Raises 2015 Earnings Guidance
SL Green Realty Corp. (NYSE:SLG):
Financial and Operating Highlights
-
Second quarter FFO of $1.65 per share before transaction related
costs of $0.03 per share compared to prior year FFO of $1.64 per share
before transaction related costs of $0.02 per share. Prior year FFO
included a promote of $10.3 million, or $0.10 per share, recognized on
the sale of 747 Madison Avenue.
-
Raising 2015 NAREIT defined FFO guidance to a range of $6.30 to
$6.34 per share, an increase of $0.05 per share at the midpoint, as
compared to a previous range of $6.24 to $6.30 per share.
-
Second quarter net loss attributable to common stockholders of
$0.39 per share compared to prior year net income attributable to
common stockholders of $2.46 per share. Current year net loss includes
accelerated depreciation expense of $0.95 per share related to the
properties that comprise the One Vanderbilt development site.
-
Combined same-store cash NOI increased 4.9 percent for the second
quarter and 4.0 percent for the first six months as compared to the
same periods in the prior year.
-
Signed 50 Manhattan office leases covering 839,590 square feet
during the second quarter. The mark-to-market on signed Manhattan
office leases was 11.3 percent higher in the second quarter than the
previously fully escalated rents on the same spaces.
-
Signed 32 Suburban office leases covering 203,768 square feet
during the second quarter. The mark-to-market on signed Suburban
office leases was 1.0 percent lower in the second quarter than the
previously fully escalated rents on the same spaces.
-
Increased Manhattan same-store occupancy, inclusive of leases
signed but not yet commenced, as of June 30, 2015 to 97.0 percent as
compared to 94.9 percent as of June 30, 2014 and 95.9 percent as of
March 31, 2015.
-
Increased Suburban same-store occupancy, inclusive of leases signed
but not yet commenced, as of June 30, 2015 to 84.2 percent as compared
to 83.4 percent as of June 30, 2014 and 83.5 percent as of March 31,
2015.
-
Signed a 10-year lease with Adidas at 115 Spring Street.
Investing Highlights
-
Received final approval from the New York City Council for the
development of the 63-story One Vanderbilt office tower directly west
of Grand Central Terminal.
-
Entered into an agreement to acquire Eleven Madison
Avenue in Midtown South for $2.285 billion plus approximately $300.0
million in costs associated with lease stipulated improvements to the
property.
-
Entered into separate agreements to sell all of or interests in
Tower 45, 131-137 Spring Street and the Meadows Office Complex for
total gross asset valuations of $763.9 million. The Company expects to
recognize cash proceeds from these transactions in excess of $420.0
million.
-
Entered into an agreement to acquire a 90.0 percent interest in The
SoHo Building at 110 Greene Street based on a gross asset valuation of
$255.0 million.
-
Entered into an agreement to acquire two mixed-use properties
located at 187 Broadway and 5-7 Dey Street in Downtown Manhattan for
$63.7 million.
-
Closed on the off-market acquisition of a mixed-use residential and
retail property located on the Upper East Side of Manhattan for $50.0
million.
-
Originated new debt and preferred equity investments totaling
$302.5 million in the second quarter, of which $227.5 million was
retained at a weighted average current yield of 10.5 percent.
Summary
SL Green Realty Corp. (NYSE:SLG) today reported funds from operations,
or FFO, for the quarter ended June 30, 2015 of $171.7 million, or $1.65
per share, before transaction related costs of $3.1 million, or $0.03
per share, as compared to FFO for the same period in 2014 of $162.6
million, or $1.64 per share, before transaction related costs of $1.7
million, or $0.02 per share. FFO for the current quarter includes the
recognition of the Company’s share of lease termination income at 919
Third Avenue of $5.8 million. Prior year FFO included a promote of $10.3
million recognized on the sale of 747 Madison Avenue.
Net loss attributable to common stockholders for the quarter ended June
30, 2015 totaled $39.1 million, or $0.39 per share, inclusive of $99.1
million, or $0.95 per share, of acceleration depreciation expense
related to the properties that comprise the One Vanderbilt development
site. Net income attributable to common stockholders for the quarter
ended June 30, 2014 totaled $235.5 million, or $2.46 per share,
inclusive of $117.8 million, or $1.18 per share, of gains recognized
from the sale of 673 First Avenue and a purchase price fair value
adjustment of $71.4 million, or $0.72 per share, related to the
acquisition of the Company's joint venture partner's interest in 388-390
Greenwich Street.
All per share amounts in this press release are presented on a diluted
basis.
Operating and Leasing Activity
For the quarter ended June 30, 2015, the Company reported consolidated
revenues and operating income of $409.1 million and $251.3 million,
respectively, compared to $380.6 million and $233.7 million,
respectively, for the same period in 2014.
Same-store cash NOI on a combined basis increased by 4.9 percent to
$183.8 million and by 4.0 percent to $353.6 million for the three and
six months ended June 30, 2015, respectively, as compared to the same
periods in 2014. For the three months ended June 30, 2015, consolidated
property same-store cash NOI increased by 5.0 percent to $163.3 million
and unconsolidated joint venture property same-store cash NOI increased
by 3.6 percent to $20.5 million, as compared to the same period in 2014.
For the six months ended June 30, 2015, consolidated property same-store
cash NOI increased by 3.7 percent to $313.1 million and unconsolidated
joint venture property same-store cash NOI increased by 6.1 percent to
$40.4 million, as compared to the same period in 2014.
