SL Green Realty Q2 Earnings Call Highlights

SL Green sharply raised its 2026 FFO guidance by $1.20 per share, or more than 26%, citing stronger leasing, lower vacancy, expense control, and a recurring boost from One Vanderbilt. Management said most of the increase should recur and that the property’s contribution could be “as much or more” next year. Leasing momentum remains broad-based across Manhattan assets, with rents rising at key properties like 1185 Sixth Avenue and 245 Park Avenue. The company reported a 900,000-square-foot leasing pipeline and said New York City’s office market is being supported by strong demand and limited new supply. Capital markets activity and asset monetization are progressing, including sales and partnerships tied to the 2026 business plan, while debt financing remains available. SL Green also said it is increasing its interest-rate hedging and expects dividend coverage to improve over 2026 and 2027, with breakeven targeted for 2028.

SL Green raised its 2026 funds from operations guidance sharply after what management described as a strong first half of the year, citing stronger leasing, improved economic occupancy, expense control and a recurring contribution tied to One Vanderbilt. On the company’s Q2 2026 earnings call, Chairman and Chief Executive Officer Marc Holliday said leasing gains made over the past several years are now showing up in the company’s financial results. He said economic occupancy rose 300 basis points during the quarter as concessions burned off and vacancy declined.

“Much of what we predicted at our investor conference in December is now playing out in ways that directly drive earnings and improves cash flow,” Holliday said. He added that the company expects to exceed its leasing goals for the year, though management said it was too early to reforecast the exact magnitude.

Chief Financial Officer Matt DiLiberto said SL Green increased its 2026 FFO guidance by $1.20 per share, or more than 26%, with “the vast majority” of the increase recurring. He attributed $0.20 per share of incremental FFO to the real estate portfolio, including benefits from early renewals, leasing of pre-built space, faster delivery of space to tenants and expense containment. $0.10 of that amount was recognized in the second quarter.

Another $0.20 per share is expected from additional fee and other income tied to execution of the company’s 2026 business plan over the remainder of the year. The largest component of the guidance increase, however, came from One Vanderbilt. DiLiberto said the property’s strong cash flow had caused SL Green’s carrying value in the investment to go negative, reaching the maximum negative basis allowed under GAAP at the end of the first quarter. Beginning in Q2, the company’s FFO contribution from One Vanderbilt includes amortization of the negative carrying value and the difference between cash distributions received and SL Green’s share of GAAP net income. DiLiberto said those two components add $0.80 per share to 2026 FFO, including $0.35 recorded in the second quarter. He said the contribution is expected to be “as much or more” next year based on current projections.

SL Green executives described leasing strength as broad-based, with particular rent appreciation in Park Avenue and Sixth Avenue assets. Steve Durels, executive vice president and director of leasing and real property, said rents have risen “dramatically” at properties including 1185 Sixth Avenue...