Q3 2026 SL Green Realty Corp Earnings Call

October 22, 2026

Operator: Thank you everybody for joining us, and welcome to SL Green Realty Corp's Q3 2026 earnings results conference call. This conference call is being recorded. At this time, the company would like to remind listeners that during the call, management may make forward-looking statements. You should not rely on forward-looking statements as predictions of future events, as actual results and events may differ from any forward-looking statements that management may make today. All forward-looking statements made by management on this call are based on their assumption and beliefs as of today. Additional information regarding the risk, uncertainties, and other factors that could cause such differences to appear are set forth in the Risk Factors and MD&A section of the company's latest Form 10-K and other subsequent reports filed by the company with the Securities and Exchange Commission.

Operator: Thank you everybody for joining us, and welcome to SL Green Realty Corp's Q3 2026 Earnings Results Conference Call. This conference call is being recorded. At this time, the company would like to remind listeners that during the call, management may make forward-looking statements. You should not rely on forward-looking statements as predictions of future events, as actual results and events may differ from any forward-looking statements that management may make today.

Speaker #1: At this time, the company would like to remind listeners that during the call, management may make forward-looking statements. You should not rely on forward-looking statements as predictions of future events as actual results and events may differ from any forward-looking statements that management may make today.

Operator: All forward-looking statements made by management on this call are based on their assumption and beliefs as of today. Additional information regarding the risk, uncertainties, and other factors that could cause such differences to appear are set forth in the Risk Factors and MD&A section of the company's latest Form 10-K and other subsequent reports filed by the company with the Securities and Exchange Commission.

Speaker #1: All forward-looking statements made by management on this call are based on their assumption and beliefs as of today. Additional information regarding the risk, uncertainties, and other factors that could cause such differences to appear are set forth in the risk factors and MD&A section of the company's latest form 10-K and other subsequent reports filed by the company with the securities and exchange commission.

Operator: Also, during today's conference call, the company may discuss non-GAAP financial measures as defined by Regulation G under the Securities Act. The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed, and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measures can be found on both the company's website at www.slgreen.com by selecting the press release regarding the company's Q3 2026 earnings, and in our supplemental information included in our current report on Form 8-K relating to our Q3 2026 earnings. Before turning the call over to Marc Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp, I ask those of you participating in the Q&A portion of the call to please limit your questions to two per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Operator: Also, during today's conference call, the company may discuss non-GAAP financial measures as defined by Regulation G under the Securities Act.

Speaker #1: Also, during today's conference call, the company may discuss non-GAAP financial measures as defined by regulation G under the securities act. The GAAP financial measures most directly comparable to each non-GAAP financial measures discussed and the reconciliation of the differences between each non-GAAP financial measures and the comparable GAAP financial measures can be found on both the company's website at www.slgreen.com by selecting the press release regarding the company's third quarter 2026 earnings and in our supplemental information included in our current report on form 8-K relating to our third quarter 2026 earnings.

Operator: The GAAP financial measures most directly comparable to each non-GAAP financial measure discussed, and the reconciliation of the differences between each non-GAAP financial measure and the comparable GAAP financial measures can be found on both the company's website at www.slgreen.com by selecting the press release regarding the company's Q3 2026 earnings, and in our supplemental information included in our current report on Form 8-K relating to our Q3 2026 earnings.

Operator: Before turning the call over to Marc Holliday, Chairman and Chief Executive Officer of SL Green Realty Corp, I ask those of you participating in the Q&A portion of the call to please limit your questions to two per person. Thank you. I will now turn the call over to Marc Holliday. Please go ahead, Marc.

Speaker #1: Before turning the call over to Mark Holiday, Chairman and Chief Executive Officer of SL GREEN REALTY CORP, I ask those of you participating in the Q&A portion of the call to please limit your questions to two per person.

Speaker #1: Thank you. I will now turn the call over to Mark Holiday. Please go ahead, Mark.

Marc Holliday: Thank you, and thank you all for joining us this afternoon as we recap another momentous quarter for SL Green. In many ways, this quarter and the year have exceeded expectations as our predictions about the strength of the Manhattan office market have materialized and our performance has been nothing short of spectacular. We took advantage of a very strong leasing market to surpass perhaps the company's most important goal, the leasing of over 2 million square feet year to date, as we currently sit, bringing our leased occupancy to 95%. As we predicted, rents are now rising quickly as demand remains strong and our pricing power grows for the limited supply of high quality, well located Manhattan office buildings. Our greatest strength comes from having a well-leased portfolio at rents that are generally exceeding previous rents by, on average, around 15%.

Speaker #2: Thank you, and thank you all for joining us this afternoon. As we recap, another momentous quarter for SL GREEN. In many ways, this quarter and the year have exceeded expectations as our predictions about the strength of the Manhattan office market have materialized and our performance has been nothing short of spectacular.

Speaker #2: We took advantage of a very strong leasing market to surpass perhaps the company's most important goal, the leasing of over 2 million square feet year to date as we currently sit bringing our least occupancy to 95%.

Marc Holliday: As we predicted, rents are now rising quickly as demand remains strong and our pricing power grows for the limited supply of high quality, well located Manhattan office buildings. Our greatest strength comes from having a well-leased portfolio at rents that are generally exceeding previous rents by, on average, around 15%.

Speaker #2: And as we predicted, rents are now rising quickly as demand remains strong and our pricing power grows for the limited supply of high-quality, well-located Manhattan office buildings.

Speaker #2: Our greatest strength comes from having a well-leased portfolio at rents that are generally exceeding previous rents by, on average, around 15% and driving strong underlying operating performance with more than 4% same-store NOI growth.

Marc Holliday: Driving strong underlying operating performance with more than 4% same-store NOI growth. This trend is expected to continue into Q4 as our pipeline of leasing activity has actually increased over the quarter to 1.3 million square feet, representing both important renewals that we are working on right now, along with filling up the remainder of our diminishing vacancy. Our outperformance in the quarter was not limited to operational matters, but also extended into significant capital markets activities, where we were able to consummate deals while our competitors largely sat on the sidelines as a number of their deals stalled. We continued to advance our disposition and financing plans this year with a staggering amount of work already completed.

Speaker #2: With this trend expected to continue into the fourth quarter as our pipeline of leasing activity is actually increased over the quarter to 1.3 million square feet, representing both important renewals that we're working on right now along with filling up the remainder of our diminishing vacancy.

Speaker #2: Our outperformance in the quarter wasn't limited to operational matters but also extended into significant capital markets activities where we were able to consummate deals while our competitors largely sat on the sidelines as a number of their deals stalled.

Speaker #2: We continue to advance our disposition and financing plans this year with a staggering amount of work already completed. With the successful $2 billion refinancing of $245 park, we now have completed over $7 billion of our financing plan for 2026, which has helped to generate incremental liquidity, strengthen our balance sheet, and extend our debt maturities at fixed rates.

Marc Holliday: With the successful $2 billion refinancing of 245 Park, we now have completed over $7 billion of our financing plan for 2026, which has helped to generate incremental liquidity, strengthen our balance sheet, and extend our debt maturities at fixed rates. With that now behind us, we have very little to do in 2027 from a financing perspective, therefore allowing us to focus almost entirely on growth opportunities, development projects, and further sales and dispositions of assets and joint venture interests. The third quarter also brought a number of new dispositions, including the sales of 110 Green Street and 185 Broadway at really good prices.

Speaker #2: With that now behind us, we have very little to do in 2027 from a financing perspective. And therefore, allowing us to focus almost entirely on growth opportunities, development projects, and further sales and dispositions of assets and joint venture interests.

Speaker #2: The third quarter also brought a number of new dispositions including the sales of 110 Green Street and 185 Broadway at really good prices. Those real estate deals you may have seen coming, but at SL GREEN, we try to surprise you with our creativity and I was especially proud to announce this week that we've sold a portion of our hospitality platform at a $200 million valuation bringing $40 million in unbudgeted proceeds.

Marc Holliday: Those real estate deals you may have seen coming, but at SL Green, we try to surprise you with our creativity. I was especially proud to announce this week that we have sold a portion of our hospitality platform at a $200 million valuation, bringing $40 million in unbudgeted proceeds. This is part of our platform that most people do not value at all, and that we have monetized at a 20x FFO, while the whole of SL Green trades at just 9x FFO. That is a direct credit to how hard our team works and how we continue to find new ways to bring value to our shareholders.

Speaker #2: This is part of our platform that most people don't doesn't value at all. And that we've monetized at a 20 times FFO while the whole of SL GREEN trades at just 9 times FFO.

Speaker #2: That's a direct credit to how hard our team works and how we continue to find new ways to bring value to our shareholders. I know there's been some focus in the analyst community on the timing of future dispositions, and I do expect that we'll have more announcements in 2026, but we've had a staggering amount of success this year in selling where JVing assets with over a billion dollars of pro out of value and are working feverishly on additional transactions to ultimately achieve the full $2.5 billion.

Marc Holliday: I know there has been some focus in the analyst community on the timing of future dispositions. I do expect that we will have more announcements in 2026, but we have had a staggering amount of success this year in selling JV assets with over $1 billion of pro-rata value and are working feverishly on additional transactions to ultimately achieve the full $2.5 billion. Some of these deals may be deferred into H1 2027, but we are still seeing very good demand from the institutional investment community for our assets. Last but not least, we celebrated our 10 millionth visitor at SUMMIT One Vanderbilt, which happened to coincide yesterday with our five-year anniversary. That business has vaulted over the Empire State Building as the top observation attraction and one of the most sought-after attractions of any kind in New York City.

Speaker #2: Some of these deals may be deferred into the first half of '27, but we're still seeing very good demand from the institutional investment community for our assets.

Speaker #2: And last but not least, we celebrated our $10 million visitor at Summit One Vanderbilt, which happened to coincide yesterday with our five-year anniversary. That business has vaulted over the Empire State Building as the top observation attraction and one of the most sought-after attractions of any kind in New York City.

Marc Holliday: That has all translated to our earnings guidance being up more than $2 per share from the original estimates last December, which felt pretty good to us until our analyst friends raised their Q3 estimates even higher last week. We appreciate your confidence, but don't think that anyone should say we missed anything given the monumental performance this year and quarter. Before we open to questions, let me briefly address the one drag on earnings we felt this quarter and throughout the year, which is stubbornly high interest rates. Higher rates impact all real estate businesses and most every industry, and we're talking about a swing of about 150 basis points throughout the year, up from the already elevated levels at the beginning of the year.

Speaker #2: That has all translated to our earnings guidance being up more than $2 per share from the original estimates last December. Which felt pretty good to us until our analyst friends raised their third quarter estimates even higher last week.

Speaker #2: We appreciate your confidence, but don't think that anyone should say we missed anything. Given the monumental performance this year and quarter. Before we open to questions, let me briefly address the one drag-on earnings we felt this quarter and throughout the year, which is stubbornly high interest rates.

Speaker #2: Higher rates impact all real estate businesses and most every industry. And we're talking about a swing of about $150 basis points throughout the year up from the already elevated levels at the beginning of the year.

Marc Holliday: That, of course, is not something we control, and that we've noted in the earnings release had a $0.25 impact on the back half of the year. However, we can and have aggressively and smartly hedged parts of our liabilities to lock in lower interest rates, so the impact has not been nearly as great as it could have been. Thanks to our incredibly hardworking team, we have continued to operate quite successfully in this context, advancing dispositions and financings that no one else could have achieved and delivering on creative solutions like the sale of part of our hospitality business. Thank you, and I'm happy to open the line for questions.

Speaker #2: That, of course, is not something we control, and that we've noted in the earnings release had a 25 cent impact on the back half of the year.