During the second quarter, the Company signed 50 office leases in its
Manhattan portfolio totaling 839,590 square feet. Seventeen leases
comprising 306,913 square feet represented office leases that replaced
previous vacancy. Thirty-three leases comprising 532,677 square feet,
representing office leases on space that had been occupied within the
prior twelve months, are considered replacement leases on which
mark-to-market is calculated. Those replacement leases had average
starting rents of $60.74 per rentable square foot, representing an 11.3
percent increase over the previously fully escalated rents on the same
office spaces. The average lease term on the Manhattan office leases
signed in the second quarter was 11.2 years and average tenant
concessions were 7.5 months of free rent with a tenant improvement
allowance of $60.17 per rentable square foot.
During the first six months of 2015, the Company signed 94 office leases
in its Manhattan portfolio totaling 1,305,838 square feet. Thirty-two
leases comprising 621,191 square feet represented office leases that
replaced previous vacancy. Sixty-two leases comprising 684,647 square
feet, representing office leases on space that had been occupied within
the prior twelve months, are considered replacement leases on which
mark-to-market is calculated. Those replacement leases had average
starting rents of $62.40 per rentable square foot, representing a 12.6
percent increase over the previously fully escalated rents on the same
office spaces.
Manhattan same-store occupancy increased to 97.0 percent at June 30,
2015, inclusive of 103,385 square feet of leases signed but not yet
commenced, as compared to 94.9 percent at June 30, 2014 and 95.9 percent
at March 31, 2015.
During the second quarter, the Company signed 32 office leases in its
Suburban portfolio totaling 203,768 square feet. Nine leases comprising
35,188 square feet represented office leases that replaced previous
vacancy. Twenty-three leases comprising the remaining 168,580 square
feet, representing office leases on space that had been occupied within
the prior twelve months, are considered replacement leases on which
mark-to-market is calculated. Those replacement leases had average
starting rents of $34.85 per rentable square foot, representing a 1.0
percent decrease over the previously fully escalated rents on the same
office spaces. The average lease term on the Suburban office leases
signed in the second quarter was 6.2 years and average tenant
concessions were 5.0 months of free rent with a tenant improvement
allowance of $26.65 per rentable square foot.
During the first six months of 2015, the Company signed 65 office leases
in its Suburban portfolio totaling 414,678 square feet. Twenty leases
comprising 131,329 square feet represented office leases that replaced
previous vacancy. Forty-five leases comprising 283,349 square feet,
representing office leases on space that had been occupied within the
prior twelve months, are considered replacement leases on which
mark-to-market is calculated. Those replacement leases had average
starting rents of $34.07 per rentable square foot, representing a 3.5
percent decrease over the previously fully escalated rents on the same
office spaces.
Same-store occupancy for the Company's Suburban portfolio was 84.2
percent at June 30, 2015, inclusive of 127,646 square feet of leases
signed but not yet commenced, as compared to 83.4 percent at June 30,
2014 and 83.5 percent at March 31, 2015.
Significant leases that were signed during the second quarter included:
-
New lease on a total of 350,173 square feet on 10 floors with
Bloomberg LP, the world’s premier information network, for 15.0 years
at 919 Third Avenue;
-
New lease on 133,208 square feet with WeWork for 15.0 years,
comprising all nine floors at 315 West 36th Street;
-
Early renewal on 70,145 square feet with Astor Parking, LLC at 1515
Broadway, bringing the remaining lease term to 10.1 years;
-
New lease on 41,830 square feet with GIC (New York) Inc. at 280 Park
Avenue for 15.0 years;
-
New lease on 33,250 square feet with Golden Tree Asset Management LP
at 485 Lexington Avenue for 10.5 years;
-
Early renewal on 30,365 square feet with Haworth, Inc. at 125 Park
Avenue, bringing the remaining lease term to 12.4 years;
-
Early renewal on 27,321 square feet with UBS Financial Services at 750
Washington Boulevard, Stamford, Connecticut, bringing the remaining
lease term to 6.8 years;
-
New lease on 26,520 square feet with Shiseido at The Meadows,
Rutherford, New Jersey for 10.8 years; and
-
New lease on 21,981 square feet with Infor (US), Inc. at 641 Sixth
Avenue for 10.8 years increasing its commitment to 136,029 square feet
at 635-641 Sixth Avenue.
In July, the Company announced that Adidas signed a 10-year lease at 115
Spring Street, a prime location in one of Manhattan’s strongest retail
areas. The two-level 5,218 square foot space will be the new home of
sportswear company’s Originals boutique.
Marketing, general and administrative, or MG&A, expenses for the quarter
ended June 30, 2015 were $23.2 million, or 5.0 percent of total revenues
and an annualized 49 basis points of total assets including the
Company's share of joint venture revenues and assets.
Real Estate Investment Activity
In May, the New York City Council approved plans for the Company’s One
Vanderbilt office tower and demolition has commenced on the site.
Located directly west of Grand Central Terminal, the 63-story skyscraper
will be 1,501 feet tall and contain 1.6 million rentable square feet of
Class A commercial space. One Vanderbilt features open floor plans,
efficient use of space, and the highest level of sustainable design
in New York City. TD Bank will anchor approximately 200,000 square feet
of space in One Vanderbilt, including a flagship retail store on the
northeast corner of 42nd Street and Madison Avenue. The
Company will invest an $220.0 million in public infrastructure,
constructing new, direct subway access points and circulation areas,
easing platform and mezzanine crowding and allowing trains to move more
quickly through the station at peak hours.
