From left: SL Green CEO Marc Holliday, 1515 Broadway, the Graybar Building
It has been “a very busy, satisfying seven weeks,” for SL Green Realty, CEO Marc Holliday said in a conference call with investors today to discuss the company’s fourth-quarter earnings results. The company last spoke to investors at its annual conference Dec. 7.
SL Green posted a $5 million loss for the quarter yesterday, down from a $76 million gain for the fourth quarter of 2008, but Holliday was nonetheless optimistic about 2010′s prospects.
Strong leasing activity will better-position the city’s office landlords to attract tenants without the generous concessions seen in 2009, he said.
“The general consensus amongst owners is that we’re going to see concessions tighten up this year,” Holliday said, adding that security deposits and lease lengths were likely to increase.
The city’s largest landlord saw average starting rents fall by 30 percent to $33.05 per square foot in the fourth quarter, pushed downward in part by a 227,782-square-foot lease renewal by BMW of Manhattan at 555 West 57th Street. Starting rents averaged $47.31 per square foot in the third quarter of 2009.
Still, in the 31-story Graybar Building, where SL Green handles the management and leasing and has been snapping up additional leasehold positions in recent months, transactions are “pretty healthy,” Holliday said, pointing to a deal for 12,000 square feet that’s currently underway. “It looks like that deal may [even] get knocked out by someone who wants to do a deal for twice the square footage,” he said.
Earlier this month, the company closed on a $475 million refinancing at 1515 Broadway, the Viacom International headquarters between 44th and 45th streets. Holliday said the recent 15-year 17,500-square-foot retail lease there by teen apparel store Aeropostale was in line with the company’s goal to reposition the retail space at the tower. “This asset is largely repositioned, recapitalized, and for the time being, put to bed for us,” he said.
Holliday said he was limited in what he could discuss regarding 510 Madison Avenue, Harry Macklowe’s vacant, 30-story tower for which SL Green recently purchased the construction loan, but called the building a “terrific asset.”
SL Green is still awaiting a decision from the state on its bid to develop the Aqueduct racino, Holliday said. “Everyone seems to be anxious for a conclusion to the process, us included, but I can’t tell you that there’s any serious advancement one way or the other. We’re certainly hopeful that decision-makers will reach a consensus as early as this week,” he said, adding that he hopes the decision will favor SL Green.
