SL Green reports first decline in six years in new versus expiring rents

From left: Marc Holliday, head of SL Green, which signed leases at 220 East 42nd Street and 420 Lexington Avenue

SL Green Realty reported for the first time in nearly six years that new leases signed for its Manhattan properties were for prices averaging less than what was being paid for the given location, the company said in statement yesterday.

The Midtown-based real estate investment trust included the information on new leases in its quarterly earnings statement released yesterday. Its operation funds, a common measure to track earnings in REITs, fell 3 percent in the first quarter 2010 to $85 million compared with $88.1 million in the same period last year.

For the new leases, the average rent was $45 per square foot in the first quarter of 2010, or 5.1 percent lower than the final previous rent at each given location, the company said. The last time the average new rent declined was in the second quarter of 2004, when new rents were 1.6 percent below previous rents. 

The company signed 47 new office leases in the first quarter of 2010 for just over 500,000 square feet, including a new lease with Jones Day for 44,034 square feet at 220 East 42nd Street and an early renewal for New York Life Insurance for 87,944 square feet at 420 Lexington Avenue.