SL Green Realty, a real estate investment trust specialising in New York office properties, has presented solid financial results for the third quarter of 2026. Despite persistently high interest rate levels and a decline in transactional leasing volume, the company benefited considerably from its portfolio streamlining, which generated substantial liquidity inflows.
Substantial proceeds from Manhattan disposals
In August, SL Green completed the sale of the property at 10 East 53rd Street to Meadow Partners, led by Jeffrey Kaplan, for 312.2 million dollars. Net proceeds of 99 million dollars flowed to the group from this transaction. In the following September, the company also parted with the property at 110 Greene Street. This sale to the Natora Group was valued at 226 million dollars and generated net inflows of 216 million dollars for the company.
The disposals are clearly reflected in operating performance. Funds from operations rose to 122.1 million dollars in the third quarter, compared with 109.6 million dollars in the previous quarter and 120.4 million dollars in the third quarter of 2025. Total revenue climbed to 273 million dollars, after 241 million dollars was recorded in the second quarter and 244 million dollars in the prior-year period. Net profit stood at 72.2 million dollars, up from 26.5 million dollars in the preceding quarter and 24.9 million dollars in the third quarter of 2025.
Interest rate environment and dynamics in the letting market
Marc Holliday, Chief Executive of SL Green, pointed to the impact of capital markets during the conference call. Higher interest rates were affecting the entire property sector as well as large parts of the wider economy. Over the course of the year, the shift in interest rates had amounted to roughly 150 basis points, which mathematically weighed on second-half earnings by about 25 cents per share. However, the company had taken proactive steps to hedge liabilities in order to secure more favourable terms and noticeably cushion the impact.
Meanwhile, the letting market showed a mixed performance. The number of new lettings declined: SL Green signed 38 office leases in Manhattan during the reporting quarter, representing a total volume of 591,108 square feet. In the second quarter, there had been 53 transactions, although these contracted a smaller total space of 445,161 square feet. Among the larger deals of the quarter was a lease agreement with Landesbank Baden-Württemberg for 58,332 square feet at 1185 Avenue of the Americas.
