- SL Green raised over $1B for its NYC-focused distressed debt fund, exceeding initial targets.
- The REIT beat earnings expectations and increased its full-year FFO guidance.
- Occupancy dipped slightly but remains on track for year-end projections.
- CEO Marc Holliday dismissed political risks from progressive mayoral contender Zohran Mamdani.
A Billion-Dollar Milestone
SL Green Realty has crossed the $1B mark for its distressed debt investment fund, reports Bisnow. The firm is doubling down on its bet that volatile markets—and New York’s commercial real estate—present major upside. The REIT secured an additional $500M in commitments this week, pushing the fund beyond its initial goal, according to CEO Marc Holliday.
The announcement came just after SL Green reported a 20% year-over-year drop in funds from operations (FFO), down to $1.63 per share. Still, it beat analyst expectations and prompted the company to raise its full-year FFO guidance by 40 cents.
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Mixed Leasing Picture, But Confidence Remains
SL Green signed 46 leases in Q2, totaling 1.1M SF for the first half of 2025. However, occupancy fell slightly to 91.4%, down from 91.8% in Q1. The firm remains on track to hit its 93.2% year-end target, it said.
Major deals included Pinterest’s 83K SF lease at 11 Madison Ave. and a 64K SF lease by Sigma Computing at One Madison, which will be reflected in Q3. Holliday also teased two upcoming tech and AI deals totaling 140K SF across those same buildings.
Amazon Windfall And Strategic Sales
The firm’s opportunistic investing paid off in Q2 with a $200M payday from Amazon’s $456M acquisition of 522 Fifth Ave.—a debt SL Green had purchased at a discount last year for $125M. The firm also sold half of its preferred equity stake in Related Cos.’ 625 Madison Ave. project for $104.9M, at just under 94% of its carrying value.
Political Risk?
Asked about Zohran Mamdani’s surprise Democratic primary win and potential mayoral run, Holliday dismissed investor anxiety. “We are very confident in our ability… to continue to operate and succeed in whatever political environment we’re facing,” he said.
SL Green has backed Mayor Eric Adams’ reelection campaign and is seen as aligned with pro-growth real estate policies. Holliday noted broader economic volatility from inflation and trade tensions, but argued New York City thrives amid market swings.
Market Outlook
NYC’s office market is rebounding, with over 20M SF leased in the first half of 2025—the best start to a year since 2014. If that pace continues, Manhattan office deals could surpass 40M SF for the first time since 2019.
With strong leasing momentum, rising fund commitments, and strategic debt windfalls, SL Green is leaning into volatility—and betting it can weather both market and political storms.
