SL Green FFO Doubles in Q1

New York’s biggest office landlord says the state’s freshly minted office-to-residential plan is designed to create a sense of urgency.

“The way this bill is structured, to get the maximum tax benefits, you have to file for your permits at some time in ’26. That means you’ve gotta get going right now,” SL Green CEO Marc Holliday said on the company’s first-quarter earnings call Thursday afternoon. “This isn’t wait-and-see.”

Gov. Kathy Hochul on Monday announced a state budget plan that includes a tax incentive and other measures meant to spur office conversions. Holliday said he expects that 20 million to 40 million rentable square feet of office space could be converted to residential under the program.

That would be a boon to SL Green in two ways.

The company had previously indicated that it intends to convert its nearly vacant office building at 750 Third Avenue into apartments, and Holliday said that with the state’s new framework, SL Green intends to be first out of the gate in the conversion race.

Second, the reduction of competing office space will help SL Green bring up occupancy across its portfolio, Holliday said.

SL Green for the first quarter reported funds from operations of $215 million, more than double the $106 million for the same period last year. Occupancy across the REIT’s portfolio slipped to 89.2 percent from 89.8 percent at the end of the year.

The company completed $2.1 billion worth of refinancings, including the extension of a $1 billion loan at 280 Park Avenue.

“We’re able to get substantial runway in term on all these deals, and in return the lenders want to see some form of skin in the game,” chief investment officer Harry Sitomer said.