Question · Q4 2025
Mike Lewis questioned the total lease economics, noting that TIs and free rent periods are up significantly (60-70%) since 2019, while rents are up less (20-25%), and asked how this reflects market strength and the stickiness of concessions.
Answer
Marc Holliday, Chairman and CEO, SL Green Realty Corp, advised amortizing TIs over the lease term for a proper comparison and noted that more new deals are being done. He emphasized that the true measure is the price per square foot for premium assets, which for the top 20-25% of the market is solidly between $1,000 and $2,000 per sq ft, and even higher for the best new product. He stated that for buildings with average rents well north of $100 per sq ft, the improvement is both nominal and net effective, cautioning against painting the entire market with one brush due to different categories of buildings.
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