Speaker #2: However, we can and have aggressively and smartly hedged parts of our liabilities to lock in lower interest rates, so the impact has not been nearly as great as it could have been.

Speaker #2: And thanks to our incredibly hardworking team, we have continued to operate quite successfully in this context. Advancing dispositions, and financings, that no one else could have achieved, and delivering on creative solutions like the sale of part of our hospitality business.

Speaker #2: Thank you and I'm happy to open the line for questions.

Operator: Thank you. To ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Again, please limit your questions to two per person. Our first question will come from Nicholas Yulico with Scotiabank. Your line is now open.

Speaker #1: Thank you. And to ask a question, please press star 11 on your telephone and wait for your name to be announced. And to withdraw your question, please press star 11 again.

Speaker #1: Again, please limit your questions to two per person. And our first question will come from Nicholas Ulico with Scotiabank. Your line is now open.

Nicholas Yulico: Oh, thanks. Good afternoon. First, I guess I was hoping you could talk about maybe what the leasing pipeline looks like in terms of the mark to market. I know that's been strong, what you've achieved year to date. Any thoughts on how that could sort of trend heading into next year and whether there was also any just one-time comp benefits this year that made that number harder than what it could be next year? Thanks.

Speaker #3: Oh, thanks, good afternoon. First, I guess I was hoping you could talk about maybe what the leasing pipeline looks like in terms of, you know, the mark-to-market.

Speaker #3: I know that's been strong what you've achieved year to date. Any thoughts on how that could sort of trend heading into next year and whether there was also any just one-time comp benefits this year that made that number higher than what it could be next year?

Speaker #3: Thanks.

[Company Representative] (SL Green Realty Corp): Yeah. Let me hit a couple points. As Marc mentioned, the pipeline is over 1.3 million square feet. Most notable in that pipeline is almost 840,000 square feet of which are active leases in negotiation as opposed to straight term sheets. The mark to market, as we have experienced throughout all of this year, is very, very healthy. I think something north of 20%.

Speaker #4: Yeah, let me hit a couple of points. So as Mark mentioned, the pipeline is over $1.3 million square feet. Most notable in that pipeline is over almost $840,000 square feet, of which are active leases in negotiation.

Speaker #4: As opposed to straight term sheets. And the mark-to-market, as we've experienced throughout all of this year, is very, very healthy. I think something north of 20%.

Nicholas Yulico: Okay, great. Thanks. My second question maybe for Matt is, in terms of that $0.25 impact now in guidance from higher interest rates. I know some of this is just due to you guys changing where rates are, or sort of rates coming in higher than where they were planned at the Investor Day. There is also the asset sale issue. I was wondering if you could just parse that out a little bit, just thinking about how much of that drag carries into next year. Does some of it also just go away once the asset sales are completed? Thanks.

Speaker #3: Okay, great. Thanks. And then I guess second question, maybe for Matt, is in terms of that 25 cents, impact now in guidance from higher interest rates, I know some of this is just due to you guys changing where rates are or sort of rates coming in higher than where they were planned at the investor day.

Speaker #3: But there's also the asset sale issue. And so I was wondering if you could just parse that out a little bit, just thinking about how much of that drag carries into next year.

Speaker #3: And some of it also just go away once the asset sales are completed. Thanks.

Matt DiLiberto: Yeah, your last point is a good one, and I will let Harrison expand a little bit on the asset disposition program. The timing of those dispositions definitely plays into our revision. Things are taking long, and the interest rate environment, as we phrase it in the release, covers a lot of areas of the business. That is an effect. The rates are definitely higher than we projected a year ago. You can look at any of the curves, the SOFR curve, the 5-year curve, the 10-year curve. They are all up really 100 basis points or more last December to where they are expected to end this coming year. That combination of effects, plus the effect of if we trip up a JV sale out into 2027 that had fees associated with it, that would also be part of the $0.25 revision lower.

Speaker #4: Yeah, that's your last point's a good one. I'll let Harrison expand a little bit on the asset disposition program. But yeah, the timing of those dispositions definitely plays into our revision.

Speaker #4: Things are taking longer. The interest rate environment, as we phrase it in the release, covers a lot of areas of the business. So that's an effect.

Speaker #4: And yeah, the rates are definitely higher than we projected a year ago. You can look at any of the curves, the SOFR curve, the five-year curve, the 10-year curve.

Speaker #4: They are all up really 100 basis points or more last December to where they're expected to end this coming year. So that combination of effects, plus the effect of if we trip a JV sale out into 2027 that had fees associated with it, that would also be part of the 25 cent revision lower.

Matt DiLiberto: Harrison can talk more about the disposition plan and timing.

Speaker #4: Harrison can talk more about the disposition plan and timing.

fkf lv: Yeah, sure. On the disposition plan, you have heard me talk about it throughout the year, about 11 transactions. So far, we have announced six of those. The two most recent asset sales being Side Street Buildings that got done at approximately 5.7% cap rates. Looking forward, on the remaining deals two of which, those are two JV stakes. Those are both in documentation. The smaller of the two is near completion. The second one we are working hard to complete by the end of the year. It could slip till early next year, but we are targeting the end of the year. Then two of the other deals, we just commenced marketing. I do expect there will be some pricing discovery, which is to be expected in the rate environment. But deals are being bid. Interest is there. Tolerance is being tested by both buyers and sellers.

Harrison Sitomer: Yeah, sure. On the disposition plan, you have heard me talk about it throughout the year, about 11 transactions. So far, we have announced six of those. The two most recent asset sales being Side Street Buildings that got done at approximately 5.7% cap rates. Looking forward, on the remaining deals two of which, those are two JV stakes. Those are both in documentation. The smaller of the two is near completion. The second one we are working hard to complete by the end of the year. It could slip till early next year, but we are targeting the end of the year. Then two of the other deals, we just commenced marketing. I do expect there will be some pricing discovery, which is to be expected in the rate environment. But deals are being bid. Interest is there. Tolerance is being tested by both buyers and sellers.

Speaker #2: Yeah, sure. On the disposition plan, you've heard me talk about it throughout the year about 11 transactions. So far, we've announced six of those: the two most recent asset sales being side street buildings that got done at approximately 5.7% cap rates.

Speaker #2: Looking forward, on the remaining deals, two of which, those are two JV stakes, those are both in documentation. The smaller of the two is near completion, the second one we're working hard to complete.

Speaker #2: By the end of the year, it could slip to early next year, but we are targeting the end of the year. And then two of the other deals, we just commenced marketing.

Speaker #2: I do expect there'll be some pricing discovery, which is to be expected in the rate environment. But deals are being bid. Interest is there.

Speaker #2: Tolerance is being tested by both buyers and sellers. Importantly for us on the JV executions, which is why you're seeing us get those done so quickly, we have very loyal partners.

fkf lv: Importantly for us on the JV executions, which is why you are seeing us get those done so quickly, we have very loyal partners. They put their faith in us. We have performed for them over the years. The brand is very important to us, and we protect those investors and that brand. So I feel very good about our disposition plan. The assets we have left to sell are phenomenal. We may be a bit more patient than we had originally budgeted. But rest assured, these executions will get done as we always do.

Harrison Sitomer: Importantly for us on the JV executions, which is why you are seeing us get those done so quickly, we have very loyal partners. They put their faith in us. We have performed for them over the years. The brand is very important to us, and we protect those investors and that brand. So I feel very good about our disposition plan. The assets we have left to sell are phenomenal. We may be a bit more patient than we had originally budgeted. But rest assured, these executions will get done as we always do.

Speaker #2: They put their faith in us. We've performed for them over the years. The brand is very important to us, and we protect those investors and that brand.

Speaker #2: So I feel very good about our disposition plan. The assets we have left to sell are phenomenal. We may be a bit more patient than we had originally budgeted.

Speaker #2: But rest assured, these executions will get done as we always do.

Nicholas Yulico: Okay. Thank you.

Speaker #3: Okay, thank you.

Operator: Thank you. The next question will come from Steve Sakwa with Evercore. Your line is open.

Speaker #1: Thank you. And the next question will come from Steve Sackwell with Evercore. Your line's open.

Steve Sakwa: Great. Thanks. Maybe just to follow up on that line of questioning. Marc or Harrison, maybe just talk about return expectations. I realize that's a function of rates, and that may be moving higher, but the offset would also be that rent growth is probably stronger than people expected. So maybe that's not impacting cap rates at all. I'm just curious how you're thinking about the interplay between the better rent growth, higher expectations on sale candidates, and the impact on cap rates.

Speaker #3: Great, thanks. Maybe just a follow-up on that line of questioning. Mark or Harrison, maybe just talk about return expectations. And I realize that's a function of rates, but and that may be moving higher, but the offset would also be that rent growth is probably stronger than people expected.

Speaker #3: So maybe that's not impacting cap rates at all, but I'm just curious how you're sort of thinking about kind of the interplay between the better rent growth, higher expectations on sale candidates and the impact on cap rates.

fkf lv: Well, Steve, I think you hit it. Cap rates are not merely a function of interest rates. It's a function of interest rates and underlying growth in profits driven by rents. Right now you have increased rents, but you have increased rates, but substantially increased rents. I think that you're seeing investors with a very bullish outlook on where rates are heading in 2027 and 2028, when in this market, you're going to have almost zero new delivery of space, of new space in that 24-month period. Probably 30-month period, because it'll be well into 2029 before first deliveries hit.

Harrison Sitomer: Well, Steve, I think you hit it. Cap rates are not merely a function of interest rates. It's a function of interest rates and underlying growth in profits driven by rents. Right now you have increased rents, but you have increased rates, but substantially increased rents. I think that you're seeing investors with a very bullish outlook on where rates are heading in 2027 and 2028, when in this market, you're going to have almost zero new delivery of space, of new space in that 24-month period. Probably 30-month period, because it'll be well into 2029 before first deliveries hit.

Speaker #2: Yeah, well, Steve, I mean, I think you hit it. It's cap rates are not merely a function of interest rates. It's a function of interest rates and underlying growth and profits.

Speaker #2: Driven by rents. And right now, you have increased rents, but you have substantial you have increased rates, but substantially increased rents. And I think that you're seeing investors with a very bullish outlook on where rates are heading in 2027 and 2028 when in this market, you're going to have almost zero new delivery of space, of new space.

Speaker #2: In that 24-month period, probably 30-month period, because it'll be well into '29 before first deliveries hit. And with the imbalance of demand that we see in the market, I think the momentum behind anticipated rent increases, not just in the high end, not even in the medium end, but net effective increases in the affordable range, the 70, 80, $90 foot properties, with shrinking concessions and rising rates, is going to keep cap rates for better assets in prime midtown locations in a fairly tight band.

fkf lv: With the imbalance of demand that we see in the market, I think the momentum behind anticipated rent increases, not just in the high end, not even in the medium end, but net effect of increases in the affordable range, the $70, $80, $90 a foot properties with shrinking concessions and rising rates, is going to keep cap rates for better assets in prime Midtown locations in a fairly tight band in and around 5%, 5.5%, max 6%. You may see some deals on the margins or in the periphery go off higher, but we're not seeing that for our prime product. With rates seemingly stabilizing at this new level, they're down a bit today, but that doesn't impact in any way the rental growth, which I think is locked in through 2027 and 2028, given this level of demand.

Harrison Sitomer: With the imbalance of demand that we see in the market, I think the momentum behind anticipated rent increases, not just in the high end, not even in the medium end, but net effect of increases in the affordable range, the $70, $80, $90 a foot properties with shrinking concessions and rising rates, is going to keep cap rates for better assets in prime Midtown locations in a fairly tight band in and around 5%, 5.5%, max 6%. You may see some deals on the margins or in the periphery go off higher, but we're not seeing that for our prime product. With rates seemingly stabilizing at this new level, they're down a bit today, but that doesn't impact in any way the rental growth, which I think is locked in through 2027 and 2028, given this level of demand.

