SL Green Realty Reports Sharp Decline in Core Earnings Amid Strategic Portfolio Shift

SL Green Realty Corp., Manhattan's largest office landlord, has reported a significant contraction in its key profitability metric for the final quarter of 2025. The company's latest financial results highlight the persistent pressures in the commercial real estate sector, even as leasing activity shows resilience. Management's extensive capital strategy, targeting billions in refinancing and asset sales by 2026, is now under increased scrutiny.

The real estate investment trust (REIT) disclosed a net loss attributable to common stockholders of $1.49 per share for the quarter. A more critical measure for REITs, Funds From Operations (FFO), fell sharply to $1.13 per share. This represents a notable drop from the $1.81 per share reported for the same period a year prior. Quarterly revenue was reported at $276.5 million.

Despite the earnings pressure, the company's operational metrics in its core Manhattan market presented a mixed picture. SL Green's portfolio occupancy rate remained robust, holding steady at 93.0% at year-end. Furthermore, the firm executed 56 leases covering approximately 766,783 square feet during the quarter. Notably, the rental rates achieved on these new and renewed leases were, on average, 6.4% higher than the prior rents for the same spaces.

Portfolio Reshaping Through Acquisitions and Divestitures

Concurrent with its earnings release, SL Green is actively restructuring its asset base. This month, the company finalized the acquisition of the Park Avenue Tower for a purchase price of $730.0 million. The deal was financed through a new five-year, $480.0 million mortgage loan carrying an effective interest rate of 5.25% after accounting for hedging arrangements.

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This acquisition follows a recent divestiture. In December 2025, SL Green sold a 49% minority interest in the property located at 100 Park Avenue. The transaction, which valued the asset at a gross valuation of $425.0 million, provided the company with $34.9 million in cash proceeds. Executives describe these moves as part of a deliberate plan to strengthen the company's balance sheet.

A Defining Year Ahead: Ambitious 2026 Targets

Looking forward, SL Green's leadership has outlined an ambitious capital allocation agenda for the coming year. The centerpiece is a dual-pronged strategy involving a major refinancing initiative and a substantial asset sales program.

The company aims to refinance approximately $7.0 billion of debt and execute asset sales totaling around $2.5 billion. Alongside these financial maneuvers, management has set a specific operational goal: to increase the overall portfolio occupancy rate to 94.8% by the end of 2026. These targets underscore a focused effort to navigate a competitive landscape and stabilize operations through active portfolio management.