SL GREEN REALTY CORP (SLG) Q4 2024 Earnings Summary

Executive Summary

Q4 revenue and EPS improved sequentially; total revenues rose to $245.9M and diluted EPS to $0.13, while diluted FFO/share increased to $1.81, aided by $26M of discounted debt extinguishment gains and $7.7M of positive derivative marks .
Leasing momentum accelerated: 1.79M sf signed in Q4 (third-highest annual leasing year ever at 3.61M sf), with +9.0% cash mark-to-market in Q4 and Manhattan same-store occupancy reaching 92.5% including signed-not-yet-commenced leases .
Balance sheet actions continued: One Vanderbilt 11% stake sale (gross asset value $4.7B) raised $189.5M, 690 Madison mortgage repaid at a discount, and multiple major JV mortgage extensions; dividend raised to $3.09 annualized effective January 2025 .
Management tone was notably bullish: pipeline ~900k sf entering 2025, Park Avenue/trophy vacancy tightening, and a $1B+ opportunistic debt fund expected to deploy in 2025; normalized FFO finished ~$0.09 ahead of the December plan, driven by property NOI, fees, SUMMIT, and DPE income .

What Went Well and What Went Wrong

What Went Well
- Leasing velocity and pricing: 1.79M sf Q4 signed with +9.0% mark-to-market; full-year 3.61M sf with +8.5% mark-to-market; Manhattan same-store occupancy improved 240 bps QoQ to 92.5% including SNC .
- Capital recycling and financing: Monetized 11% of One Vanderbilt ($4.7B GAV) for $189.5M proceeds; extended/modified major JV mortgages (100 Park, One Madison, 1515 Broadway) at SOFR +225–393 bps and term to 2027–2028; repaid 690 Madison mortgage for $32.1M net .
- SUMMIT and fee income outperformance: Q4 outperformed internal expectations on a normalized basis; drivers included better property NOI, higher fee income, SUMMIT results, and incremental DPE investing late in December .
- Strategic platform expansion: Opportunistic Debt Fund anchored with $250M and expected to exceed $1B in 1H25; special servicing pipeline grew to $5.0B active and $8.2B designated .
- Dividend increase: Monthly dividend raised to $0.2575 (annualized $3.09) from $3.00, with management indicating coverage in 2025 .
What Went Wrong
- Same-store cash NOI softness: Q4 same-store cash NOI -1.9% YoY (or -2.7% ex-lease terminations), reflecting move-outs and timing lag between lease signings and commencements .
- GAAP expenses and interest: Interest expense rose YoY; Q4 total expenses increased to $247.5M vs $233.9M in Q4’23, with higher interest costs and operating expenses .
- Financial occupancy lag vs leased: Management highlighted near-term drag as financial occupancy trails leased during build-out/commencement cycle into 2025 .
- Estimate comparison unavailable: S&P Global consensus EPS/Revenue estimates were not retrievable at the time of analysis; we cannot quantify beat/miss to Street for Q4 (management cited a ~$0.09 normalized FFO outperformance vs December internal plan) .

Financial Results

Metric	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Total Revenues ($M)	211.7	222.8	229.7	245.9
Diluted EPS ($)	(2.45)	(0.04)	(0.21)	0.13
Diluted FFO/Share ($)	0.72	2.05	1.13	1.81

Operating KPIs

KPI	Q4 2023	Q2 2024	Q3 2024	Q4 2024
Same-store Cash NOI YoY (%), ex-LTI	—	(1.3%)	+2.9%	(2.7%)
Manhattan Same-store Office Occupancy (% incl. SNC)	89.8%	89.6%	90.1%	92.5%
Manhattan Office Leases Signed (sf)	—	420,513	763,755	1,789,996
Cash M-T-M on Replacement Leases (%)	—	+15.5%	+10.8%	+9.0%

Segment NOI (SLG Share)

Segment NOI ($M)	Q2 2024	Q3 2024	Q4 2024
Manhattan Office	163.7	175.0	165.7
Development / Redevelopment	6.6	8.2	6.1
High Street Retail	0.2	0.5	5.2
Suburban & Residential	4.4	4.6	4.1
Alternative Strategy Portfolio	16.6	11.6	9.8

Additional notes:

SUMMIT Operator revenue: $38.6M in Q4 (vs $35.2M in Q4’23), $133.2M for FY24 .
FY24 diluted FFO/share: $8.11, including $3.08/share of discounted debt extinguishment gains and $0.07/share positive derivative marks .

Guidance Changes

Metric	Period	Previous Guidance	Current Update	Change
FFO/Share (FY 2024)	FY 2024	$7.45–$7.75 (raised in Q2’24)	Actual FY 2024: $8.11	Surpassed FY24 guidance
Gains on Discounted Debt Extinguishment	FY 2025	n/a	Layered ~$20M into 2025 plan; “stretch” could reach ~$50M as in 2024, subject to execution	New framework
Manhattan Same-store Occupancy	YE 2024	Target 92.5% by YE (Q3 commentary)	Achieved 92.5% at 12/31/24 (incl. SNC)	Achieved
Common Dividend	Ongoing	$3.00 annualized through Dec 2024	Raised to $3.09 annualized (paid $0.2575 on 1/15/25)	Raised