Speaker #2: In and around 5, 5.5, max 6%. You may see some deals on the margins or in the periphery go off higher, but we're not seeing that for our prime product.

Speaker #2: And with rates seemingly stabilizing at this new level, they're down a bit today, but that doesn't impact in any way the rental growth, which I think is kind of locked in through '27 and '28, given this level of demand.

fkf lv: I think you're going to see cap rates trade in a reasonably tight level, close to on top of Treasuries, which is not unusual for Manhattan, for prime cap rates to be Treasuries flat, Treasuries +50 for prime assets.

Harrison Sitomer: I think you're going to see cap rates trade in a reasonably tight level, close to on top of Treasuries, which is not unusual for Manhattan, for prime cap rates to be Treasuries flat, Treasuries +50 for prime assets.

Speaker #2: I think you're going to see cap rates trade in a reasonably tight level, close to on top of treasuries, which is not unusual from Manhattan.

Speaker #2: To be for prime cap rates to be treasuries flat, treasuries plus 50, for prime assets.

Steve Sakwa: Great. Then maybe just as a follow-up, just on the development. I realize you have 346 sort of in the early stages of taking that building down to rebuild it back up. Just how are you thinking about any other new development opportunities and how would those return hurdles have to change or compare to your underwriting at 346?

Speaker #3: Great. And then maybe just as a follow-up, just on the development, I mean, I realize you've got 346 sort of in the early stages of taking that building down to rebuild it back up.

Speaker #3: Just how are you thinking about any other new development opportunities and how would those return hurdles have to change or compare to kind of your underwriting at 346?

Marc Holliday: Well, just so I understand the question. 346, if there is any question about that, is we are in demolition. Drive by the site, you will see buildings coming down. We are on track. We are very excited. We will be filing that project into ULURP in December. We have had very good response from the tenant community, and in fact, we have an RFP in from one tenant with another expected. So in terms of new development opportunities, we are always busy trying to mine new opportunities, assemble other sites. For prime Midtown located meaningful site, we and others will be pursuing those for sure, because you have to have seeds planted for future growth, and those deals take time, as you know. The pricing for those deals, I just sort of went through that with you, is I do not think it has really changed all that much.

Speaker #2: Well, just so I understand the question, 346, if there's any question about that, is we're in demolition, drive-by the site. You'll see it's buildings coming down.

Speaker #2: We're on track. We're very excited. We'll be filing that project. Into Euler in December. And we've had very good response from the tenant community and in fact have we have an RFI in from one tenant with another expected.

Speaker #2: So in terms of new development opportunities, I mean, we are always busy trying to mine new opportunities, assemble other sites. For prime midtown, located meaningful site, we and others will be pursuing those for sure.

Speaker #2: Because you have to have seeds planted for future growth, and those deals take time, as you know. The pricing for those deals, I mean, I just sort of went through that with you.

Speaker #2: I don't think it's really changed all that much. There's a little bit more debt load for sure. Because of the higher interest rates. So it's more interest costs.

Marc Holliday: There is a little bit more debt load, for sure, because of the higher interest rates, so there is more interest costs. But we are also projecting rents that are much, much higher than when we were evaluating these sites, just a year and a half, 2, 3 years ago. I would say most new development sites and prime locations today are modeling anywhere between $240 and $270 per square foot, kind of midpoint average rental range taking on project completion. Those are big rents. They are rents that are being signed up. They are rents that I think the tenant community has come to expect in order to cover costs, cover interest, and cover profit. So I think that is the new mark. We think these projects underwrite feasibly.

Speaker #2: But we're also projecting rents that are much higher. When we were evaluating these sites, just a year and a half, two, three years ago, I'd say most new development sites in prime locations today are modeling anywhere between 240 and 270 dollars per square foot, kind of midpoint average rental range taking on project completion.

Speaker #2: And those are big rents. And they're rents that are being signed up. They're rents that I think the tenant community has come to expect.

Speaker #2: In order to cover costs, cover interest, and cover profits. So I think that is the new mark and we think these projects underwrite feasibly.

Marc Holliday: It is a matter of the very complicated process of putting together the assemblages and the entitlements to go big in Midtown Manhattan, which is otherwise a fully built-out sub-market.

Speaker #2: It's a matter of the very complicated process of putting together the assemblages and the entitlements to go big in midtown Manhattan, which is otherwise a fully built-out submarket.

Operator: Thank you. Our next question is going to come from Peter Abramowitz with Deutsche Bank. Your line is open.

Speaker #1: Thank you. And our next question is going to come from Peter Abramowitz with Deutsche Bank. Your line is open.

Peter Abramowitz: Yes. Thank you for taking the question. Maybe first one just for Steve. Wondering if you could comment and give some color on just concessions around the market, maybe whipping around to some of the key sub-markets. It seems that they're pretty stable or declining here, but just curious on your latest comments on that.

Speaker #4: Yes. Thank you for taking the question. Maybe first one just for Steve. Wondering if you could comment, give some color on just concessions around the market.

Speaker #4: Maybe whipping around to some of the key submarkets. It seems that they're pretty stable or declining here, but just curious on your latest comments on that.

[Company Representative] (SL Green Realty Corp): Yeah. I think there's a couple points. What we're seeing is TIs have still been sticky as far as being elevated. Free rent we've started to see come down. But I think, given the complexion of our pipeline with the vast majority of our pipeline, sort of three-quarters of it being renewals, the renewal concessions are dramatically lower than new tenant concessions. So our net effectives on the renewal, given how much square footage we have out for lease right now on renewals, those net effectives are very strong because the rents are up and the renewal concessions are down.

Speaker #5: Yeah, I think there's a couple of points. What we're seeing is TIs have still been sticky. As far as being elevated, free rent, we've started to see come down.

Speaker #5: But I think given the complexion of our pipeline, with the vast majority of our pipeline sort of three-quarters of it being renewals, the renewal concessions are dramatically lower than new tenant concessions.

Speaker #5: So our net effectives on the renewal given how much square footage we have out for lease right now on renewals, those net effectives are very strong because the rents are up and the renewal concessions are down.

Peter Abramowitz: All right. Appreciate that. Then to touch on the capital market side. You've talked about this a little bit already, but maybe to ask the question in a different way. Just wondering if you could kind of Is there a bifurcation in expectations around just the outlook for a transaction for something like a 245 Park, where obviously you're pretty much fully leased and have a pretty main and main location versus something like 1350 where it's a good location, a good building, but maybe not as well leased and in demand. I guess just kind of curious, is there much of a divergence in terms of expectations for pricing execution on deals like that across the portfolio?

Speaker #4: All right. Appreciate that. And then to touch on the capital market side, you've talked about this a little bit already, but maybe to ask the question in a different way.

Speaker #4: But just wondering if you could kind of is there a bifurcation in expectations around just the outlook for a transaction for something like a 245 park, where obviously you're pretty much fully leased and have an eye a pretty main and main location versus something like 1350, where it's a good location, a good building, but maybe not as well leased and in demand.

Speaker #4: I guess just kind of curious, is there much of a divergence in terms of expectations for pricing execution on deals like that across the portfolio?

fkf lv: Yeah. I talked about this a bit on the last call. What we are seeing in this market right now is a heavy diversity of buyer base and investor base. You have seen that just in the six deals that we have gone and done, whether it be 1031 buyers like 110 Green, institutional buyers like we saw at 10 East 53rd Street that have been in this market for years, LP Equity that invests in both development projects and in JV interests with us. So we have a lot of confidence in this market that there is interest across a wide variety of asset types. Some of that you have seen in our disposition plan to date. Some of that you have seen in the market. Just recently, we saw announcement around the Chrysler Building. We saw announcements around 1301 Avenue of the Americas, an announcement at 600 Third Avenue as well.

Harrison Sitomer: Yeah. I talked about this a bit on the last call. What we are seeing in this market right now is a heavy diversity of buyer base and investor base. You have seen that just in the six deals that we have gone and done, whether it be 1031 buyers like 110 Green, institutional buyers like we saw at 10 East 53rd Street that have been in this market for years, LP Equity that invests in both development projects and in JV interests with us. So we have a lot of confidence in this market that there is interest across a wide variety of asset types. Some of that you have seen in our disposition plan to date. Some of that you have seen in the market. Just recently, we saw announcement around the Chrysler Building. We saw announcements around 1301 Avenue of the Americas, an announcement at 600 Third Avenue as well.

Speaker #2: Yeah. I mean, I talked about this a bit on the last call. What we're seeing in this market right now is a heavy diversity of buyer base and investor base.

Speaker #2: You've seen that just in the six deals that we've gotten done, whether it be 1031 buyers like 110 Green, institutional buyers like we saw at 10 East 53rd Street, that have been in this market for years.

Speaker #2: LP equity that invests in both development projects and in JV interests with us. And so we have a lot of confidence in this market that there's interest across a wide variety of asset types.

Speaker #2: Some of that you've seen in our disposition plan to date. Some of that you've seen in the market. I mean, just recently, we saw announcement around the Chrysler building.

Speaker #2: We saw announcements around 1301 Avenue of the Americas. An announcement at 603rd Avenue as well. So I think the market today in a very strong way has a lot of capacity for different buyer base.

fkf lv: I think the market today, in a very strong way, has a lot of capacity for different buyer base, and I think we will continue to see transaction activity. Now, like I said earlier, the only thing I will add is I do think with interest rate volatility, you will see some pricing discovery. You will see a little bit of a delay in some execution across the market, but I do not think that results in any nontrades. I think it just results in a little bit of pricing discovery and patience.

Harrison Sitomer: I think the market today, in a very strong way, has a lot of capacity for different buyer base, and I think we will continue to see transaction activity. Now, like I said earlier, the only thing I will add is I do think with interest rate volatility, you will see some pricing discovery. You will see a little bit of a delay in some execution across the market, but I do not think that results in any nontrades. I think it just results in a little bit of pricing discovery and patience.

Speaker #2: And I think we'll continue to see transaction activity. And like I said earlier, the only thing I'll add is I do think with interest rate volatility, you will see some pricing discovery.

Speaker #2: You will see some a little bit of delay in some execution across the market. But I don't think that results in any non-trades. I think it just results in a little bit of pricing discovery and patience.

Peter Abramowitz: All right. Thanks for the time.

Speaker #4: All right. Thanks for the time.

Operator: Thank you. The next question is going to come from Alexander Goldfarb with Piper Sandler. Your line is open.

Speaker #1: Thank you. And the next question is going to come from Alexander Goldfarb with Piper Sandler. Your line's open.

Alexander Goldfarb: Hey, thank you. Good afternoon down there. Two questions. First up, Matt, I realize we have to wait for guidance, but as we think about that $0.25 and as we think about capitalized interest, the two things that are tough to model. One is, capitalized interest impact that converts to expense interest in 2027. Two, in that $0.25 interest rate headwind that you discussed, how much of that is fee income versus just the refinancing we can model, but it is the fee income that can be tricky for us. Can you just help us understand those two elements?

Speaker #6: Hey. Thank you. Good afternoon down there. Two questions. First up, Matt, on the I realize we have to wait for guidance, but as we think about that 25 cents and as we think about capitalized interest, the two things that are tough to model one is capitalized interest impact that converts to expense interest in 27 and two, in that 25 cent interest rate headwind that you discussed, how much of that is fee income versus just the refinancing we can model, but it's the fee income that can be tricky for us.

Speaker #6: So can you just help us understand those two elements? Sure. I appreciate you saying we'll give guidance in a few weeks because we will.