In May, the Company entered into an agreement to acquire Eleven Madison
Avenue for $2.285 billion plus approximately $300.0 million in costs
associated with lease stipulated improvements to the property.
Eleven Madison Avenue is a 29-story, 2.3 million square foot
Class-A, Midtown South office property that was built in 1929 and
originally served as the headquarters of Metropolitan Life Insurance
Company. After a $700.0 million modernization in the 1990s, it became
the North American headquarters of Credit Suisse, which continues to be
the largest tenant in the building today. It also will serve as the new
headquarters for Sony Corp. of America. The transaction is expected to
close in the third quarter of 2015, subject to customary closing
conditions.
In July, the Company announced an agreement to sell Tower 45, the office
building located at 120 West 45th Street, for $365.0 million,
or approximately $830 per square foot. The 440,000-square-foot Tower 45
was acquired by the Company in 2007 as part of the merger with Reckson
Associates. Subsequently, the Company executed a significant capital
improvement program that successfully repositioned the property. Tower
45 is currently 96.2 percent leased. The transaction is expected to
close in the third quarter of 2015, subject to customary closing
conditions.
In July, the Company announced the formation of a joint venture with
Invesco Real Estate ("Invesco") for the ownership of 131-137 Spring
Street, a 73,000 square foot mixed-use asset located in SoHo. Under the
terms of the agreement, Invesco will acquire an 80.0 percent stake in
the property, with the Company retaining a 20.0 percent ownership
interest as well as management and leasing responsibilities. The
transaction values the property at $277.8 million. 131-137 Spring
Street, a six-story building in the heart of the popular SoHo shopping
district, features 100 feet of ground floor frontage on Spring Street
and houses the multi-level flagship stores for Diesel and Burberry while
the balance of the building includes office space and residential rental
units. The transaction is expected to close in the third quarter of
2015, subject to customary closing conditions.
The Company will recognize cash proceeds in excess of $400.0 million
from the 131-137 Spring Street and Tower 45 transactions, combined,
which were executed at a blended cap rate of 3.3 percent.
In April, the Company, together with its joint venture partner, entered
into an agreement to sell the Meadows Office Complex, a two-building
604,000 square foot property in Rutherford, New Jersey, for $121.1
million. The Company owns a 50 percent joint venture interest in the
property, which is 91 percent leased, with Onyx Equities.
In July, the Company announced an agreement to acquire a 90.0 percent
interest in The SoHo Building at 110 Greene Street based on a gross
asset valuation of $255.0 million. The 13-story iconic mixed-use
property is located in the heart of historic SoHo, one of New York
City’s most desirable submarkets. 110 Greene Street is the tallest
building in the submarket, offering office and residential tenants
unparalleled views, along with large floor plates and substantial common
areas. Retail space at the building, along Greene and Mercer Streets,
offers existing and future tenants high visibility on two of the
strongest retail streets in Manhattan. Notwithstanding the building’s
current prominence, the Company plans additional enhancements to the
property as it reintroduces it to the marketplace. The transaction
increases the Company’s sizable footprint in SoHo, adding the
submarket’s best office space to the Company’s commercial portfolio, and
extending its substantial retail presence. The transaction is expected
to close in the third quarter of 2015, subject to customary closing
conditions.
In July, the Company announced an agreement to acquire two mixed-use
properties located at 187 Broadway and 5-7 Dey Street for $63.7 million.
Located adjacent to the entrance to Downtown Manhattan’s new Fulton
Transit Center and one block east of the World Trade Center, the site
consists of two mixed-use, retail/office buildings in a neighborhood
that has undergone rapid growth in the office, residential and retail
segments. The transaction is expected to close in the third quarter of
2015, subject to customary closing conditions.
In June 2015, the Company closed on the off-market acquisition of a
mixed-use residential and retail property located on the Upper East Side
of Manhattan for $50.0 million. The property is situated directly across
the street from two new subway stations that will anchor the Second
Avenue subway line and presents long-term value add opportunities for
the Company’s residential and retail business.
Debt and Preferred Equity Investment Activity
The carrying value of the Company’s debt and preferred equity investment
portfolio totaled $1.7 billion at June 30, 2015. During the second
quarter, the Company originated new debt and preferred equity
investments totaling $302.5 million, of which $227.5 million was
retained and $193.0 million was funded, at a weighted average current
yield of 10.5 percent, and recorded $82.8 million of principal
reductions from investments that were sold or repaid. As of June 30,
2015, the debt and preferred equity investment portfolio had a weighted
average maturity of 1.7 years, excluding any extension options, and had
a weighted average yield during the second quarter of 10.2 percent.
Guidance
Based on the Company’s performance for the first six months of 2015 and
its outlook for the remainder of 2015, the Company is raising its NAREIT
defined FFO guidance for 2015 to a range of $6.30 to $6.34 per share, an
increase of $0.05 per share at the midpoint, as compared to the previous
FFO guidance range of $6.24 to $6.30 per share.
Dividends
During the second quarter of 2015, the Company declared quarterly
dividends on its outstanding common and preferred stock as follows:
-
$0.60 per share of common stock, which was paid on July 15, 2015 to
shareholders of record on the close of business on June 30, 2015; and
-
$0.40625 per share on the Company's 6.50% Series I Cumulative
Redeemable Preferred Stock for the period April 15, 2015 through and
including July 14, 2015, which was paid on July 15, 2015 to
shareholders of record on the close of business on June 30, 2015, and
reflects the regular quarterly dividend, which is the equivalent of an
annualized dividend of $1.625 per share.
