SL Green reports mixed quarter

By Adam Pincus | July 29, 2008 10:19AM

SL Green Realty Corporation, the Manhattan-based real estate manager and developer, reported a 59 percent increase in its funds from operations in the second quarter, helped in part by its sale of 1250 Broadway.

The funds from operations increased to $2 per share, or $122 million, up from $1.26 a share, or $79.5 million, in the same period of 2007. They included a distribution from the $310 million sale of the Midtown South office building.

However, net income available to shareholders dropped by 45 percent in the quarter to $2.37 from $4.38 a year earlier.

Average rents increased to $65.89 compared with $52.96 in June 2007.

The amount of space leased decreased to 431,345 square feet from 677,807 square feet compared to last year, as occupancy dropped from 97.7 percent last year to 96.7 percent. But compared to the prior quarter, occupancy at the company’s Manhattan buildings increased from 96.3 percent to 96.7 percent. Occupancy at suburban properties fell from 91.9 percent to 91.8 percent compared to the prior quarter.

During the three months ending June 30, the company and its partner, the New York State Teachers’ Retirement System, reported a payment of $32.8 million to buy out other investors and become the sole owner of 919 Third Avenue. SL Green signed 42 office leases totaling 431,345 square feet.

SL Green, a real estate investment trust, owns 30 office properties in New York City with a total of 23.7 million square feet of space. It also owns 36 properties with 7.8 million square feet in Brooklyn, Queens and the suburbs.

Funds from operations is a figure used by real estate investment trusts to define cash flow for their companies. It limits the impact of profit-reducing depreciation.