Matt DiLiberto: Sure. I appreciate you saying we will give guidance in a few weeks because we will. I will give a little bit of color, but save the real detail for 7 December at the investor conference. But of the $0.25, I would say call it $0.05 is fee income and the rest is interest expense. There is an opportunity to maybe claw some of that back. We do turn over every stone looking for fees, but that is what was layered into the $0.25. As the capitalized interest, it is linear to occupancy. As you look at occupancy coming in on properties that are otherwise capitalized, the capitalized interest goes down on the same timing that the economic occupancy comes in.

Speaker #6: So I'll give a little bit of color, but save the real detail for December 7th at the investor conference. But of the 25 cents, I'd say call it 5 cents is fee income and the rest is interest expense.

Speaker #6: Now, there is an opportunity to maybe clause some of that back. We do turn over every stone looking for fees, but that's what was layered into the 25 cents.

Speaker #6: And as to capitalized interest, it is linear to occupancy. So as you look at occupancy coming in on properties that are otherwise capitalized, the capitalized interest goes down on the same timing that the economic occupancy comes in.

Matt DiLiberto: If you are looking at something like a One Madison where all the tenants are not in place yet, then as that comes in, the capitalized interest on that asset goes down. So it is a trickier thing to model, but it is something we have all the time. It is diminishing because a lot of our development properties are coming online. I think the modeling of it, as I look at the street models, has gotten better on the capitalized interest side. It is constantly being fine-tuned. But looking at the forward curves is something where I think people need to do a little bit more work.

Speaker #6: So if you're looking at something like a one Madison where all the tenants aren't in place yet, then as that comes in, the capitalized interest on that asset goes down.

Speaker #6: So it's in trickier thing to model, but it's something we have all the time. And it's diminishing because a lot of our development properties are coming online.

Speaker #6: I think the modeling of it as I look at the street models has gotten better on the capitalized interest side. Is constantly being fine-tuned.

Speaker #6: But looking at the forward curves, is something where I think people need to do a little bit more work. Okay. And then Harrison, on the activity, and appreciate the comments on the durability of premium assets, office in Manhattan, but still the disruption sounds like it has, as you guys said, delayed things.

Alexander Goldfarb: Okay. Harrison, on the activity, and appreciate the comments on the durability of premium assets office in Manhattan. Still, the disruption sounds like it has, as you guys said, delayed things, and I am sure it takes a while to sort of restart conversations. Just, I guess, to the best that you can help us understand timing, should we think about these, you mentioned two transactions that likely will close in Q4, but some other stuff that gets pushed into the new year. When you say pushed into the new year, should we think about Q1 closing, or is this more like Q2 or later? We are just trying to get an understanding of how long it takes to restart these things, given the volatility that has occurred and how conversations may have changed.

Speaker #6: And I'm sure it takes a while to sort of restart conversations. So just, I guess, to the best that you can help us understand timing, should we think about these you mentioned two transactions that likely close in the fourth, but some other stuff that gets pushed into the new year.

Speaker #6: When you say pushed into the new year, should we think about first quarter closing, or is this more like second quarter or later? We're just trying to get an understanding of how long it takes to restart these things, given the volatility that's occurred and how conversations may have changed.

fkf lv: Yeah. Just to be clear, when I reference delay, I think that is more general market commentary. I went deal by deal in the beginning, but just to recap of what is left in the plan. Two of the four deals in the plan, one of which is fairly imminent, one of which we are hoping to get done by the end of the year, could slip into early next year. The other two deals, which you heard me reference a couple weeks ago, I guess that was at Bank of America when we did our talk. We just launched those a few weeks ago. So nothing is delayed. We wanted to get the financing on 245 Park lined up, which we just announced and closed. Right now we are out in the market, and the feedback has been great. As I said, we are going to be patient.

Harrison Sitomer: Yeah. Just to be clear, when I reference delay, I think that is more general market commentary. I went deal by deal in the beginning, but just to recap of what is left in the plan. Two of the four deals in the plan, one of which is fairly imminent, one of which we are hoping to get done by the end of the year, could slip into early next year. The other two deals, which you heard me reference a couple weeks ago, I guess that was at Bank of America when we did our talk. We just launched those a few weeks ago. So nothing is delayed. We wanted to get the financing on 245 Park lined up, which we just announced and closed. Right now we are out in the market, and the feedback has been great. As I said, we are going to be patient.

Speaker #2: Yeah. Just to be clear, when I reference delay, I think that's more general market commentary. I went deal by deal in the beginning, but just to recap of what's left in the plan.

Speaker #2: Two of the four deals in the plan, one of which is fairly imminent, one of which we're hoping to get done by the end of the year, could slip into early next year.

Speaker #2: And then the other two deals, which you heard me reference a couple of weeks ago, I guess that was at Bank of America, when we did our talk, we just launched those a few weeks ago.

Speaker #2: So nothing's delayed. We wanted to get the financing on 245 Park, lined up, which we just announced and closed. Right now, we're out in the market and the feedback's been great.

Speaker #2: As I said, we're going to be patient. 245 Park, I just want to that is a home run for this company. I think it represents everything that we've done what we do well.

fkf lv: 245 Park, that is a home run for this company. I think it represents everything that we have done, what we do well. Whether it was navigating the complex acquisition, redeveloping it and bringing the amenity plan, bringing in an incredible joint venture partner at a difficult time in the market, getting to 100% occupancy, and now stabilizing the asset with the financing. So it has been a great deal for the company. Now we are going to go out and execute on our capital market strategy.

Harrison Sitomer: 245 Park, that is a home run for this company. I think it represents everything that we have done, what we do well. Whether it was navigating the complex acquisition, redeveloping it and bringing the amenity plan, bringing in an incredible joint venture partner at a difficult time in the market, getting to 100% occupancy, and now stabilizing the asset with the financing. So it has been a great deal for the company. Now we are going to go out and execute on our capital market strategy.

Speaker #2: Whether it was navigating the complex acquisition, redeveloping it, and bringing the amenity plan, bringing in an incredible joint venture partner at a difficult time in the market, getting to 100% occupancy, and now stabilizing the asset with the financing.

Speaker #2: So it's been a great deal for the company. And now we're going to go out and execute on our capital market strategy. Yeah. Steve, I just want to add something.

Marc Holliday: Yeah. Steve, I just want to add something. You talk about delay or deferment or whatever. In 9 and a half months, this company has completed $7 billion of refinancings on many individual deals and $1 billion of dispositions. That is 9 and a half months. I do not know what we are talking about. This is ferocious performance in my book, and I have only been doing it for 35 years. There is more to come. We are not throwing in the towel on anything. I mean, like, we hang up with you guys, we go right back to work, and we are going to try and get the remaining volume done by year-end as close as possible. We feel pretty good about our prospects for getting done everything we set out to get done. We challenge ourselves by setting ambitious goals. We put pressure on ourselves.

Speaker #2: You talk about delay or deferment or whatever. In nine and a half months, this company has completed $7 billion of refinancings on many individual deals.

Speaker #2: And a billion dollars of dispositions. That's nine and a half months. I don't know what we're talking about. This is ferocious performance in my book, and I've only been doing it for 35 years.

Speaker #2: And there's more to come. We're not throwing in the towel on anything. I mean, we hang up with you guys, we go right back to work, and we're going to try and get the remaining volume done by year, and it was close as possible.

Speaker #2: And we feel pretty good about our prospects for getting done everything we set out to get done. We challenge ourselves by setting ambitious goals.

Speaker #2: We put pressure on ourselves. And I mean, look at it for what it is in absolute terms and relative terms to the market. There's no pause or delay here.

Marc Holliday: I mean, look at it for what it is in absolute terms and relative terms to the market. There is no pause or delay here. There is nothing but ferocious activity. You cannot do all deals at once. That is an impossibility. Deals have to be sequenced. Or else it appears chaotic, and we are not chaotic. We are orderly and thoughtful in our approach to this market. We are going to try and get it all done. If it trips into the early part of next year, so be it, but I would not stress it. I should say, we are not stressing it on our end because we think we are in a really good market and we have got a lot of demand for our assets. That is what I was saying. I think that is what Harrison is saying. Whether it is coming through or not, I do not know. But that is how we see it.

Speaker #2: There's nothing but ferocious activity. You can't do all deals at once. That's an impossibility. Deals have to be sequenced. Or else it appears chaotic.

Speaker #2: And we're not chaotic. We are orderly. And thoughtful in our approach to this market, we're going to try and get it all done. If it trips into the early part of next year, so be it.

Speaker #2: But I wouldn't stress it. I should say I would. We're not stressing it on our end because we think we're in a really good market and we've got a lot of demand for our assets.

Speaker #2: That's what we're what I was saying. I think that's what Harrison's saying. Whether it's coming through or not, I don't know. But that's how we see it.

Speaker #2: That's how we see it.

Alexander Goldfarb: Marc, thank you.

Speaker #6: Mark, thank you.

Marc Holliday: Yeah.

Speaker #2: Yeah.

Operator: Thank you. Our next question comes from Blaine Heck with Wells Fargo. Your line is open.

Speaker #5: Thank you. And our next question comes from Blaine Hick with Wells Fargo. You're line is open.

Blaine Heck: Great, thanks. On the opportunistic debt fund, you have deployed $643 million of the $1.3 billion to date. Can you just talk about where you are finding the best risk-adjusted returns right now, what kind of levered returns you are underwriting, and whether the opportunity set is more about new originations or buying existing paper at a discount?

Speaker #6: Great. Thanks. So on the opportunistic debt fund, you've deployed $643 million of the 1.3 billion to date. Can you just talk about where you're finding the best risk-adjusted returns right now?

Speaker #6: What kind of levered returns you're underwriting and whether the opportunity set is more about new originations or buying existing paper at a discount?

Marc Holliday: Short answer, all of the above. Our team back there is monitoring every opportunity in this market. There is not a deal that we are not trying to turn over or find an edge on. As you said, we have deployed a significant amount of capital this past quarter. We have a pretty deep pipeline, so I would expect that activity to continue through the end of the year. It is moments of volatility where we excel. I would say, where we are seeing the best opportunities today is a combination of loan acquisitions, new origination, and then a third category, which was some component of the activity this quarter, which is extensions and upsizes of existing facilities in lieu of taking out our existing financing. Which is great. Gets us more term and gets us more exposure to some really good deals.

Speaker #2: Short answer, all of the above. Our team back there is monitoring every opportunity in this market. There isn't a deal that we're not trying to turn over or find an edge on.

Speaker #2: As you said, we've deployed a significant amount of capital this past quarter. We have a pretty deep pipeline so I'd expect that activity to continue through the end of the year.

Speaker #2: It's moments of volatility where we excel. And I would say where we're seeing the best opportunities today is a combination of loan acquisitions, new origination, and then a third category, which was some component of the activity this quarter, which is extensions and upsizes of existing facilities in lieu of taking out our existing financing, which is great.

Speaker #2: Gets us more term and gets us more exposure to some really good deals.

Blaine Heck: Very helpful. Then just touching on SUMMIT. The operating loss widened pretty meaningfully year-over-year. Can you just comment on what drove the expense increase, whether that is pre-opening or marketing spends tied to the international expansion? When you would expect that business to get back to kind of a normalized margin?

Speaker #6: Very helpful. And then just touching on Summit, the operating loss widened pretty meaningfully year over year. Can you just comment on what drove the expense increase, whether that's pre-opening or marketing spend tied to the international expansion?

Speaker #6: And when you'd expect that business to get back to kind of a normalized margin?