Conference Call and Audio Webcast
The Company's executive management team, led by Marc Holliday, Chief
Executive Officer, will host a conference call and audio webcast on
Thursday, July 23, 2015 at 2:00 pm ET to discuss the financial results.
The supplemental data will be available prior to the quarterly
conference call in the Investors section of the SL Green Realty Corp.
website at http://slgreen.com/
under “Financial Reports.”
The live conference call will be webcast in listen-only mode in the
Investors section of the SL Green Realty Corp. website at http://slgreen.com/
under “Event Calendar & Webcasts” and on Thomson's StreetEvents Network.
The conference may also be accessed by dialing (877) 312-8765 Domestic
or (419) 386-0002 International.
A replay of the call will be available through July 30, 2015 by dialing
(800) 585-8367, using pass-code 70777563.
Company Profile
SL Green Realty Corp., an S&P 500 company and New York City's largest
office landlord, is a fully integrated real estate investment trust, or
REIT, that is focused primarily on acquiring, managing and maximizing
value of Manhattan commercial properties. As of June 30, 2015, SL Green
held interests in 120 Manhattan buildings totaling 44.1 million square
feet. This included ownership interests in 29.0 million square feet of
commercial buildings and debt and preferred equity investments secured
by 15.1 million square feet of buildings. In addition to its Manhattan
investments, SL Green held ownership interests in 37 suburban buildings
totaling 5.9 million square feet in Brooklyn, Long Island, Westchester
County, Connecticut and New Jersey.
To be added to the Company's distribution list or to obtain the latest
news releases and other Company information, please visit our website at www.slgreen.com
or contact Investor Relations at (212) 594-2700.
Disclaimers
Non-GAAP Financial Measures
During the quarterly conference call, the Company may discuss
non-GAAP financial measures as defined by SEC Regulation G. In addition,
the Company has used non-GAAP financial measures in this press release.
A reconciliation of each non-GAAP financial measure and the comparable
GAAP financial measure can be found in this release and in the Company’s
Supplemental Package.
Forward-looking Statement
This press release includes certain statements that may be deemed to
be "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995 and are intended to be covered
by the safe harbor provisions thereof. All statements, other than
statements of historical facts, included in this press release that
address activities, events or developments that we expect, believe or
anticipate will or may occur in the future, are forward-looking
statements. Forward-looking statements are not guarantees of future
performance and we caution you not to place undue reliance on such
statements. Forward-looking statements are generally identifiable by the
use of the words "may," "will," "should," "expect," "anticipate,"
"estimate," "believe," "intend," "project," "continue," or the negative
of these words, or other similar words or terms.
Forward-looking statements contained in this press release are
subject to a number of risks and uncertainties, many of which are beyond
our control, that may cause our actual results, performance or
achievements to be materially different from future results, performance
or achievements expressed or implied by forward-looking statements made
by us. Factors and risks to our business that could cause actual results
to differ from those contained in the forward-looking statements are
described in our filings with the Securities and Exchange Commission. We
undertake no obligation to publicly update or revise any forward-looking
statements, whether as a result of future events, new information or
otherwise.
|
|
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SL GREEN REALTY CORP.
CONSOLIDATED STATEMENTS OF INCOME
(unaudited and in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental revenue, net
|
$
|
304,226
|
|
|
$
|
279,608
|
|
|
$
|
607,555
|
|
|
$
|
535,584
|
|
|
Escalation and reimbursement
|
|
41,407
|
|
|
|
38,576
|
|
|
|
82,376
|
|
|
|
76,383
|
|
|
Investment income
|
|
45,191
|
|
|
|
39,714
|
|
|
|
87,260
|
|
|
|
93,798
|
|
|
Other income
|
|
18,250
|
|
|
|
22,734
|
|
|
|
28,182
|
|
|
|
37,312
|
|
|
Total revenues
|
|
409,074
|
|
|
|
380,632
|
|
|
|
805,373
|
|
|
|
743,077
|
|
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses, including related party expenses of $4,472 and
