 2019, with a 16.5% availability rate and large block leasing exceeding pre-pandemic averages; amenitized buildings are capturing the majority of new demand.

• Major renewals and expansions include Bloomberg at 919 Third Ave (925,000 RSF) and Ares at 245 Park Ave (307,000 RSF), supporting high occupancy rates and rising rents.

• One Madison Avenue and 245 Park Avenue are highlighted as flagship developments, with robust leasing, new amenities, and retail activations.

• High Street retail assets have fully recovered, with flagship leases to global luxury brands and strong asset appreciation.

• Launching a landmark office-to-residential conversion at 750 Third Avenue, leveraging new city and state incentives, with a projected $805 million investment and mid-to-high 6% unlevered yield.