Matt DiLiberto: Yeah, there are two factors in Q3. The biggest thing is, SUMMIT pays its percentage rent in Q3 of every year. So every year, if you look historically, the Q3 expenses are high because their year, the year on which their percentage rate is calculated, runs from October to October. So the clock is reset. Their fiscal year runs October. They just celebrated their five-year opening. It was 21 October. That starts the year of measurement for percentage rent, then they eclipse the threshold and pay it in Q3. So that makes every Q3's operating expenses higher than the others. You will not see that again in Q4. Also now we do have expense related to Paris, until such time as the facility opens and generates revenue.

Speaker #4: Yeah. There's two factors in the third quarter. The biggest thing is they pay Summit pays its percentage rent. In the third quarter of every year.

Speaker #4: So every year, if you look historically, the third quarter expenses are high because they're year, the year on which their percentage rate is calculated runs from October to October.

Speaker #4: So the clock is reset. Their fiscal year runs October. They just celebrate their five-year opening. It's October 21st. That starts the year of measurement for percentage rent.

Speaker #4: And then they eclipse the threshold and pay it in the third quarter. So that makes every third quarter's operating expenses higher than the others.

Speaker #4: You won't see that again in fourth. And also now we do have expense related to Paris. Until such time as the facility opens and generates revenue, now it's we are building out the space in anticipation of opening the middle of next year.

Matt DiLiberto: Now we are building out the space in anticipation of opening in the middle of next year. We have to run the rent for SUMMIT through the operating expenses on the financials.

Speaker #4: We have to run the rent for Summit through the operating expenses on the financials.

Marc Holliday: Yeah, we are in full throttle in Paris right now. Active development. I expect the build-out to be completed in May. I expect the facility to be open in June 2027. We have built out our organization in Paris. We continue to build it out, but we have many employees onboarded now working on pre-launch, pre-marketing, staffing, construction of the entertainment experience. The mock-ups are nothing short of phenomenal. I think that it is going to be, I hope, one of the great new attractions for Paris. We are on track, we are on budget. But it is a heavy lift between now and June 2027 until we open doors to public to get it open. Then I hope we will be rewarded, I hope Paris and visitors in Paris will have a great new attraction to see and enjoy.

Speaker #2: Yeah. I mean, we are in full throttle in Paris right now, active development. I expect the build-out to be completed in May. I expect the facility to be open in June, 2027.

Speaker #2: We are built out our organization in Paris. We continue to build it out, but we have many employees on boarded now working on pre-launch, pre-marketing, staffing, construction of the entertainment experience.

Speaker #2: I've the mock-ups are nothing short of phenomenal. I think that it's going to be I hope one of the great new attractions for Paris.

Speaker #2: We're on track. We're on budget. But it's a heavy lift between now and June of 2027 until we open doors to public to get it open.

Speaker #2: And then I hope we'll be rewarded, and I hope Paris and visitors in Paris will have a great new attraction to see and enjoy.

Blaine Heck: Great. Thanks a lot, guys.

Speaker #6: Great. Thanks a lot, guys.

Operator: Thank you. Our next question comes from John Kim with BMO Capital Markets. Your line's open.

Speaker #5: Thank you. And our next question comes from John Kim with BMO Capital Markets. Your line's open.

John Kim: Thank you. The $200 million valuation for the F&B business came out of the blue for us. Congratulations on getting that done. I was wondering if you could comment on what this business is exactly, and where this sat in your NAV build-out last year, if it was part of the other assets of like $559 million. If I could just add on to that, how the $40 million of proceeds translates into $0.10 of incremental FFO for this year.

Speaker #6: Thank you. The $200 million valuation for the F&B business came out of the blue for us. Congratulations on getting that done. But I was wondering if you could comment on what this business is exactly and where the set in your NAV build-out last year, if it was part of the other assets of like $559 million.

Speaker #6: And then if I could just add on to that, how the $40 million of proceeds translates into dollar 10 of incremental FFO for this year.

Marc Holliday: Well, look, we've got a big, diverse set of revenue-generating hospitality activities across the whole portfolio that we've built out over the last 10 years. Now we were able to package and monetize it because it's run very successfully. It's profitable. It's everything from big events business at Le Jardin sur Madison, 72nd floor at OVA, in addition to our F&B and events at all of our amenity spaces, rooftops. To be clear, it does not include SUMMIT or any physical real estate. This is really just our pure hospitality and F&B business. It's become a big business. I meet weekly on this with a team of about 15 people we have internally that run this business. It's growing fairly significantly, which is why you see that kind of multiple. There's an expectation of additional growth into 2027 and beyond.

Speaker #2: Okay. Well, look, I mean, we've got a big diverse set of revenue-generating hospitality activities across the whole portfolio that we've built out over the last 10 years.

Speaker #2: And now we were able to package and monetize it because it's run very successfully. It's profitable. It's everything from big events business at Leisure Dan, Sir Madison, 72nd Floor at OVA, in addition to our F&B and events at all of our amenity spaces, rooftops, and to be clear, it does not include Summit or any physical real estate.

Speaker #2: So this is really just our pure hospitality and F&B business. It's become a big business. I meet weekly on this with a team of about 15 people.

Speaker #2: We have internally that run this business. It's growing. Fairly significantly, which is why you see that kind of multiple. There's an expectation of additional growth into 27 and beyond.

Speaker #2: And it also flatters the buildings and it's a great add-on for our tenants. So it's a win all around. Wasn't a surprise for us.

Marc Holliday: It also flatters the buildings, it is a great add-on for our tenants. So it is a win all around. It was not a surprise for us. I imagine it might have been for shareholders, but something we have been working on for a while. It is just one example of ways in which we are trying to diversify our activities throughout the

Speaker #2: I imagine it might have been for shareholders, but something we've been working on for a while. And it's just one example of ways in which we are trying to diversify our activities throughout the city.

Marc Holliday: in ways that enhance the real estate but create some value for shareholders.

Speaker #2: In ways that enhance the real estate, but create some value for shareholders.

Matt DiLiberto: As to your other questions, John, it was included in the other assets category in our NAV illustration just at cost. This translates into a significant gain because under GAAP, you take a gain on the piece you sold as well as the piece that you retained. So you mark up the retained piece to the equivalent value at which you sold the 20%.

Speaker #6: And as to your other questions, John, the it was included in the other assets category in our NAV illustration. Just at cost. And this translates into a significant gain because under GAP, you take a gain on the piece you sold as well as the piece that you retain.

Speaker #6: So you mark up the retained piece to the equivalent value at which you sold the 20%. Okay. And then, Matt, on the $20 headwind that you're seeing on interest rates environment, ex the JV fees, that still seems like a lot for one quarter.

John Kim: Okay. Then Matt, on the $0.20 headwind that you are seeing on interest rates environment, ex the JVCs, that still seems like a lot for one quarter. I am wondering how much of that is in relation to 245 Park Avenue. I know the successful financing, but did the timing of that impact your guidance for this year? How did the valuation of the asset compare to what you were expecting?

Speaker #6: And I'm wondering how much of that is in relation to $245 Park Avenue? I know it was a successful financing, but the timing of that impact, your guidance for this year, and how did the valuation of the asset compared to what you were expecting?

Matt DiLiberto: Yeah, I'll let Harrison touch on valuation. 245 was nominal impact. We had been tracking that. Obviously, that had been in execution on our radar for the year. So it ended up higher than we expected a year ago or almost a year ago, but we had been factoring that in along the way, so that was a nominal impact. The impact of the $0.20, remember, that's for Q3 and Q4, not just Q4. There was an impact of the higher rates on the quarter that we just printed last night. That's basically just running a higher line balance than we expected at that rate, and that very quickly gets you to that 20%. Or $0.20, sorry. As to valuation, Harrison.

Speaker #4: Yeah. I'll let Harrison touch on valuation. $245 was nominal impact. We had been tracking that, obviously, that had been an execution on our radar for the year.

Speaker #4: So it ended up higher than what we expected a year ago or almost a year ago. But we had been factoring that in along the way.

Speaker #4: So that was a nominal impact. The impact of the 20 cents, remember, that's for third and fourth quarter. Not just fourth. There was an impact of the higher rates on the quarter that we just printed last night.

Speaker #4: And that's basically just running a higher line balance than we expected at that rate. And that very quickly gets it at 20%. Or 20 cents.

Speaker #4: Sorry. As to valuation, Harrison.

fkf lv: We're unable to comment on valuation, obviously for competitive reasons as we're in the market.

Harrison Sitomer: We're unable to comment on valuation, obviously for competitive reasons as we're in the market.

Speaker #2: We're unable to comment on valuation, obviously, for competitive reasons as we're in the market.

John Kim: Okay. Thank you.

Speaker #6: Okay. Thank you.

Operator: Thank you. Our next question comes from Anthony Paolone with JPMorgan. Your line's open.

Speaker #5: Thank you. And our next question comes from Anthony Poloni with JP Morgan. Your line's open.

Anthony Paolone: Yeah, thanks. Just two quick ones. First, Matt, on OVA, is there any change to the $0.80 in accounting income this year from that change last quarter?

Speaker #6: Yeah. Thanks. Just two quick ones. First, Matt, on OVA, is there any change to the 80 cents in accounting income this year from that change last quarter?

Matt DiLiberto: No. No change from last quarter. It is not linear, though. I will answer a question you did not ask. Because it is now based largely on distributions, the amount we took in Q3 is substantially larger than we will take in Q4. It was about $0.40 for Q3. We will be substantially less in Q4 because we get that percentage rent that I talked about earlier on the call from SUMMIT in Q3, which gives us excess distributable cash. We distribute out of our JVs at the end of every quarter. At the end of Q4, we do not have the percentage rent, and also we hold back distributions because we need to pay real estate taxes on 1 January.

Speaker #4: No. No change from last quarter. It is not linear, though. I'll answer a question you didn't ask. Because it's now based largely on distributions, the amount we took in the third quarter substantially larger than we will take in the fourth.

Speaker #4: It was about 40 cents for the third quarter. We'll be substantially less in the fourth because we get that percentage rent that I talked about earlier on the call from Summit in the third quarter, which gives us excess distributable cash.

Speaker #4: We distribute out of our JVs at the end of every quarter. And at the end of the fourth quarter, we do not have the percentage rent.

Speaker #4: And also, we hold back distributions because we need to pay real estate taxes on January 1st.

Anthony Paolone: Okay. Got it. Thanks. Then just the second one, I think I got a little bit lost in the answer on the SUMMIT question. So is the guidance for the full year still intact, or did that come down because of the OpEx?

Speaker #6: Okay. Got it. Thanks. And then just a second one. I think I got a little bit lost in the answer on the Summit. Question.

Speaker #6: So is the guidance for the full year still intact or did that come down because of the OPEX?

Matt DiLiberto: It has come down. It has come down. Marc touched on how successful we have been, certainly on a relative basis. We are below our initial expectations, and you have seen that through the first three quarters of the year. So we are off a bit, but we are mitigating what revenue losses we are seeing through reduced attendance through cost containment. The team is doing a really good job at that.

Speaker #4: It has come down. It has come down. Mark touched on how successful we've been, certainly on a relative basis. We are below our initial expectations.

Speaker #4: So and you've seen that through the first three quarters of the year. So we are off a bit, but we are mitigating what revenue losses we're seeing through reduced attendance, through cost containment.

Speaker #4: And the team's doing a really, really good job at that.

Anthony Paolone: Okay. Thank you.

Speaker #6: Okay. Thank you.

Operator: Thank you. The next question will come from Caitlin Burrows with Goldman Sachs. Your line is open.

Speaker #5: Thank you. And the next question will come from Caitlin Burrows with Goldman Sachs. Your line's open.

Caitlin Burrows: Good afternoon, everyone. You mentioned earlier the 1.3 million square feet in the leasing pipeline. I was wondering if you could go through how you would categorize what is new leasing versus renewals, and then on those renewals, talk a little bit more about what is maybe normal course timing versus earlier than you would have otherwise expected.