$8,189 in 2015 and $4,567 and $8,080 in 2014
|
|
70,114
|
|
|
|
69,098
|
|
|
|
146,891
|
|
|
|
139,010
|
|
|
Real estate taxes
|
|
56,286
|
|
|
|
51,804
|
|
|
|
112,009
|
|
|
|
104,154
|
|
|
Ground rent
|
|
8,086
|
|
|
|
8,040
|
|
|
|
16,274
|
|
|
|
16,073
|
|
|
Interest expense, net of interest income
|
|
75,746
|
|
|
|
77,870
|
|
|
|
151,553
|
|
|
|
154,048
|
|
|
Amortization of deferred financing costs
|
|
5,952
|
|
|
|
5,401
|
|
|
|
12,567
|
|
|
|
9,058
|
|
|
Depreciation and amortization
|
|
199,565
|
|
|
|
93,379
|
|
|
|
307,902
|
|
|
|
179,894
|
|
|
Transaction related costs
|
|
3,067
|
|
|
|
1,697
|
|
|
|
4,210
|
|
|
|
4,171
|
|
|
Marketing, general and administrative
|
|
23,200
|
|
|
|
23,872
|
|
|
|
48,664
|
|
|
|
47,128
|
|
|
Total expenses
|
|
442,016
|
|
|
|
331,161
|
|
|
|
800,070
|
|
|
|
653,536
|
|
|
(Loss) income from continuing operations before equity in net income
from unconsolidated joint ventures, equity in net gain on sale of
interest in unconsolidated joint venture/real estate, purchase price
fair value adjustment and loss on early extinguishment of debt
|
|
(32,942
|
)
|
|
|
49,471
|
|
|
|
5,303
|
|
|
|
89,541
|
|
|
Equity in net income from unconsolidated joint ventures
|
|
2,994
|
|
|
|
8,619
|
|
|
|
7,024
|
|
|
|
14,748
|
|
|
Equity in net gain on sale of interest in unconsolidated joint
venture/real estate
|
|
769
|
|
|
|
1,444
|
|
|
|
769
|
|
|
|
106,084
|
|
|
Purchase price fair value adjustment
|
|
-
|
|
|
|
71,446
|
|
|
|
-
|
|
|
|
71,446
|
|
|
Loss on early extinguishment of debt
|
|
-
|
|
|
|
(1,028
|
)
|
|
|
(49
|
)
|
|
|
(1,025
|
)
|
|
(Loss) income from continuing operations
|
|
(29,179
|
)
|
|
|
129,952
|
|
|
|
13,047
|
|
|
|
280,794
|
|
|
Net income from discontinued operations
|
|
-
|
|
|
|
5,645
|
|
|
|
427
|
|
|
|
11,414
|
|
|
Gain on sale of discontinued operations
|
|
-
|
|
|
|
114,735
|
|
|
|
12,983
|
|
|
|
114,735
|
|
|
Net (loss) income
|
|
(29,179
|
)
|
|
|
250,332
|
|
|
|
26,457
|
|
|
|
406,943
|
|
|
Net loss (income) attributable to noncontrolling interests in the
Operating Partnership
|
|
1,577
|
|
|
|
(8,645
|
)
|
|
|
(166
|
)
|
|
|
(13,374
|
)
|
|
Net income attributable to noncontrolling interests in other
partnerships
|
|
(6,626
|
)
|
|
|
(1,843
|
)
|
|
|
(12,553
|
)
|
|
|
(3,333
|
)
|
|
Preferred unit distributions
|
|
(1,140
|
)
|
|
|
(565
|
)
|
|
|
(2,091
|
)
|
|
|
(1,130
|
)
|
|
Net (loss) income attributable to SL Green
|
|
(35,368
|
)
|
|
|
239,279
|
|
|
|
11,647
|
|
|
|
389,106
|
|
|
Perpetual preferred stock dividends
|
|
(3,738
|
)
|
|
|
(3,738
|
)
|
|
|
(7,476
|
)
|
|
|
(7,475
|
)
|
|
Net (loss) income attributable to SL Green common stockholders
|
$
|
(39,106
|
)
|
|
$
|
235,541
|
|
|
$
|
4,171
|
|
|
$
|
381,631
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per Share (EPS)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income per share (Basic)
|
$
|
(0.39
|
)
|
|
$
|
2.47
|
|
|
$
|
0.04
|
|
|
$
|
4.01
|
|
|
Net (loss) income per share (Diluted)
|
$
|
(0.39
|
)
|
|
$
|
2.46
|
|
|
$
|
0.04
|
|
|
$
|
3.99
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations (FFO)
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO per share (Basic)
|
$
|
1.63
|
|
|
$
|
1.63
|
|
|
$
|
3.14
|
|
|
$
|
3.15
|
|
|
FFO per share (Diluted)
|
$
|
1.62
|
|
|
$
|
1.62
|
|
|
$
|
3.12
|
|
|
$
|
3.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic ownership interest
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average REIT common shares for net income per share
|
|
99,579
|
|
|
|
95,455
|
|
|
|
98,994
|
|
|
|
95,288
|
|
|
Weighted average partnership units held by noncontrolling interests
|
|
3,908
|
|
|
|
3,515
|
|
|
|
3,936
|
|
|
|
3,339
|
|
|
Basic weighted average shares and units outstanding
|
|
103,487
|
|
|
|
98,970
|
|
|
|
102,930
|
|
|
|
98,627
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted ownership interest
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average REIT common share and common share equivalents
|
|
100,038
|
|
|
|
95,969
|
|
|
|
99,487
|
|
|
|
95,789
|
|
|
Weighted average partnership units held by noncontrolling interests
|
|
3,908
|
|
|
|
3,515
|
|
|
|
3,936
|
|
|
|
3,339
|
|
|
Diluted weighted average shares and units outstanding
|
|
103,946
|
|
|
|
99,484
|
|
|
|
103,423
|
|
|
|
99,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SL GREEN REALTY CORP.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Assets
|
|
(Unaudited)
|
|
|
|
|
Commercial real estate properties, at cost:
|
|
|
|
|
|
|
Land and land interests