Management did not provide detailed 2025 revenue/margin/tax guidance in the release; commentary focused on leasing pipeline, occupancy trajectory, and contemplated gains from liability management .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2’24 and Q3’24)	Current Period (Q4’24)	Trend
Demand/Return-to-Office	YE24 occupancy goal >91.5% (Q2); pipeline and leasing mix broadened (Q3)	92.5% occupancy achieved incl. SNC; 900k sf pipeline; 5‑day return gaining traction; 38k office-using jobs forecast for NYC in 2025	Improving
AI/Tech	Limited portfolio exposure; steady interest (prior)	IBM expanded ~93k sf at One Madison; broader tech searches doubled to 7M sf YoY marketwide	Improving
Park Ave/Trophy Tightness	Strong Park Ave demand (prior)	Park Ave availability ~7%; trophy availability down ~200 bps since Q3; ability to push rents and rein in concessions as occupancy nears 95%	Tightening
Capital Markets	Debt mods/extensions (Q2–Q3)	Lenders “are back”; large CMBS prints (e.g., Spiral), AAA ~1%; multiple marquee financings out in Q1–Q2	Improving
Opportunistic Debt Fund	Announced/anchored (Q2–Q3)	Targeting >$1B in 1H25; active pipeline to deploy in 2025	Scaling up
Special Servicing	$3.0B active; $6.4–6.8B designated (Q2–Q3)	$5.0B active; $8.2B designated	Growing
Office-to-Resi Conversions	Early references (limited)	750 Third Ave conversion kick-off; tracking 15M sf in conversions citywide (potentially 25M sf over 5–7 years)	Accelerating
SUMMIT	Strong revenue line (Q2–Q3)	2.25M visitors in 2024; >6M cumulative; Paris expansion announced	Strong/expanding

Management Commentary

“We finished the year strong…188 individual leasing deals, totaling 3.6 million square feet…we ended the year at 92.5% occupancy and we're projecting over 93% leased occupancy in the coming year…when we get close to that 95% range…that's when we can really begin to push rents, rein in concessions…” — Marc Holliday .
“The market on Park…about as tight as I've ever seen it…availability…6.7%…down almost 200 basis points from…third quarter…Space is going to be even more constrained…there are 0 new ground-up office projects…in core Midtown.” — Marc Holliday .
“Fourth quarter was…well ahead of our expectations…excluding…gains and mark-to-market, our normalized FFO midpoint…was $4.86…we ended up at $4.95…$0.09 ahead…driven by…higher NOI, other income…Summit…incremental debt and preferred equity investing.” — Matthew Diliberto .

Q&A Highlights

Normalized FFO beat plan by ~$0.09 on Q4 drivers: property NOI, fee income, SUMMIT, DPE investments .
2025 liability management: ~$20M of DPO gains layered into plan; potential “stretch” to ~$50M (as in 2024) if opportunities arise .
Financial occupancy to trail leased until build-outs/commencements; upward trend through 2025 .
Congestion pricing: too early to assess; proximity to Grand Central seen as positive if transit use increases .
Lending markets “are back”: large NYC office financings closing or in market; AAA CMBS spreads just over 1% .
Capex/leasing economics: as markets tighten, TIs expected to decline at the high end and for renewals; management says dividend is covered in 2025 .
Tech demand: active NYC tech searches ~7M sf vs ~3.7M sf a year ago; SLG in diligence with select tech users at One Madison .
CMBS investments: focused on NYC commercial properties .

Estimates Context

S&P Global consensus estimates for Q4 2024 were not retrievable at the time of analysis, so we cannot quantify Street beat/miss for revenue/EPS. Management indicated a ~$0.09 normalized FFO outperformance vs its December expectation driven by NOI, fees, SUMMIT, and DPE income .

Key Takeaways for Investors

Leasing momentum and occupancy trajectory are positive: 92.5% same-store office occupancy including SNC at YE and a ~900k sf pipeline set 2025 up for further occupancy gains, rent firming, and lower concessions at prime assets .
Balance sheet and capital recycling remain accretive: discounted loan payoffs, JV mortgage extensions, and selective asset monetization (One Vanderbilt stake) supported earnings and liquidity; management targeting additional $20M DPO gains in 2025 .
Dividend raised and management asserts coverage in 2025; operating cash generation supported by NOI growth lag as commencements catch up to signings .
Park Avenue/trophy tightening should support rent growth and lower TIs, while conversions shrink commodity supply—benefiting SLG’s premier Midtown portfolio .
SUMMIT is a durable profit center with brand expansion (Paris) and contributes to diversified fee/other income streams .
Near-term watch items: timing of lease commencements (financial occupancy lag), same-store cash NOI inflection as 2025 progresses, opportunistic debt fund deployment cadence, and execution on additional liability management .

Appendix: Additional Data Points

Q4 Total expenses: $247.5M vs $233.9M in Q4’23; interest expense $38.2M vs $27.4M .
FY24 diluted FFO/share: $8.11 (incl. $3.08/share DPO gains and $0.07/share positive derivative marks) .
Significant Q4 / Jan leasing: Bloomberg 924,876 sf (919 Third), Alvarez & Marsal 220,221 sf (100 Park), IBM 92,663 sf (One Madison), Ares +38,074 sf (245 Park), among others .

Sources: SLG Q4 2024 8-K (including supplemental) –; SLG Q3 2024 8-K –; SLG Q2 2024 8-K –; Q4 2024 press release –; Q4 2024 earnings call transcript –.