Speaker #7: Good afternoon, everyone. You mentioned earlier the $1.3 million square feet in the leasing pipeline. I was wondering if you could go through how you would categorize what's new leasing versus renewals.

Speaker #7: And then on those renewals, talk a little bit more about what's maybe normal course timing versus earlier than you would have otherwise expected.

[Company Representative] (SL Green Realty Corp): Sure. There is 1.3 million in the pipeline, of which 840,000 square feet are leases out. Of the renewals, there is about 300,000 square feet of renewal transactions versus over 1 million square feet of, I am sorry, 300,000 square feet of new transactions versus over 1 million square feet of renewals. What we are seeing is that the larger tenants are clearly engaging the market sooner, certainly compared to, in my recollection, even prior cycles when the market was on the upswing. We are seeing some of our larger tenants engage the market that could be three, four, five years in advance.

Speaker #2: Sure. So there's a million three in the pipeline of which 840,000 square feet are leases out of the renewals. There's about 300,000 square feet of renewal transactions versus over a million square feet of I'm sorry, 300,000 square feet of new transactions versus over a million square feet of renewals.

Speaker #2: And what we're seeing is that the bigger the larger tenants are clearly engaging the market sooner. Certainly, compared to in my recollection, even prior cycles when the market got was on the upswing.

Speaker #2: We're seeing some of our larger tenants engage the market that could be three, four, five years in advance. And I think that's largely because as those tenants think about their opportunities in the future for finding high-quality space in desired locations, in better buildings, that supply is tight as a drum.

[Company Representative] (SL Green Realty Corp): I think that's largely because as those tenants think about their opportunities in the future for finding high-quality space in desired locations, in better buildings, that supply is tight as a drum, and there's no relief in the future because there's really no material new supply coming on the market. Just the opposite with the amount of conversions of office to resi. The inventory, particularly in Midtown, is rapidly declining. As we see today and as we look into the future, we're in a really strong position and desirous of doing as many renewals as we can early.

Speaker #2: And there's no relief in the future because there's really no material new supply coming on the market. Just the opposite with the conversion with the amount of conversions of office to resi.

Speaker #2: The inventory in particularly in Midtown is rapidly declining. So I mean, at this as we see today and as we look into the future, we're in a really strong position in desires of doing as many renewals as we can early.

Caitlin Burrows: Got it. Separately, I think going into 2026, I remember you guys saying that some of the disposition plan was being driven by the cost of debt being so high. As you mentioned, that's more expensive than it was as of last Investor Day.

Speaker #7: Got it. And then separately, I think going into 2026, I remember you guys saying that some of the disposition plan was being driven by the cost of debt being so high.

Speaker #7: And as you mentioned, that's more expensive than it was as of last investor day. So realizing you haven't given guidance, as we think of the drivers of dispositions like, should we think that 2027 dispositions could be similar to 2026 or yeah, what would drive disposition plans in 2027 to be similar or different than this year?

Caitlin Burrows: Realizing you haven't given guidance, as we think of the drivers of dispositions, should we think that 2027 dispositions could be similar to 2026? What would drive disposition plans in 2027 to be similar or different than this year?

Marc Holliday: Well, the disposition plan as you're putting it, really falls into two camps. There's assets we think we've mined most of what we can get out of it, and we choose to sell and move on and put into somebody else's hands. Or JV assets for core long-term holds, where we still see recurring and replicable upside and we want to be a part of. Every year we go through the entire portfolio of assets, and we have keepers and ones we want to sell, and that's generally what we consider to be sort of around 5% to 10% of the portfolio. I don't want to say at the bottom of the portfolio because they're great assets. They're just assets that we think we're ready to move on in the life cycle and monetize.

Speaker #2: Well, the disposition plan, as you're putting it, really falls into two camps. There's assets we think we've mined most of what we can get out of it and we choose to sell and move on and put into somebody else's hands.

Speaker #2: Or JV assets for core long-term holds where we still see recurring and replicable upside and we want to be a part of. So every year, we go through the entire portfolio of assets and we have them in keepers and ones we want to sell and that's generally what we consider to be sort of the around 5 to 10 percent of the portfolio.

Speaker #2: I don't want to say at the bottom of the portfolio because they're great assets. They're just assets that we think we're ready to move on in the life cycle and monetize.

Speaker #2: And then joint ventures is really a form of optimization and financing for us. And building up our fee management, fee asset management business and fee generating business, which has been very successful.

Marc Holliday: Joint ventures is really a form of optimization and financing for us, building up our fee management, fee asset management business and fee-generating business, which has been very successful. As you know, it is over $100 million, I think $110 million or so, third-party fee income, and we are looking to grow that measurably. You will see some outright sales, I am sure, in 2027. There is a diminishing supply of outright sales because the assets we tend to retain at this point are of the highest quality, and a lot of them have embedded growth well beyond what the current escalated in-place rents are in these buildings, because rents are rising so substantially right now. There is a lot of embedded growth in certain of these buildings in mark-to-market sense, especially over the next 3 years.

Speaker #2: As you know, it's over $100 million I think $110 million or so of third-party fee income. And we are looking to grow that measurably.

Speaker #2: So you'll see some outright sales. I'm sure in 2027. There's a diminishing supply of outright sales because the assets we tend to retain at this point are of the highest quality.

Speaker #2: And a lot of them have embedded growth well beyond what the current escalated in-place rents are in these buildings. Because rents are rising so substantially right now.

Speaker #2: So there's a lot of embedded growth in certain of these buildings in mark-to-market sense, especially over the next three years. So I think you'll see it a little bit more weighted towards joint ventures next year.

Marc Holliday: I think you will see it a little bit more weighted towards joint ventures next year than outright sales. That will all get illuminated in December because we are kind of going through the process right now.

Speaker #2: Then outright sales. And that'll all get illuminated in December because we're kind of going through the process right now.

Caitlin Burrows: Thank you.

Speaker #7: Thank you.

Operator: Thank you. The next question is going to come from Jana Galan with Bank of America Securities. Your line is open.

Speaker #5: Thank you. And the next question is going to come from Janna Gallen with Bank of America Securities. Your line's open.

Jana Galan: Thank you. Good afternoon and congrats on great operating results. Appreciated the update on 346 Madison. I was wondering if you could provide any update on the timeline or financing plan for the 750 Third Avenue redevelopment.

Speaker #8: Thank you. Good afternoon and congrats on great operating results. Appreciated the update on 346 Madison. I was wondering if you could provide any update on the timeline or financing plan for the $753rd Avenue redevelopment.

Marc Holliday: What is the question, 750 Third?

Speaker #2: What's the question? 753rd? Yeah. If you don't mind, was it on 346 or on 750?

fkf lv: Yeah. If you do not mind, was it on 346 or on 750?

Harrison Sitomer: Yeah. If you do not mind, was it on 346 or on 750?

Jana Galan: 750.

Speaker #8: 750.

Marc Holliday: 750 is the project, as you know we are doing, and we are far along with. It is a conversion of an 800 and some odd thousand square foot office building on Third Avenue to approximately 750 multifamily units. For me, I think it is like a signature project for this company because it really shows the ability to adapt a building that was a strong office performer since our acquisition back in, I think, 2003 or so, into what will become an even better multifamily project. We have had full physical possession. We have done the interior demolition. I think we have done most or all of the internal column strengthening successfully and without incident. We are about to commence on active construction and conversion into the apartment buildings. We pulled the permit at a time where maximum tax advantage benefits were obtained before the June sunset.

Speaker #2: 750 is the project, as you know, we're doing and we're far along with. It's a conversion of an 800 and some odd thousand square foot office building on 3rd Avenue to approximately 750 multifamily units.

Speaker #2: It's a for me, I think it's like a signature project for this company because it really shows the ability to adapt a building that was a strong office performance since our acquisition back in, I think, 2003 or so.

Speaker #2: Into what will become an even better multifamily project. And we've had full physical possession. We've done the interior demolition. I think we've done most or all of the internal column strengthening successfully and without incident.

Speaker #2: And we are about to commence on active construction and conversion into the apartment buildings. We pulled the permit at a time where maximum tax-advantaged benefits were obtained before the June sunset.

Marc Holliday: Now, if you pull a permit now, the tax benefits are not for as long a period of time. We vested our rights into the longest possible tax abatement period. We have de-risked the project. We have financing ready to close, I think, on a timeline by year-end, Harry, right? I mean, we are looking at, I think, a December close for that construction loan, and it is about a $500 million construction loan, I want to say.

Speaker #2: Now, if you pull a permit now, the tax benefits are not for as long a period of time. So we've vested our rights into a the longest possible tax abatement period.

Speaker #2: We've de-risked the project. And we have financing ready to close I think on a timeline by year-end, Harry, right? I mean, we're looking at I think a December close for that construction loan.

Speaker #2: And it's about a $500 million construction loan, I want to say, that will enable us to we'll fund most or all of the remaining capital necessary to build out the project, which we should be delivering to the market in 2029.

Marc Holliday: That will enable us to fund most or all of the remaining capital necessary to build out the project, which we should be delivering to the market in 2029. It is very highly amenitized. I think it is going to get top-of-market rents in this Midtown East area. I think it is quickly going to become sort of a blueprint for a lot of other conversions to follow.

Speaker #2: It's very highly amenitized. I think it's going to get top-of-market rents in this Midtown East area. I think it's quickly going to become sort of a blueprint for a lot of other conversions to follow.

Jana Galan: Great. Thank you so much.

Speaker #8: Great. Thank you so much.

Operator: Thank you. The next question is going to come from Tom Catherwood with U.S. Bank Corp. Your line is open.

Speaker #5: Thank you. And the next question is going to come from Tom Catherwood with US Bank Corp. Your line's open.

Tom Catherwood: Thanks so much, and good afternoon. Steve, maybe going back to something Caitlin's questioned before about the leasing pipeline. Given that your Park Avenue and Madison Square buildings are effectively full at this point, what are your expectations for leasing in your Lex and Third portfolios, as well as Sixth Avenue? How much progress can you make there in the near term?

Speaker #6: Thanks so much and good afternoon. Steve, maybe going back to something Caitlin's question before about the leasing pipeline. Given that your Park Avenue and Madison Square buildings are effectively full at this point, what are your expectations for leasing in your Lex and third portfolios as well as 6th Avenue?

Speaker #6: How much progress can you make there in the near term?

[Company Representative] (SL Green Realty Corp): Well, a lot of progress. You take buildings like 800 Third or 420 Lexington Avenue.

Speaker #2: Well, a lot of progress. I mean, we're you take buildings like 803rd or 420 Lexington Avenue, those buildings are enjoying significant rent increases. As a matter of fact, at 803rd, we just raised the rents another five bucks a foot a week ago.

[Company Representative] (SL Green Realty Corp): Those buildings are enjoying significant rent increases. Matter of fact, at 830, we just raised the rents another $5 a foot a week ago. There is a lot of leasing velocity at Graybar, which is one of our bigger pre-war buildings. The rents there are, I have been involved with that building for almost 40 years, and the rents are at the highest level I have ever enjoyed. As we look up and down the avenue, east of Grand Central, you are seeing a lot of velocity. I have seen a lot of tenant demand, and part of it is boosted by a diminishing amount of supply because of the office-to-resi conversions for the projects that similar to what Marc was describing.

Speaker #2: There's a lot of leasing velocity at Graybar, which is one of our bigger pre-war buildings. That and the rents there are I've been involved with that building for almost 40 years.

Speaker #2: And the rents are the highest level I've ever enjoyed. So as we look up and down the avenue, east of Grand Central, you're seeing you're seeing a lot of velocity.

