Blaine M. Heck

Blaine M. Heck asked about the significant disposition target for 2026 and the solid occupancy trajectory forecast, inquiring how much of the projected occupancy gain is related to selling off underleased buildings versus organic leasing of vacancy.

Answer

Matt J. DiLiberto, CFO, SL Green Realty Corp, stated that the occupancy objective is only nominally, if at all, affected by asset sales, and the company could likely achieve its target without the disposition plan. Marc Holliday, Chairman and CEO, SL Green Realty Corp, referred to an investor conference slide that visualized projected occupancy gains coming from same-store buildings, highlighting the company's goal to reach 97%+ occupancy in a tight market, which has a dramatic impact on the bottom line.

Blaine M. Heck questioned the drivers behind the increased appetite for foreign investment, considering factors like a weaker US dollar, rebalancing international exposure, and the search for higher yields. He also asked if this trend would lead to more partners or increased competition and higher asset values. Additionally, he asked for an estimate of how much of the projected 2026 occupancy gain is attributable to selling underleased buildings versus organic leasing of vacant space within the portfolio.

Answer

Marc Holliday, Chairman and CEO, SL Green Realty Corp, noted that both a strengthening and depreciating dollar have not deterred foreign investment, with interest rates being the primary driver of pricing. Harrison Sitomer, Chief Investment Officer, highlighted the relative value of New York commercial office properties as a key enticement. Matt J. DiLiberto, CFO, stated that the occupancy objective is only nominally affected by asset sales, with Marc Holliday emphasizing organic leasing as the primary driver for projected gains.