|
$
|
3,756,488
|
|
|
$
|
3,844,518
|
|
|
Building and improvements
|
|
8,397,117
|
|
|
|
8,778,593
|
|
|
Building leasehold and improvements
|
|
1,424,822
|
|
|
|
1,418,585
|
|
|
Properties under capital lease
|
|
27,445
|
|
|
|
27,445
|
|
|
|
|
13,605,872
|
|
|
|
14,069,141
|
|
|
Less: accumulated depreciation
|
|
(2,081,646
|
)
|
|
|
(1,905,165
|
)
|
|
|
|
11,524,226
|
|
|
|
12,163,976
|
|
|
Assets held for sale
|
|
420,569
|
|
|
|
462,430
|
|
|
Cash and cash equivalents
|
|
215,896
|
|
|
|
281,409
|
|
|
Restricted cash
|
|
128,234
|
|
|
|
149,176
|
|
|
Investment in marketable securities
|
|
46,251
|
|
|
|
39,429
|
|
|
Tenant and other receivables, net of allowance of $16,369 and
$18,068 in 2015 and 2014, respectively
|
|
64,873
|
|
|
|
57,369
|
|
|
Related party receivables
|
|
11,395
|
|
|
|
11,735
|
|
|
Deferred rents receivable, net of allowance of $23,656 and $27,411
in 2015 and 2014, respectively
|
|
433,999
|
|
|
|
374,944
|
|
|
Debt and preferred equity investments, net of discounts and deferred
origination fees of $18,867 and $19,172 in 2015 and 2014,
respectively
|
|
1,685,234
|
|
|
|
1,408,804
|
|
|
Investments in unconsolidated joint ventures
|
|
1,262,723
|
|
|
|
1,172,020
|
|
|
Deferred costs, net
|
|
328,838
|
|
|
|
327,962
|
|
|
Other assets
|
|
1,144,720
|
|
|
|
647,333
|
|
|
Total assets
|
$
|
17,266,958
|
|
|
$
|
17,096,587
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Mortgages and other loans payable
|
$
|
5,287,934
|
|
|
$
|
5,586,709
|
|
|
Revolving credit facility
|
|
705,000
|
|
|
|
385,000
|
|
|
Term loan and senior unsecured notes
|
|
2,113,050
|
|
|
|
2,107,078
|
|
|
Accrued interest payable and other liabilities
|
|
161,188
|
|
|
|
137,634
|
|
|
Accounts payable and accrued expenses
|
|
147,028
|
|
|
|
173,246
|
|
|
Deferred revenue
|
|
337,571
|
|
|
|
187,148
|
|
|
Capitalized lease obligations
|
|
21,013
|
|
|
|
20,822
|
|
|
Deferred land leases payable
|
|
1,387
|
|
|
|
1,215
|
|
|
Dividend and distributions payable
|
|
66,026
|
|
|
|
64,393
|
|
|
Security deposits
|
|
67,985
|
|
|
|
66,614
|
|
|
Liabilities related to assets held for sale
|
|
178,252
|
|
|
|
266,873
|
|
|
Junior subordinate deferrable interest debentures held by trusts
that issued trust preferred securities
|
|
100,000
|
|
|
|
100,000
|
|
|
Total liabilities
|
|
9,186,434
|
|
|
|
9,096,732
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies
|
|
-
|
|
|
|
-
|
|
|
Noncontrolling interest in the Operating Partnership
|
|
431,418
|
|
|
|
469,524
|
|
|
Preferred units
|
|
124,723
|
|
|
|
71,115
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
Stockholders’ equity:
|
|
|
|
|
|
|
Series I Preferred Stock, $0.01 par value, $25.00 liquidation
preference, 9,200 issued and outstanding at both June 30, 2015 and
December 31, 2014
|
|
221,932
|
|
|
|
221,932
|
|
|
Common stock, $0.01 par value 160,000 shares authorized, 99,590
and 100,928 issued and outstanding at June 30, 2015 and December
31, 2014, respectively (including 3,643 and 3,603 shares held in
Treasury at June 30, 2015 and December 31, 2014, respectively)
|
|
1,033
|
|
|
|
1,010
|
|
|
Additional paid-in capital
|
|
5,570,746
|
|
|
|
5,289,479
|
|
|
Treasury stock at cost
|
|
(325,207
|
)
|
|
|
(320,471
|
)
|
|
Accumulated other comprehensive loss
|
|
(10,906
|
)
|
|
|
(6,980
|
)
|
|
Retained earnings
|
|
1,657,911
|
|
|
|
1,752,404
|
|
|
Total SL Green Realty Corp. stockholders’ equity
|
|
7,115,509
|
|
|
|
6,937,374
|
|
|
Noncontrolling interests in other partnerships
|
|
408,874
|
|
|
|
521,842
|
|
|
Total equity
|
|
7,524,383
|
|
|
|
7,459,216
|
|
|
Total liabilities and equity
|
$
|
17,266,958
|
|
|
$
|
17,096,587
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SL GREEN REALTY CORP.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited and in thousands, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
Six Months Ended
|
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
FFO Reconciliation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income attributable to SL Green common stockholders
|
|
$
|
(39,106
|
)
|
|
$
|
235,541
|
|
$
|
4,171
|
|
$
|
381,631
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
199,565
|
|
|
|
93,379
|
|
|
307,902
|
|
|
179,894
|
|
Discontinued operations depreciation adjustments
|
|
|
-
|
|
|
|
1,459
|
|
|
-
|
|
|
4,756
|
|
Joint venture depreciation and noncontrolling interest adjustments
|
|
|
4,435
|
|
|
|
8,161
|
|
|
13,057
|
|
|
21,148
|
|
Net income attributable to noncontrolling interests
|
|
|
5,049