Speaker #2: You're seeing a lot of tenant demand. And part of it is boosted by a diminishing amount of supply because of the office-to-residence conversions for the projects that similar to what Mark was describing.

Tom Catherwood: That is great. Thanks for that, Steve. Last one for me, Marc, maybe going back to comments that you made on fee income and generating more than $100 million on that platform. There are parts of that fee income business that we tend to think of as countercyclical. This is like your special servicer, like kind of the platform you have for debt fund investments. If rates remain elevated, how much more can those lines of business, special servicer, debt funds, and others, how much more can they contribute to the bottom line?

Speaker #6: That's great. Thanks for that, Steve. And then last one for me, Mark, maybe going back to comments that you made on fee income and generating more than $100 million on that platform.

Speaker #6: There are parts of that fee income business that we tend to think of as countercyclical. This is like your special service or kind of the platform you have for debt-fund investments.

Speaker #6: If rates remain elevated, kind of how much more can those lines of business, special service or debt funds and others, how much more can they contribute to the bottom line?

Marc Holliday: Well, so that's a question very specific to the special servicing business because the asset management fees we're generating, I think have longevity to them and repeatability to them. Our goal is to be in the business of working for institutional owners that have 5 to 10-year hold horizons to reposition and optimize assets they take back. We're having great success there. The portion of the business that is servicing related, it is somewhat countercyclical, but in good and bad markets you've got servicing opportunities. I mean, it's a business that's always in demand.

Speaker #2: Well, so that's a question very specific to the special service and business because the asset management fees were generating, I think, have longevity to them.

Speaker #2: And replicability to them. And our goal is to be in the business of working for institutional owners, that have 5 to 10-year hold horizons to reposition and optimize assets they take back.

Speaker #2: And we're having great success there. So the portion of the business that is servicing-related, it is somewhat countercyclical, but good and bad markets you've got servicing opportunities.

Speaker #2: I mean, it's a business that's always in demand. I think that looking at the rates the refinancing rates today and some of the big SASB deals that have been paused, I think you're getting to a point where deals that have already been extended for a year or two, three are going to get to a point of no further extension.

Marc Holliday: I think that looking at the refinancing rates today and some of the big SASB deals that have been paused, I think you're getting to a point where deals that have already been extended for a year or 2, 3 are going to get to a point of no further extension, and we're going to be very active in 2027 and 2028 at these rate levels. Probably realizing on many of these assets, taking them in and becoming long-term asset managers. Which is a natural progression of this servicing business, is to go from special servicer to asset manager for assets that become REO. There's a good proportion of which that I think that might occur, not just in New York but around the country. I'd say we'll have upward guidance on that business in December when we have our investor conference.

Speaker #2: And we're going to be very active in 2027 and 2028 at these rate levels, probably realizing on many of these assets, taking them in and becoming long-term asset managers.

Speaker #2: Which is a natural progression of the servicing business is to go from special service or to asset manager for assets that become REO. And there's a good proportion of which that I think that might occur, not just in New York, but around the country.

Speaker #2: So I'd say we have an upward we'll have upward guidance on that business in December when we have our investor conference. But Harry, you want to add something to that?

Marc Holliday: But Harry, you want to add something to that?

fkf lv: Yeah. One piece I think is very important is how diverse the asset base is within our special servicing business. We're now, as I've mentioned in previous calls, now the largest active SASB servicer in the country. We have exposure to not only office, but retail, data centers, hotel, life science. That exposure across a diverse asset base not only serves as a countercyclical financial impact or benefit, but also just maintains that that business will stay busy for a while. One thing that Marc just hit is becoming asset manager as well. Just in this past quarter alone, we've picked up over 2 million square feet within green property services of asset management. Through that business line, that's really our first foray into that business. You'll see us earning new leasing commissions, new property management fees, new construction management fees.

Harrison Sitomer: Yeah. One piece I think is very important is how diverse the asset base is within our special servicing business. We're now, as I've mentioned in previous calls, now the largest active SASB servicer in the country. We have exposure to not only office, but retail, data centers, hotel, life science. That exposure across a diverse asset base not only serves as a countercyclical financial impact or benefit, but also just maintains that that business will stay busy for a while. One thing that Marc just hit is becoming asset manager as well. Just in this past quarter alone, we've picked up over 2 million square feet within green property services of asset management. Through that business line, that's really our first foray into that business. You'll see us earning new leasing commissions, new property management fees, new construction management fees.

Speaker #7: Yeah. One piece I think is very important is how diverse the asset base is within our special servicing business. We're now, as I've mentioned in previous calls, now the largest active SASB servicer in the country.

Speaker #7: We have exposure to not only office but retail, data centers, hotel, life science. And so that exposure across a diverse asset base not only serves as a countercyclical financial impact or benefit, but also just gets us maintains that that business will stay busy for a while.

Speaker #7: One thing that Mark just hit is becoming asset manager as well. Just in this past quarter alone, we've picked up over $2 million square feet within green property services of asset management.

Speaker #7: So through that business line, that's really our first foray into that business. You'll see us earning new leasing commissions, new property management fees, new construction management fees.

fkf lv: I would expect that to be a part of the growth story into 2027.

Harrison Sitomer: I would expect that to be a part of the growth story into 2027.

Speaker #7: And I'd expect that to be a part of the growth story into 2027.

Tom Catherwood: That is very helpful. Thanks for the color, everybody.

Speaker #6: That's very helpful. Thanks for the call, everybody.

Operator: Thank you. The next question will come from Brendan Lynch with Barclays. Your line is open.

Speaker #5: Thank you. And the next question will come from Brendan Lynch with Barclays. Your line's open.

[Analyst] (Barclays): Hi. Thank you for taking the question. This is Annabelle on for Brendan. Maybe as a follow-up to your comment about larger tenants looking three to five years out for renewals, what is your strategy when thinking about signing an early renewal now versus waiting for potentially better lease economics down the road?

Speaker #8: Hi. Thank you for taking the question. This is Annabelle on for Brendan. Maybe as a follow-up to your comment about larger tenants looking three to five years out for renewals, kind of what is your strategy when thinking about signing an early renewal now versus waiting for potentially better lease economics down the road?

[Company Representative] (SL Green Realty Corp): Philosophically, we are not big believers in waiting. If the opportunity presents itself and the economics are attractive, you put the deal to bed. Rolling the dice and playing the gamble of waiting for even better returns in the future is kind of a fool's errand. You are better off locking in the rent roll, taking these moments in time where we have a strong market, raising the rents, extending the lease terms, being critical as to opportunities to improve the credit of our tenant base, and using the leverage that we have to reduce concessions so we lock in great net effective rents.

Speaker #2: It's philosophically, we're not big believers in waiting. If the opportunity presents itself and the economics are attractive, you put the deal to bed. It's rolling the dice and playing the gamble of waiting for even better returns in the future.

Speaker #2: It's kind of a fool's errand. You're better off locking in the rent role, taking these moments in time where we have a strong market, raising the rents, extending the lease terms, being critical as to opportunities to improve the credit of our tenant base, and using the leverage that we have to reduce concessions so we lock in great net effective rents.

[Analyst] (Barclays): Okay, great. Can you provide some more details on tenant demand in 346 Madison, and what are the next milestones that we should be focusing on?

Speaker #8: Okay, great. And can you provide some more details on tenant demand in 346 Madison and what are the next milestones that we should be focusing on?

[Company Representative] (SL Green Realty Corp): Well, it is early days in that process. We do not TCO the building until we do not complete construction until Q4 2031. Notwithstanding that, we are actively presenting the opportunity to the market, to the brokerage community, to prospective tenants. As Marc mentioned, we are already in term sheet discussion with a large prospective tenant. That is not to suggest that we will go to lease with that tenant, but it is a good indicator of tenants love the building, love the presentation, love the opportunity. As a matter of fact, I was in a presentation this morning with the CEO of a prospective quarter-million-square-foot tenant for that project. So, we are firing on all cylinders. The construction is moving forward, and the moment is right because there is no new product coming online.

Speaker #2: Well, it's early days in that process. We don't see the building until we don't complete construction until fourth quarter of 2031, notwithstanding that, we're actively presenting the opportunity to the market, to the brokerage community, to prospective tenants.

Speaker #2: As Mark mentioned, we're already in term sheets discussion with a large prospective tenant. That's not to suggest that we'll go to lease with that tenant, but it is of good indicator of tenants are love the building, love the presentation, love the opportunity.

Speaker #2: As a matter of fact, I was in a presentation this morning with the CEO of a prospective quarter million square foot tenant for that project.

Speaker #2: So we're firing on all cylinders. The construction is moving forward. And the moment is ripe because there's no new product coming online.

[Analyst] (Barclays): Great. Thank you.

Speaker #8: Great. Thank you.

Operator: Thank you. Our next question will come from Ronald Kamdem with Morgan Stanley. Your line's open.

Speaker #5: Thank you. And our next question will come from Ronald Camden with Morgan Stanley. Your line's open.

Ronald Kamdem: Great. Just two quick ones. On the same store NOI in the quarter and thinking about potential acceleration from here, I think at the Investor Day last year, you talked about maybe double digits in 2027. Just curious if we can get some updated thoughts given that maybe occupancies commence even faster and rents are moving in your direction. Thanks.

Speaker #6: Great. Just two quick ones. On the same store in Hawaii, in the quarter and thinking about potential acceleration from here, I think if the investor day last year, you talked about maybe double digits in 2027.

Speaker #6: Just curious if we can get some updated thoughts given that maybe occupancy has commenced even faster and rents are moving in your direction. Thanks.

Matt DiLiberto: Yep. That 10% is still our objective for 2027, even in the face of two things, 2026 performing better, which sets the hurdle that much higher, and inflationary pressures on operating expenses. Our operations team doesn't get enough credit for how good a job they do of containing expenses in this environment where costs of pretty much everything are going up. In the face of both of those things, I would still expect 2027 same store NOI, cash NOI north of 10%.

Speaker #2: Yeah. 10% is still our objective for 2027, even in the face of two things. 2026 performing better, which is sets the hurdle that much higher.

Speaker #2: And inflationary pressures on operating expenses. Our operations team doesn't get enough credit for how good a job they do of containing expenses in this environment where costs have pretty much everything are going up.

Speaker #2: But in the face of both of those things, I would still expect 2027, same store in Hawaii, cash in Hawaii north of 10%.

Ronald Kamdem: Yeah, helpful. My second one is just on leasing CapEx and updated thoughts there. I think there was some conversations about that's going to start to roll off obviously as occupancy commences and so forth. Any quick takes on what the run rate has been for this year and how that could improve as you flip the calendar and so forth. Thanks so much.

Speaker #6: Yeah, helpful. And then my second one is just on leasing capex and updated thoughts there. Just I think there was some conversations about that's going to start to roll off.

Speaker #6: Obviously, as occupancy sort of commences, and so forth. Just any quick takes on what the run rate has been for this year and how that could improve as you sort of flip the calendar and so forth.

Speaker #6: Thanks so much.

Matt DiLiberto: Yeah. The trajectory over the next few years should be lower. We have said that, and we are on that trajectory. The unpredictability of the TI component of capital spend, that is the thing that is the most challenging because the bulk of the TI capital is in the control of the tenants, not the landlord. This year, we are trending ahead, and I would love to see that continue into 2027 and 2028. We will have a better look at that coming up in early December.

Speaker #2: Yeah, the trajectory over the next few years should be lower. We've said that and we're on that trajectory. The unpredictability of the TI component of capital spend, that's the thing that's the most challenging because the bulk of the TI capital is in the control of the tenants, not the landlord.

