SL Green Realty (SLG) Q2 2024 earnings summary

Executive summary

• Achieved strong quarterly results, outperforming a challenging New York City commercial real estate market, with a focus on Park Avenue and East Midtown, and monetizing top assets to fund new developments.

• Signed 38 Manhattan office leases totaling 420,513 sq ft in Q2 2024, with year-to-date leasing at 1.4 million sq ft and a 1.2 million sq ft pipeline, over 80% outside Park Avenue.

• Manhattan same-store office occupancy rose to 89.6% as of June 30, 2024, with expectations to exceed 91.5% by year-end.

• Retail and tourism in New York City are rebounding, with One Madison Retail 100% leased and hotel occupancy approaching 90%.

• The company manages 36 commercial properties totaling 24.9 million sq ft, with a weighted average leased occupancy of 88.7% as of June 30, 2024.

Financial highlights

• Q2 2024 total revenues were $222.8 million, down 9.4% year-over-year, with net income of $1.96 million compared to a $379.2 million loss in Q2 2023.

• Q2 2024 FFO was $143.9 million ($2.05/share), up from $1.43/share in Q2 2023, including $0.69/share in gains on discounted debt extinguishments.

• Funds from Operations for the six months ended June 30, 2024, was $359.4 million, up from $203.9 million in the prior year period.

• Rental revenue declined 19% year-over-year in Q2 2024, mainly due to the deconsolidation of 245 Park Avenue.

• Weighted average consolidated debt balance was $3.8 billion in Q2 2024, with a weighted average interest rate of 5.21%.

Outlook and guidance

• 2024 FFO per share guidance raised to $7.45–$7.75, up $0.10 at midpoint, with net income guidance maintained at $2.73–$3.03 per share.

• Full-year Manhattan office signed lease guidance of 2 million sq ft is expected to be exceeded.

• Special servicing and asset management fee income expected to grow and become a larger part of recurring income.

• Liquidity stood at $0.9 billion as of June 30, 2024, including $708.6 million of revolver availability and $216.1 million of consolidated cash.

• Anticipated capital expenditures for the remainder of 2024 include $25.9 million for leasing, $22.3 million for recurring capex, and $54.4 million for development/redevelopment.