|
|
|
|
10,488
|
|
|
12,719
|
|
|
16,707
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
-
|
|
|
|
114,735
|
|
|
12,983
|
|
|
114,735
|
|
Equity in net gain on sale of interest in unconsolidated joint
venture/real estate
|
|
|
769
|
|
|
|
1,444
|
|
|
769
|
|
|
106,084
|
|
Purchase price fair value adjustment
|
|
|
-
|
|
|
|
71,446
|
|
|
-
|
|
|
71,446
|
|
Depreciation on non-rental real estate assets
|
|
|
500
|
|
|
|
503
|
|
|
1,025
|
|
|
1,017
|
|
Funds From Operations attributable to SL Green common stockholders
and noncontrolling interests
|
|
$
|
168,674
|
|
|
$
|
160,900
|
|
$
|
323,072
|
|
$
|
310,854
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Properties
|
|
|
SL Green’s share of
Unconsolidated Joint Ventures
|
|
|
Combined
|
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
Three Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
Operating income and Same-store NOI
Reconciliation:
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
2014
|
|
(Loss) income from continuing operations before equity in net income
from unconsolidated joint ventures, equity in net gain on sale of
interest in unconsolidated joint venture/real estate, purchase price
fair value adjustment and loss on early extinguishment of debt
|
$
|
(32,942
|
)
|
$
|
|
49,471
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income from unconsolidated joint ventures
|
|
2,994
|
|
|
|
8,619
|
|
|
|
2,994
|
|
|
|
8,619
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
199,565
|
|
|
|
93,379
|
|
|
|
15,819
|
|
|
|
14,928
|
|
|
|
|
|
|
|
Interest expense, net of interest income
|
|
75,746
|
|
|
|
77,870
|
|
|
|
18,259
|
|
|
|
15,427
|
|
|
|
|
|
|
|
Amortization of deferred financing costs
|
|
5,952
|
|
|
|
5,401
|
|
|
|
1,344
|
|
|
|
832
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
-
|
|
|
|
(1,028
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
Operating income
|
$
|
251,315
|
|
$
|
|
233,712
|
|
|
$
|
38,416
|
|
|
$
|
39,806
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, general and administrative expense
|
|
23,200
|
|
|
|
23,872
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
Net operating income from discontinued operations
|
|
-
|
|
|
|
10,661
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
Transaction related costs
|
|
3,067
|
|
|
|
1,697
|
|
|
|
3
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-building revenue
|
|
(47,353
|
)
|
|
|
(58,756
|
)
|
|
|
(6,361
|
)
|
|
|
(6,365
|
)
|
|
|
|
|
|
|
Equity in net income from unconsolidated joint ventures
|
|
(2,994
|
)
|
|
|
(8,619
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
-
|
|
|
|
1,028
|
|
|
|
-
|
|
|
|
1,787
|
|
|
$
|
|
$
|
|
|
Net operating income (NOI)
|
|
227,235
|
|
|
|
203,595
|
|
|
|
32,058
|
|
|
|
35,255
|
|
|
259,293
|
|
238,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI from discontinued operations
|
|
-
|
|
|
|
(10,661
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
(10,661
|
)
|
|
NOI from other properties/affiliates
|
|
(34,755
|
)
|
|
|
(18,275
|
)
|
|
|
(9,190
|
)
|
|
|
(13,039
|
)
|
|
|
(43,945
|
)
|
|
(31,314
|
)
|
|
Same-Store NOI
|
$
|
192,480
|
|
$
|
|
174,659
|
|
|
$
|
22,868
|
|
|
$
|
22,216
|
|
|
$
|
215,348
|
|
$
|
196,875
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ground lease straight-line adjustment
|
|
400
|
|
|
|
400
|
|
|
|
-
|
|
|
|
-
|
|
|
|
400
|
|
|
400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line and free rent
|
|
(24,353
|
)
|
|
|
(13,278
|
)
|
|
|
(2,131
|
)
|
|
|
(2,062
|
)
|
|
|
(26,484
|
)
|
|
(15,340
|
)
|
|
Rental income – FAS 141
|
|
(5,197
|
)
|
|
|
(6,249
|
)
|
|
|
(258
|
)
|
|
|
(390
|
)
|
|
|
(5,455
|
)
|
|
(6,639
|
)
|
|
Same-store cash NOI
|
$
|
163,330
|
|
$
|
|
155,532
|
|
|
$
|
20,479
|
|
|
$
|
19,764
|
|
|
$
|
183,809
|
|
$
|
175,296
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Properties
|
|
|
SL Green’s share of
Unconsolidated Joint Ventures
|
|
|
Combined
|
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
|
Six Months Ended
|
|
|
|
June 30,
|
|
|
June 30,
|
|
|
June 30,
|
|
Operating income and Same-store NOI
Reconciliation:
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
|
2015
|
|
|
2014
|
|
Income from continuing operations before equity in net income from
unconsolidated joint ventures, equity in net gain on sale of
interest in unconsolidated joint venture/real estate, purchase price
fair value adjustment and loss on early extinguishment of debt
|
$
|
5,303
|
|
|
$
|
89,541
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity in net income from unconsolidated joint ventures
|
|
7,024
|
|
|
|
14,748
|
|
|
|
7,024
|
|
|
|
14,748
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
307,902
|
|
|
|
179,894
|
|
|
|
29,967
|
|
|
|
35,085
|
|
|
|
|
|
|
|
|
Interest expense, net of interest income
|
|
151,553
|
|
|
|
154,048
|
|
|
|
33,514
|
|
|
|
34,130
|
|
|
|
|
|
|
|
|
Amortization of deferred financing costs
|
|
12,567
|
|
|
|
9,058
|
|
|
|
2,665
|
|
|
|
3,458
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
(49
|
)
|
|
|
(1,025
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Operating income
|
$
|
484,300
|
|
|
$
|
446,264
|
|
|
$
|
73,170
|
|
|
$
|
87,421
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Marketing, general and administrative expense
|
|
48,664
|
|
|
|
47,128
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Net operating income from discontinued operations
|
|
488
|
|
|
|
24,599
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Transaction related costs
|
|
4,210
|
|
|
|
4,171
|
|
|
|
10
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-building revenue
|
|
(95,405
|
)
|
|
|
(123,259
|
)
|
|
|
(12,718
|
)
|
|
|
(10,170
|
)
|
|
|
|
|
|
|
|
Equity in net income from unconsolidated joint ventures
|
|
(7,024
|
)
|
|
|
(14,748
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
Loss on early extinguishment of debt
|
|
49
|
|
|
|
1,025
|
|
|
|
407
|
|
|
|
3,382
|
|
|
$
|
|
|
$
|
|
|
Net operating income (NOI)
|
|
435,282
|
|
|
|
385,180
|
|
|
|
60,869
|
|
|
|
80,733
|
|
|
496,151
|
|
|
465,913
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NOI from discontinued operations
|
|
(488
|
)
|
|
|
(24,599
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(488
|
)
|
|
|
(24,599
|
)
|
|
NOI from other properties/affiliates
|
|
(76,712
|
)
|
|
|
(23,777
|
)
|
|
|
(15,353
|
)
|
|
|
(36,951
|
)
|
|
|
(92,065
|
)
|
|
|
(60,728
|
)
|
|
Same-Store NOI
|
$
|
358,082
|
|
|
$
|
336,804
|
|
|
$
|
45,516
|
|
|
$
|
43,782
|
|
|
$
|
403,598
|
|
|
$
|
380,586
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ground lease straight-line adjustment
|
|
801
|
|
|
|
801
|
|
|
|
-
|
|
|
|
-
|
|
|
|
801
|
|
|
|
801
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Straight-line and free rent
|
|
(37,291
|
)
|
|
|
(23,441
|
)
|
|
|
(4,279
|
)
|
|
|
(4,810
|
)
|
|
|
(41,570
|
)
|
|
|
(28,251
|
)
|
|
Rental income – FAS 141
|
|
(8,460
|
)
|
|
|
(12,235
|
)
|
|
|
(793
|
)
|
|
|
(854
|
)
|
|
|
(9,253
|
)
|
|
|
(13,089
|
)
|
|
Same-store cash NOI
|
$
|
313,132
|
|
|
$
|
301,929
|
|
|
$
|
40,444
|
|
|
$
|
38,118
|
|
|
$
|
353,576
|
|
|
$
|
340,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SL GREEN REALTY CORP.
SELECTED OPERATING DATA-UNAUDITED
|
|
|
|
|
|
|
|
June 30,
|
|
|
|
2015
|
|
|
2014
|
|
Manhattan Operating Data: (1)
|
|
|
|
|
|
|
Net rentable area at end of period (in 000’s)
|
|
22,009
|
|
|
21,905
|
|
Portfolio percentage leased at end of period
|
|
96.9%
|
|
|
94.2%
|
|
Same-Store percentage leased at end of period
|
|
96.5%
|
|
|
93.6%
|
|
Number of properties in operation
|
|
31
|
|
|
30
|
|
|
|
|
|
|
|
|
Office square feet where leases commenced during quarter (rentable)
|
|
573,432
|
|
|
314,938
|
|
Average mark-to-market percentage-office
|
|
16.5%
|
|
|
0.5%
|
|
Average starting cash rent per rentable square foot-office
|
|
$61.66
|
|
|
$54.18
|
|
|
|
|
|
|
|
|
|
(1) Includes wholly-owned and joint venture properties.
|
|
|
|
The following table reconciles estimated earnings per share (diluted) to
FFO per share (diluted) for the year ending December 31, 2015.
|
|
|
|
Year Ended
December 31,
|
|
|
|
|
2015
|
|
|
2015
|
|
Net income per share attributable to SL Green stockholders
|
|
|
$
|
1.93
|
|
|
$
|
1.97
|
|
Add:
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
5.43
|
|
|
5.43
|
|
Unconsolidated joint ventures depreciation and noncontrolling
interests adjustments
|
|
|
0.28
|
|
|
0.28
|
|
Net income attributable to noncontrolling interests
|
|
|
0.23
|
|
|
0.23
|
|
Less:
|
|
|
|
|
|
|
|
Gain on sale of discontinued operations
|
|
|
1.54
|
|
|
1.54
|
|
Equity in net gain on sale of interest in unconsolidated joint
venture / real estate
|
|
|
0.01
|
|
|
0.01
|
|
Depreciation and amortization on non-real estate assets
|
|
|
0.02
|
|
|
0.02
|
|
Funds from Operations per share attributable to SL Green common
stockholders and noncontrolling interests
|
|
|
$
|
6.30
|
|
|
$
|
6.34
|
View source version on businesswire.com: http://www.businesswire.com/news/home/20150722006482/en/
Copyright Business Wire 2015