Speaker #2: This year, we are trending ahead. And I'd love to see that continue into 2027 and 2028. We'll have a better look at that coming up in early December.

Ronald Kamdem: Thank you.

Speaker #6: Thank you.

Operator: Thank you. Our next question will come from Seth Bergey with Citi. Your line is open.

Speaker #5: Thank you. And our next question will come from Seth Burgie with City. Your line's open.

Seth Bergey: Hey, thanks for taking my questions. I guess the first one, it sounds like the market for core Midtown product is still healthy and maybe there is some price discovery out there. Has there been any change in the number of potential bidders out there or the types of capital that are looking to invest in office?

Speaker #6: Hey, thanks for taking my questions. I guess the first one, it sounds like the market for kind of core Midtown product is still healthy and maybe there's some price discovery out there.

Speaker #6: Has there been any kind of change in the number of potential bidders out there or the types of capital that are looking to invest in office?

fkf lv: Not really. I hit this in a question earlier. Just within our own sale disposition execution to date, we have seen the 1031 buyer, the institutional buyer, the domestic LP. We have seen international LPs. So we have not seen any specific pullback of any one of those segments of the investor pool. I will hit as part of that just what we saw also in the debt markets, because I know that question is on equity, but I think it is important. With 245 done, we had over 40 distinct investors in that 245 book. The largest SASB office deal since January 2025 at a moment in time or like a 2 or 3-day window in time when there was tremendous volatility in the market. I think that just speaks to how strong New York performs at these moments of volatility.

Harrison Sitomer: Not really. I hit this in a question earlier. Just within our own sale disposition execution to date, we have seen the 1031 buyer, the institutional buyer, the domestic LP. We have seen international LPs. So we have not seen any specific pullback of any one of those segments of the investor pool. I will hit as part of that just what we saw also in the debt markets, because I know that question is on equity, but I think it is important. With 245 done, we had over 40 distinct investors in that 245 book. The largest SASB office deal since January 2025 at a moment in time or like a 2 or 3-day window in time when there was tremendous volatility in the market. I think that just speaks to how strong New York performs at these moments of volatility.

Speaker #7: Not really. I mean, I had this in a question earlier just within our own sale disposition execution to date. We've seen the 1031 buyer, the institutional buyer, the domestic LP, we've seen international LPs.

Speaker #7: So there really we have not seen any specific pullback of any one of those segments of the investor pool. I will hit as part of that just what we saw also in the debt markets because I know that question is on equity, but I think it's important with 245 done, we had over 40 distinct investors in that 245 book.

Speaker #7: The largest SASB office deal since January 2025 at a moment in time or like a two or three-day window in time when there was tremendous volatility in the market.

Speaker #7: And I think that just speaks to how strong New York performs at these moments of volatility. So interesting data I got earlier was same as in 2025, the office sector is on top of the leaderboard of US SASB issuance in 2026.

fkf lv: Interesting data I got earlier was same as in 2025, the office sector is on top of the leaderboard of US SASB issuance in 2026. Interestingly, 70% of the US office SASB activity was New York City office. So that puts New York City office well ahead of the entire US SASB multifamily market. It is bigger than the entire data center, self-storage, and life science market combined, and that is really why we love New York. In these moments, we continue to see tremendous amount of capital inflows both across debt and equity. I think that is most mathematically proven in the US SASB debt market and CMBS market.

Harrison Sitomer: Interesting data I got earlier was same as in 2025, the office sector is on top of the leaderboard of US SASB issuance in 2026. Interestingly, 70% of the US office SASB activity was New York City office. So that puts New York City office well ahead of the entire US SASB multifamily market. It is bigger than the entire data center, self-storage, and life science market combined, and that is really why we love New York. In these moments, we continue to see tremendous amount of capital inflows both across debt and equity. I think that is most mathematically proven in the US SASB debt market and CMBS market.

Speaker #7: And interestingly, 70% of the US office SASB activity was New York City office. So that puts New York City office well ahead of the entire US SASB multifamily market.

Speaker #7: It's bigger than the entire data center self-storage and life science market combined. And that's really why we love New York. I mean, in these moments, we continue to see tremendous amount of capital inflows both across debt and equity.

Speaker #7: I think that's most mathematically proven in the US SASB debt market and SASB and CMBS market.

Seth Bergey: Thanks. Then just maybe going back to SUMMIT, it sounds like in your answer to another question that it is kind of below your expectations for the year. What levers do you have to pull to kind of improve performance with SUMMIT, and how much of that is just kind of a more challenging macro environment?

Speaker #6: Thanks. And then just maybe going back to summit, it sounds like in your answer to another question that it's kind of below your expectations for the year.

Speaker #6: Kind of what levers do you have to pull to kind of improve performance with summit and how much of that is just kind of a more challenging macro environment?

fkf lv: Well, I think what we are experiencing is what many attractions in New York are experiencing right now, which is a year where the tourism just did not measure up to what it was expected and projected to be.

Harrison Sitomer: Well, I think what we are experiencing is what many attractions in New York are experiencing right now, which is a year where the tourism just did not measure up to what it was expected and projected to be.

Speaker #7: Well, it's I think what we're experiencing is what many attractions in New York are experiencing right now, which is a year where the tourism just didn't measure up to what it was expected and projected to be.

Marc Holliday: In a very odd and unexpected way, the FIFA World Cup finals turned out to be somewhat of a negative for hotels and destination experiential, because there was this narrative of getting out of the city for what was perceived to be a kind of an onslaught of activity and, I don't know, congestion, I guess. The games were great and went off without a hitch and were well-enjoyed, but the city was on a bit of lockdown in terms of the ability to get around, and there was sort of some discouragement almost, if you will, to what I would say, really get out there and participate and celebrate and enjoy in a way that I think would've been perhaps more lucrative for a lot of the attractions in and around New York City for the months of, let's call it June, July, August.

Speaker #7: In a very odd and unexpected way, the FIFA World Cup finals turned out to be somewhat of a negative for hotels and destination experiencial.

Speaker #7: Because there was this narrative of getting out of the city for what was perceived to be kind of an onslaught of activity and I don't know, congestion, I guess.

Speaker #7: And the games were great and went off without a hitch and were well enjoyed. But the city was on a bit of lockdown in terms of the ability to get around and there was sort of some discouragement almost, if you will, to what I would say really get out there and participate and celebrate and enjoy in a way that I think would have been perhaps more lucrative for a lot of the attractions in and around New York City for the months of, let's call it June, July, August.

Speaker #7: So that's in the past. We've seen a definite uptick and return in Q3 and Q4. We're kind of revamping our very targeted marketing programs to a lot of domestic tourism, a lot of New York City residents tri-state residents and the markets where tourism is still quite strong.

Marc Holliday: That's in the past. We've seen a definite uptick in return in Q3 and Q4. We're kind of revamping our very targeted marketing programs to a lot of domestic tourism, a lot of New York City residents, tri-state residents, and the markets where tourism is still quite strong, which is ever-changing. I'm confident that SUMMIT will retain its leadership status amongst this destination observation, and we're looking forward to, I think, a very robust end of season year, which is where we make our most money, like most hospitality venues. Then we're going to launch into 2027, which I hope and expect will be a great year.

Speaker #7: Which is ever-changing. So I'm confident that summit will retain its leadership status amongst this destination observation and where looking forward to, I think, a very robust end of season year, which is where we make our most money, like most hospitality venues.

Speaker #7: And then we're going to launch into 2027, which I hope and expect will be a great year.

Seth Bergey: Great. Thank you.

Speaker #6: Great. Thank you.

Operator: Thank you. Our last question will come from Michael Lewis with Truist Securities. Your line's open.

Speaker #5: Thank you. And our last question will come from Michael Lewis with Truist Securities. Your line's open.

Michael Lewis: Great. Thank you for hanging in there for me. My question goes back to the food and beverage hospitality business. Could you share how much income that business generates? I am just thinking about how much recurring income goes away with a 20% sale, kind of what the yield on sale is there.

Speaker #6: Great. Thank you for hanging in there for me. My question goes back to the food and beverage hospitality business. Did you share how much income that business generates?

Speaker #6: I'm just thinking about how much recurring income goes away with a 20% sale, kind of what the yield on sale is there.

Marc Holliday: Yeah, it generated about $2 million of full-year FFO, so we sold it at a 20x FFO multiple.

Speaker #8: Yeah, that was it generated about $2 million of full-year FFO. So it's a we sold it at a 20 times FFO multiple.

Michael Lewis: Okay. Gotcha. When I look at the mortgage maturities the next year or so, I think Landmark Square and The Olivia are disposition candidates. Do you intend to refinance 485 Lex, 220 East 42nd, and Worldwide Plaza, or could those be potential dispositions as well?

Speaker #6: Okay. Gotcha. And then when I look at the mortgage maturities, the next year or so, I think landmark square and the Olivia are disposition candidates.

Speaker #6: And then do you intend to refinance 485 Lex 220 East 42nd and Worldwide Plaza, or could those be potential dispositions as well?

Marc Holliday: You have to parse all of those out separately. There is a category of those assets where I would say we are focused on refinancing opportunities. For strategic reasons, I am not going to give you which go into which bucket. There is one that you referenced, and I will point out, which is Worldwide Plaza, which sits in ASP. I would not model at the moment a refinancing of that next year. On the balance of the assets, rest assured, like we tackled our full $7 billion plan, as we sit in October, we are already well ahead on the 2027 financing plan. I would also add, just as we think about financings next year, with not a lot that needs to get done, we will either be financing opportunistically and continue our DPO plan.

Speaker #7: I would you have to parse all of those out separately. There's a category of those assets where I would say we're focused on refinancing opportunities for strategic reasons.

Speaker #7: I'm not going to give you the which go into which bucket. And then there is one that you referenced that I will point out, which is Worldwide Plaza, which sits in ASP I would not expect a or I not model at the moment a refinancing of that next year.

Speaker #7: But on the balance of the assets, rest assured, like we tackled our full $7 billion plan as we sit in October, we're already well ahead on the 27 financing plan.

Speaker #7: And I'd also add just as we think about financings next year, with not a lot that needs to get done, we'll either be financing opportunistically and continue our DPO plan.

Marc Holliday: I expect us to announce two DPOs in our portfolio by the end of the year, one of which I would expect to close in 2026 and one I would expect in 2027.

Speaker #7: I expect us to announce two DPOs in our portfolio by the end of the year, one of which I would expect to close in '26 and one I would expect in 2027.

Michael Lewis: Okay, great. Thank you.

Speaker #6: Okay, great. Thank you.

Operator: Thank you. I will now turn the call back over to Marc for closing remarks.

Speaker #5: Thank you. I will now turn the call back over to Mark for closing remarks.

Speaker #7: Okay. Well, if there's anyone still on, it was a great call. Appreciate the questions. Happy we're able to sort of condense it into the hour allotted.

Marc Holliday: Well, if there is anyone still on, it was a great call. Appreciate the questions. Happy we were able to sort of condense it into the hour allotted, so well done. Most importantly, I have a message from my CFO, Matt DiLiberto.

Speaker #7: So well done. And most importantly, I have a message from my CFO, Matt DeLiberto.

Matt DiLiberto: Look forward to seeing everybody on 7 December for our annual investor conference. I think this is our 29th investor conference, 7 December, here in New York. Doors open 8:30 AM. Presentation begins at 9:00 AM. If you cannot make it in person, it is webcast. Thank you all for joining us. We will speak to you in December.

Speaker #8: Look forward to seeing everybody on December 7th for our annual investor conference. I think this is our 29th investor conference. December 7th here in New York.

Speaker #8: Doors open 8:30. Presentation begins at 9:00. If you can't make it in person, it is webcast. Thank you all for joining us. We'll speak to you in December.

Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect.